SEC Info - LiveRamp Holdings, Inc. - ‘10-K’ for 3/31/23

John L. Battelle

/s/ Timothy R. Cadogan*

Director

Timothy R. Cadogan

/s/ Vivian Chow*

Director

Vivian Chow

/s/ Scott E. Howe*

Director, CEO (principal executive officer)

Scott E. Howe

/s/ Clark M. Kokich*

Director (Non-Executive Chairman of the Board)

Clark M. Kokich

/s/ Brian O'Kelley*

Director

Brian O'Kelley

/s/ Omar Tawakol*

Director

Omar Tawakol

/s/ Debora B. Tomlin*

Director

Debora B. Tomlin

/s/ Lauren Dillard

Interim CFO, Senior Vice President of Finance and Investor Relations

Lauren Dillard

(principal financial and accounting officer)


*By:			/s/ *Jerry C. Jones*
			Jerry C. Jones
			Attorney-in-Fact

LIVERAMP HOLDINGS, INC.

INDEX TO FINANCIAL SUPPLEMENT

TO ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED MARCH 31, 2023

F-1

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and the related notes to those statements included in Item 8 to this Annual Report on Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs, and expectations, and involve risks and uncertainties. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in the section titled "Item 1A. Risk Factors."

We begin Management’s Discussion and Analysis of Financial Condition and Results of Operations with an introduction and overview, including our operating segment, sources of revenue, summary results and notable events. This overview is followed by a summary of our critical accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results. We then provide a more detailed analysis of our results of operations and financial condition.

Introduction and Overview

Operating Segment

The Company operates as one operating segment. An operating segment is defined as a component of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker. Our chief operating decision maker evaluates our financial information and resources and assesses the performance of these resources on a consolidated basis. Since we operate as one operating segment, all required financial segment information can be found in the consolidated financial statements.

Sources of Revenues

LiveRamp recognizes revenue from the following sources: (i) Subscription revenue, which consists primarily of subscription fees from clients accessing our platform; and (ii) Marketplace and Other revenue, which primarily consists of revenue-sharing fees generated from data transactions through our LiveRamp Data Marketplace, and transactional usage-based revenue from arrangements with certain publishers and addressable TV providers.

F-2

LiveRamp Data Collaboration Platform

As depicted in the graphic below, we power the industry’s leading enterprise platform for data collaboration. We enable organizations to access and leverage data more effectively across the applications they use to interact with their customers. At the core of our platform is an omnichannel, deterministic identity resolution technology that offers unparalleled accuracy, breadth, and depth. Leveraging deep expertise in identity and data collaboration, the LiveRamp Data Collaboration platform formerly branded as Safe Haven) enables an organization to unify customer and prospect data (first-, second-, or third-party) to build a single view of the customer in a way that protects consumer privacy. This single customer view can then be enhanced and activated across any of the 550 partners in our ecosystem in order to support a variety of people-based marketing solutions, including:

•Data Collaboration. We enable second-party data collaboration between organizations and their trusted partners in a neutral, manageable environment. Our platform provides customers with collaborative opportunities to safely and securely build a more accurate, dynamic view of their customers leveraging partner data. Advanced measurement and analytics use cases can be performed on this shared data without either party giving up control or compromising privacy.

•Data Marketplace. Our Data Marketplace provides customers with simplified access to industry-leading third-party data providers globally. The LiveRamp Data Collaboration Platform allows for the search, discovery and distribution of data from data providers to improve targeting, measurement, and customer intelligence. Our customers may license data through the LiveRamp Data Marketplace and connect via RampID to enrich their first-party data, leveraging across technology and media platforms, agencies, analytics environments, and TV partners. Our platform provides tools for data providers to manage the organization, distribution, and operation of their data and services across our network of customers and partners. Today we work with more than 200 data providers across all verticals and many data types (see below for discussion on Marketplace and Other).

F-3

Subscription

We primarily charge for our platform services on an annual basis. Our subscription pricing is based primarily on data volume, which is a function of data input records and connection points.

•Data Sellers. Leveraging our vast network of integrations, we allow data sellers to easily connect to the digital ecosystem and monetize their own data. Data can be distributed to clients or made available through

F-4

the LiveRamp Data Marketplace feature. This adds value for brands as it allows them to augment their understanding of consumers and increase both their reach against and understanding of customers and prospects.

Marketplace and Other

To complement our product offering, we provide professional services and enhanced support entitlements to help customers leverage our platform and drive business outcomes. Our services offering includes product implementation, data science analytics, audience measurement and general advisory. We generate revenue from services primarily from project fees paid by subscribers to our platform. Service projects are sold on an ad hoc basis as well as bundled with platform subscriptions. Services revenue is less than 5% of total Company revenue.

F-5

Summary Results and Notable Events

During fiscal 2022, the Company completed the acquisition of certain technology assets owned by Rakam, Inc. ("Rakam") for approximately $2.2 million in cash. The technology asset is a cloud-agnostic customer data analytics platform that is deployed directly in the client's data warehouse. The purchased technology has been embedded into the Company's platform, enabling us to provide a single, unified segmentation solution and enable our clients to generate real-time insights and create custom audiences wherever their data resides. The Company concluded the acquired assets did not meet the definition of a business under ASU 2017-01, "Clarifying the Definition of a Business", and therefore has accounted for the acquisition as an asset acquisition. The purchased asset was recorded as a $2.2 million developed technology intangible asset and is being amortized over a period of three years based on its estimated useful life.

During fiscal 2022, the Company completed the acquisition of Diablo.ai, Inc. ("Diablo"), a first-party data resolution platform and graph builder, for approximately $9.7 million in cash. Diablo's technology was embedded into our unified platform and plays an integral role in our global identity capability. The Company has included the financial results of Diablo in the consolidated financial statements as of the first quarter of fiscal 2022.

During fiscal 2021, the Company completed the acquisition of DataFleets, Ltd. ("DataFleets"), a cloud data platform that enables data silos to be unified without moving data or compromising privacy. This acquisition expanded LiveRamp's data protection capabilities to unlock greater data access and control for its customers. In addition, the deal opened up new use cases as well as new markets for distributed data collaboration. The Company has included the financial results of DataFleets in the consolidated financial statements as of the fourth quarter of fiscal 2021. The acquisition consideration for DataFleets was approximately $67.2 million cash.

During fiscal 2021, the Company completed the acquisition of Acuity Data ("Acuity"), a team of global retail and consumer packaged goods (“CPG”) experts, for approximately $2.9 million in cash. The acquisition also included a three-year performance plan having a maximum potential attainment of $5.1 million that would be recorded as non-cash stock compensation if achieved. The acquisition strengthened the retail analytics capabilities of our data collaboration platform by enabling better reporting, insights, and collaboration for retailers and CPG companies, bridging the gap between trade and media by bringing consumers’ digital signals and retail transaction data together in a privacy-conscious manner. The Company has included the financial results of Acuity in the consolidated financial statements as of the second quarter of fiscal 2021.

A financial summary of the fiscal year ended March 31, 2023 compared to the fiscal year ended March 31, 2022 (fiscal 2022) is presented below:

•Revenues were $596.6 million, a 12.8% increase from $528.7 million in fiscal 2022.

•Cost of revenue was $170.1 million, a 15.4% increase from $147.4 million in fiscal 2022.

•Gross margin decreased to 71.5% from 72.1% in fiscal 2022.

•Total operating expenses were $552.3 million, a 23.6% increase from $446.8 million in fiscal 2022.

•Cost of revenue and operating expenses for fiscal 2023 and 2022 included the following items:

◦Non-cash stock compensation of $125.8 million and $87.3 million, respectively (cost of revenue of $6.3 million and $4.1 million, respectively, and operating expenses of $119.5 million and $83.1 million, respectively)

◦Purchased intangible asset amortization of $16.8 million and $18.7 million, respectively (cost of revenue)

◦Transformation costs of $9.0 million in fiscal 2023 (general and administrative)

◦Restructuring charges of $35.3 million and $1.5 million, respectively (gains, losses, and other)

•Total other income, net was $6.9 million, a decrease of $23.5 million from $30.5 million in fiscal 2022.

F-6

•Net loss was $118.7 million, or $1.79 per diluted share, in fiscal 2023 compared to $33.8 million, or $0.50 per diluted share, in fiscal 2022.

•Net cash provided by operating activities was $34.4 million in fiscal 2023 compared to $78.1 million in fiscal 2022.

•The Company repurchased 6.1 million shares of its common stock in fiscal 2023 for $150.0 million compared to 1.3 million shares in fiscal 2022 for $58.6 million under the Company's common stock repurchase program.

This summary and the following discussion and analysis highlight financial results as well as other significant events and transactions of the Company during the fiscal year ended March 31, 2023 compared to the same period in fiscal 2022, unless otherwise stated. Discussion and analysis for the year ended March 31, 2022 compared to the same period ended March 31, 2021 may be found in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended March 31, 2022, filed with the Securities and Exchange Commission on May 24, 2022

On June 27, 2022, the third and final vesting date relating to the Company's fiscal 2020 acquisition of Data Plus Math, the Company issued an additional 311,868 shares of common stock of the Company in the aggregate to the co-founders.

On August 8, 2022, in connection with the second earn-out period of the Acuity acquisition, the Company paid an aggregate cash amount equal to approximately $0.5 million and issued 44,796 shares of common stock of the Company in the aggregate to the Acuity shareholders.

On November 3, 2022, the Company announced (i) a reduction in force involving approximately 10% of our full-time employees, and (ii) a planned downsizing of our real estate footprint in addition to the footprint reduction that occurred during our fiscal year second quarter. The headcount reduction is part of a broader strategic re-prioritization to build a stronger, more profitable company by tightening our focus and simplifying and driving efficiency into our business processes. These actions are expected to result in an annualized operating expense savings of approximately $30 million beginning in the fourth quarter of fiscal 2023.

On November 15, 2022, the board of directors voted to amend the Amended and Restated 2005 Equity Compensation Plan of LiveRamp, Inc. (the "2005 Plan"). The 2005 Plan was amended to provide that, in the event of a participant’s retirement on or after age 65 with at least five years of service, awards held by the participant at retirement will continue to vest in accordance with their terms. This amendment to the 2005 Plan impacted stock-based compensation expense by accelerating $5.4 million of expense recognition into fiscal 2023 that would have otherwise been recognized over future reporting periods through the quarter ending December 31, 2025

On December 20, 2022, the board of directors approved an amendment to the Company's existing share repurchase program to (i) authorize an additional $100 million in repurchases, thereby increasing the total amount authorized for repurchase under the Company's share repurchase program to $1.1 billion, and (ii) extend its duration through December 31, 2024. As of March 31, 2023, the share repurchase program had remaining capacity of $217.8 million.

On February 15, 2023, Warren C. Jenson, the Company's President, Chief Financial Officer and Executive Managing Director of International, notified the Company that he would resign from those positions and terminate his employment with the Company effective as of April 14, 2023 (the “Termination Date”), to pursue other opportunities. The Company subsequently announced on February 21, 2023 that Lauren Dillard, Senior Vice President of Finance and Investor Relations, will serve as the interim Chief Financial Officer of the Company effective as of the Termination Date. She retains her present title and will continue to serve in her present position during her tenure as the interim Chief Financial Officer of the Company. As interim Chief Financial Officer, Ms. Dillard is the Company’s principal financial and accounting officer.

On February 17, 2023, the second vesting date of the acquisition of DataFleets, the Company issued an additional 90,141 shares of common stock of the Company in the aggregate to the co-founders pursuant to a distribution under the holdback agreements entered into in connection with the acquisition. In connection with this vesting, the Company elected to calculate the number of shares to be issued using the closing share price floor set forth in the

F-7

holdback agreements. Accordingly, in accordance with the requirements of the holdback agreements, the Company paid the co-founders an aggregate amount in cash equal to approximately $3.8 million.

F-8

Critical Accounting Policies

We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”), and we consider the various staff accounting bulletins and other applicable guidance issued by the United States Securities and Exchange Commission (“SEC”). GAAP, as set forth within the ASC, requires management to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can 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. Note 1 to the accompanying consolidated financial statements includes a summary of significant accounting policies used in the preparation of LiveRamp’s consolidated financial statements. Of those policies, we have identified the following as the most critical because they are both important to the portrayal of the Company’s financial condition and operating results, and they may require management to make judgments and estimates about inherently uncertain matters:

•Revenue Recognition

•Accounting for Income Taxes

•Business Combinations

Revenue Recognition

The Company’s policy follows the guidance from ASC 606, Revenue from Contracts with Customers.

LiveRamp recognizes revenue from the following sources: (i) Subscription revenue, which consists primarily of subscription fees from clients accessing our LiveRamp platform; and (ii) Marketplace and Other revenue, which primarily consists of revenue-sharing fees generated from access to data through our LiveRamp Data Marketplace, professional services including product implementation, data science analytics and audience measurement, and transactional usage-based revenue from arrangements with certain publishers and addressable TV providers.

We determine revenue recognition through the following steps:

•Identification of the contract, or contracts, with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

•Recognition of revenue when, or as, the performance obligations are satisfied.

Identification of the contract

We consider the terms and conditions of the contract and our customary business practices when identifying our contracts under ASC 606. We determine we have a contract or contract modification with a customer when the contract is approved and the parties are committed to performing their respective obligations, we can identify each party's rights regarding the services to be transferred, we can identify the payment terms for the services, we have determined the contract has commercial substance, and we have determined that collection of at least some of the contract consideration is probable. At contract inception we evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the single or combined contract includes one or multiple performance obligations. We apply judgment in determining the customer's ability to pay, which is based on a variety of factors, including the customer's historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer.

F-9

Identification of the performance obligations

As part of accounting for arrangements with multiple performance obligations, we must assess whether each performance obligation is distinct. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and a company's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. We have determined that our subscriptions to the platform are a distinct performance obligation and access to data for revenue-sharing and usage-based arrangements is a distinct performance obligation because, once a customer has access to the platform, the service is fully functional and does not require any additional development, modification, or customization.

Determination of the transaction price

The transaction price is the amount of consideration we expect to be entitled to in exchange for transferring services to a customer, excluding sales taxes that are collected on behalf of government agencies. Variable consideration is assessed and included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of our contracts contain a significant financing component.

Allocation of the transaction price to the performance obligations in the contract

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each distinct performance obligation based on the standalone selling price ("SSP") of each service. We generally determine the SSP based on contractual selling prices when the obligation is sold on a standalone basis, as well as market conditions, competition, and pricing practices. As pricing and marketing strategies evolve, we may modify our pricing practices in the future, which could result in changes to SSP.

Recognition of revenue when, or as, the performance obligations are satisfied

Revenues are recognized when or as control of the promised services is transferred to customers. Subscription revenue is generally recognized ratably over the subscription period beginning on the date the services are made available to customers. Marketplace and other revenue is typically transactional in nature, tied to a revenue share or volumes purchased. We report revenue from Data Marketplace and other similar transactions on a net basis because our performance obligation is to facilitate a transaction between data providers and data buyers, for which we earn a portion of the gross fee. Consequently, the portion of the gross amount billed to data buyers that is remitted to data providers is not reflected as revenues. We generate revenue from Services primarily from project fees paid by subscribers to our platform. Service projects are sold on an ad hoc basis as well as bundled with platform subscriptions.

