LiveRamp Holdings, Inc.

Previous wording

Total revenues were $194.8 million for the three months ended June 30, 2025, an $18.9 million, or 10.7%, increase compared to the same period a year ago. The increase was due to revenue growth in both Subscription and Marketplace and Other. The Subscription revenue growth was $13.6 million, or 10.1%, primarily due to upsell to existing customers and higher variable revenue. The Marketplace and Other revenue growth was $5.3 million, or 12.8%, primarily due to Data Marketplace and Services growth. On a geographic basis, U.S. revenue increased $18.0 million, or 10.8%. International revenue increased $0.9 million, or 9.4%.

Current wording

Total revenues were $394.7 million for the six months ended September 30, 2025, a $33.2 million, or 9.2%, increase compared to the same period a year ago. The increase was due to revenue growth in both Subscription and Marketplace and Other. The Subscription revenue growth was $20.3 million, or 7.3%, primarily due to upsell to existing customers and higher variable revenue. The Marketplace and Other revenue growth was $12.9 million, or 15.4%, primarily due to Data Marketplace and Services growth. On a geographic basis, U.S. revenue increased $31.5 million, or 9.2%. International revenue increased $1.7 million, or 8.7%.

Previous wording

Cost of revenue was $58.3 million for the three months ended June 30, 2025, a $6.6 million, or 12.7%, increase from the same period a year ago. Gross profit increased to $136.5 million (70.1% gross margin) from $124.2 million (70.6% gross margin) in the prior period due to the revenue increase of $18.9 million and a decrease in purchased intangible asset amortization of $1.1 million (declining amortization from Habu acquisition in fiscal 2024), offset partially by an increase in cloud infrastructure costs (increased $6.8 million) driven by increased customer usage and platform migration costs, and an increase in services costs (increased $0.7 million) due to headcount and related increases. U.S. gross margins decreased to 70.6% from 71.5%, and International gross margins increased to 60.5% from 55.5%.

Current wording

Cost of revenue was $117.9 million for the six months ended September 30, 2025, a $14.9 million, or 14.5%, increase from the same period a year ago. Gross profit increased to $276.7 million (70.1% gross margin) from $258.5 million (71.5% gross margin) in the prior period due to the revenue increase of $33.2 million and a decrease in purchased intangible asset amortization of $2.1 million (roll-off of amortization from previous acquisitions in the prior year), offset partially by an increase in cloud infrastructure costs (increased $15.6 million) driven by increased customer usage and platform migration costs. U.S. gross margins decreased to 70.6% from 72.4%, and International gross margins increased to 61.2% from 56.4%.

Previous wording

R&D expenses were $39.6 million for the three months ended June 30, 2025, a decrease of $4.5 million, or 10.2%, compared to the same period a year ago, and are 20.3% of total revenues compared to 25.1% in the prior year. The decrease is primarily due to stock-based compensation expense (decreased $1.9 million) and headcount-related expenses (decreased $2.5 million).

Current wording

R&D expenses were $76.6 million for the six months ended September 30, 2025, a decrease of $11.4 million, or 13.0%, compared to the same period a year ago, and are 19.4% of total revenues compared to 24.3% in the prior year. The decrease is primarily due to stock-based compensation expense (decreased $6.3 million) and headcount-related expenses (decreased $4.9 million).

Previous wording

S&M expenses were $51.9 million for the three months ended June 30, 2025, a decrease of $2.3 million, or 4.2%, compared to the same period a year ago, and are 26.6% of total revenues compared to 30.8% in the prior year. The decrease is primarily due to stock-based compensation expense (decreased $1.1 million), headcount-related expenses (decreased $0.9 million), third-party marketing expenses (decreased $0.5 million), and professional services expenses (decreased $0.3 million), offset partially by an increase in bad debt expense (increased $0.8 million).

