LiveRamp (RAMP) Q4 2020 earnings summary

Executive summary

• FY20 revenue rose 33.2% to $380.6M; subscription revenue grew 29.1%, while gross margin expanded to 59.9% from 57.7%.

• Operating loss narrowed to $180.9M from $198.1M; continuing-operations net loss was $125.3M, or $1.85 diluted loss per share.

• More than $717M in cash and no debt at year-end supported continued investment and capital returns; COVID-19 added uncertainty to FY21 conditions.

Financial highlights

• FY20 revenue was $380.6M, up 33.2% YoY; cost of revenue rose 26.5% to $152.7M and gross profit increased to $227.9M.

• Subscription revenue reached $305.7M, up 29.1%; Marketplace and Other revenue was $74.9M, up 53.1%, led by Data Marketplace and TV transactions.

• Total operating expenses were $408.8M, up 12.6%; continuing-operations net loss improved to $125.3M from $133.9M.

• Operating loss was $180.9M versus $198.1M; FY20 expenses included $89.4M non-cash stock compensation, $19.0M intangible amortization and $5.0M restructuring and merger charges.

• Net cash used in operating activities was $28.6M versus $2.0M; year-end cash and equivalents totaled $717.8M, down from $1.06B.

Outlook and guidance

• FY21 plans called for aggressive investment in platformization, addressability, TV and Safe Haven; R&D spending as a share of revenue was expected to remain at similar levels.

• Management cited COVID-19-related industry and business headwinds, while expecting to pursue growth from data-driven, performance-based marketing and a recurring subscription model.

• The CARES Act NOL carryback was expected to generate a ~$32M tax refund.