What changed in LiveRamp Holdings, Inc.'s 10-K — 2022 vs 2023
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Paragraph-level year-over-year comparison of LiveRamp Holdings, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.
+243 added−398 removedSource: 10-K (2023-05-24) vs 10-K (2022-05-24)
Top changes in LiveRamp Holdings, Inc.'s 2023 10-K
243 paragraphs added · 398 removed · 75 edited across 6 sections
- Item 1. Business+152 / −301 · 2 edited
- Item 1A. Risk Factors+73 / −80 · 56 edited
- Item 5. Market for Registrant's Common Equity+10 / −9 · 9 edited
- Item 7A. Quantitative and Qualitative Disclosures About Market Risk+5 / −5 · 5 edited
- Item 2. Properties+2 / −2 · 2 edited
Item 1. Business
Business — how the company describes what it does
2 edited+150 added−299 removed0 unchanged
Item 1. Business
Business — how the company describes what it does
2 edited+150 added−299 removed0 unchanged
2022 filing
2023 filing
Biggest changeLiveRamp is a Delaware corporation headquartered in San Francisco, California. Our common stock is listed on the New York Stock Exchange under the symbol “RAMP.” We serve a global client base from locations in the United States, Europe, and the Asia-Pacific (“APAC”) region.
Biggest changeOur common stock is listed on the New York Stock Exchange under the symbol “RAMP.” We serve a global client base from locations in the United States, Europe, and the Asia-Pacific (“APAC”) region.
Our direct client list includes many of the world’s largest and best-known brands across most major industry verticals, including but not limited to financial, insurance and investment services, retail, automotive, telecommunications, high tech, consumer packaged goods, healthcare, travel, entertainment, non-profit, and government.
Our direct client list includes many of the world’s best-known and most innovative brands across most major industry verticals, including but not limited to financial, insurance and investment services, retail, automotive, telecommunications, high tech, consumer packaged goods, healthcare, travel, entertainment and non-profit.
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AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) March 31, March 31, 2022 2021 ASSETS Current assets: Cash and cash equivalents $ 600,162 $ 572,787 Restricted cash — 8,900 Trade accounts receivable, net 148,343 114,284 Refundable income taxes 30,354 65,692 Other current assets 36,975 64,052 Total current assets 815,834 825,715 Property and equipment, net of accumulated depreciation and amortization 11,531 11,957 Intangible assets, net 26,718 39,730 Goodwill 363,845 357,446 Deferred commissions, net 30,594 22,619 Other assets, net 85,214 30,854 $ 1,333,736 $ 1,288,321 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 83,197 $ 39,955 Accrued payroll and related expenses 39,188 46,438 Other accrued expenses 46,067 58,353 Acquisition escrow payable — 8,900 Deferred revenue 16,114 11,603 Total current liabilities 184,566 165,249 Other liabilities 86,110 42,389 Commitments and contingencies (Note 13) Stockholders' equity: Preferred stock, $1.00 par value (authorized 1 million shares; issued 0 shares at March 31, 2022 and 2021, respectively) — — Common stock, $0.10 par value (authorized 200 million shares; issued 149.8 million and 147.8 million shares at March 31, 2022 and 2021, respectively) 14,984 14,781 Additional paid-in capital 1,721,118 1,630,072 Retained earnings 1,420,993 1,454,826 Accumulated other comprehensive income 5,730 7,522 Treasury stock, at cost (81.2 million and 79.6 million shares at March 31, 2022 and 2021, respectively) (2,099,765) (2,026,518) Total stockholders' equity 1,063,060 1,080,683 $ 1,333,736 $ 1,288,321 See accompanying notes to consolidated financial statements.
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Item 1. Business LiveRamp Holdings, Inc. ("LiveRamp", "we", "us", or the "Company") is a global technology company that helps companies build enduring brand and business value by collaborating responsibly with data.