Accounting for Income Taxes

The Company makes estimates and judgments in determining the provision for income taxes for financial statement purposes. These estimates and judgments occur in the calculation of tax credits, benefits, and deductions, and in the calculation of certain deferred tax assets and liabilities that arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to uncertain tax positions. Significant changes in these estimates may result in an increase or decrease to the tax provision in a subsequent period. The Company assesses the likelihood that it will be able to recover its deferred tax assets. If recovery is not likely, the Company increases the provision for taxes by recording a valuation allowance against the deferred tax assets that it estimates will not ultimately be recoverable.

F-10

The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process pursuant to ASC 740, Income Taxes. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. If the Company determines that a tax position will more likely than not be sustained on audit, the second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as the Company must determine the probability of various outcomes.

The Company re-evaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors such as changes in facts or circumstances, changes in tax law, new audit activity, and effectively settled issues. Determining whether an uncertain tax position is effectively settled requires judgment. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision.

Business Combinations

We apply the provisions of ASC 805, Business Combinations, in accounting for acquisitions. ASC 805 requires us to determine if assets or a business was acquired. If a business was acquired, it requires us to recognize separately from goodwill the fair value of the assets acquired and the liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of the fair value of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as any contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments resulting from new information about facts and circumstances that existed at the acquisition date and falls within the measurement period to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.

F-11

Key Performance Metrics

In addition to measures of financial performance presented in our consolidated financial statements, we monitor the key metrics set forth below to help us evaluate revenue growth trends, establish budgets and measure the effectiveness of our sales and marketing efforts. The below data is presented in millions, except for percentages.


	March 31,			March 31,			2023		2022
	2023			2022			% Change		% Change

Subscription net retention	97		%	111		%	(12.6)	%	9.9	%
Annualized recurring revenue	$	423.8		$	399.5		6.1	%	18.5	%
Remaining performance obligation	$	470.9		$	394.2		19.5	%	6.3	%
Current remaining performance obligation	$	337.6		$	308.5		9.4	%	20.6	%
Subscription CRPO	$	295.4		$	279.5		5.7	%	18.3	%

Subscription Net Retention

Subscription net retention (“SNR”) is defined as the current quarter subscription revenue (net) from customers who have been on our platform for one year or more, divided by the prior year quarter subscription revenue (net), inclusive of upsell, churn (lost contract), downsell (contract reduction), and variable revenue changes. SNR excludes revenue from new customers that have not been on our platform for one year or more. We believe our SNR is an important metric that provides insight into the long-term value of our subscription agreements and our ability to retain and grow revenue from our subscription customer base. SNR rate is an operational metric and there is no comparable GAAP financial measure to which we can reconcile this particular key metric.

The decline of SNR in fiscal year 2023 was primarily attributable to downsell and churn activity offsetting customer upsell revenue, as well as lower contribution from variable usage. The increase in downsell and churn activity was driven in part by budget and economic pressures on our customers.

Annualized Recurring Revenue

Annualized Recurring Revenue (“ARR”) is defined as the last month of quarter recurring revenue annualized. Recurring revenue is fixed and contracted subscription revenue and does not include any variable or non-recurring revenue amounts. We believe ARR provides important information about our future revenue potential, our ability to acquire new clients, and our ability to maintain and expand our relationship with existing clients. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates. ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to be combined with or replace these items. Our use of ARR has limitations as an analytical tool, and investors should not consider it in isolation. Other companies in our industry may calculate ARR differently, which reduces its usefulness as a comparative measure.

Our ARR growth of 6.1%, or $24.3 million, was primarily attributable to new client revenue as growth from upsell was more than offset by downsell and churn. Our ARR growth declined from 18.5% to 6.1% this year. The decline is due to similar reasons as those resulting in SNR declines, namely, lower contribution from new and upsell activity as well as downsell and churn from customers due in part to budget pressures.

Remaining Performance Obligations and Current Remaining Performance Obligations

Remaining performance obligations (“RPO”) is defined as all future revenue under contract that has not yet been recognized as revenue. Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty that is due upon cancellation, and invoicing is not dependent on a future event such as the delivery of a specific new product or feature, or the achievement of contractual contingencies. Current RPO ("CRPO") represents RPO to be recognized over the next twelve months. Subscription CRPO represents CRPO associated with subscription-only RPO to be recognized over the next twelve months.

F-12

While the Company believes RPO, CRPO, and Subscription CRPO are leading indicators of revenue as they represent sales activity not yet recognized in revenue, they are not necessarily indicative of future revenue growth as they are influenced by several factors, including seasonality of contract renewal timing and average contract terms. The Company monitors RPO, CRPO, and Subscription CRPO to manage the business and evaluate performance. RPO increased due to several large, multi-year renewals, including one with one of our largest customers. CRPO and Subscription CRPO growth was due to new customer additions. The decline in CRPO and Subscription CRPO annual growth rates was primarily attributable to lower relative contribution of new customer additions in fiscal year 2023 compared to fiscal year 2022.

Based on the year-over-year decline in annual growth rates for these key metrics, the Company expects subscription revenue growth in fiscal year 2024 to be lower than rates of growth experienced in fiscal year 2023.

Additionally, recent lower revenue growth trends in Marketplace & Other could continue during fiscal year 2024 if recent macroeconomic conditions continue to negatively impact global advertising spend.

F-13

Results of Operations

A summary of selected financial information for each of the periods reported is presented below (dollars in thousands, except per share amounts):



	Year ended March 31,
						%
		2023		2022		Change
Revenues		$	596,583	$	528,657	13
Cost of revenue		170,084		147,427		15
Gross profit		426,499		381,230		12
Total operating expenses		552,299		446,768		24
Loss from operations		(125,800)		(65,538)		(92)
Total other income, net		6,946		30,463		NA
Net loss from continuing operations		$	(124,106)	$	(33,833)	(267)
Diluted loss per share		$	(1.87)	$	(0.50)	(277)

Revenues

The Company's revenues for each of the periods reported is presented below (dollars in thousands):



	Year ended March 31,
						%
		2023		2022		Change
Revenues:
Subscription		$	482,807	$	428,617	13
Marketplace and Other		113,776		100,040		14
Total revenues		$	596,583	$	528,657	13

Total revenues for the twelve months ended March 31, 2023 were $596.6 million, a $67.9 million or 12.8% increase compared to the same period a year ago. The increase was primarily due to Subscription revenue growth of $54.2 million, or 12.6%, primarily due to new logo deals and upsell to existing customers, and a $4.0 million increase in revenue stemming from a customer contract settlement. Marketplace and Other revenue growth was $13.7 million, or 13.7%, primarily due to Data Marketplace growth. On a geographic basis, U.S. revenue increased $60.5 million, or 12.2%. International revenue increased $7.5 million, or 22.7%. The differences in exchange rates in the current year compared to those in the prior year negatively impacted international revenue growth by approximately 9 percentage points.

Cost of Revenue and Gross Profit

The Company’s cost of revenue and gross profit for each of the periods reported is presented below (dollars in thousands):



	Year ended March 31,
								%
		2023			2022			Change
Cost of revenue		$	170,084		$	147,427		15
Gross profit		$	426,499		$	381,230		12
Gross margin (%)		71.5		%	72.1		%	(1)

Cost of revenue includes third-party direct costs including identity graph data, other data and cloud-based hosting costs, as well as costs of IT, security and product operations functions. Cost of revenue also includes amortization of acquisition-related intangibles.

F-14

Cost of revenue was $170.1 million for the twelve months ended March 31, 2023, a $22.7 million, or 15.4%, increase from the same period a year ago. Gross margins decreased to 71.5% compared to 72.1% in the prior year due to revenue increases offset by an increase in cost of revenue primarily from cloud infrastructure costs. U.S. gross margins decreased to 72.8% in the current year from 73.4% in the prior year. International gross margins increased to 53.6% from 52.2%.

Operating Expenses

The Company’s operating expenses for each of the periods reported is presented below (dollars in thousands):



	Year ended March 31,
						%
		2023		2022		Change
Operating expenses:
Research and development		$	189,195	$	157,935	20
Sales and marketing		202,437		182,763		11
General and administrative		125,351		104,591		20
Gains, losses and other items, net		35,316		1,479		2,288
Total operating expenses		$	552,299	$	446,768	24

Research and development (“R&D”) expense includes operating expenses for the Company’s engineering and product/project management functions supporting research, new development, and related product enhancement.

R&D expenses were $189.2 million for the twelve months ended March 31, 2023, an increase of $31.3 million, or 19.8% compared to the same period a year ago, and are 31.7% of total revenues compared to 29.9% in the same period a year ago. The increase is primarily due to stock-based compensation expense (increased $23.3 million), headcount costs (employee-related expenses increased $8.0 million), travel, entertainment and events costs (increased $3.3 million) and hosting expenses (increased $2.0 million), offset partially by a decrease in professional services (decreased $4.3 million). $10.5 million of the increase in stock-based compensation is due to the current year vesting acceleration of awards that would have otherwise vested over the subsequent six months to take advantage of cash tax savings opportunities.

Sales and marketing (“S&M”) expense includes operating expenses for the Company’s sales, marketing, and product marketing functions.

S&M expenses were $202.4 million for the twelve months ended March 31, 2023, an increase of $19.7 million, or 10.8%, compared to the same period a year ago, and are 33.9% of total revenues compared to 34.6% in the same period a year ago. The increase is primarily due to headcount costs (employee-related expenses increased $21.3 million), travel and entertainment costs (increased $3.9 million primarily due to higher levels of customer-related travel and events after the COVID-19 pandemic), advertising and events costs (increased $3.7 million), and stock-based compensation expense (increased $0.8 million), offset partially by a decrease in professional services (decreased $9.4 million) and administrative expenses (decreased $1.7 million).

F-15

General and administrative ("G&A") expense represents operating expenses for the Company's finance, human resources, legal, corporate IT, and other corporate administrative functions.

G&A expenses were $125.4 million for the twelve months ended March 31, 2023, an increase of $20.8 million, or 19.8% compared to the same period a year ago, and are 21.0% of total revenues compared to 19.8% in the same period a year ago. The increase is primarily due to stock-based compensation expense (increased $12.2 million) and transformation costs (increased $9.0 million), offset partially by a decrease in employee-related expenses of $1.6 million which reflects lower year-over-year incentive compensation costs. $4.6 million of the increase in stock-based compensation is due to the current year vesting acceleration of awards that would have otherwise vested over the subsequent six months to take advantage of cash tax savings opportunities. Transformation costs are third party costs incurred during the year associated with the assessment of strategic and operating plans, including the Company’s long-term location strategy, in response to recent macroeconomic conditions.

Gains, losses, and other items, net represents restructuring costs and other adjustments.

Gains, losses and other items, net was $35.3 million for the twelve months ended March 31, 2023, an increase of $33.8 million compared to the same period a year ago. The current year amount includes $27.5 million in lease impairments and lease restructuring related to a downsizing of our real estate footprint, and $7.8 million related to termination benefits for employees whose positions were eliminated. The prior year period included $1.0 million related to the early termination of a data provider agreement.

Loss from Operations and Operating Margin

Loss from operations was $125.8 million for the twelve months ended March 31, 2023 compared to $65.5 million in the same period a year ago. Operating margin was negative 21.1% compared to negative 12.4% for the twelve months ended March 31, 2023 and 2022, respectively. Margins were negatively impacted by operating expense growth of 24% relative to revenue growth of 13%. Operating expense growth was impacted by costs related to the downsizing of our real estate footprint, termination benefits for employees whose positions were eliminated, and the acceleration of stock-based compensation expenses outlined above.

Other Income and Income Taxes

Other income was $6.9 million for the twelve months ended March 31, 2023 compared to $30.5 million in the same period a year ago. The current year includes interest income of $12.0 million on invested cash balances, offset partially by $4.1 million of impairment of a strategic investment. The prior year amount included a $30.1 million gain related to a cash distribution from our retained profits interest in a previous disposition.

Other income primarily consists of interest income from invested cash balances and net foreign exchange transaction gains and losses as well as the strategic investment impairment in the current year.

Income tax expense was $5.3 million on a pretax loss of $118.9 million for the twelve months ended March 31, 2023, resulting in a negative 4% effective tax rate. This compares to a prior year income tax benefit of $1.2 million on pretax loss of $35.1 million, or a 4% effective tax rate. The current period tax expense reflects the impact of the capitalization of research and development expenditures in accordance with Internal Revenue Code ("IRC") Section 174, partially offset by the tax benefit from the vesting acceleration of stock-based awards and the $3.8 million release of certain state tax contingency reserves. During the twelve months ended March 31, 2022, the Company released $2.6 million in tax contingency reserves as a result of the expiration of statutes of limitation.

Discontinued Operations

Earnings from discontinued operations, net of tax, was $5.4 million for the twelve months ended March 31, 2023. During fiscal 2019, the Company completed the sale of its Acxiom Marketing Solutions ("AMS") business, and the business qualified for treatment as discontinued operations. Significant income taxes were incurred and paid on the gain from the sale of AMS. During fiscal 2023, the Company recovered certain previously paid state income taxes arising from the sale of AMS.

F-16

Capital Resources and Liquidity

The Company’s cash and cash equivalents are primarily located in the United States. At March 31, 2023, approximately $19.2 million of the total cash balance of $464.4 million, or approximately 4.1%, was located outside of the United States. The Company has no current plans to repatriate this cash to the United States.

Net accounts receivable balances were $157.4 million at March 31, 2023, an increase of $9.0 million, compared to $148.3 million at March 31, 2022. Days sales outstanding ("DSO"), a measurement of the time it takes to collect receivables, were 95 days at March 31, 2023, compared to 94 days at March 31, 2022. 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 Marketplace and Other 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, 2022, DSO at March 31, 2023 was negatively impacted by approximately 3 days by 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.

Working capital at March 31, 2023 totaled $539.7 million, a $91.5 million decrease when compared to $631.3 million at March 31, 2022. The decrease was primarily due to the $150.0 million use of cash for acquisition of treasury shares.

Management believes that the Company's existing available cash will be sufficient to meet the Company's working capital and capital expenditure requirements for the foreseeable future. However, in light of the risk of recession, the military conflict between Russia and Ukraine, cost increases, rising interest rates, capital markets volatility, bank failures and general inflationary pressures, our liquidity position may change due to the inability to collect from our customers, inability to raise new capital via issuance of equity or debt, and disruption in completing repayments or disbursements to our creditors. We have historically taken and may continue to take advantage of opportunities to generate additional liquidity through capital market transactions. These impacts have caused significant disruptions to the global financial markets, which could increase the cost of capital and adversely impact our ability to raise additional capital, which could negatively affect our liquidity in the future. The amount, nature, and timing of any capital market transactions will depend on our operating performance and other circumstances; our then-current commitments and obligations; the amount, nature, and timing of our capital requirements; and overall market conditions. If we are unable to raise funds as and when we need them, we may be forced to curtail our operations.

