- Establishes industry-leading interoperable platform for data
collaboration across all clouds and walled gardens
globally
- Strategically expands collaboration network and drives
further adoption of core identity and connectivity
solutions
- Preliminary Q3 FY24 revenue and operating income above the
Company’s prior guide
- Conference call today at 2:30 PM PT (5:30 PM ET)
LiveRamp® (NYSE: RAMP), the leading data collaboration platform,
today announced that it has entered into a definitive agreement to
acquire Habu, a data clean room software provider, in a cash and
stock transaction valued at approximately $200 million. The
acquisition will further accelerate LiveRamp’s ability to offer
global data collaboration at scale, across all clouds and walled
gardens, solving fundamental challenges for customers while also
unlocking powerful measurement and analytics use cases.
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Global brands and media companies use Habu’s technology to
securely share first-party customer data with business partners and
publishers to enable more effective and personalized marketing.
Companies are overwhelmed with data and even the most
sophisticated companies find it challenging to fully realize the
value of their data. Today, data still sits in operational silos,
making it difficult to leverage internally and even more so with
external partners. The combination of LiveRamp and Habu solves
these structural challenges by connecting data and making it
interoperable across all clouds, walled gardens, and clean room
environments while maintaining privacy and governance
protocols.
“LiveRamp enables next-generation data collaboration that
delivers unmatched brand and business value. Through this
acquisition, we will further empower our customers to unlock
insights, use cases, and revenue streams by seamlessly connecting
data and deepening measurement, across any platform or partner they
prefer,” said Scott Howe, CEO of LiveRamp. “Habu shares our vision,
and together, we will help more global enterprises benefit from the
transformative power of data collaboration.”
The Habu acquisition will allow LiveRamp to deliver
differentiated capabilities to customers to:
- Streamline and simplify cross-cloud collaboration by
seamlessly connecting data across clouds, warehouses, and clean
rooms while reducing complexity and IT infrastructure
constraints.
- Achieve a first-of-its-kind, single view of measurement
across any walled garden, programmatic channel, or media partner,
including media networks and all major CTV and TV platforms.
- Access enhanced enterprise identity and connectivity
solutions to break down data silos and navigate signal loss and
evolving privacy regulation with confidence.
- Expand LiveRamp’s industry leading data collaboration
network, enabling global connectivity to the world's most
scaled network of publishers, walled gardens, retailers, brands,
and agencies.
- Advance AI initiatives through greater data access to
train and optimize analytical models that inform marketing
decisions and enable other enterprise use cases.
Matt Kilmartin, CEO of Habu, added, “LiveRamp and Habu
approached the data collaboration market with two complementary
strategies that share the common goal of creating the largest data
collaboration network rooted in privacy. As we look ahead to our
next chapter as part of LiveRamp, we’re as committed as ever to our
mission of paving the way for the next frontier of responsible data
collaboration.”
The Habu team will help lead LiveRamp’s data collaboration
strategy, reporting to LiveRamp’s Chief Revenue Officer, Vihan
Sharma.
To learn more about LiveRamp’s acquisition of Habu, please visit
this website.
Shareholder Value and Financial Impact
Under the terms of the agreement, LiveRamp will acquire Habu for
approximately $200 million, subject to customary adjustments,
consisting of approximately $170 million in cash to be paid at
closing and the remaining consideration in the form of LiveRamp
stock related to unvested stock awards and holdback agreements with
certain key employees that will vest in future periods. In
addition, approximately $16 million of restricted stock unit awards
will be extended at closing to continuing employees for retention
purposes.
The addition of Habu will extend LiveRamp’s lead in data
collaboration, driving accelerated growth and value for LiveRamp
shareholders in the form of:
- Greater cross-sell and upsell. The combined capabilities
will unlock several powerful and new cloud and walled garden clean
room use cases for existing customers. In addition, it will provide
the opportunity to extend LiveRamp’s core identity and connectivity
products across a rapidly scaling collaboration network, driving
additional usage of the LiveRamp platform.
- New customer acquisition. Offering a simple, cross-cloud
user interface and enhanced self-service capabilities will enable
LiveRamp to better address a broader set of customers, including
non-technical mid-market organizations.
- Global expansion. Habu’s network of walled garden and
premium publishers span 200+ markets globally, which will
accelerate LiveRamp’s international expansion efforts.
- New use cases across the enterprise. Frictionless
cross-cloud capabilities will enable new data collaboration use
cases outside of marketing, such as supply chain optimization and
inventory management.