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AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) For the twelve months ended March 31, 2022 2021 2020 Revenues $ 528,657 $ 443,026 380,572 Cost of revenue 147,427 144,004 152,704 Gross profit 381,230 299,022 227,868 Operating expenses: Research and development 157,935 135,111 105,981 Sales and marketing 182,763 177,543 188,905 General and administrative 104,591 104,201 108,903 Gains, losses and other items, net 1,479 2,715 5,001 Total operating expenses 446,768 419,570 408,790 Loss from operations (65,538) (120,548) (180,922) Total other income (expense), net 30,463 (252) 15,385 Loss before income taxes (35,075) (120,800) (165,537) Income tax benefit (1,242) (30,532) (40,276) Net loss from continuing operations (33,833) (90,268) (125,261) Earnings from discontinued operations, net of tax — — 750 Net loss $ (33,833) $ (90,268) $ (124,511) Basic earnings (loss) per share Continuing operations $ (0.50) $ (1.36) $ (1.85) Discontinued operations — — 0.01 Basic loss per share $ (0.50) $ (1.36) $ (1.84) Diluted earnings (loss) per share Continuing operations $ (0.50) $ (1.36) $ (1.85) Discontinued operations — — 0.01 Diluted loss per share $ (0.50) $ (1.36) $ (1.84) See accompanying notes to consolidated financial statements.
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A groundbreaking leader in consumer privacy, data ethics and foundational identity, LiveRamp is setting a new standard for building a connected customer view with unmatched clarity and context while protecting brand and consumer trust. Our best-in-class enterprise platform enables data collaboration, where companies can share first-party consumer data with trusted business partners securely and in a privacy conscious manner.
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F-20 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Dollars in thousands) For the twelve months ended March 31, 2022 2021 2020 Net loss (33,833) (90,268) (124,511) Other comprehensive income (loss): Change in foreign currency translation adjustment (1,792) 1,777 (2,056) Comprehensive income (loss) (35,625) (88,491) (126,567) See accompanying notes to consolidated financial statements. F-21 LIVERAMP HOLDINGS, INC.
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We offer flexibility to collaborate wherever data lives to support a wide range of data collaboration use cases—within organizations, between brands, and across our global network of premier partners.
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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, 2019 141,865,888 $ 14,187 $ 1,406,813 $ 1,669,605 $ 7,801 (73,167,892) $ (1,767,574) $ 1,330,832 Employee stock awards, benefit plans and other issuances 266,011 27 4,709 — — (537,694) (24,522) (19,786) Non-cash stock-based compensation 71,211 7 65,212 — — — — 65,219 Restricted stock units vested 1,342,337 134 (134) — — — — — Liability-classified restricted stock units vested 393,306 39 17,665 — — — — 17,704 Acquisition-related replacement stock options — — 2,300 — — — — 2,300 Acquisition of treasury stock — — — — — (4,375,728) (182,190) (182,190) Comprehensive loss: Foreign currency translation — — — — (2,056) — — (2,056) Net loss — — — (124,511) — — — (124,511) Balances at March 31, 2020 143,938,753 $ 14,394 $ 1,496,565 $ 1,545,094 $ 5,745 (78,081,314) $ (1,974,286) $ 1,087,512 Employee stock awards, benefit plans and other issuances 583,476 58 8,680 — — (182,730) (9,920) (1,182) Non-cash stock-based compensation 21,736 2 84,394 — — — — 84,396 Restricted stock units vested 2,186,763 219 (219) — — — — — Liability-classified restricted stock units vested 1,084,237 108 40,652 — — — — 40,760 Acquisition of treasury stock — — — — — (1,321,666) (42,312) (42,312) Comprehensive income (loss): Foreign currency translation — — — — 1,777 — — 1,777 Net loss — — — (90,268) — — — (90,268) Balances at March 31, 2021 147,814,965 $ 14,781 $ 1,630,072 $ 1,454,826 $ 7,522 (79,585,710) $ (2,026,518) $ 1,080,683 F-22 LIVERAMP HOLDINGS, INC.