Current wording

S&M expenses were $48.7 million for the three months ended September 30, 2025, a decrease of $2.4 million, or 4.7%, compared to the same period a year ago, and are 24.4% of total revenues compared to 27.6% in the prior year. The decrease is primarily due to stock-based compensation expense (decreased $1.9 million) and headcount-related expenses (decreased $0.3 million).

Previous wording

G&A expenses were $37.3 million for the three months ended June 30, 2025, an increase of $6.4 million, or 20.6%, compared to the same period a year ago, and are 19.2% of total revenues compared to 17.6% in the prior year period. The increase is primarily due to professional services expenses (increased $5.4 million) largely related to litigation costs associated with the class action lawsuit and fees in support of strategic corporate initiatives, headcount-related expenses (increased $0.6 million), and stock-based compensation expense (increased $0.4 million).

Current wording

G&A expenses were $70.5 million for the six months ended September 30, 2025, an increase of $8.2 million, or 13.1%, compared to the same period a year ago, and are 17.9% of total revenues compared to 17.2% in the prior year. The increase is primarily due to professional services expenses (increased $7.1 million) largely related to litigation costs, including those associated with the class action lawsuit, and fees in support of strategic corporate initiatives, headcount-related expenses (increased $1.9 million, primarily incentive compensation), offset partially by stock-based compensation expense (decreased $1.9 million).

Previous wording

Gains, losses and other items, net was $0.4 million for the three months ended June 30, 2025, an increase of $0.2 million compared to the same period a year ago. The current year relates primarily to adjustments to previous lease restructuring reserves while the prior year costs are primarily related to termination benefits for employees whose positions were eliminated.

Current wording

Gains, losses and other items, net was $0.4 million for the six months ended September 30, 2025, a decrease of $0.2 million compared to the same period a year ago. The current year relates primarily to adjustments to previous lease restructuring reserves while the prior year costs are primarily related to termination benefits for employees whose positions were eliminated.

Previous wording

Income from operations was $7.2 million for the three months ended June 30, 2025 compared to loss from operations of $5.2 million in the same period a year ago. Operating margin was 3.7% compared to negative 3.0% in the prior year period. Margins were positively impacted by the gross profit increase.

Current wording

Income from operations was $21.4 million for the three months ended September 30, 2025 compared to income from operations of $7.5 million in the same period a year ago. Operating margin was 10.7% compared to 4.0% in the same period a year ago. Margins in the current year were positively impacted by the decrease in stock-based compensation.

Previous wording

Total other income, net was $3.7 million for the three months ended June 30, 2025 compared to $4.4 million in the same period a year ago. The decrease is primarily attributable to lower invested cash balances and lower interest rates in the current year.

Current wording

Total other income, net was $3.5 million for the three months ended September 30, 2025 compared to total other income, net of $4.2 million in the same period a year ago. Total other income, net was $7.3 million for the six months ended September 30, 2025 compared to $8.6 million in the same period a year ago. The decrease is primarily attributable to lower invested cash balances and lower interest rates in the current year.

Previous wording

Income tax expense was $3.2 million on income from continuing operations before income taxes of $10.9 million for the three months ended June 30, 2025, resulting in a 29.1% effective tax rate. This compares to a prior year income tax expense of $6.7 million on loss from continuing operations before income taxes of $0.8 million, or a negative 831.5% effective tax rate. Tax expense for all periods reflects the impact of the valuation allowance and nondeductible stock-based compensation. In accordance with Internal Revenue Code ("IRC") Section 174, as modified by the Tax Cuts and Jobs Act of 2017, research and development expenditures are required to be capitalized and amortized over five years (15 years for foreign-based costs). Due to the valuation allowance, the Company has not recorded a deferred tax benefit for future amortization deductions.