Cash Flows

The following table summarizes our cash flows for the periods reported (dollars in thousands):



	Year ended March 31,
	2023		2022

Net cash provided by operating activities	$	34,441	$	78,077
Net cash provided by (used in) investing activities	$	(28,999)	$	7,578
Net cash used in financing activities	$	(146,010)	$	(66,981)

Operating Activities

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

F-17

In the twelve months ended March 31, 2023, net cash provided by operating activities of $34.4 million resulted primarily from net loss adjusted for non-cash items of $55.9 million offset by net cash used in operating assets and liabilities of $21.4 million. Net cash used in operating assets and liabilities was primarily related to increases in accounts receivable of $12.1 million and accounts payable and other liabilities of $15.4 million. The change in accounts receivable is primarily due to revenue growth and the timing of cash receipts from clients. The change in accounts payable and other liabilities is primarily due to the payment of annual incentive compensation and the timing of payments to suppliers.

In the twelve months ended March 31, 2022, net cash provided by operating activities of $78.1 million resulted primarily from net loss adjusted for non-cash items of $50.3 million and net cash provided by operating assets and liabilities of $27.8 million. New cash provided by operating assets and liabilities was primarily related to a decrease in income taxes of $34.0 million primarily related to a $32.0 million Internal Revenue Service refund received related to fiscal 2020, an increase in other assets of $26.9 million, and an increase in accounts payable and other liabilities of $8.9 million, offset partially by an increase in accounts receivable of $38.6 million and an increase in deferred commissions of $8.0 million. The change in other assets was due to the acceleration of certain payments in fiscal 2020 for tax planning purposes. The change in accounts payable and other liabilities is primarily due to the payment of annual incentive compensation, 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 clients.

Investing Activities

Our primary investing activities have historically consisted of capital expenditures. Capital expenditures may vary from period to period due to the timing of the expansion of our operations, the addition of new headcount, new facilities, and acquisitions.

In the twelve months ended March 31, 2023, net cash used in investing activities of $29.0 million consisted of purchases of short-term investments of $28.2 million, capital expenditures of $4.7 million and purchases of strategic investments of $0.5 million, offset partially by proceeds from the sale of short-term investments of $3.0 million and the sale of strategic investments of $1.4 million.

In the twelve months ended March 31, 2022, net cash provided by investing activities of $7.6 million consisted of a $31.2 million distribution received from a retained profits interest in a previous disposition, offset partially by net cash paid for the final release of the DataFleets escrow of $8.7 million, the Diablo acquisition of $8.4 million, the acquisition of technology assets from Rakam of $2.0 million, and capital expenditures of $4.5 million.

Financing Activities

Our financing activities have consisted of acquisition of treasury stock, proceeds from our equity compensation plans, and shares repurchased for tax withholdings upon vesting of stock-based awards.

In the twelve months ended March 31, 2023, net cash used in financing activities was $146.0 million, consisting of the acquisition of treasury shares pursuant to the board of directors' approved stock repurchase plan of $150.0 million (6.1 million shares) and $2.3 million for shares repurchased for tax withholdings upon vesting of stock-based awards. These uses of cash were partially offset by proceeds of $6.3 million from the sale of common stock from our equity compensation plans.

In the twelve months ended March 31, 2022, net cash used in financing activities was $67.0 million, consisting of the acquisition of treasury shares pursuant to the board of directors' approved stock repurchase plan of $58.6 million (1.3 million shares), and $14.6 million for shares repurchased for tax withholdings upon vesting of stock-based awards. These uses of cash were partially offset by proceeds of $6.3 million from the sale of common stock from our equity compensation plans.

F-18

Common Stock Repurchase Program

On December 20, 2022, the Company's board of directors approved an amendment to the existing common stock repurchase program, which was initially adopted in 2011. The amendment authorized an additional $100.0 million in share repurchases, increasing the total amount authorized for repurchase under the common stock repurchase program to $1.1 billion. In addition, it extended the common stock repurchase program duration through December 31, 2024.

During the twelve months ended March 31, 2023, the Company repurchased 6.1 million shares of its common stock for $150.0 million under the modified common stock repurchase program. Through March 31, 2023, the Company had repurchased a total of 35.6 million shares of its common stock for $882.2 million under the program, leaving remaining capacity of $217.8 million.

Pursuant to the Inflation Reduction Act of 2022, share repurchases made after December 31, 2022 will be subject to a 1% excise tax. In determining the total taxable value of shares repurchased, a deduction is allowed for the fair market value of any newly issued shares during the fiscal year. We do not expect the excise tax to have a material impact on our consolidated financial statements.

Contractual Commitments

The following tables present the Company’s contractual cash obligations and purchase commitments at March 31, 2023 (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 $23.4 million as the Company is not able to predict the periods in which the payments will be made.


	For the years ending March 31,
	2024		2025		2026		2027		2028		Thereafter		Total
Operating leases	$	10,090	$	9,116	$	8,283	$	8,017	$	8,238	$	8,346	$	52,090

Future minimum payments as of March 31, 2023 related to restructuring plans as a result of the Company's exit from certain leased office facilities are (dollars in thousands): Fiscal 2024: $2,698; Fiscal 2025: $2,698; and Fiscal 2026: $1,799.


	For the years ending March 31,
	2024		2025		2026		2027		2028		Total
Purchase commitments	$	90,433	$	75,931	$	6,106	$	675	$	—	$	173,145

While the Company does not have any other material contractual commitments for capital expenditures, certain levels of investments in facilities and computer equipment continue to be necessary to support the growth of the business.

For a description of certain risks that could have an impact on results of operations or financial condition, see “Risk Factors” contained in Part I, Item 1A, of this Annual Report.

Recent Accounting Pronouncements

For information on recent accounting pronouncements, see “Accounting Pronouncements Adopted During the Current Year" and “Recent Accounting Pronouncements Not Yet Adopted” under Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements accompanying this report.

F-19

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
LiveRamp Holdings, Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of LiveRamp Holdings, Inc. and subsidiaries (the Company) as of March 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the years in the three-year period ended March 31, 2023, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of March 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2023, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are

F-20

being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the sufficiency of audit evidence over revenue

As discussed in Notes 1 and 2 to the consolidated financial statements, the Company recorded $596.6 million of total revenues for the year ended March 31, 2023, of which $482.8 million was subscription related, and $113.8 million was marketplace and other related.

We identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter. Evaluating the nature and extent of audit evidence obtained for new revenue contracts or amendments of existing contracts required subjective auditor judgment because of the non-standard nature of the Company’s revenue contracts.

The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over new or amended revenue contracts. We tested certain internal controls over the Company’s revenue recognition process, including controls over the Company’s assessment of the revenue recognition requirements for new or amended revenue contracts. We tested certain new or amended contracts by reading the underlying contracts and evaluating the Company’s assessment of revenue recognition requirements. We obtained external confirmation directly from certain of the Company’s customers and compared the terms and conditions relevant to the Company’s revenue recognition to the Company’s contracts with those customers. We assessed the recorded revenue by selecting a sample of transactions and comparing the amounts recognized for consistency with underlying documentation, including contracts with customers. In addition, we evaluated the overall sufficiency of audit evidence over revenue by assessing the results of procedures performed.

i KPMG LLP

We have served as the Company's auditor since 2003.

i Dallas, Texas

F-21

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

March 31,

2023

2022

ASSETS

Current assets:

Cash and cash equivalents

i 464,448

i 600,162

Short-term Investments

i 32,807

i 7,500

Trade accounts receivable, net

i 157,379

i 148,343

Refundable income taxes, net

i 28,897

i 30,354

Other current assets

i 31,028

i 29,475

Total current assets

i 714,559

i 815,834

Property and equipment, net of accumulated depreciation and amortization

i 7,085

i 11,531

Intangible assets, net

i 9,868

i 26,718

Goodwill

i 363,116

i 363,845

Deferred commissions, net

i 37,030

i 30,594

Other assets, net

i 41,045

i 85,214

i 1,172,703

i 1,333,736

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Trade accounts payable

i 86,568

i 83,197

Accrued payroll and related expenses

i 33,434

i 39,188

Other accrued expenses

i 35,736

i 46,067

Deferred revenue

i 19,091

i 16,114

Total current liabilities

i 174,829

i 184,566

Other liabilities

i 71,798

i 86,110

Commitments and contingencies (Note 13)

Stockholders' equity:

Preferred stock, $ i i 1.00 / par value (authorized i i 1 / million shares; issued i i 0 / shares at March 31, 2023 and 2022, respectively)

i —

Common stock, $ i i 0.10 / par value (authorized i i 200 / million shares; issued i 154.0 million and i 149.8 million shares at March 31, 2023 and 2022, respectively)

i 15,399

i 14,984

Additional paid-in capital

i 1,855,916

i 1,721,118

Retained earnings

i 1,302,291

i 1,420,993

Accumulated other comprehensive income

i 4,504

i 5,730

Treasury stock, at cost ( i 87.4 million and i 81.2 million shares at March 31, 2023 and 2022, respectively)

( i 2,252,034)

( i 2,099,765)

Total stockholders' equity

i 926,076

i 1,063,060

i 1,172,703

i 1,333,736

See accompanying notes to consolidated financial statements.

F-22

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

Year ended March 31,

2023

2022

2021

Revenues

i 596,583

i 528,657

i 443,026

Cost of revenue

i 170,084

i 147,427

i 144,004

Gross profit

i 426,499

i 381,230

i 299,022

Operating expenses:

Research and development

i 189,195

i 157,935

i 135,111

Sales and marketing

i 202,437

i 182,763

i 177,543

General and administrative

i 125,351

i 104,591

i 104,201

Gains, losses and other items, net

i 35,316

i 1,479

i 2,715

Total operating expenses

i 552,299

i 446,768

i 419,570

Loss from operations

( i 125,800)

( i 65,538)

( i 120,548)

Total other income (expense), net

i 6,946

i 30,463

( i 252)

Loss from continuing operations before income taxes

( i 118,854)

( i 35,075)

( i 120,800)

Income tax expense (benefit)

i 5,252

( i 1,242)

( i 30,532)

Net loss from continuing operations

( i 124,106)

( i 33,833)

( i 90,268)

Earnings from discontinued operations, net of tax

i 5,404

i —

Net loss

( i 118,702)

( i 33,833)

( i 90,268)

Basic earnings (loss) per share

Continuing operations

( i 1.87)

( i 0.50)

( i 1.36)

Discontinued operations

i 0.08

i —

Basic loss per share

( i 1.79)

( i 0.50)

( i 1.36)

Diluted earnings (loss) per share

Continuing operations

( i 1.87)

( i 0.50)

( i 1.36)

Discontinued operations

i 0.08

i —

Diluted loss per share

( i 1.79)

( i 0.50)

( i 1.36)

See accompanying notes to consolidated financial statements.

F-23

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Dollars in thousands)

Year ended March 31,

2023

2022

2021

Net loss

( i 118,702)

( i 33,833)

( i 90,268)

Other comprehensive income (loss):

Change in foreign currency translation adjustment

( i 1,226)

( i 1,792)

i 1,777

Comprehensive loss

( i 119,928)

( i 35,625)

( i 88,491)

See accompanying notes to consolidated financial statements.

F-24

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands)

Accumulated

Common Stock

Additional

other

Treasury Stock

Number

paid-in

Retained

comprehensive

Number

Total

of shares

Amount

Capital

earnings

income (loss)

of shares

Amount

Equity

Balances at March 31, 2020

i 143,938,753

i 14,394

i 1,496,565

i 1,545,094

i 5,745

( i 78,081,314)

( i 1,974,286)

i 1,087,512

Employee stock awards, benefit plans and other issuances

i 583,476

i 58

i 8,680

—

( i 182,730)

( i 9,920)

( i 1,182)

Non-cash stock-based compensation

i 21,736

i 2

i 84,394

—

i 84,396

Restricted stock units vested

i 2,186,763

i 219

( i 219)

—

i —

Liability-classified restricted stock units vested

i 1,084,237

i 108

i 40,652

—

i 40,760

Acquisition of treasury stock

—

( i 1,321,666)

( i 42,312)

Comprehensive income (loss):

Foreign currency translation

—

i 1,777

—

i 1,777

Net loss

—

( i 90,268)

—

( i 90,268)

Balances at March 31, 2021

i 147,814,965

i 14,781

i 1,630,072

i 1,454,826

i 7,522

( i 79,585,710)

( i 2,026,518)

i 1,080,683

Employee stock awards, benefit plans and other issuances

i 254,069

i 26

i 6,240

—

( i 290,675)

( i 14,626)

( i 8,360)

Non-cash stock-based compensation

i 52,459

i 5

i 71,175

—

i 71,180

Restricted stock units vested

i 1,131,489

i 113

( i 113)

—

i —

Acquisition-related restricted stock award

i 40,600

i 4

( i 4)

—

i —

Liability-classified restricted stock units vested

i 547,343

i 55

i 13,748

—

i 13,803

Acquisition of treasury stock

—

( i 1,329,211)

( i 58,621)

Comprehensive loss:

Foreign currency translation

—

( i 1,792)

—

( i 1,792)

Net loss

—

( i 33,833)

—

( i 33,833)

Balances at March 31, 2022

i 149,840,925

i 14,984

i 1,721,118

i 1,420,993

i 5,730

( i 81,205,596)

( i 2,099,765)

i 1,063,060

F-25

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands)

Accumulated

Common Stock

Additional

other

Treasury Stock

Number

paid-in

Retained

comprehensive

Number

Total

of shares

Amount

Capital

earnings

income (loss)

of shares

Amount

Equity

Employee stock awards, benefit plans and other issuances

i 399,146

i 40

i 6,219

—

( i 101,011)

( i 2,272)

i 3,987

Non-cash stock-based compensation

i 47,093

i 5

i 117,346

—

i 117,351

Restricted stock units vested

i 3,253,815

i 325

( i 325)

—

i —

Liability-classified restricted stock units vested

i 446,805

i 45

i 11,558

—

i 11,603

Acquisition of treasury stock

—

( i 6,066,230)

( i 149,997)

Comprehensive loss:

Foreign currency translation

—

( i 1,226)

—

( i 1,226)

Net loss

—

( i 118,702)

—

( i 118,702)

Balances at March 31, 2023

i 153,987,784

i 15,399

i 1,855,916

i 1,302,291

i 4,504

( i 87,372,837)

( i 2,252,034)

i 926,076

See accompanying notes to consolidated financial statements.