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Global innovators, from iconic consumer brands and tech platforms to retailers, financial services, and healthcare leaders, turn to LiveRamp to deepen customer engagement and loyalty, activate new partnerships, and maximize the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements. LiveRamp is a Delaware corporation headquartered in San Francisco, California.
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AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (Continued) (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 254,069 26 6,240 — — (290,675) (14,626) (8,360) Non-cash stock-based compensation 52,459 5 71,175 — — — — 71,180 Restricted stock units vested 1,131,489 113 (113) — — — — — Acquisition-related restricted stock award 40,600 4 (4) — — — — — Liability-classified restricted stock units vested 547,343 55 13,748 — — — — 13,803 Acquisition of treasury stock — — — — — (1,329,211) (58,621) (58,621) Comprehensive loss: Foreign currency translation — — — — (1,792) — — (1,792) Net loss — — — (33,833) — — — (33,833) Balances at March 31, 2022 149,840,925 $ 14,984 $ 1,721,118 $ 1,420,993 $ 5,730 (81,205,596) $ (2,099,765) $ 1,063,060 See accompanying notes to consolidated financial statements.
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Through our expansive partner ecosystem we serve thousands of additional companies, unlocking access to unique customer moments and creating powerful network effects. Industry We are experiencing a convergence of several key industry trends that are shaping the future of how data is used to power the customer experience economy.
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AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) For the twelve months ended March 31, 2022 2021 2020 Cash flows from operating activities: Net loss $ (33,833) $ (90,268) $ (124,511) Earnings from discontinued operations — — (750) Non-cash operating activities: Depreciation and amortization 24,248 27,741 35,901 Loss on disposal or impairment of assets 183 388 1,725 Gain on distribution from retained profits interest (30,235) — — Provision for doubtful accounts 4,217 2,915 7,133 Deferred income taxes (1,540) (1,418) (6,878) Non-cash stock compensation expense 87,257 111,707 89,447 Changes in operating assets and liabilities: Accounts receivable, net (38,611) (24,828) (20,518) Deferred commissions (7,975) (6,605) (5,273) Other assets 26,863 (18,772) (6,144) Accounts payable and other liabilities 8,850 (116) 24,923 Income taxes, net 33,969 (26,215) (25,453) Deferred revenue 4,684 4,911 1,823 Net cash provided by (used in) operating activities 78,077 (20,560) (28,575) Cash flows from investing activities: Capital expenditures (4,499) (2,182) (11,711) Proceeds from sales of assets — — 873 Cash paid in acquisitions, net of cash received (19,107) (76,012) (105,365) Distribution from retained profits interest 31,184 — — Purchases of investments — (7,500) — Purchases of strategic investments — (2,200) — Net cash provided by (used in) investing activities 7,578 (87,894) (116,203) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 6,266 8,737 4,736 Shares repurchased for tax withholdings upon vesting of stock-based awards (14,626) (9,920) (24,522) Acquisition of treasury stock (58,621) (42,312) (182,190) Net cash used in financing activities (66,981) (43,495) (201,976) Net cash provided by (used in) continuing operations 18,674 (151,949) (346,754) F-24 LIVERAMP HOLDINGS, INC.
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Some of these key industry trends include: Marketing and Customer Experience in the Data-Driven Era As the world becomes more multichannel, consumer behavior is rapidly shifting, and organizations are increasingly realizing that true competitive advantage lies in providing meaningful customer experiences – experiences that are personalized, relevant and cohesive across all channels and interactions.