Current wording

Income tax benefit was $2.4 million on income from continuing operations before income taxes of $25.0 million for the three months ended September 30, 2025, resulting in a negative 9.8% effective tax rate. This compares to income tax expense of $10.0 million on income from continuing operations before income taxes of $11.7 million, or an 85.2% effective tax rate in the same period a year ago. The current year period benefited from the enactment of new tax laws, as described below. The prior year tax rate reflects the impact of the capitalization of research and development expenditures in accordance with Internal Revenue Code ("IRC") Section 174, as modified by the Tax Cuts and Jobs Act of 2017, without a corresponding deferred tax benefit. Income tax expense was $0.7 million on income from continuing operations before income taxes of $35.9 million for the six months ended September 30, 2025, resulting in a 2.0% effective tax rate. This compares to income tax expense of $16.6 million on income from continuing operations before income taxes of $10.9 million, or a 152.9% effective tax rate in the same period a year ago. Income tax expense (benefit) for all periods reflects the impact of the valuation allowance and nondeductible stock-based compensation.

Previous wording

On July 4, 2025, H.R. 1, also known as “The One Big Beautiful Bill” Act (the "2025 Tax Act") was signed into law in the U.S. The 2025 Tax Act includes provisions that allow for the immediate expensing of domestic research and development costs, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. As the 2025 Tax Act was enacted after the end of our reporting period, it had no impact on the Company’s condensed consolidated financial condition or results of operations for the quarter ended June 30, 2025. We are currently evaluating the impact of the legislation on the Company’s future effective tax rate, tax liabilities, and cash taxes.

Current wording

On July 4, 2025, H.R. 1, also known as “The One Big Beautiful Bill” Act (the "2025 Tax Act"), was signed into law in the U.S. The 2025 Tax Act includes provisions that allow for the immediate expensing of domestic research and development expenditures, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. Under the 2025 Tax Act's transition rules, IRC Section 174A allows certain unamortized domestic research and development expenditures to be deducted over one or two years, at the taxpayer's election. In accordance with IRC Section 174, foreign research and development expenditures are still required to be capitalized and amortized over 15 years. Due to the valuation allowance, the Company has not recorded a deferred tax benefit for future amortization deductions.

Previous wording

Given the Company's recent earnings, it is reasonably possible that within the next 12 months sufficient positive evidence may become available to support a conclusion that a substantial portion of the valuation allowance is no longer needed. The exact timing and amount of the valuation allowance release are subject to significant judgment and continued analysis of the positive and negative evidence. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

Current wording

Given the Company's recent history of profitability, it is reasonably possible that within the next 12 months sufficient positive evidence may become available to support a conclusion that a substantial portion of the valuation allowance is no longer needed. The exact timing and amount of the valuation allowance release are subject to significant judgment and continued analysis of the positive and negative evidence. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

Previous wording

The Company’s cash and cash equivalents are primarily located in the United States. At June 30, 2025, approximately $25.0 million of the total cash balance of $363.6 million, or approximately 6.9%, was located outside of the United States.

Current wording

The Company’s cash and cash equivalents are primarily located in the United States. At September 30, 2025, approximately $25.6 million of the total cash balance of $369.4 million, or approximately 6.9%, was located outside of the United States.

Previous wording

Trade accounts receivable, net balances were $219.8 million at June 30, 2025, an increase of $33.6 million, compared to $186.2 million at March 31, 2025. Days sales outstanding ("DSO"), a measurement of the time it takes to collect receivables, was 103 days at June 30, 2025, compared to 89 days at March 31, 2025. DSO can fluctuate due to the timing and nature of contracts that lead to up-front billings related to deferred revenue on services not yet performed, and Data Marketplace contracts, which are billed on a gross basis, recognized on a net basis, but for which the amount that is due to data sellers is not reflected as an offset to accounts receivable. Compared to March 31, 2025, DSO at June 30, 2025 was negatively impacted by approximately nine days due to the increased impact of Data Marketplace gross accounts receivable. All customer accounts are actively managed, and no losses in excess of amounts reserved are currently expected.