LiveRamp expects the acquisition, inclusive of revenue
synergies, to deliver approximately $18 million in revenue in FY25
and to help accelerate the Company’s progress toward Rule of 40
achievement.
The transaction is expected to be completed in LiveRamp’s fiscal
fourth quarter. The transaction is not expected to have a material
impact on LiveRamp’s fiscal 2024 revenue and non-GAAP operating
income results. The Company expects the transaction to negatively
impact GAAP operating income as a result of higher non-cash stock
compensation, purchased intangible amortization and one-time
transaction related expenses. LiveRamp will provide an updated
outlook for the remainder of fiscal 2024 when it releases its
complete third quarter results on February 8, 2024.
Evercore is acting as the exclusive financial advisor to
LiveRamp, and Baker McKenzie is acting as legal counsel to
LiveRamp. Goldman Sachs is acting as the exclusive financial
advisor to Habu, and Gunderson Dettmer is acting as legal counsel
to Habu.
Preliminary Results for Third Quarter Fiscal 2024
LiveRamp today also provided preliminary financial results for
its fiscal 2024 third quarter ended December 31, 2023.
“We had a strong fiscal third quarter, with preliminary revenue
and operating income results significantly exceeding our guidance,”
said CFO Lauren Dillard. “Additionally, our forward sales momentum
continued, giving us increasing confidence as we look ahead to
fiscal 2025.”
For the third quarter, the Company expects to report:
- Revenue of approximately $174 million, an increase of 10%
year-on-year and ahead of the prior expectation of $165 million.
The upside relative to guidance was driven by both Subscription and
Marketplace & Other revenue.
- Operating income of approximately $15 million, above the
Company’s prior expectation of $8 million.
- Non-GAAP operating income of approximately $36 million, above
the Company’s prior expectation of $29 million.
A reconciliation between GAAP and non-GAAP operating income is
provided in the appendix to this press release.
This unaudited financial information above is based on
preliminary estimates and information as of the date hereof and is
subject to revision in connection with the Company's financial
closing procedures and finalization of the Company's financial
statements for its fiscal 2024 third quarter. Actual results for
the third quarter may differ materially from these preliminary
unaudited financial results.
The Company will provide additional details about its third
quarter results on its upcoming earnings call on February 8,
2024.
Conference Call
LiveRamp will hold a conference call today at 2:30 PM PT (5:30
PM ET) to further discuss the acquisition. The conference call will
be webcast live on the Company’s website www.investors.liveramp.com
and will be available for replay. The conference call is also
accessible via telephone by dialing 1(888) 414-4513 or 1(646)
960-0379 for international callers and using Conference ID code
6394771.
A slide presentation will be referenced during the call and is
available here.
About LiveRamp
LiveRamp is the data collaboration platform of choice for the
world’s most innovative companies. A groundbreaking leader in
consumer privacy, data ethics, and foundational identity, LiveRamp
is setting the new standard for building a connected customer view
with unmatched clarity and context while protecting precious brand
and consumer trust. LiveRamp offers complete flexibility to
collaborate wherever data lives to support the widest range of data
collaboration use cases—within organizations, between brands, and
across its premier global network of top-quality partners. Hundreds
of global innovators, from iconic consumer brands and tech giants
to banks, retailers, and healthcare leaders, turn to LiveRamp to
build enduring brand and business value by deepening customer
engagement and loyalty, activating new partnerships, and maximizing
the value of their first-party data while staying on the forefront
of rapidly evolving compliance and privacy requirements. LiveRamp
is based in San Francisco, California with offices worldwide. Learn
more at LiveRamp.com.
About Habu
Habu is a global leader in data clean room software, enabling
companies to benefit from the value of data without the risk. Habu
connects data internally and externally with other departments,
partners, customers, and providers in privacy-safe and compliant
ways for better collaboration, decision making, and results. The
Company is headquartered in San Francisco, CA, and Boston, MA. For
more information on Habu data collaboration solutions, visit
www.habu.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended (the “PSLRA”). These statements, which are not
statements of historical fact, may contain opinions, estimates,
assumptions, projections and/or expectations regarding the
Company’s financial position, results of operations for fiscal 2024
and beyond, closing, integrating and expected benefits of the Habu
acquisition, market position, product development, growth
opportunities, economic conditions, and other similar forecasts and
statements of expectation. Forward-looking statements are often
identified by words or phrases such as “anticipate,” “estimate,”
“plan,” “expect,” “believe,” “intend,” “foresee,” or the negative
of these terms or other similar variations thereof.