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AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued (Dollars in thousands) For the twelve months ended March 31, 2022 2021 2020 Cash flows from discontinued operations: From operating activities — — (207) From investing activities — — 18,582 Net cash provided by discontinued operations — — 18,375 Effect of exchange rate changes on cash (199) 1,010 (468) Net change in cash and cash equivalents 18,475 (150,939) (328,847) Cash and cash equivalents at beginning of period 581,687 732,626 1,061,473 Cash and cash equivalents at end of period $ 600,162 $ 581,687 $ 732,626 Supplemental cash flow information: Cash (received) for income taxes, net $ (32,916) $ (2,911) $ (7,344) Operating lease assets obtained in exchange for operating lease liabilities 56,182 372 2,707 See accompanying notes to consolidated financial statements.
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Experience is the key to brand differentiation and customer retention. Companies that fail to prioritize customer experience as a strategic growth initiative will simply get left behind. Companies are also increasingly realizing that best-in-class customer experiences require enhanced insights that can only be achieved through a structured data collaboration effort that combines first- and second-party data.
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F-25 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Description of Business - LiveRamp is a global technology company with a vision of making it safe and easy for companies to use data effectively.
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At the same time, consumer expectations are also at an all-time high. Consumers are demanding personalization from brands and, in this new area, every consumer interaction has the potential to be individually relevant, addressable, and measurable. Data is at the center of exceptional customer experiences but is still vastly underutilized.
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We provide a best-in-class enterprise data connectivity platform that helps organizations better leverage customer data within and outside their four walls. Powered by core identity capabilities and an extensive network, LiveRamp enables companies and their partners to better connect, control, and activate data to transform customer experiences and generate more valuable business outcomes.
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Organizations must capture, analyze, understand – and, most importantly use – customer data to power the customer experience. By understanding which devices, email addresses, and postal addresses relate to the same individual, enterprise marketers can leverage that insight to deliver seamless experiences as consumers engage with a company across all touchpoints.
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Through our extensive reseller and partnership network, we serve thousands of additional companies, establishing LiveRamp as a foundational and neutral enabler of the customer experience economy. 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.
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At the same time, by reaching consumers at the individual level, organizations can reduce marketing waste and more easily attribute their marketing spend to actual results.
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We have prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“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").
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Enterprise marketers recognize the huge opportunity big data brings, yet many admit they are not using their data effectively to drive their customer experience. 7 Growing Data Usage Advances in software and hardware and the growing use of the Internet have made it possible to collect and rapidly process massive amounts of personal data.
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Our fiscal year ends on March 31. References to fiscal 2022, for example, are to the fiscal year ended March 31, 2022.
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Data vendors and direct-to-consumer platforms are able to collect user information across a wide range of offline and online properties and connected devices, and to aggregate and combine it with other data sources. With proper permissions, this data can be integrated with a company's own proprietary data and can be made non-identifiable if the use case requires it.
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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.
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Through the use of data, marketers and publishers can more effectively acquire customers, elevate their lifetime value, and enhance the customer experience. Growing Data Collaboration to Enable Commerce Media The advertising market is being transformed by commerce media, a new form of advertising that closes the loop between media impressions and sales transactions.
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Estimates are used in determining, among other items, revenue recognition criteria, allowance for doubtful accounts, 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.
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Commerce media provides enhanced audience insights that drive more effective and efficient advertising and more relevant experiences for consumers. The foundation for commerce media is data collaboration where companies share first-party consumer data with trusted business partners in a manner that is safe, secure and adheres to privacy regulations.
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Risks and Uncertainties - Due to the COVID-19 Coronavirus pandemic ("COVID-19" or "COVID-19 pandemic"), there has been uncertainty and disruption in the global economy and financial markets.
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Retail media was the first to scale, spurred by e-commerce, but other sectors are embracing the commerce media opportunity, including travel & hospitality, telecommunications, finance, auto and healthcare .
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We are not aware of any specific event or circumstance that would require an update to our estimates or judgments or a revision of the carrying value of our assets or liabilities as of March 31, 2022.
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Other examples of data collaboration use cases include enterprise companies connecting consumer data across functional groups or properties, cross-screen media measurement and analysis, and media and commerce networks across a range of industries, including finance, travel and hospitality, and healthcare.