Current wording

Trade accounts receivable, net balances were $216.8 million at September 30, 2025, an increase of $30.6 million, compared to $186.2 million at March 31, 2025. Days sales outstanding ("DSO"), a measurement of the time it takes to collect receivables, was 100 days at September 30, 2025, compared to 89 days at March 31, 2025. DSO can fluctuate due to the timing and nature of contracts that lead to up-front billings related to deferred revenue on services not yet performed, and Data Marketplace contracts, which are billed on a gross basis, recognized on a net basis, but for which the amount that is due to data sellers is not reflected as an offset to accounts receivable. Compared to March 31, 2025, DSO at September 30, 2025 was negatively impacted by approximately eight days due to the increased impact of Data Marketplace gross accounts receivable. All customer accounts are actively managed, and no losses in excess of amounts reserved are currently expected.

Previous wording

Working capital at June 30, 2025 totaled $410.0 million, a $1.4 million increase when compared to $408.7 million at March 31, 2025.

Current wording

Working capital at September 30, 2025 totaled $409.7 million, a $1.0 million increase when compared to $408.7 million at March 31, 2025.

Previous wording

Cash flows from operating activities are primarily influenced by growth in our operations, increases or decreases in collections from our customers, and related payments to our suppliers and employees. The timing of cash receipts from customers and payments to suppliers can significantly impact our cash flows from operating activities. Our collection and payment cycles can vary from period to period.

Current wording

Cash flows from operating activities are primarily influenced by growth in our operations, increases or decreases in collections from our customers, and related payments to our suppliers and employees. The timing of cash receipts from customers and payments to suppliers and employees can significantly impact our cash flows from operating activities. Our collection and payment cycles can vary from period to period.

Previous wording

Net cash used in operating activities for the three months ended June 30, 2024 was $9.3 million and resulted primarily from operating results adjusted for non-cash items of $25.6 million offset by unfavorable changes in operating assets and liabilities of $34.9 million. Net cash used by changes in operating assets and liabilities was primarily related to a decrease in accounts payable and other liabilities of $39.0 million and an increase in accounts receivable of $16.6 million, partially offset by an increase in deferred revenue of $7.5 million. The change in accounts payable and other liabilities is primarily due to the payment of annual incentive compensation awards for fiscal year 2024 and the timing of payments to suppliers. The change in accounts receivable is primarily due to revenue growth and the timing of cash receipts from customers.

Current wording

Net cash provided by operating activities for the six months ended September 30, 2025 was $41.6 million and resulted primarily from operating results adjusted for non-cash items of $90.3 million offset by unfavorable changes in operating assets and liabilities of $48.7 million. Net cash used by changes in operating assets and liabilities was primarily related to an increase in accounts receivable of $31.9 million and a decrease in accounts payable and other liabilities of $24.1 million. The change in accounts receivable is primarily due to revenue growth and the timing of cash receipts from customers. The change in accounts payable and other liabilities is primarily due to the payment of annual incentive compensation awards for fiscal year 2025 and the timing of payments to suppliers.

Previous wording

Net cash used in operating activities for the three months ended June 30, 2025 was $15.8 million and resulted primarily from operating results adjusted for non-cash items of $38.2 million offset by unfavorable changes in operating assets and liabilities of $54.0 million. Net cash used by changes in operating assets and liabilities was primarily related to a decrease in accounts payable and other liabilities of $35.9 million and an increase in accounts receivable of $34.3 million, partially offset by an increase in deferred revenue of $5.7 million and income taxes payable of $4.5 million. The change in accounts payable and other liabilities is primarily due to the payment of annual incentive compensation awards for fiscal year 2025 and the timing of payments to suppliers. The change in accounts receivable is primarily due to revenue growth and the timing of cash receipts from customers.

Current wording

Net cash provided by operating activities for the six months ended September 30, 2024 was $46.3 million and resulted primarily from operating results adjusted for non-cash items of $61.6 million offset by unfavorable changes in operating assets and liabilities of $15.3 million. Net cash provided by changes in operating assets and liabilities was primarily related to a decrease in accounts payable and other liabilities of $32.0 million primarily due to the payment of annual incentive compensation awards for fiscal year 2024 and the timing of payments to suppliers.