F-26

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

Year ended March 31,

2023

2022

2021

Cash flows from operating activities:

Net loss

( i 118,702)

( i 33,833)

( i 90,268)

Earnings from discontinued operations

( i 5,404)

i —

Non-cash operating activities:

Depreciation and amortization

i 20,787

i 24,248

i 27,741

Loss on disposal or impairment of assets

i 4,137

i 183

i 388

Gain on sale of strategic investments

( i 194)

i —

Lease-related restructuring charges

i 27,545

i —

Gain on distribution from retained profits interest

i —

( i 30,235)

i —

Provision for doubtful accounts

i 1,776

i 4,217

i 2,915

Deferred income taxes

i 115

( i 1,540)

( i 1,418)

Non-cash stock compensation expense

i 125,800

i 87,257

i 111,707

Changes in operating assets and liabilities:

Accounts receivable, net

( i 12,123)

( i 38,611)

( i 24,828)

Deferred commissions

( i 6,436)

( i 7,975)

( i 6,605)

Other assets

i 7,705

i 26,863

( i 18,772)

Accounts payable and other liabilities

( i 15,369)

i 8,850

( i 116)

Income taxes, net

i 596

i 33,969

( i 26,215)

Deferred revenue

i 4,208

i 4,684

i 4,911

Net cash provided by operating activities

i 34,441

i 78,077

( i 20,560)

Cash flows from investing activities:

Capital expenditures

( i 4,696)

( i 4,499)

( i 2,182)

Cash paid in acquisitions, net of cash received

i —

( i 19,107)

( i 76,012)

Distribution from retained profits interest

i —

i 31,184

i —

Purchases of investments

( i 28,197)

i —

( i 7,500)

Proceeds from investments

i 3,000

i —

Purchases of strategic investments

( i 500)

i —

( i 2,200)

Proceeds from sale of strategic investment

i 1,394

i —

Net cash provided by (used in) investing activities

( i 28,999)

i 7,578

( i 87,894)

Cash flows from financing activities:

Proceeds related to the issuance of common stock under stock and employee benefit plans

i 6,259

i 6,266

i 8,737

Shares repurchased for tax withholdings upon vesting of stock-based awards

( i 2,272)

( i 14,626)

( i 9,920)

Acquisition of treasury stock

( i 149,997)

( i 58,621)

( i 42,312)

Net cash used in financing activities

( i 146,010)

( i 66,981)

( i 43,495)

Net cash provided by (used in) continuing operations

( i 140,568)

i 18,674

( i 151,949)

F-27

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

Year ended March 31,

2023

2022

2021

Cash flows from discontinued operations:

From operating activities

i 5,404

i —

Net cash provided by discontinued operations

i 5,404

i —

Effect of exchange rate changes on cash

( i 550)

( i 199)

i 1,010

Net change in cash and cash equivalents

( i 135,714)

i 18,475

( i 150,939)

Cash and cash equivalents at beginning of period

i 600,162

i 581,687

i 732,626

Cash and cash equivalents at end of period

i 464,448

i 600,162

i 581,687

Supplemental cash flow information:

Cash paid (received) for income taxes, net - continuing operations

i 5,801

( i 32,916)

( i 2,911)

Cash (received) for income taxes, net - discontinued operations

( i 8,332)

i —

Cash paid for operating lease liabilities

i 8,243

i 10,108

i 10,883

Operating lease assets obtained in exchange for operating lease liabilities

i 69

i 56,182

i 372

Operating lease assets, and related lease liabilities, relinquished in lease terminations

( i 6,781)

i —

Purchases of property, plant and equipment remaining unpaid at period end

i 47

i 696

i —

See accompanying notes to consolidated financial statements.

F-28

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. i ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Description of Business -

Basis of Presentation and Principles of Consolidation -

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, after elimination of all significant intercompany accounts and transactions. We have prepared the accompanying consolidated financial statements in U.S. dollars in accordance with accounting principles generally accepted in the U.S. (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification and Updates (“ASC” and "ASU"), and we consider the various staff accounting bulletins and other applicable guidance issued by the United States Securities and Exchange Commission ("SEC"). Our fiscal year ends on March 31. References to fiscal 2023, for example, are to the fiscal year ended March 31, 2023.

Use of Estimates -

In preparing consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, we must make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates are used in determining, among other items, revenue recognition criteria, allowance for credit losses, operating lease assets and liabilities, including the incremental borrowing rate and terms and provision of each lease, the fair value of acquired assets and assumed liabilities, restructuring and impairment accruals, litigation and facilities lease loss accruals, stock-based compensation, and the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax positions. Actual results could differ from those estimates.

As of March 31, 2023, the impacts to the Company's business due to COVID-19, geopolitical developments and macroeconomic factors, such as rising interest rates, inflation, bank failures, changes in foreign currency exchange rates and supply chain disruptions, continue to evolve. As a result, many of the Company's estimates and assumptions, including the allowance for credit losses, consider macroeconomic factors in the market, which require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company's estimates may change materially in future periods.

F-29

Operating Segments -

The Company operates as i one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by our Chief Operating Decision Maker ("CODM"). Our Chief Executive Officer is our CODM. Our CODM evaluates our financial information and resources and assesses the performance of these resources on a consolidated basis. Since we operate as i one operating segment, all required financial segment information can be found in the consolidated financial statements.

i Earnings (Loss) per Share -

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period.

i A reconciliation of the numerator and denominator of basic and diluted loss per share is shown below (in thousands, except per share amounts):

Year ended March 31,

2023

2022

2021

Net loss from continuing operations

( i 124,106)

( i 33,833)

( i 90,268)

Earnings from discontinued operations, net of tax

i 5,404

i —

Net loss

( i 118,702)

( i 33,833)

( i 90,268)

Basic weighted-average shares outstanding

i 66,352

i 68,211

i 66,304

Dilutive effect of common stock options and restricted stock as computed under the treasury stock method (1)

i —

Diluted weighted-average shares outstanding

i 66,352

i 68,211

i 66,304

Net earnings (loss) per common share, basic and diluted

Continuing operations

( i 1.87)

( i 0.50)

( i 1.36)

Discontinued operations

i 0.08

i —

Net loss

( i 1.79)

( i 0.50)

( i 1.36)

(1) The number of common stock options and restricted stock units as computed under the treasury stock method that would have otherwise been dilutive but are excluded from the table above because their effect would have been anti-dilutive due to the net loss position of the Company was i 0.7 million, i 1.3 million, and i 2.7 million for the years ended March 31, 2023, 2022, and 2021, respectively.

i Restricted stock units that were outstanding during the years presented but were not included in the computation of diluted loss per share because their effect would have been anti-dilutive (other than due to the net loss position of the Company) are shown below (shares in thousands):

Year ended March 31,

2023

2022

2021

Number of shares underlying restricted stock units

i 2,376

i 686

i 90

F-30

Significant Accounting Policies

i Cash and Cash Equivalents -

The Company considers all highly-liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid money-market fund investments and U.S. Treasury securities with remaining maturities of three months or less at the date of purchase.

Investments -

Investments consist of U.S. Treasury securities and certificates of deposit. Securities having remaining maturities of more than three months at the date of purchase and less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. These investments are carried at fair market value, with unrealized gains and losses considered to be temporary in nature reported as accumulated other comprehensive income, a separate component of stockholders' equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. We did not recognize any gains or losses in fiscal 2023, 2022 or 2021.

Strategic Investments -

Strategic investments consist of non-controlling equity investments in privately held companies. The Company elected the measurement alternative for these investments without readily determinable fair values and for which the Company does not have the ability to exercise significant influence. These investments are accounted for under the cost method of accounting. Under the cost method of accounting, the non-marketable equity securities are carried at cost less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, which is recorded within the statement of operations. On a quarterly basis, the Company performs a qualitative assessment to evaluate whether the investment is impaired. If there are sufficient indicators that the fair value of the investment is less than the carrying value, the carrying value of the investment is reduced and an impairment is recorded in the consolidated statements of operations as other expense, net of tax. During the twelve months ended March 31, 2023, the Company recorded a $ i 4.0 million impairment of a strategic investment that is recorded in other expense in the consolidated statement of operations. There were i i no / impairment charges for the twelve months ended March 31, 2022 or 2021, respectively.

Revenue Recognition -

We determine revenue recognition through the following steps:

•Identification of the contract, or contracts, with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

•Recognition of revenue when, or as, the performance obligations are satisfied.

F-31

Identification of the contract

We consider the terms and conditions of the contract and our customary business practices when identifying our contracts under ASC 606. We determine we have a contract with a customer when the contract or contract modification is approved and the parties are committed to performing their respective obligations, we can identify each party's rights regarding the services to be transferred, we can identify the payment terms for the services, we have determined the contract has commercial substance, and we have determined that collection of at least some of the contract consideration is probable. At contract inception we evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the single or combined contract includes one or multiple performance obligations. We apply judgment in determining the customer's ability to pay, which is based on a variety of factors, including the customer's historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer.

Identification of the performance obligations

Determination of the transaction price

Allocation of the transaction price to the performance obligations in the contract

Recognition of revenue when, or as, the performance obligations are satisfied

Revenues are recognized when or as control of the promised services is transferred to customers. Subscription revenue is generally recognized ratably over the subscription period beginning on the date the services are made available to customers. Marketplace and Other revenue is typically transactional in nature, tied to a revenue share or volumes purchased. We report revenue from Data Marketplace and other similar transactions on a net basis because our performance obligation is to facilitate a transaction between data providers and data buyers, for which we earn a portion of the gross fee. Consequently, the portion of the gross amount billed to data buyers that is remitted to data providers is not reflected as revenues. We generate revenue from Services primarily from project fees paid by subscribers to our platform. Service projects are sold on an ad hoc basis as well as bundled with platform subscriptions. Services revenue is less than i 5% of total Company revenue.

F-32

Accounts Receivable

Accounts receivable include amounts billed to customers as well as unbilled amounts recognized in accordance with the Company’s revenue recognition policies. Unbilled amounts included in trade accounts receivable, net, which generally arise from the performance of services to customers in advance of billings, were $ i 16.7 million at March 31, 2023, and $ i 12.5 million at March 31, 2022.

Trade accounts receivable are presented net of allowances for credit losses, returns and credits based on the probability of future collections. The probability of future collections is based on specific considerations of historical loss patterns and an assessment of the continuation of such patterns based on past collection trends and known or anticipated future economic events that may impair collectability. Accounts receivable that are determined to be uncollectible are charged against the allowance for doubtful accounts. Indicators that there is no reasonable expectation of recovery include past due status greater than 360 days or bankruptcy of the debtor.

A summary of the activity of the allowance for credit losses, returns and credits was (dollars in thousands):

Year ended:

Balance at beginning of period

Additions charged to costs and expenses

Other changes

Bad debts written off, net of amounts recovered

Balance at end of period

March 31, 2021

i 7,575

i 2,915

i 108

( i 2,981)

i 7,617

i 7,617

i 4,217

( i 3)

( i 1,870)

i 9,961

i 9,961

i 1,776

i 10

( i 2,403)

i 9,344

Deferred Revenue

Deferred revenue consists of amounts billed in excess of revenue recognized. Deferred revenues are subsequently recorded as revenue when earned in accordance with the Company’s revenue recognition policies.

i Deferred Commissions, net -

The Company capitalizes incremental costs to acquire contracts and amortizes them on a straight-line basis over the expected period of benefit, which we have determined to be i four years. Net capitalized costs of $ i 6.8 million and $ i 8.0 million were recognized as a reduction of operating expense for the years ended March 31, 2023 and 2022, respectively. We did not recognize any impairment charges in fiscal 2023, 2022, or 2021.

i Property and Equipment -

Property and equipment are stated at cost. Depreciation and amortization are calculated on the straight-line method over the estimated useful lives of the assets as follows: leasehold improvements, i 2 - i 5 years; data processing equipment, i 2 - i 5 years, and office furniture and other equipment, i 3 - i 7 years.

Operating Leases -

Right-of-use ("ROU") assets represent the Company's right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right.

F-33

The Company determines if an arrangement is, or contains, a lease at inception, and whether lease and non-lease components are combined or not. Operating leases with a duration of one year or less are excluded from ROU assets and lease liabilities and related expense is recorded as incurred. ROU assets and lease liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company's leases is not readily determinable, the Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments. The Company uses judgment in determining its incremental borrowing rate, which includes selecting a yield curve based on a hypothetical credit rating. ROU assets also include any initial direct costs and any lease payments made prior to the lease commencement date and are reduced by any lease incentives received. ROU assets are included in other assets in the consolidated balance sheets. Short-term lease liabilities are included in other accrued expenses and long-term lease liabilities are included in other liabilities in the consolidated balance sheets. ROU assets are amortized on a straight-line basis as operating lease cost in the consolidated statements of operations.

Business Combinations –

Goodwill -

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business acquisitions accounted for using the acquisition method of accounting and is not amortized. Goodwill is measured and tested for impairment on an annual basis in the first quarter of the Company's fiscal year in accordance with ASC 350, Intangibles-Goodwill and Other, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Such events and changes may include significant changes in performance related to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in our business strategy.

Our test for goodwill impairment starts with a qualitative assessment to determine whether it is necessary to perform the quantitative goodwill impairment test. If qualitative factors indicate that the fair value of the reporting unit is more likely than not less than its carrying amount, then a quantitative goodwill impairment test is performed. For the purposes of impairment testing, we have determined that we have i three reporting units. We completed our annual impairment test during the first quarter of fiscal 2023 and assessed whether there were any triggering events quarterly. We did not recognize any goodwill impairment charges in fiscal 2023, 2022 or 2021.

Intangible Assets -

We amortize intangible assets with finite lives over their estimated useful lives and review them for impairment whenever an impairment indicator exists. We continually monitor events and changes in circumstances that could indicate carrying amounts of our long-lived assets, including our intangible assets, may not be recoverable. When such events or changes in circumstances occur, we assess recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on any excess of the carrying amount over the fair value of the assets. We did not recognize any intangible asset impairment charges in fiscal 2023, 2022 or 2021.

F-34

During fiscal 2023, our intangible assets were amortized over their estimated useful lives ranging from i two years to i six years. Amortization is based on the pattern in which the economic benefits of the intangible asset will be consumed or on a straight-line basis when the consumption pattern is not apparent. i The weighted average useful lives of our intangible assets were as follows:


						Weighted Average Useful Life (years)
Developed technology						i 3.9
Customer relationships						i 5.3
Publisher and Data Supply relationships						i 4.0

Impairment of Long-lived Assets -

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company considers factors such as operating losses, declining outlooks, and business conditions when evaluating the necessity for an impairment analysis. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Fair Value of Financial Instruments -

We apply the provisions of ASC 820, Fair Value Measurement, to our assets and liabilities that we are required to measure at fair value pursuant to other accounting standards. The additional disclosure regarding our fair value measurements is included in Note 18 - Fair Value of Financial Instruments.

Concentration of Credit Risk and Significant Customers -

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable.

The Company's cash and cash equivalents are held in federally insured financial institutions. Although the Company's deposits may exceed federally insured limits, management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

The Company has no significant off-balance sheet risk such as foreign exchange contracts, options contracts, or other hedging arrangements.

The Company’s trade accounts receivables are from a large number of customers. Accordingly, the Company’s credit risk is affected by general economic conditions.

At March 31, 2023, there were no customers that represented more than 10% of the trade accounts receivable balance. Our ten largest clients represented approximately i 29% of our revenues in fiscal year 2023. One client, The Interpublic Group of Companies, accounted for i 12% of our revenues in fiscal year 2023.