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While there was not a material impact to our consolidated financial statements for the fiscal year ended March 31, 2022, these estimates may change as new events occur and additional information is obtained, as well as other factors related to the COVID-19 pandemic that could result in material impacts to our consolidated financial statements in future reporting periods.
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Growing Complexity of the Customer Journey The customer experience economy has evolved significantly in recent years, driven by rapid innovation and an explosion of data, channels, devices, and applications. Historically, brands interacted with consumers through a limited number of channels, with limited visibility into the activities taking place.
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F-26 Operating Segments - The Company operates as 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.
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Today, companies interact with consumers across a growing number of touchpoints, including online, social, mobile and point-of-sale. The billions of interactions that take place each day between brands and consumers create a trove of valuable data that can be harnessed to power better interactions and experiences.
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Our CODM 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.
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However, most enterprise marketers remain unable to navigate through the complexity to effectively leverage this data. Additionally, innovation has fueled the growth of a highly-fragmented technology landscape, forcing companies to contend with thousands of marketing technologies and data silos.
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Discontinued Operations - Discontinued operations comprise those activities that have been disposed of during the period or that have been classified as held for sale at the end of the period and represent a separate major line of business or geographical area that can be clearly distinguished for operational and financial reporting purposes.
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To make every customer experience relevant across channels and devices, organizations need a trusted platform that can break down those silos, make data portable, and accurately recognize individuals throughout the customer journey. Marketing is becoming more audience-centric, automated, and optimized. However, several important factors still prevent data from being used effectively to optimize the customer experience: • Identity.
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In fiscal 2019, the Company sold its Acxiom Marketing Solutions business (“AMS”) and began reporting the results of operations, cash flows and the balance sheet amounts pertaining to AMS as a component of discontinued operations in the consolidated financial statements. The amount recorded in fiscal 2020 relates to the final working capital true-up and receipt of final proceeds.
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For organizations to target audiences at the individual level, they must be able to recognize consumers across all channels and devices, and link multiple identifiers and data elements to create a single view of the customer. The evolving digital identity landscape further highlights the importance of authenticated, first-party identity. • Scaled Data Assets.
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Unless otherwise indicated, information in the notes to the consolidated financial statements relates to continuing operations.
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Quality, depth, and recency of data matter when deriving linkages between identifiers. Organizations must have access to an extensive set of data and be able to match that data with a high degree of accuracy to perform true cross-device audience targeting and measurement. • Connectivity.
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Loss per Share - 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, 2022 2021 2020 Basic earnings (loss) per share: Net loss from continuing operations $ (33,833) $ (90,268) $ (125,261) Earnings from discontinued operations, net of tax — — 750 Net loss $ (33,833) $ (90,268) $ (124,511) Basic weighted-average shares outstanding 68,211 66,304 67,760 Continuing operations $ (0.50) $ (1.36) $ (1.85) Discontinued operations — — 0.01 Basic loss per share $ (0.50) $ (1.36) $ (1.84) Diluted earnings (loss) per share: Basic weighted-average shares outstanding 68,211 66,304 67,760 Dilutive effect of common stock options and restricted stock as computed under the treasury stock method (1) — — — Diluted weighted-average shares outstanding 68,211 66,304 67,760 Continuing operations $ (0.50) $ (1.36) $ (1.85) Discontinued operations — — 0.01 Diluted loss per share $ (0.50) $ (1.36) $ (1.84) F-27 (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 1.3 million, 2.7 million, and 2.4 million for the years ended March 31, 2022, 2021, and 2020, respectively.
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The fragmented marketing landscape creates a need for a common network of integrations that make it easy and safe to connect and activate data anywhere in the ecosystem. • Data Control .
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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, 2022 2021 2020 Number of shares underlying restricted stock units 686 90 1,368 Significant Accounting Policies Cash and Cash Equivalents - The Company considers all highly-liquid investments purchased with original maturities of three months or less to be cash equivalents.