These forward-looking statements are not guarantees of future
performance and are subject to a number of factors and
uncertainties that could cause the Company’s actual results and
experiences to differ materially from the anticipated results and
expectations expressed in the forward-looking statements.
Among the factors that may cause actual results and expectations
to differ from anticipated results and expectations expressed in
forward-looking statements are uncertainties related to interest
rates, cost increases, the possibility of a recession, general
inflationary pressure, geo-political circumstances that could
result in increased economic uncertainties and the associated
impacts of these potential events on our suppliers, customers and
partners; the Company’s dependence upon customer renewals; new
customer additions and upsell within our subscription business; our
reliance upon partners, including data suppliers; competition;
rapidly changing technology’s impact on our products and services;
attracting, motivating and retaining talent; risks that the
agreement regarding the Habu acquisition may be modified or
terminated prior to closing or that conditions to the acquisition
may not be satisfied; and the possibility that we fail to fully
realize the potential benefits of or have difficulty integrating
Habu. Additional risks include maintaining our culture and our
ability to innovate and evolve while operating in a hybrid work
environment, with some employees working remotely at least some of
the time within a rapidly changing industry, while also avoiding
disruption from reductions in our current workforce as well as
disruptions resulting from acquisition, divestiture and other
activities affecting our workforce (including the Habu
acquisition). Our global workforce strategy could possibly
encounter difficulty and not be as beneficial as planned. Our
international operations are also subject to risks, including the
performance of third parties as well as impacts from war and civil
unrest, that may harm the Company’s business. The risk of a
significant breach of the confidentiality of the information or the
security of our or our customers’, suppliers’, or other partners’
data and/or computer systems, or the risk that our current
insurance coverage may not be adequate for such a breach, that an
insurer might deny coverage for a claim or that such insurance will
continue to be available to us on commercially reasonable terms, or
at all, could be detrimental to our business, reputation and
results of operations. Any time that an acquisition is made there
are a multitude of risks including the challenges of integrating a
business into the company including the loss of key personnel and
customer disruption. Other business risks include unfavorable
publicity and negative public perception about our industry;
interruptions or delays in service from data center or cloud
hosting vendors we rely upon; and our dependence on the continued
availability of third-party data hosting and transmission services.
Our clients’ ability to use data on our platform could be
restricted if the industry’s use of third-party cookies and
tracking technology declines due to technology platform changes,
regulation or increased user controls. Changes in laws or
regulations relating to information collection and use represents a
risk, as well as changes in tax laws and regulations that are
applied to our customers which could cause enterprise software
budget tightening. In addition, third parties may claim that we are
infringing their intellectual property or may infringe our
intellectual property which could result in competitive injury and
/ or the incurrence of significant costs and draining of our
resources.
For a discussion of these and other risks and uncertainties,
please refer to LiveRamp’s Annual Report on Form 10-K for our
fiscal year 2023 ended March 31, 2023, and LiveRamp's Quarterly
Reports on Form 10-Q issued in fiscal year 2024.
The financial information set forth in this press release
reflects estimates based on information available at this time.
LiveRamp assumes no obligation and does not currently intend to
update these forward-looking statements.
To automatically receive LiveRamp financial news by email,
please visit www.LiveRamp.com and subscribe to email alerts.
LiveRampⓇ and all other LiveRamp marks contained herein are
trademarks or service marks of LiveRamp, Inc. All other marks are
the property of their respective owners.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS
(1) For the Three Months Ended December 31, 2023 (Unaudited)
(Dollars in millions) Income from continuing
operations
15
Excluded items: Purchased intangible asset amortization
(cost of revenue)
1
Non-cash stock compensation (cost of revenue and operating
expenses)
17
Restructuring charges (gains, losses, and other)
3
Total excluded items
21
Income from continuing operations before excluded items
36
(1) This presentation includes non-GAAP
measures. Our non-GAAP measures are not meant to be considered in
isolation or as a substitute for comparable GAAP measures, and
should be read only in conjunction with our consolidated financial
statements prepared in accordance with GAAP. For a detailed
explanation of the adjustments made to comparable GAAP measures,
the reasons why management uses these measures and the material
limitations on the usefulness of these measures, please see
Appendix A.