Income Taxes -

The Company and its domestic subsidiaries file a consolidated federal income tax return. The Company’s foreign subsidiaries file separate income tax returns in the countries in which their operations are based.

F-35

Foreign Currency -

The reporting currency of the Company is the U.S. dollar. The functional currency of our foreign operations generally is the applicable local currency for each foreign subsidiary. The balance sheets of the Company’s foreign subsidiaries are translated at period-end rates of exchange, and the statements of operations are translated at the average exchange rate for the period. The effects of foreign currency translation adjustments are included in accumulated other comprehensive income (loss) in the consolidated statements of equity and comprehensive income (loss). We reflect net foreign exchange transaction gains and losses, resulting from the conversion of the transaction currency to functional currency, as a component of foreign currency exchange gain (loss) in total other income (expense) in the consolidated statements of operations.

Advertising Expense -

Advertising costs are expensed as incurred. Advertising expense was approximately $ i 12.9 million, $ i 10.5 million, and $ i 7.0 million for the fiscal years ended March 31, 2023, 2022 and 2021, respectively. Advertising expense is included in operating expenses in the consolidated statements of operations.

Legal Contingencies -

We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant matter and assess our potential financial exposure. We accrue a liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable, and the amount can be reasonably estimated. Note 13 - Commitments and Contingencies provides additional information regarding certain of our legal contingencies.

Stock-Based Compensation -

The Company records stock-based compensation expense according to the provisions of ASC Topic 718, Compensation – Stock Compensation. ASC Topic 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations over the service period of the award based on their fair values. Under the provisions of ASC Topic 718, the Company determines the appropriate fair value model to be used for valuing stock-based payments and the amortization method for compensation cost.

F-36

The Company has stock option plans and equity compensation plans (collectively referred to as the “stock-based plans”) administered by the compensation committee of the board of directors (“compensation committee”) under which options and restricted stock units were outstanding as of March 31, 2023.

The Company’s equity compensation plan provides that all employees (employees, officers, directors, affiliates, independent contractors or consultants) are eligible to receive awards (grant of any option, stock appreciation right, restricted stock award, restricted stock unit award, performance award, performance share, performance unit, qualified performance-based award, or other stock unit award) under the plan with the terms and conditions applicable to an award set forth in applicable grant documents.

Incentive stock option awards granted under the stock-based plans cannot be granted with an exercise price less than i 100% of the per-share market value of the Company’s shares at the date of grant and have a maximum duration of i ten years from the date of grant. Board policy currently requires that non-qualified options also must be priced at or above i 100% of the fair market value of the common stock at the time of grant with a maximum duration of i ten years.

Restricted stock units may be issued under the equity compensation plan and represent the right to receive shares in the future by way of an award agreement that includes vesting provisions. Award agreements can further provide for forfeitures triggered by certain prohibited activities, such as breach of confidentiality. All restricted stock units are expensed over the vesting period and adjusted for forfeitures as incurred. The vesting of some restricted stock units is subject to the Company’s achievement of certain performance criteria, as well as the individual remaining employed by the Company for a period of years.

The Company receives income tax deductions because of the exercise of non-qualified stock options and the vesting of other stock-based awards. To the extent the income tax deductions differ from the corresponding stock-based compensation expense, such excess tax benefits and deficiencies are included as a component of income tax expense and reflected as an operating cash flow included in changes in operating assets and liabilities.

i Restructuring –

The Company records costs associated with employee terminations and other exit activity in accordance with ASC 420, Exit or Disposal Cost Obligations, depending on whether the costs relate to exit or disposal activities under the accounting standards, or whether they are other post-employment termination benefits. Under applicable accounting standards for exit or disposal costs, the Company records employee termination benefits as an operating expense when the benefit arrangement is communicated to the employee and no significant future services are required. Under the accounting standards related to post employment termination benefits, the Company records employee termination benefits when the termination benefits are probable and can be estimated. The Company recognizes the present value of facility lease termination obligations, net of estimated sublease income and other exit costs, when the Company has future payments with no future economic benefit or a commitment to pay the termination costs of a prior commitment. In future periods, the Company will record accretion expense to increase the liability to an amount equal to the estimated future cash payments necessary to exit the leases. This requires judgment and management estimation to determine the expected time frame for securing a subtenant, the amount of sublease income to be received and the appropriate discount rate to calculate the present value of the future cash flows. Should actual lease exit costs differ from estimates, the Company may be required to adjust the restructuring charge within gains, losses and other items, net in the consolidated statement of operations in the period any adjustment is recorded.

F-37

i i


Accounting Pronouncements Adopted During the Current Year -

Standard	Description	Date of Adoption	Effect on Financial Statements or Other Significant Matters
Accounting Standard Update (“ASU”) 2021-08 Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers	ASU 2021-08 requires companies to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with the revenue recognition guidance as if the acquirer had entered into the original contract at the same time, and on the same terms, as the acquiree. Generally, this will result in the acquirer recognizing contract assets and liabilities at the same amounts recorded by the acquiree as of the acquisition date. Under the previous standard, an acquirer generally recognizes such items at fair value on the acquisition date. This update is effective for fiscal years beginning after December 15, 2022 with early adoption permitted.	April 1, 2022	The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures.


Recent accounting pronouncements not yet adopted -

Standard	Description	Date of Adoption	Effect on Financial Statements or Other Significant Matters
There are no material accounting pronouncements applicable to the Company not yet adopted

F-38

2. i REVENUE FROM CONTRACTS WITH CUSTOMERS:

Disaggregation of Revenue

In the following table, revenue is disaggregated by primary geographical market and major service offerings (dollars in thousands):

Year ended March 31,

Primary Geographical Markets

2023

2022

2021

United States

i 556,219

i 495,765

i 415,976

Europe

i 32,210

i 26,373

i 22,515

Asia-Pacific ("APAC")

i 7,470

i 6,519

i 4,535

Other

i 684

i —

i 596,583

i 528,657

i 443,026

Major Offerings/Services

Subscription

i 482,807

i 428,617

i 356,597

Marketplace and Other

i 113,776

i 100,040

i 86,429

i 596,583

i 528,657

i 443,026

Transaction Price Allocated to the Remaining Performance Obligations

We have performance obligations associated with fixed commitments in customer contracts for future services that have not yet been recognized in our consolidated financial statements. The amount of fixed revenue not yet recognized was $ i 470.9 million as of March 31, 2023, of which $ i 337.6 million will be recognized over the next i twelve months. The Company expects to recognize revenue on substantially all of these remaining performance obligations by March 31, 2027.

3. i LEASES:

i Right-of-use assets and lease liabilities balances consist of the following (dollars in thousands):

Right-of-use assets included in other assets, net

i 24,604

i 59,459

Short-term lease liabilities included in other accrued expenses

i 9,929

i 8,984

Long-term lease liabilities included in other liabilities

i 37,243

i 52,241

Supplemental balance sheet information:

Weighted average remaining lease term

i 5.6 years

i 6.4 years

Weighted average discount rate

i 3.5

i 3.6

The Company leases its office facilities under non-cancellable operating leases that expire at various dates through fiscal 2030. Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property service fees, and other factors. Operating lease costs were $ i 11.6 million, $ i 11.6 million, and $ i 11.6 million for the twelve months ended March 31, 2023, 2022, and 2021, respectively.

F-39

During the twelve months ended March 31, 2023, the Company recorded $ i 24.6 million of right-of-use asset impairment charges and $ i 2.9 million of non-lease component restructuring charges that are included in gains, losses and other items, net in the consolidated statements of operations related to the exit from certain leased office facilities. Please refer to Note 4, Restructuring, Impairment and Other Charges for further details.

Future minimum payments under all operating leases (including operating leases with a duration of one year or less) as of March 31, 2023 are as follows (dollars in thousands):


	Amount
Fiscal 2024	$	i 10,090
Fiscal 2025	i 9,116
Fiscal 2026	i 8,283
Fiscal 2027	i 8,017
Fiscal 2028	i 8,238
Thereafter	i 8,346
Total undiscounted lease commitments	i 52,090
Less: Interest and short-term leases	i 4,918
Total discounted operating lease liabilities	$	i 47,172

Future minimum payments as of March 31, 2023 related to restructuring plans as a result of the Company's exit from certain leased office facilities (see Note 4) are as follows (dollars in thousands): Fiscal 2024: $ i 2,698; Fiscal 2025: $ i 2,698; and Fiscal 2026: $ i 1,799.

4. i RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES:

Restructuring activities result in various costs, including asset write-offs, right of use ("ROU") asset group impairments, exit charges including severance, contract termination fees, and decommissioning and other costs.

A reconciliation of the beginning and ending restructuring liabilities is shown below for the twelve months ended March 31, 2023, 2022 and 2021. The restructuring charges and adjustments are included in gains, losses and other items, net in the consolidated statements of operations. i The reserve balances are included in other accrued expenses and other liabilities in the consolidated balance sheets (dollars in thousands).

Employee-related
reserves

Lease
accruals

Total

Balances at March 31, 2020

i 450

i 6,243

i 6,693

Restructuring charges and adjustments

i 1,663

i 62

i 1,725

Payments

( i 1,288)

( i 2,387)

( i 3,675)

Balances at March 31, 2021

i 825

i 3,918

i 4,743

Restructuring charges and adjustments

i —

( i 19)

Payments

( i 778)

( i 872)

( i 1,650)

Balances at March 31, 2022

i 47

i 3,027

i 3,074

Restructuring charges and adjustments

i 7,792

i 2,946

i 10,738

Payments

( i 7,080)

( i 1,100)

( i 8,180)

Balances at March 31, 2023

i 759

i 4,873

i 5,632

Employee-related Restructuring Plans

During the twelve months ended March 31, 2023, the Company recorded a total of $ i 7.8 million in employee-related restructuring charges and adjustments. The expense included severance and other employee-related charges primarily in the United States. Of the $ i 7.8 million employee-related charges, $ i 0.8 million remained accrued as of March 31, 2023 and are expected to be paid out during fiscal 2024.

F-40

In fiscal 2021, the Company recorded a total of $ i 1.7 million in employee-related restructuring charges and adjustments. The expense included severance and other employee-related charges in the United States and Europe. Of the associate-related charges of $ i 1.7 million, final amounts were paid out during fiscal 2023.

Lease-related Impairments and Restructuring Plans

In fiscal 2023, the Company initiated a restructuring plan to lower its operating expenses by reducing its global real estate footprint. As part of this plan, we exited a total of i eight leased office spaces. Of that, i five were in the United States: i one located in Boston, i one located in Philadelphia, i one located in Phoenix, and i two floors of leased office space in San Francisco. The i three remaining spaces were in Europe: i one located in the Netherlands, i one floor of leased office space in London, England, and i one floor of leased office space in Paris, France.

Based on a comparison of undiscounted cash flows to the ROU asset group of each exited lease, the Company determined that each of the ROU asset groups were impaired, driven largely by the difference between the existing lease terms and rates on the Company’s leases and the expected sublease terms and rates available in the market. This resulted in an impairment charge of $ i 24.6 million which reflects the excess of the ROU asset group book value over its fair value, which was determined based on estimates of future discounted cash flows and is classified as Level 3 in the fair value hierarchy. The lease impairment charges included impairments of the operating lease ROU assets of $ i 20.5 million, and the associated furniture, equipment, and leasehold improvements of $ i 4.1 million. Additionally, the Company recorded $ i 2.9 million in lease-related restructuring charges and adjustments that covered other obligations related to the leased office space in San Francisco and Phoenix. Of the $ i 2.9 million lease-related charges, $ i 2.7 million remained accrued as of March 31, 2023 and will be satisfied over the remainder of the San Francisco and Phoenix properties' lease terms, which continues through April 2029.

In fiscal 2017, the Company made the strategic decision to exit and sub-lease a certain leased office facility under a staggered-exit plan. The full exit was completed in fiscal 2019. We intend to continue subleasing the facility to the extent possible. The liability will be satisfied over the remainder of the leased property's term, which continues through November 2025. Any future changes in the estimates or in the actual sublease income may require future adjustments to the liabilities, which would impact net earnings (loss) in the period the adjustment is recorded. Through March 31, 2023, the Company has recorded a total of $ i 7.3 million of restructuring charges and adjustments related to this lease. Of the amount accrued for this facility lease, $ i 2.1 million remained accrued at March 31, 2023.

Gains, Losses and Other Items, net

The following table summarizes the activity included in gains, losses and other items, net in the consolidated statements of operations for each of the periods presented (dollars in thousands):

Year ended March 31,

2023

2022

2021

Employee-related restructuring plan charges and adjustments

i 7,792

( i 19)

i 1,725

Lease-related restructuring plan charges and adjustments

i 2,946

i —

Early contract terminations

i —

i 1,042

i —

ROU asset group impairments

i 24,599

i —

Other

( i 21)

i 456

i 990

i 35,316

i 1,479

i 2,715

F-41

5. i ACQUISITIONS:

Rakam

On December 13, 2021, the Company completed the acquisition of certain technology assets owned by Rakam, Inc. ("Rakam") for approximately $ i 2.2 million in cash (including a holdback amount of $ i 0.2 million included in other accrued expenses in the consolidated balance sheet - see Note 11). The technology asset is a cloud-agnostic customer data analytics platform that is deployed direct in the client's data warehouse. The purchased technology has been embedded into the Company's platform, enabling us to provide a single, unified segmentation solution and enable our clients to generate real-time insights and create custom audiences wherever their data resides.

The Company concluded the acquired assets did not meet the definition of a business under ASU 2017-01, "Clarifying the Definition of a Business," and therefore has accounted for the acquisition as an asset acquisition. The purchased asset was recorded as a $ i 2.2 million developed technology intangible asset included in other assets, net in the consolidated balance sheet and is being amortized over a period of i three years based on its estimated useful life.

In connection with acquisition, the Company extended employment agreements and granted $ i 2.6 million of restricted stock units to two key Rakam employees that will be recorded as non-cash stock compensation (see Note 14). The restricted stock units vest over i four years and were not considered part of the asset purchase price as they require future service and continued employment by those individuals to vest.

Diablo

On April 21, 2021, the Company completed the acquisition of Diablo.ai, Inc. ("Diablo"), a first-party data resolution platform and graph builder, for approximately $ i 9.7 million in cash (including a holdback amount of $ i 1.2 million included in other accrued expenses in the consolidated balance sheet - see Note 11). The acquisition also included $ i 1.9 million of assumed restricted stock awards that are recorded as non-cash stock compensation over a period of i three years (see Note 14). Diablo's technology has been embedded into our unified platform and plays an integral role in our global identity capability. The Company omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition was not material. The results of operations for this acquisition are included in the Company's consolidated results beginning April 21, 2021.

i The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition (dollars in thousands):


	April 21, 2021
Assets acquired:
Cash	$	i 131
Goodwill	i 6,807
Intangible assets	i 3,500
Total assets acquired	i 10,438
Deferred income taxes	( i 505)
Accounts payable and accrued expenses	( i 65)
Net assets acquired	i 9,868
Less:
Cash acquired	( i 131)
Net purchase price allocated	i 9,737
Less:
Cash held back	( i 1,200)
Net cash paid in acquisition	i 8,537

F-42

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill and is primarily attributed to the development of future technology and products. The goodwill balance is not deductible for U.S. income tax purposes. The amount allocated to intangible assets in the table is developed technology with a useful life of i three years.