Previous wording

Net cash used in investing activities for the three months ended June 30, 2025 was $0.9 million and consisted of net cash paid in acquisitions of $0.6 million related to the Habu escrow and capital expenditures of $0.3 million.

Current wording

Net cash used in investing activities for the six months ended September 30, 2025 was $2.0 million and consisted of capital expenditures of $0.9 million, net cash paid in acquisitions of $0.6 million related primarily to the Habu escrow release, and purchases of strategic investments for $0.5 million.

Previous wording

Net cash used in financing activities for the three months ended June 30, 2025 was $34.8 million and consisted of the acquisition of treasury shares pursuant to the board of directors' approved stock repurchase plan, and related excise tax payments, of $29.9 million (1.1 million shares), and $10.8 million for shares repurchased for tax withholdings upon vesting of stock-based awards. These uses of cash were partially offset by $5.9 million of proceeds from the sale of common stock from our equity compensation plans.

Current wording

Net cash used in financing activities for the six months ended September 30, 2025 was $85.1 million and consisted of the acquisition of treasury shares pursuant to the board of directors' approved stock repurchase plan, and related excise tax payments, of $79.8 million (2.9 million shares), and $11.7 million for shares repurchased for tax withholdings upon vesting of stock-based awards. These uses of cash were partially offset by $6.3 million of proceeds from the sale of common stock from our equity compensation plans.

Previous wording

Net cash used in financing activities for the three months ended June 30, 2024 was $16.5 million and consisted of the acquisition of treasury shares pursuant to the board of directors' approved stock repurchase plan of $15.8 million (0.5 million shares), and $6.8 million for shares repurchased for tax withholdings upon vesting of stock-based awards. These uses of cash were partially offset by $6.2 million of proceeds from the sale of common stock from our equity compensation plans.

Current wording

Net cash used in financing activities for the six months ended September 30, 2024 was $67.1 million and consisted of the acquisition of treasury shares pursuant to the board of directors' approved stock repurchase plan of $65.7 million (2.4 million shares), and $7.7 million for shares repurchased for tax withholdings upon vesting of stock-based awards. These uses of cash were partially offset by $6.3 million of proceeds from the sale of common stock from our equity compensation plans.

Previous wording

During the three months ended June 30, 2025, the Company repurchased 1.1 million shares of its common stock for $29.9 million under the modified common stock repurchase program. The repurchase amounts included in the fiscal 2026 condensed consolidated statements of stockholders equity and the condensed consolidated statements of cash flows included amounts related to the 1% excise tax on share repurchases, net of share issuances, as a result of the Inflation Reduction Act of 2022. Through June 30, 2025, the Company had repurchased a total of 42.6 million shares of its common stock for $1.1 billion under the program, leaving remaining capacity of $226.3 million.

Current wording

During the six months ended September 30, 2025, the Company repurchased 2.9 million shares of its common stock for $79.6 million under the modified common stock repurchase program. The repurchase amounts included in the fiscal 2026 condensed consolidated statements of stockholders equity and the condensed consolidated statements of cash flows included amounts related to the 1% excise tax on share repurchases, net of share issuances, as a result of the Inflation Reduction Act of 2022. Through September 30, 2025, the Company had repurchased a total of 44.4 million shares of its common stock for $1.1 billion under the program, leaving remaining capacity of $176.6 million.

Previous wording

The following tables present the Company’s contractual cash obligations and purchase commitments at June 30, 2025 (dollars in thousands). Operating leases primarily consist of our various office facilities. Purchase commitments primarily include contractual commitments for the purchase of data, hosting services, software-as-a-service arrangements, and leasehold improvements. The tables do not include the future payment of liabilities related to uncertain tax positions of $31.1 million as the Company is not able to predict the periods in which the payments will be made. The amount for 2026 represents the remaining nine months ending March 31, 2026. All other periods represent fiscal years ending March 31.