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Organizations are increasingly looking to collaborate with their most important partners but do not want to give up control of their data or, in certain cases, do not want their data to leave their environment. 8 • Walled Gardens.
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Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid money-market fund investments with remaining maturities of three months or less at the date of purchase.
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Walled gardens, or marketing platforms that restrict the use of data outside of their walls, are becoming more pervasive and can result in loss of control, lack of transparency, and fragmented brand experiences.
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Revenue Recognition - 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, and transactional usage-based revenue from arrangements with certain publishers and addressable TV providers.
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Organizations need a solution that enables an open ecosystem and ensures complete control over customer data, along with the flexibility to choose a diversified approach to meeting marketing goals. • Data Governance. Preserving brand integrity while delivering positive customer experiences is a top priority for every company.
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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.
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Organizations must be able to manage large sets of complex data ethically, securely, within legal boundaries, and in a way that protects consumers from harm. Importantly, they must also honor consumer preferences and put procedures in place that enable individuals to control how, when and for what reasons companies collect and use information about them.
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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.
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Increasing Fragmentation of Consumer Identity Today, customer journeys span multiple channels and devices over time, resulting in data silos and fragmented identities.
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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.
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As consumers engage with brands across various touchpoints – over the web, mobile devices and applications, by email and television, and in physical stores – they may not be represented as single unique individuals with complex behaviors, appearing instead as disparate data points with dozens of different identifiers.
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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.
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Becky Smith who lives at 123 Main Street may appear as beckys@acme.com when she uses Facebook, becky@yahoo.com when she signs into Yahoo Finance, becky.smith@gmail.com when she conducts a Google search, cookie ABC when she browses cnn.com, device ID 234 on Hulu and so on.
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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.
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As a result, enterprise marketers struggle to understand the cross-channel, cross-device habits of consumers and the different steps they take on their path to conversion.
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F-28 Identification of the performance obligations As part of accounting for arrangements with multiple performance obligations, we must assess whether each performance obligation is distinct.
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More specifically, data silos and fragmented identities prevent companies from being able to resolve all relevant data to a specific individual; this poses a challenge to the formation of accurate, actionable insights about a brand’s consumers or campaigns.
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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.
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Marketing Waste from Inaccurate Consumer Identification Every day, brands spend billions of dollars on advertising and marketing, yet many of the messages they deliver are irrelevant, repetitive, mistimed, or simply reach the wrong audience.
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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.
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In addition, as the marketing landscape continues to grow and splinter across a growing array of online and offline channels, it is increasingly difficult to attribute marketing spend to a measurable outcome, such as an in-store visit or sale.
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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.
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Wasted marketing spend is largely driven by the fragmented ecosystem of brands, data providers, marketing applications, media providers, and agencies that are involved in the marketing process, but operate without cohesion. Without a common understanding of consumer identity to unify otherwise siloed data, brands are unable to define accurate audience segments and derive insights that would enable better decision making.
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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.
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Heightened Privacy and Security Concerns In the era of regulations such as the European General Data Protection Regulation ("GDPR") and the California Consumer Privacy Act ("CCPA"), diligence in the areas of consumer privacy and security is and will continue to be paramount. Every year there are new consumer data privacy regulations being introduced.
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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.
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For example, new comprehensive privacy legislation, similar to the CCPA, has taken, or will take, effect in at least eight states on or before July 1, 2025. New category-specific legislation, such as the My Health, My Data Act passed in Washington State in April 2023, will also take effect in the next year or two.
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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.
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Consumers' understanding of the benefits of marketing technology often lags the pace of innovation, giving rise to new demands from government agencies and consumer advocacy groups across the world. These factors challenge the liability every company faces when managing and activating consumer data.
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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.