DataFleets

On February 17, 2021, the Company acquired DataFleets, Ltd. ("DataFleets"), a cloud data platform that enables data silos to be unified without moving data or compromising privacy. This acquisition expands LiveRamp's data protection capabilities to unlock greater data access and control for its customers. In addition, the deal opens up new use cases as well as new markets for distributed data collaboration. The Company has included the financial results of DataFleets in the consolidated financial statements as of February 17, 2021. i The acquisition date fair value of the consideration for DataFleets was approximately $ i 67.2 million, which consisted of the following (dollars in thousands): /


Cash, net of $ i 2.1 million cash acquired	i 58,264
Restricted cash held in escrow	i 8,900
Total fair value of consideration transferred	$	i 67,164

On the acquisition date, the Company delivered $ i 8.9 million of cash to an escrow agent according to the terms of the purchase agreement. The principal escrow was owned by the Company until the funds were delivered to the DataFleets sellers in the fourth quarter of fiscal 2022. All interest and earnings on the principal escrow amount remained the property of the Company.

The total fair value of replacement stock options issued was $ i 2.9 million for future services and is being expensed over the future requisite service periods.

In connection with the DataFleets acquisition, the Company agreed to pay $ i 18.1 million to certain key employees (see Note 14). The consideration holdback is payable in i three equal, annual increments, based on the anniversary dates of the acquisition, and is payable in shares of Company common stock. The number of shares to be issued annually will vary based on the market price of the shares on the date of issuance. The consideration holdback is not part of the purchase price, as vesting is dependent on continued employment of the key employees. It will be recorded as non-cash stock-based compensation expense over the i three-year earning period.

F-43

The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition (dollars in thousands):


	February 17, 2021
Assets acquired:
Cash	$	i 2,099
Goodwill	i 56,436
Intangible assets	i 11,400
Other current and noncurrent assets	i 1,119
Total assets acquired	i 71,054
Deferred income taxes	( i 1,716)
Accounts payable and accrued expenses	( i 75)
Net assets acquired	i 69,263
Less:
Cash acquired	( i 2,099)
Net purchase price allocated	i 67,164
Less:
Restricted cash held in escrow	( i 8,900)
Net cash paid in acquisition	$	i 58,264

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill and is primarily attributed to expectations to the development of future technology. The goodwill balance is not deductible for U.S. income tax purposes.

The amounts allocated to intangible assets in the table above included developed technology and customer relationships/trade name. Intangible assets are being amortized on a straight-line basis over the estimated useful lives. i The following table presents the components of intangible assets acquired and their estimated useful lives as of the acquisition date (dollars in thousands):

Useful life

Fair value

(in years)

Developed technology

i 11,000

i 4

Customer relationships/trade names

i 400

i 2

Total intangible assets

i 11,400

The Company has omitted pro forma disclosures related to this acquisition date as the pro forma effect of this acquisition is not material.

Acuity Data

On July 16, 2020, the Company completed the acquisition of Acuity Data ("Acuity"), a team of global retail and consumer packaged goods ("CPG") experts, for approximately $ i 2.9 million in cash. The acquisition also included a i three-year performance plan having a maximum potential attainment of $ i 5.1 million that would be recorded as non-cash stock-based compensation expense if achieved. The acquisition strengthens the retail analytics capabilities of our data collaboration platform by enabling better reporting, insights, and collaboration for retailers and CPG companies, bridging the gap between trade and media by bringing consumers' digital signals and retail transaction data together in a privacy-conscious manner.

F-44

The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition (dollars in thousands):


	July 16, 2020
Assets acquired:
Cash	$	i 184
Trade accounts receivable	i 156
Goodwill	i 2,011
Intangible assets	i 1,100
Other current and noncurrent assets	i 43
Total assets acquired	i 3,494
Deferred income taxes	( i 288)
Accounts payable and accrued expenses	( i 89)
Net assets acquired	i 3,117
Less:
Cash acquired	( i 184)
Net cash paid	$	i 2,933

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill and is primarily attributed to the development of future technology and products, development of future customer relationships, and the Acuity assembled workforce. The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition is not material.

6. i DISCONTINUED OPERATIONS:

Acxiom Marketing Solutions ("AMS") business

During fiscal 2019, the Company completed the sale of its Acxiom Marketing Solutions ("AMS") business, and the business qualified for treatment as discontinued operations. Significant income taxes were incurred and paid on the gain from the sale of AMS. During fiscal 2023, the Company recovered $ i 5.4 million, net of tax and fees, of certain previously paid state income taxes arising from the sale of AMS.

7. i OTHER CURRENT AND NONCURRENT ASSETS:

i Other current assets consist of the following (dollars in thousands):

Prepaid expenses and other

i 18,918

i 13,947

Assets of non-qualified retirement plan

i 12,110

i 15,528

Other current assets

i 31,028

i 29,475

F-45

i Other noncurrent assets consist of the following (dollars in thousands):

Long-term prepaid revenue share

i 9,659

i 13,468

Right-of-use assets (see Note 3)

i 24,604

i 59,459

Deferred tax asset

i 1,253

i 1,224

Deposits

i 3,452

i 4,486

Strategic investments

i 1,600

i 5,700

Other miscellaneous noncurrent assets

i 477

i 877

Other assets, net

i 41,045

i 85,214

During the twelve months ended March 31, 2023, the Company became aware of a pending sale and the proposed value of the transaction related to one of our strategic investments. As a result, the Company recorded a $ i 4.0 million impairment that is recorded in other expense in the consolidated statement of operations.

In conjunction with the July 2015 disposition of our former IT outsourcing business, we retained a profits interest previously recognized at $ i 0.7 million within miscellaneous noncurrent assets at March 31, 2021. In the twelve months ended March 31, 2022, the Company recorded a $ i 30.5 million gain included in total other income in the consolidated statement of operations related to a $ i 31.2 million cash distribution received from the settlement of this retained profits interest.

8. i PROPERTY AND EQUIPMENT:

i Property and equipment is summarized as follows (dollars in thousands):

Leasehold improvements

i 25,262

i 28,224

Data processing equipment

i 6,537

i 7,001

Office furniture and other equipment

i 7,594

i 9,776

i 39,393

i 45,001

Less accumulated depreciation and amortization

i 32,308

i 33,470

Property and equipment, net of accumulated depreciation and amortization

i 7,085

i 11,531

Depreciation expense on property and equipment was $ i 4.0 million, $ i 5.4 million and $ i 8.9 million for the twelve months ended March 31, 2023, 2022 and 2021, respectively.

During the twelve months ended March 31, 2023, the Company recorded $ i 4.1 million of impairment charges related to the exit from certain leased office facilities that are included in gains, losses and other items, net in the consolidated statements of operations. There were i i no / impairment charges recorded during the twelve months ended March 31, 2022 and 2021.

F-46

9. i GOODWILL:

Changes in goodwill for the twelve months ended March 31, 2023 and 2022 were as follows (dollars in thousands):


	Total
Balance at March 31, 2021	$	i 357,446
Acquisition of Diablo	i 7,012
Change in foreign currency translation adjustment	( i 613)
Balance at March 31, 2022	$	i 363,845
Purchase price accounting adjustment related to acquisition of Diablo	( i 205)
Change in foreign currency translation adjustment	( i 524)
Balance at March 31, 2023	$	i 363,116

Goodwill by geography as of March 31, 2023 was:


	Total
U.S.	$	i 360,155
APAC	i 2,961
Balance at March 31, 2023	$	i 363,116

10. i INTANGIBLE ASSETS:

The amounts allocated to intangible assets from acquisitions include developed technology, customer relationships, trade names, and publisher and data supply relationships. i The following table shows the amortization activity of intangible assets (dollars in thousands):

Developed technology, gross

i 72,095

i 84,146

Accumulated amortization

( i 63,658)

( i 67,980)

Net developed technology

i 8,437

i 16,166

Customer relationship/trade name, gross

i 34,384

i 43,490

Accumulated amortization

( i 33,953)

( i 40,582)

Net customer/trade name

i 431

i 2,908

Publisher/data supply relationships, gross

i 16,000

i 39,800

Accumulated amortization

( i 15,000)

( i 32,156)

Net publisher/data supply relationships

i 1,000

i 7,644

Total intangible assets, gross

i 122,479

i 167,436

Total accumulated amortization

( i 112,611)

( i 140,718)

Total intangible assets, net

i 9,868

i 26,718

Total amortization expense related to intangible assets was $ i 16.8 million, $ i 18.7 million and $ i 18.0 million for the twelve months ended March 31, 2023, 2022 and 2021, respectively.

F-47

The following table presents the estimated future amortization expenses related to intangible assets.


Fiscal Year:
2024	$	i 6,847
2025	i 3,021


	$	i 9,868

11. i OTHER ACCRUED EXPENSES:

i Other accrued expenses consist of the following (dollars in thousands):

Liabilities of non-qualified retirement plan

i 12,110

i 15,528

Short-term lease liabilities (see Note 3)

i 9,929

i 8,984

DPM acquisition consideration holdback (see Note 14)

i —

i 6,092

Acuity performance earnout liability (see Note 14)

i 1,535

i 2,420

DataFleets consideration holdback (see Note 14)

i 324

i 756

Diablo consideration holdback

i —

i 1,200

Rakam consideration holdback

i 223

Other miscellaneous accrued expenses

i 11,615

i 10,864

Other accrued expenses

i 35,736

i 46,067

12. i OTHER LIABILITIES:

Other liabilities consist of the following (dollars in thousands):

Uncertain tax positions

i 23,427

i 24,374

Long-term lease liabilities (see Note 3)

i 37,243

i 52,241

Lease restructuring accruals

i 5,713

i 3,619

Deferred tax liabilities

i 298

i 305

Other

i 5,117

i 5,571

Other liabilities

i 71,798

i 86,110

F-48

13. i COMMITMENTS AND CONTINGENCIES:

Legal Matters

The Company is involved in various claims and legal proceedings that arise in the ordinary course of business. Management routinely assesses the likelihood of adverse judgments or outcomes to these matters, as well as ranges of probable losses, to the extent losses are reasonably estimable. The Company records accruals for these matters to the extent that management concludes a loss is probable and the financial impact, should an adverse outcome occur, is reasonably estimable. These accruals are adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertinent to a particular matter. These accruals are reflected in the Company’s consolidated financial statements. In management’s opinion, the Company has made appropriate and adequate accruals for these matters, and management believes the probability of a material loss beyond the amounts accrued to be remote. However, the ultimate liability for these matters is uncertain, and if accruals are not adequate, an adverse outcome could have a material effect on the Company’s consolidated financial condition or results of operations. The Company maintains insurance coverage above certain limits.

Commitments

The following table presents the Company’s purchase commitments at March 31, 2023. Purchase commitments primarily include contractual commitments for the purchase of data, hosting services, software-as-a-service arrangements and leasehold improvements. The table does not include the future payment of liabilities related to uncertain tax positions of $ i 23.4 million as the Company is not able to predict the periods in which the payments will be made (dollars in thousands):


	For the years ending March 31,
	2024		2025		2026		2027		Total
Purchase commitments	$	i 90,433	$	i 75,931	$	i 6,106	$	i 675	$	i 173,145

14. i STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION:

The Company has authorized i 200 million shares of $ i 0.10 par value common stock and i 1 million shares of $ i 1.00 par value preferred stock. The board of directors of the Company may designate the relative rights and preferences of the preferred stock when and if issued. Such rights and preferences could include liquidation preferences, redemption rights, voting rights and dividends, and the shares could be issued in multiple series with different rights and preferences. There has not been any preferred stock activity in the periods presented.

On August 29, 2011, the board of directors adopted a common stock repurchase program. That program was subsequently modified and expanded, most recently on December 20, 2022 to authorize an additional $ i 100.0 million in share repurchases and extend the term of the existing common stock repurchase program. Under the modified common stock repurchase program, the Company may purchase up to $ i 1.1 billion of its common stock through the period ending December 31, 2024. During the fiscal year ended March 31, 2023, the Company repurchased i 6.1 million shares of its common stock for $ i 150.0 million under the stock repurchase program. During the fiscal year ended March 31, 2022, the Company repurchased i 1.3 million shares of its common stock for $ i 58.6 million under the stock repurchase program. During the fiscal year ended March 31, 2021, the Company repurchased i 1.3 million shares of its common stock for $ i 42.3 million under the stock repurchase program. Through March 31, 2023, the Company has repurchased i 35.6 million shares of its common stock for $ i 882.2 million, leaving remaining capacity of $ i 217.8 million under the stock repurchase program.

The Company paid i no dividends on its common stock for any of the years reported.

F-49

Stock-based Compensation Plans

The Company has stock option, equity compensation, and stock purchase plans for which a total of i 45.0 million shares of the Company’s common stock have been reserved for issuance since the inception of the plans. At March 31, 2023, there were a total of i 5.4 million shares available for future grants under the plans, of which i 1.1 million shares relate to the Company's qualified employee stock purchase plan.

During fiscal 2023, the board of directors voted to amend the Amended and Restated 2005 Equity Compensation Plan (the "2005 Plan") to increase the number of shares available under the plan by i 4.5 million shares. The amendment received shareholder approval at the August 9, 2022 annual shareholders' meeting (the "2022 Annual Meeting"), bringing the plan shares from i 37.9 million shares at June 30, 2022 to i 42.4 million shares beginning in the quarter ended September 30, 2022. The board of directors also voted to amend the LiveRamp Holdings, Inc. Employee Stock Purchase Plan (the "ESPP") to increase the number of shares available under the plan by i 1.0 million shares. The amendment received shareholder approval at the 2022 Annual Meeting bringing the ESPP shares from i 0.4 million shares at June 30, 2022 to i 1.4 million shares beginning in the quarter ended September 30, 2022. These actions bring the total number of shares reserved for issuance since inception of all plans from i 39.5 million shares at June 30, 2022 to i 45.0 million shares beginning in the quarter ended September 30, 2022.

During fiscal 2023, the board of directors voted to further amend the Company's 2005 Plan. The 2005 Plan was amended to provide that, in the event of a participant’s retirement on or after age 65 with at least i five years of service, awards held by the participant at retirement will continue to vest in accordance with their terms. This amendment to the 2005 Plan impacted stock-based compensation expense by accelerating $ i 5.4 million of expense recognition into fiscal 2023 that would have otherwise been recognized over future reporting periods through the quarter ending December 31, 2025.