APPENDIX A LIVERAMP HOLDINGS, INC. AND
SUBSIDIARIES Q3 FISCAL 2024 FINANCIAL RESULTS EXPLANATION OF
NON-GAAP MEASURES AND OTHER KEY METRICS
To supplement our financial results, we use non-GAAP measures
which exclude certain acquisition related expenses, non-cash stock
compensation and restructuring charges. We believe these measures
are helpful in understanding our past performance and our future
results. Our non-GAAP financial measures and schedules are not
meant to be considered in isolation or as a substitute for
comparable GAAP measures and should be read only in conjunction
with our consolidated GAAP financial statements. Our management
regularly uses these non-GAAP financial measures internally to
understand, manage and evaluate our business and to make operating
decisions. These measures are among the primary factors management
uses in planning for and forecasting future periods. Compensation
of our executives is also based in part on the performance of our
business based on these non-GAAP measures.
Our non-GAAP financial measures, including non-GAAP earnings
(loss) per share, income (loss) from operations and adjusted EBITDA
reflect adjustments based on the following items, as well as the
related income tax effects when applicable:
Purchased intangible asset
amortization: We incur amortization of purchased intangibles
in connection with our acquisitions. Purchased intangibles include
(i) developed technology, (ii) customer and publisher
relationships, and (iii) trade names. We expect to amortize for
accounting purposes the fair value of the purchased intangibles
based on the pattern in which the economic benefits of the
intangible assets will be consumed as revenue is generated.
Although the intangible assets generate revenue for us, we exclude
this item because this expense is non-cash in nature and because we
believe the non-GAAP financial measures excluding this item provide
meaningful supplemental information regarding our operational
performance.
Non-cash stock compensation:
Non-cash stock compensation consists of charges for associate
restricted stock units, performance shares and stock options in
accordance with current GAAP related to stock-based compensation
including expense associated with stock-based compensation related
to unvested options assumed in connection with our acquisitions. As
we apply stock-based compensation standards, we believe that it is
useful to investors to understand the impact of the application of
these standards to our operational performance. Although
stock-based compensation expense is calculated in accordance with
current GAAP and constitutes an ongoing and recurring expense, such
expense is excluded from non-GAAP results because it is not an
expense that typically requires or will require cash settlement by
us and because such expense is not used by us to assess the core
profitability of our business operations.
Restructuring charges: During the
past several years, we have initiated certain restructuring
activities in order to align our costs in connection with both our
operating plans and our business strategies based on then-current
economic conditions. As a result, we recognized costs related to
termination benefits for employees whose positions were eliminated,
lease and other contract termination charges, and asset
impairments. These items, as well as third party expenses
associated with business acquisitions in the current year, reported
as gains, losses, and other items, net, are excluded from non-GAAP
results because such amounts are not used by us to assess the core
profitability of our business operations.
Our non-GAAP financial schedules are:
Non-GAAP EPS, Non-GAAP Income from
Operations, and Non-GAAP expenses: Our Non-GAAP earnings per
share, Non-GAAP income from operations, and Non-GAAP expenses
reflect adjustments as described above, as well as the related tax
effects where applicable.
Adjusted EBITDA: Adjusted EBITDA is
defined as net income from continuing operations before income
taxes, other expenses, depreciation and amortization, and including
adjustments as described above. We use Adjusted EBITDA to measure
our performance from period to period both at the consolidated
level as well as within our operating segments and to compare our
results to those of our competitors. We believe that the inclusion
of Adjusted EBITDA provides useful supplementary information to and
facilitates analysis by investors in evaluating the Company's
performance and trends. The presentation of Adjusted EBITDA is not
meant to be considered in isolation or as an alternative to net
earnings as an indicator of our performance.
Free Cash Flow to Equity: To
supplement our statement of cash flows, we use a non-GAAP measure
of cash flow to analyze cash flows generated from operations. Free
cash flow to equity is defined as operating cash flow less cash
used by investing activities (excluding the impact of cash paid in
acquisitions), less required payments of debt, and excluding the
impact of discontinued operations. Management believes that this
measure of cash flow is meaningful since it represents the amount
of money available from continuing operations for the Company's
discretionary spending after funding all required obligations
including scheduled debt payments. The presentation of non-GAAP
free cash flow to equity is not meant to be considered in isolation
or as an alternative to cash flows from operating activities as a
measure of liquidity.
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LiveRamp Investor Relations Investor.Relations@LiveRamp.com
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