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Our Approach Leveraging our groundbreaking leadership in consumer privacy, data ethics, foundational identity and connectivity, we help our clients build enduring brand and business value by unlocking siloed and fragmented consumer data and enabling responsible data collaboration. 9 We are middleware for the customer experience economy.
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Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
56 edited+17 added−24 removed127 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
56 edited+17 added−24 removed127 unchanged
2022 filing
2023 filing
Biggest changeWe believe we have taken appropriate measures to protect our systems from intrusion, but we cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities in our systems and attempts to exploit those vulnerabilities, physical system or facility break-ins and data thefts or other developments will not compromise or breach the technology protecting our systems and the information we possess. 24 Although we have developed systems and processes that are designed to protect our data, our client data, and data transmissions to prevent data loss, and to prevent or detect security breaches, our databases have in the past been and in the future may be subject to unauthorized access by third parties, and we may incur significant costs in protecting against or remediating cyberattacks.
Biggest changeWe believe we have taken appropriate measures to protect our systems from intrusion, but we cannot be certain that advances in criminal capabilities, discovery of new or existing vulnerabilities in our systems and attempts to exploit those vulnerabilities, physical system or facility break-ins and data thefts or other developments will not compromise or breach the technology protecting our systems and the information we possess.
In particular, interest-based advertising, or the use of data to draw inferences about a user’s interests and deliver relevant advertising to that user, and similar or related practices, such as cross-device data collection and aggregation, steps taken to de-identify personal data and to use and distribute the resulting data, including for purposes of personalization and the targeting of advertisements, have come under increasing scrutiny by legislative, regulatory, and self-regulatory bodies in the U.S. and abroad that focus on consumer protection or data privacy.
In particular, interest-based advertising, or the use of data to draw inferences about a user’s interests and deliver relevant advertising to that user, and similar or related practices, such as cross-device data collection and aggregation, steps taken to de-identify or pseudonymize personal data and to use and distribute the resulting data, including for purposes of personalization and the targeting of advertisements, have come under increasing scrutiny by legislative, regulatory, and self-regulatory bodies in the U.S. and abroad that focus on consumer protection or data privacy.
The loss of, or decrease in revenue from, any of our significant clients for any reason could have a material adverse effect on our revenue and operating results, which could be exacerbated by client consolidation, changes in technologies or solutions used by our clients, changes in demand for our platform, legal or regulatory changes, market optics, client bankruptcies or departures from their respective industries, pricing competition or deviation from marketing and sales methods, any one of which may result in even fewer contractual relationships accounting for a high percentage of our revenue and reduced demand from any single significant client. 19 In addition, some of our clients have used, and may in the future use, the size and relative importance of their purchases to our business to require that we enter into agreements with more favorable terms than we would otherwise agree to, to obtain price concessions, or to otherwise restrict our business.
The loss of, or decrease in revenue from, any of our significant clients for any reason could have a material adverse effect on our revenue and operating results, which could be exacerbated by client consolidation, changes in technologies or solutions used by our clients, changes in demand for our platform, legal or regulatory changes, market optics, client bankruptcies or departures from their respective industries, pricing competition or deviation from marketing and sales methods, any one of which may result in even fewer contractual relationships accounting for a high percentage of our revenue and reduced demand from any single significant client. 20 In addition, some of our clients have used, and may in the future use, the size and relative importance of their purchases to our business to require that we enter into agreements with more favorable terms than we would otherwise agree to, to obtain price concessions, or to otherwise restrict our business.
Despite precautions taken at our data centers, the occurrence of spikes in usage volume, a natural disaster, such as earthquakes or hurricane, an act of terrorism, vandalism or sabotage, a decision to close a facility without adequate notice, or other unanticipated problems at a facility could result in lengthy interruptions in the availability of our platform.
Despite precautions taken at our data centers, the occurrence of spikes in usage volume, a natural disaster, such as earthquakes or hurricane, an act of terrorism, destruction, vandalism or sabotage, a decision to close a facility without adequate notice, or other unanticipated problems at a facility could result in lengthy interruptions in the availability of our platform.