Stock-based Compensation Expense

i The Company's stock-based compensation activity for the twelve months ended March 31, 2023, 2022, and 2021, by award type, was (dollars in thousands):

Year ended March 31,

2023

2022

2021

Stock options

i 968

i 1,935

i 2,308

Restricted stock units

i 111,943

i 56,008

i 78,164

Diablo restricted stock awards

i 1,126

i 794

i —

Data Plus Math ("DPM") acquisition consideration holdback

i 2,031

i 8,122

i 8,030

Pacific Data Partners assumed performance plan

i —

i 9,101

i 18,388

Acuity performance plan

i 815

i 1,912

i 2,208

DataFleets acquisition consideration holdback

i 5,611

i 6,043

i 755

Employee stock purchase plan

i 2,051

i 1,803

i 704

Directors stock-based compensation

i 1,255

i 1,539

i 1,150

Total non-cash stock-based compensation included in the consolidated statements of operations

i 125,800

i 87,257

i 111,707

Less expense related to liability-based equity awards

( i 8,449)

( i 16,077)

( i 27,311)

Total non-cash stock-based compensation included in the consolidated statements of equity

i 117,351

i 71,180

i 84,396

F-50

The effect of stock-based compensation expense on income, by financial statement line item, was (dollars in thousands):

Year ended March 31,

2023

2022

2021

Cost of revenue

i 6,317

i 4,111

i 5,300

Research and development

i 55,407

i 32,112

i 38,960

Sales and marketing

i 29,429

i 28,586

i 40,401

General and administrative

i 34,647

i 22,448

i 27,046

Total non-cash stock-based compensation included in the consolidated statements of operations

i 125,800

i 87,257

i 111,707

In March 2023 and March 2021, the Company accelerated the vesting of certain time-vesting restricted stock units that would have otherwise vested over the following six months, respectively, to take advantage of cash tax savings opportunities.

•In March 2023, this resulted in the vesting of time-vesting restricted stock units covering approximately i 1.5 million shares of common stock. The Company recognized $ i 22.6 million of compensation costs related to the accelerated vesting of these units, which is included in loss from operations in the consolidated statement of operations. Of the $ i 22.6 million compensation costs, $ i 0.4 million represented incremental compensation cost due to the modification and $ i 22.1 million represented accelerated original grant date fair value compensation cost.

•In March 2021, this resulted in the vesting of time-vesting and performance-based restricted stock units covering approximately i 0.7 million shares of common stock. The Company recognized $ i 21.4 million of compensation costs related to the accelerated vesting of these units, which is included in loss from operations in the consolidated statement of operations. Of the $ i 21.4 million compensation costs, $ i 8.4 million represented incremental compensation cost due to the modification and $ i 13.0 million represented accelerated original grant date fair value compensation cost.

i The following table provides the expected future expense for all of the Company's outstanding equity awards at March 31, 2023, by award type.

For the years ending March 31,

2024

2025

2026

Total

Stock options

i 583

i 125

i —

i 708

Restricted stock units

i 49,579

i 59,676

i 15,304

i 124,559

Acuity performance plan

i 165

i —

i 165

DataFleets acquisition consideration holdback

i 2,266

i —

i 2,266

Employee stock purchase plan

i 361

i —

i 361

Expected future expense

i 52,954

i 59,801

i 15,304

i 128,059

Stock Options Activity

In fiscal 2022, in connection with the acquisition of DataFleets, the Company replaced all unvested outstanding stock options held by DataFleets employees immediately prior to the acquisition with options to acquire shares of LiveRamp common stock having substantially the same terms and conditions as were applicable under the original options. In total, the Company issued i 42,154 replacement options at a weighted-average exercise price of $ i 0.70 per share. The acquisition-date fair value of the replacement stock options was $ i 2.9 million and was determined using a binomial lattice model. All of the replacement options require post-combination service. As a result, the $ i 2.9 million acquisition-date fair value is considered future compensation cost and will be recognized as stock-based compensation cost over the remaining service period of the replacement options.

F-51

i Stock option activity for the twelve months ended March 31, 2023 was:

Weighted average

remaining

Aggregate

Number of

exercise price

contractual term

Intrinsic value

per share

(In years)

(In thousands)

Outstanding at March 31, 2022

i 730,004

i 16.28

Exercised

( i 200,559)

i 11.06

i 3,681

Forfeited or canceled

( i 4,534)

i 2.48

Outstanding at March 31, 2023

i 524,911

i 18.39

i 1.6

i 1,857

Exercisable at March 31, 2023

i 514,870

i 18.73

i 1.5

i 1,646

The aggregate intrinsic value for options exercised in fiscal 2023, 2022, and 2021 was $ i 3.7 million, $ i 4.3 million, and $ i 23.2 million, respectively. The aggregate intrinsic value at period end represents the total pre-tax intrinsic value (the difference between LiveRamp’s closing stock price on the last trading day of the period and the exercise price for each in-the-money option) that would have been received by the option holders had they exercised their options on March 31, 2023. This amount changes based upon changes in the fair market value of LiveRamp’s common stock.

A summary of stock options outstanding and exercisable as of March 31, 2023 was:

Options outstanding

Options exercisable

Range of

Weighted average

exercise price

Options

remaining

exercise price

Options

exercise price

per share

outstanding

contractual life

per share

exercisable

per share

i —

—

i 9.99

i 40,973

i 5.7 years

i 0.98

i 30,932

i 1.01

i 10.00

—

i 19.99

i 182,603

i 2.1 years

i 17.49

i 182,603

i 17.49

i 20.00

—

i 24.99

i 301,335

i 0.8 years

i 21.31

i 301,335

i 21.31

i 524,911

i 1.6 years

i 18.39

i 514,870

i 18.73

Diablo Restricted Stock Awards

During fiscal 2022, in connection with the acquisition of Diablo, the Company replaced the unvested outstanding restricted stock shares held by a Diablo employee immediately prior to the acquisition with restricted shares of LiveRamp common stock having substantially the same terms and conditions as were applicable under the original restricted stock agreement. The conversion calculation resulted in issuance of i 40,600 replacement restricted stock shares having an acquisition-date fair value of $ i 1.9 million. The restricted shares vest subject to post-combination service requirements. As a result, the acquisition-date fair value is considered future compensation cost and was recognized as stock-based compensation cost over the vesting period of the awards.

Changes in the Company's restricted stock for the twelve months ended March 31, 2023 was:

Weighted average

fair value per

Weighted average

Number

share at grant

remaining contractual

of shares

date

term (in years)

Unvested restricted stock awards at March 31, 2022

i 24,766

i 47.29

Diablo replacement restricted stock award

i —

i 47.29

Vested

( i 24,766)

i 47.29

Unvested restricted stock awards at March 31, 2023

i —

n/a

F-52

The total fair value of restricted stock awards vested during the twelve months ended March 31, 2023 and 2022 was $ i 0.6 million and $ i 0.8 million, respectively, and is measured as the quoted market price of the Company's common stock on the vesting date for the number of shares vested.

Restricted Stock Unit Activity

Time-vesting restricted stock units ("RSUs") -

During the twelve months ended March 31, 2023, the Company granted time-vesting RSUs covering i 4,352,078 shares of common stock and having a fair value at the date of grant of $ i 107.2 million. The RSUs granted in the current year primarily vest over i three years. Grant date fair value of these units is equal to the quoted market price for the shares on the date of grant.

During fiscal 2022, the Company granted time-vesting RSUs covering i 3,037,440 shares of common stock and having a fair value at the date of grant of $ i 143.4 million. The RSUs granted in fiscal 2022 primarily vest over i four years. Grant date fair value of these units is equal to the quoted market price for the shares on the date of grant. Included in the RSUs granted in fiscal 2022 were units related to the Diablo and Rakam acquisitions (see Note 5). Following the closing of the Diablo acquisition, the Company granted new awards of RSUs covering i 98,442 shares of common stock, and having a grant date fair value of $ i 4.7 million, to select employees to induce them to accept employment with the Company. In connection with the Rakam acquisition, the Company extended employment agreements and granted new awards of RSUs, covering i 55,927 shares of common stock having a grant date fair value of $ i 2.6 million, to two key Rakam employees.

During fiscal 2021, the Company granted time-vesting RSUs covering i 2,228,445 shares of common stock and having a fair value at the date of grant of $ i 99.8 million. The RSUs granted in fiscal 2021 primarily vest over i four years. Grant date fair value of these units is equal to the quoted market price for the shares on the date of grant. Included in the RSUs granted in fiscal 2021 were units related to the DataFleets acquisition. Following the closing of the DataFleets acquisition, the Company granted new awards of RSUs covering i 193,595 shares of common stock, and having a grant date fair value of $ i 13.5 million, to select employees and contractors to induce them to accept employment with the Company.

i RSU activity for the twelve months ended March 31, 2023 was:

Weighted-average

fair value per

Weighted-average

Number

share at grant

remaining contractual

of shares

date

term (in years)

Outstanding at March 31, 2022

i 4,176,682

i 47.00

i 2.85

Granted

i 4,352,078

i 24.63

Vested

( i 1,614,868)

i 46.68

Units vested under the Company's March 2023 acceleration plan

( i 1,508,196)

i 30.42

Forfeited or canceled

( i 1,395,937)

i 37.07

Outstanding at March 31, 2023

i 4,009,759

i 32.57

i 2.20

The total fair value of RSUs vested during the twelve months ended March 31, 2023, 2022, and 2021 was $ i 71.5 million, $ i 30.3 million, and $ i 126.9 million, respectively, and is measured as the quoted market price of the Company's common stock on the vesting date for the number of shares vested.

Performance-based restricted stock units ("PSUs") -

Fiscal 2023 plan:

During the twelve months ended March 31, 2023, the Company granted PSUs covering i 406,501 shares of common stock having a fair value at the date of grant of $ i 10.0 million. The grants were made under two separate performance plans.

F-53

Under the total shareholder return ("TSR") performance plan, units covering i 121,951 shares of common stock were granted having a fair value at the date of grant of $ i 3.7 million, determined using a Monte Carlo simulation model. The units vest subject to attainment of market conditions established by the compensation committee of the board of directors (“compensation committee”) and continuous employment through the vesting date. The units may vest in a number of shares from i 0% to i 200% of the award, based on the TSR of LiveRamp common stock compared to the TSR of the Russell 2000 market index for the period from April 1, 2022 to March 31, 2025.

Under the operating metrics performance plan, units covering i 284,550 shares of common stock were granted having a fair value at the date of grant of $ i 6.3 million, which was equal to the quoted market price for the shares on the date of grant. The units vest subject to attainment of performance criteria established by the compensation committee and continuous employment through the vesting date. The units may vest in a number of shares from i 0% to i 200% of the award, at the end of the performance period, based on the average attainment of annual revenue growth and EBITDA margin targets for fiscal years 2023, 2024, and 2025. To the extent that shares are earned, i 50% vest immediately and i 50% vest on the i one-year anniversary of attainment approval.

Fiscal 2022 plans:

During fiscal 2022, the Company granted PSUs covering i 249,152 shares of common stock having a fair value at the date of grant of $ i 12.6 million. The grants were made under three separate performance plans.

Under a special incentive performance plan, units covering i 36,425 shares of common stock were granted having a fair value at the date of grant of $ i 1.7 million, which was equal to the quoted market price for the shares on the date of grant. The units vest subject to attainment of performance criteria established by the compensation committee and continuous employment through the vesting date. The units may vest in a number of shares from i 0% to i 100% of the award, based on the attainment of key productivity metrics for the period beginning at the date of grant and continuing through December 31, 2023. Attainment will be measured and vesting evaluated on a quarterly basis beginning on January 1, 2023 and continuing through the end of the performance period. Through March 31, 2023, measurements have resulted in an accumulated i 63% achievement, or i 22,948 total earned units, under this plan. At March 31, 2023, there remains a maximum potential of i 13,477 additional units eligible for attainment under the plan.

Under the fiscal 2022 TSR performance plan, units covering i 63,815 shares of common stock were granted having a fair value at the date of grant of $ i 3.8 million, determined using a Monte Carlo simulation model. The units vest subject to attainment of market conditions established by the compensation committee and continuous employment through the vesting date. The units may vest in a number of shares from i 0% to i 200% of the award, based on the TSR of LiveRamp common stock compared to the TSR of the Russell 2000 market index for the period from April 1, 2021 to March 31, 2024.

Under the fiscal 2022 operating metrics performance plan, units covering i 148,912 shares of common stock were granted having a fair value at the date of grant of $ i 7.1 million, which was equal to the quoted market price for the shares on the date of grant. The units vest subject to attainment of performance criteria established by the compensation committee and continuous employment through the vesting date. The units may vest in a number of shares from i 0% to i 200% of the award, based on the attainment of trailing twelve-month revenue growth and EBITDA margin targets for the period from April 1, 2021 to March 31, 2024. Performance will be measured and vesting evaluated on a quarterly basis beginning with the period ending June 30, 2022 and continuing through the end of the performance period. To the extent that shares are earned in a given quarter, i 50% vest immediately and i 50% vest on the i one-year anniversary of attainment approval, except that all earned but unvested shares will vest fully at the end of the measurement period. Through March 31, 2023, metrics measurements have resulted in an accumulated i 50% achievement, or i 58,312 total earned units, under this plan. As of March 31, 2023, there remains a maximum potential of i 174,930 additional units eligible for attainment under the plan. Quarterly measurements of attainment will continue through March 31, 2024.

Fiscal 2021 plans:

During the fiscal 2021, the Company granted PSUs covering i 246,524 shares of common stock having a fair value at the date of grant of $ i 10.7 million. The grants were made under two separate performance plans.

F-54

Under the fiscal 2021 TSR performance plan, units covering i 73,950 shares of common stock were granted having a fair value at the date of grant of $ i 4.2 million, determined using a Monte Carlo simulation model. The units vest subject to attainment of market conditions established by the compensation committee and continuous employment through the vesting date. The units may vest in a number of shares from i 0% to i 200% of the award, based on the total shareholder return of LiveRamp common stock compared to total shareholder return of the Russell 2000 market index for the period from April 1, 2020 to March 31, 2023. Remaining units under the fiscal 2021 TSR PSU plan, covering i 59,634 shares of common stock, reached maturity of their relevant performance period at March 31, 2023. The final performance measurement resulted in i 0% attainment. The units are expected to be cancelled in the first quarter of fiscal 2024 upon compensation committee approval.

Under the fiscal 2021 operating metrics performance plan, units covering i 172,574 shares of common stock were granted having a fair value at the date of grant of $ i 6.5 million, which was equal to the quoted market price for the shares on the date of grant. The units vest subject to attainment of performance criteria established by the compensation committee and continuous employment through the vesting date. The units may vest in a number of shares from i 0% to i 200% of the award, based on the attainment of trailing twelve-month revenue growth and EBITDA margin targets for the period from April 1, 2020 to March 31, 2023. The operating metrics plan performance was measured and vesting evaluated on a quarterly basis beginning with the period ended June 30, 2021 and continuing through the end of the performance period. Through the March 31, 2023 final measurement date, an accumulated i 50% achievement, or i 71,666 total units were earned under this plan. Of the earned amount, one-half vested immediately, while the remaining one-half vests i one year later. The remaining i 69,588 units are expected to be cancelled in the first quarter of fiscal 2024 upon compensation committee approval.

i PSU activity for the twelve months ended March 31, 2023 was:

Weighted-average

fair value per

Weighted-average

Number

share at grant

remaining contractual

of shares

date

term (in years)

Outstanding at March 31, 2022

i 584,468

i 51.26

i 1.01

Granted

i 406,501

i 24.65

Vested

( i 134,671)

i 45.96

Forfeited or canceled

( i 146,709)

i 61.20

Outstanding at March 31, 2023

i 709,589

i 34.97

i 1.38

The total fair value of PSUs vested in the twelve months ended March 31, 2023, 2022 and 2021 was $ i 3.0 million, $ i 6.7 million and $ i 8.4 million, respectively, and is measured as the quoted market price of the Company’s common stock on the vesting date for the number of shares vested.