Current wording

The following tables present the Company’s contractual cash obligations and purchase commitments at September 30, 2025 (dollars in thousands). Operating leases primarily consist of our various office facilities. Purchase commitments primarily include contractual commitments for the purchase of data, hosting services, software-as-a-service arrangements, and leasehold improvements. The tables do not include the future payment of liabilities related to uncertain tax positions of $31.5 million as the Company is not able to predict the periods in which the payments will be made. The amount for 2026 represents the remaining six months ending March 31, 2026. All other periods represent fiscal years ending March 31.

Previous wording

Future minimum payments as of June 30, 2025 related to restructuring plans as a result of the Company's exit from certain leased office facilities are (dollars in thousands): Fiscal 2026: $1,124.

Current wording

Future minimum payments as of September 30, 2025 related to restructuring plans as a result of the Company's exit from certain leased office facilities are (dollars in thousands): Fiscal 2026: $450.

Previous wording

The Company has a presence in the United Kingdom, France, the Netherlands, Italy, Spain, Brazil, India, Australia and China. Most of the Company’s exposure to exchange rate fluctuation is due to translation gains and losses as there are no material transactions that cause exchange rate impact. In general, each of the foreign locations is expected to fund its own operations and cash flows, although funds may be loaned or invested from the U.S. to the foreign subsidiaries. These advances are considered long-term investments, and any gain or loss resulting from changes in exchange rates as well as gains or losses resulting from translating the foreign financial statements into U.S. dollars are included in accumulated other comprehensive income. Therefore, exchange rate movements of foreign currencies may have an impact on the Company’s future costs or on future cash flows from foreign investments. The Company has not entered into any foreign currency forward exchange contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.

Current wording

The Company has a material presence in the United Kingdom, France, the Netherlands, India, Australia and China. Most of the Company’s exposure to exchange rate fluctuation is due to translation gains and losses as there are no material transactions that cause exchange rate impact. In general, each of the foreign locations is expected to fund its own operations and cash flows, although funds may be loaned or invested from the U.S. to the foreign subsidiaries. These advances are considered long-term investments, and any gain or loss resulting from changes in exchange rates as well as gains or losses resulting from translating the foreign financial statements into U.S. dollars are included in accumulated other comprehensive income. Therefore, exchange rate movements of foreign currencies may have an impact on the Company’s future costs or on future cash flows from foreign investments. The Company has not entered into any foreign currency forward exchange contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.

Previous wording

We prepare our condensed consolidated financial statements in conformity with U.S. GAAP as set forth in the FASB ASC, and we consider the various staff accounting bulletins and other applicable guidance issued by the SEC. These accounting principles require management to make certain judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The consolidated financial statements in the 2025 Annual Report include a summary of significant accounting policies used in the preparation of the Company’s consolidated financial statements. In addition, the Management’s Discussion and Analysis of Financial Condition and Results of Operations filed as part of the 2025 Annual Report contains a discussion of the policies that management has identified as the most critical because they require management’s use of complex and/or significant judgments. None of the Company’s critical accounting policies have materially changed since the date of the 2025 Annual Report other than as described in the "Accounting Pronouncements Adopted During the Current Year" section of Note 1, "Organization and Summary of Significant Accounting Policies”, of the Notes to Condensed Consolidated Financial Statements accompanying this Quarterly Report on Form 10-Q.

Current wording

These accounting principles require management to make certain judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The consolidated financial statements in the 2025 Annual Report include a summary of significant accounting policies used in the preparation of the Company’s consolidated financial statements. In addition, the Management’s Discussion and Analysis of Financial Condition and Results of Operations filed as part of the 2025 Annual Report contains a discussion of the policies that management has identified as the most critical because they require management’s use of complex and/or significant judgments. None of the Company’s critical accounting policies have materially changed since the date of the 2025 Annual Report other than as described in the "Accounting Pronouncements Adopted During the Current Year" section of Note 1, "Organization and Summary of Significant Accounting Policies”, of the Notes to Condensed Consolidated Financial Statements accompanying this Quarterly Report on Form 10-Q.