Other Stock Compensation Activity

Acquisition-related Performance Plan

As part of the Company's fiscal 2021 acquisition of Acuity, the Company will be obligated to pay up to an additional $ i 5.1 million, settled in a variable number of shares of Company common stock, and subject to certain performance conditions and continued employment of each participant. Performance will be measured and vesting evaluated in three annual increments on the anniversary of the closing date (which date may be changed by the board of directors to an earlier date). Through March 31, 2023, the Company has recognized a total of $ i 4.9 million as stock-based compensation expense related to the Acuity performance earnout plan. At March 31, 2023, the recognized, but unpaid, balance in other accrued expense in the consolidated balance sheet was $ i 1.5 million. The final annual settlement of $ i 1.7 million is expected to occur in the second quarter of fiscal 2024.

F-55

Acquisition-related Consideration Holdback

As part of the Company's fiscal 2021 acquisition of DataFleets, $ i 18.1 million of the acquisition consideration otherwise payable with respect to shares of DataFleets common stock held by certain key employees was subject to holdback by the Company pursuant to agreements with those employees (each, a "Holdback Agreement"). Each Holdback Agreement specifies that the consideration holdback will vest in i three equal annual increments on the anniversary of the closing date (which date may be changed by the board of directors to an earlier date). Vesting is subject to the DataFleets key employees' continued employment through each annual vesting date and will be settled in shares of Company common stock. Through March 31, 2023, the Company has recognized a total of $ i 12.4 million as stock-based compensation expense related to the DataFleets consideration holdback. At March 31, 2023, the recognized, but unpaid, balance related to the DataFleets consideration holdback in other accrued expenses in the consolidated balance sheet was $ i 0.3 million. The final annual settlement of $ i 2.6 million is expected to occur in the fourth quarter of fiscal 2024.

As part of the Company's fiscal 2020 acquisition of Data Plus Math ("DPM"), $ i 24.4 million of the acquisition consideration otherwise payable with respect to shares of DPM common stock held by certain key employees was subject to holdback by the Company pursuant to agreements with those employees (each, a "Holdback Agreement"). Each Holdback Agreement specifies that the consideration holdback will vest in i three equal annual increments on the anniversary of the closing date (which date may be changed by the board of directors to an earlier date). Vesting is subject to the DPM key employees' continued employment through each annual vesting date and will be settled in shares of Company common stock. The final annual settlement was paid during the first quarter of fiscal 2023.

Qualified Employee Stock Purchase Plan ("ESPP")

Under the Company's ESPP, all eligible employees are permitted to authorize payroll deductions of up to the applicable ESPP and statutory limits to purchase shares of common stock. The ESPP provides for offering periods that are generally every i six months. ESPP purchases generally occur on May 31st and November 30th each year. At each purchase date, employees are able to purchase shares at i 85% of the lower of (1) the closing market price per share of common stock on the employee's enrollment into the applicable offering period and (2) the closing market price per share of common stock on the purchase date.

The Company calculates the fair value of the ESPP purchase right using the Black-Scholes option-pricing model. Stock-based compensation expense associated with the ESPP was $ i 2.1 million, $ i 1.8 million and $ i 1.0 million for the twelve months ended March 31, 2023, 2022, and 2021, respectively.

During the twelve months ended March 31, 2023, i 197,255 shares of common stock were purchased under the ESPP at a weighted-average price of $ i 20.38 per share, resulting in cash proceeds of $ i 4.0 million over the relevant offering periods. During the twelve months ended March 31, 2022, i 103,447 shares of common stock were purchased under the ESPP at a weighted-average price of $ i 41.44 per share, resulting in cash proceeds of $ i 4.3 million over the relevant offering periods. During the twelve months ended March 31, 2021, i 44,980 shares of common stock were purchased under the ESPP at a weighted-average price of $ i 41.53 per share, resulting in cash proceeds of $ i 1.9 million over the relevant offering periods.

At March 31, 2023, there was approximately $ i 0.4 million of total unrecognized stock-based compensation expense related to the ESPP, which is expected to be recognized on a straight-line basis over the remaining term of the current offering period.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income accumulated balances of $ i 4,504 and $ i 5,730 at March 31, 2023 and March 31, 2022, respectively, reflect accumulated foreign currency translation adjustments.

F-56

15. i INCOME TAX:

i Total income tax expense (benefit) was allocated as follows (dollars in thousands):


	Year ended March 31,
	2023		2022		2021
Continuing operations	$	i 5,252	$	( i 1,242)	$	( i 30,532)
Discontinued operations	( i 7,070)		i —		i —


	$	( i 1,818)	$	( i 1,242)	$	( i 30,532)

Income tax expense (benefit) attributable to loss from continuing operations consists of (dollars in thousands):

Year ended March 31,

2023

2022

2021

Current:

U.S. Federal

i 6,325

( i 1,227)

( i 28,060)

Non-U.S.

i 1,086

i 305

i 17

State

( i 2,274)

i 1,220

( i 1,071)

i 5,137

i 298

( i 29,114)

Deferred:

U.S. Federal

i 155

( i 895)

( i 1,205)

Non-U.S.

( i 83)

( i 608)

( i 44)

State

i 43

( i 37)

( i 169)

i 115

( i 1,540)

( i 1,418)

Total

i 5,252

( i 1,242)

( i 30,532)

i Income (loss) before income tax attributable to U.S. and non-U.S. continuing operations consists of (dollars in thousands):


	Year ended March 31,
	2023		2022		2021
U.S.	$	( i 122,994)	$	( i 37,415)	$	( i 122,257)
Non-U.S.	i 4,140		i 2,340		i 1,457
Total	$	( i 118,854)	$	( i 35,075)	$	( i 120,800)

Income (loss) before income taxes, as shown above, is based on the location of the entity to which such income (losses) are attributable. However, since such income (losses) may be subject to taxation in more than one country, the income tax expense (benefit) shown above as U.S. or non-U.S. may not correspond to the income (loss) shown above.

F-57

Below is a reconciliation of expected income tax benefit, computed by applying the U.S. federal statutory rate of 21.0% to loss before income taxes, to actual income tax expense (benefit) from continuing operations (dollars in thousands):

Year ended March 31,

2023

2022

2021

Computed expected income tax benefit

( i 24,959)

( i 7,366)

( i 25,368)

Increase (reduction) in income taxes resulting from:

State income taxes, net of federal benefit

( i 2,440)

i 691

( i 979)

Research and other tax credits

( i 4,363)

( i 3,107)

( i 4,635)

Nondeductible expenses

i 669

i 673

i 1,104

Stock-based compensation

i 3,486

i 5,576

( i 2,024)

Non-U.S. subsidiaries taxed at other rates

i 491

( i 364)

i 194

Adjustment to valuation allowances

i 33,197

i 2,520

i 2,230

Other, net

( i 829)

i 135

( i 1,054)

i 5,252

( i 1,242)

( i 30,532)

On March 27, 2020, the U.S. enacted The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act included several significant changes and clarifications to existing tax law, including changes to the treatment of net operating losses (“NOLs”). Under the CARES Act, NOLs arising in tax years beginning after December 31, 2017, and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of the loss. The Company carried back its fiscal 2021 NOL, resulting in an expected refund of approximately $ i 28 million, which is included in Refundable income taxes, net on the consolidated balance sheets. The Company also carried back its fiscal 2020 NOL, resulting in a refund of approximately $ i 33 million, which was received in fiscal 2022.

F-58

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2023 and 2022 are presented below (dollars in thousands).

Year ended March 31,

2023

2022

Deferred tax assets:

Accrued expenses

i 5,287

i 5,682

Lease liabilities

i 11,613

i 14,090

Net operating loss carryforwards

i 22,504

i 25,737

Stock-based compensation

i 3,335

i 8,022

Nonqualified deferred compensation

i 2,797

i 3,119

Property and equipment

i 585

i 496

Tax credit carryforwards

i 7,779

i 7,588

Capitalized research and development

i 26,357

i 385

Other

i 253

i 1,351

Total deferred tax assets

i 80,510

i 66,470

Less valuation allowance

( i 61,152)

( i 37,399)

Net deferred tax assets

i 19,358

i 29,071

Deferred tax liabilities:

Prepaid expenses

( i 2,411)

( i 2,296)

Right-of-use assets

( i 6,011)

( i 13,691)

Intangible assets

( i 829)

( i 4,603)

Deferred commissions

( i 9,153)

( i 7,562)

Total deferred tax liabilities

( i 18,404)

( i 28,152)

Net deferred tax assets

i 954

i 919

At March 31, 2023, the Company has U.S. state net operating loss carryforwards of approximately $ i 118.1 million, of which $ i 16.6 million will not expire and the remainder will expire in various amounts and will completely expire if not used by 2043. The Company has foreign net operating loss carryforwards of approximately $ i 89.8 million. Of this amount, $ i 79.4 million will not expire. The remainder expires in various amounts and will completely expire if not used by 2031. The Company has U.S. state credit carryforwards of $ i 9.8 million, of which $ i 8.8 million will not expire and the remainder will expire in various amounts and will completely expire if not used by 2037.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization of the Company’s net deferred tax assets is dependent upon its generation of sufficient taxable income of the proper character in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences and the use of net operating loss and credit carryforwards.

Based upon the weight of available evidence, including the Company’s history of losses from continuing operations, management believes that it is not more likely than not the Company will realize the benefits of its deductible temporary differences and net operating loss and credit carryforwards. Accordingly, the Company has established a full valuation allowance against its net U.S. federal and state deferred tax assets as of March 31, 2023 and 2022, respectively.

Based upon the Company's history of losses in certain non-U.S. jurisdictions, the Company has not recorded a benefit for current foreign losses in these jurisdictions. In addition, management believes it is not more likely than not the Company will realize the benefits of certain foreign net operating loss carryforwards and has established valuation allowances in the amount of $ i 20.8 million against deferred tax assets in such jurisdictions. No valuation allowance has been established against deferred tax assets in non-U.S. jurisdictions in which historical profits and forecasted continuing profits exist.

F-59

The current year increase in the valuation allowance is primarily attributable to the impact of the capitalization of research and development expenditures in accordance with IRC Section 174, as modified by the Tax Cuts and Jobs Act of 2017.

i The following table sets forth changes in the total gross unrecognized tax benefits for the fiscal years ended March 31, 2023, 2022 and 2021 (dollars in thousands):

Year ended March 31,

2023

2022

2021

Balance at beginning of period

i 23,817

i 25,026

i 23,400

Increases related to prior year tax positions

i 93

i 411

i —

Decreases related to prior year tax positions

( i 522)

i —

( i 139)

Increases related to current year tax positions

i 2,229

i 990

i 1,765

Settlements with taxing authorities

( i 166)

i —

Lapse of statute of limitations

( i 3,827)

( i 2,610)

i —

Balance at end of period

i 21,624

i 23,817

i 25,026

Gross unrecognized tax benefits as of March 31, 2023 was $ i 21.6 million, of which $ i 18.6 million would reduce the Company’s effective tax rate in future periods if and when realized. The Company reports accrued interest and penalties related to unrecognized tax benefits in income tax expense. The combined amount of accrued interest and penalties related to tax positions on tax returns was approximately $ i 4.8 million as of March 31, 2023. Accrued interest and penalties increased by $ i 0.5 million during fiscal 2023. The Company does not anticipate a material reduction of unrecognized tax benefits within the next 12 months.

The Company files a consolidated U.S. federal income tax return and tax returns in various state and local jurisdictions. The Company’s subsidiaries also file tax returns in various foreign jurisdictions in which they operate. In the U.S., the statute of limitations for Internal Revenue Service examinations remains open for the Company’s federal income tax returns for fiscal years after 2015. The Company’s federal income tax return for fiscal year 2019 is currently under Internal Revenue Service examination. The status of other U.S. state and foreign tax examinations varies by jurisdiction. The Company does not anticipate any material adjustments to its consolidated financial statements resulting from tax examinations currently in progress.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”). Under the Inflation Reduction Act, share repurchases made after December 31, 2022 will be subject to a 1% excise tax. In determining the total taxable value of shares repurchased, a deduction is allowed for the fair market value of any newly issued shares during the fiscal year. The excise tax and other corporate income tax changes included in the Inflation Reduction Act are not expected to have a material impact on our consolidated financial statements.

16. i RETIREMENT PLANS:

The Company has a qualified 401(k) retirement savings plan that covers substantially all U.S. employees. The Company also offers a supplemental non-qualified deferred compensation plan (“SNQDC Plan”) for certain highly-compensated employees. The Company matches i 100% of the first i 6% of each participating employee's annual aggregate contributions. The Company may also contribute additional amounts to the plans at the discretion of the board of directors.

Company contributions for the above plans amounted to approximately $ i 11.6 million, $ i 10.1 million, and $ i 9.4 million in fiscal years 2023, 2022, and 2021, respectively. Included in both other current assets and other accrued liabilities are the assets and liabilities of the SNQDC Plan in the amount of $ i i 12.1 / million and $ i i 15.5 / million at March 31, 2023 and 2022, respectively.

F-60

17. i FOREIGN OPERATIONS:

The Company attributes revenue to each geographic region based on the location of the Company’s operations. i The following table shows financial information by geographic area (dollars in thousands):

Year ended March 31,

Revenue

2023

2022

2021

United States

i 556,219

i 495,765

i 415,976

Foreign

Europe

i 32,210

i 26,373

i 22,515

APAC

i 7,470

i 6,519

i 4,535

Other

i 684

i —

All Foreign

i 40,364

i 32,892

i 27,050

i 596,583

i 528,657

i 443,026

Long-lived assets excluding financial instruments (dollars in thousands):

March 31,

2023

2022

United States

i 452,555

i 509,014

Foreign

Europe

i 1,643

i 4,174

APAC

i 3,946

i 4,714

All Foreign

i 5,589

i 8,888

i 458,144

i 517,902

18. i FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS:

The Company measures certain financial assets at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

F-61

The following table details the fair value measurements within the fair value hierarchy of the Company's financial assets and liabilities at March 31, 2023 and March 31, 2022 that are measured at fair value on a recurring basis (dollars in thousands):

Cash and Cash Equivalents

Short-Term Investments

Other Current Assets

Total

Cash

i 22,603

i —

i 22,603

Level 1:

Money market funds

i 439,853

i —

i 439,853

Assets of non-qualified retirement plan

i —

i 12,110

U.S. Treasury securities

i 1,992

i 25,307

i —

i 27,299

Certificates of deposit

i —

i 7,500

i —

i 7,500

Total

i 464,448

i 32,807

i 12,110

i 509,365