Such violations could also adversely affect our reputation with existing and prospective clients, which could negatively impact our operating results and growth prospects. A significant breach of the confidentiality of the information we hold or of the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations.
Such violations could also adversely affect our reputation with existing and prospective clients, which could negatively impact our operating results and growth prospects. 24 A significant breach of the confidentiality of the information we hold or of the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations.
Much of this scrutiny has focused on the use of cookies and other technology to collect information about Internet users’ online browsing activity on web browsers, mobile devices, and other devices, to associate such data with user or device identifiers or pseudonymous identities across devices and channels.
Much of this scrutiny has focused on the use of cookies and other technology to collect information about Internet users’ online browsing activity on web browsers, mobile devices, and other devices, to associate such data with user or device identifiers or pseudonymous identifiers across devices and channels.
Moreover, the conditions caused by the COVID-19 pandemic and other events outside our control have affected, and may continue to affect, the rate of spending on advertising products and have and could continue to adversely affect our customers’ ability or willingness to purchase our offerings, delay prospective customers’ purchasing decisions, increase pressure for pricing discounts, lengthen payment terms, reduce the value or duration of their subscription contracts, or increase customer attrition rates, all of which could adversely affect our future sales, operating results and overall financial performance.
Moreover, the conditions caused by other events outside our control, such as the COVID-19 pandemic, have affected, and may continue to affect, the rate of spending on advertising products and have and could continue to adversely affect our customers’ ability or willingness to purchase our offerings, delay prospective customers’ purchasing decisions, increase pressure for pricing discounts, lengthen payment terms, reduce the value or duration of their subscription contracts, or increase customer attrition rates, all of which could adversely affect our future sales, operating results and overall financial performance.
Any failure to achieve required data protection standards may result in lawsuits, regulatory fines, or other actions or liability, all of which may harm our operating results. 29 In June 2016, a referendum was passed in the United Kingdom to leave the European Union, commonly referred to as “Brexit.” The United Kingdom exited the European Union pursuant to Brexit on January 31, 2020, subject to a transition period for certain matters that ran through December 31, 2020.
Any failure to achieve required data protection standards may result in lawsuits, regulatory fines, or other actions or liability, all of which may harm our operating results. 30 In June 2016, a referendum was passed in the United Kingdom to leave the European Union, commonly referred to as “Brexit.” The United Kingdom exited the European Union pursuant to Brexit on January 31, 2020, subject to a transition period for certain matters that ran through December 31, 2020.
The occurrence of any of these events could result in decreased revenues, net income and earnings per share. We have also divested assets in the past and may do so again in the future.
The occurrence of any of these events could result in decreased revenues, net income and earnings per share. 23 We have also divested assets in the past and may do so again in the future.
In addition, providers of Internet browsers have engaged in, or announced plans to continue or expand, efforts to provide increased visibility into, and certain controls over, cookies and similar technologies and the data collected using such technologies. For example, in January 2020 Google announced that at some point in the following 24 months the Chrome browser will block third-party cookies.
In addition, providers of Internet browsers have engaged in, or announced plans to continue or expand, efforts to provide increased visibility into, and certain controls over, cookies and similar technologies and the data collected using such technologies. For example, in January 2020 Google announced that at some point in the following 24 months the Chrome browser would block third-party cookies.
The COVID-19 pandemic has generally increased opportunities available to hackers and cyber criminals as more companies and individuals work online from remote locations.
The COVID-19 pandemic generally increased opportunities available to hackers and cyber criminals as more companies and individuals work online from remote locations.
Privacy concerns, whether valid or not valid, may inhibit market adoption of our platform particularly in certain industries and foreign countries. 30 Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.
Privacy concerns, whether valid or not valid, may inhibit market adoption of our platform particularly in certain industries and foreign countries. 31 Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.
If we fail to maintain our company culture, our business may be adversely impacted. Failure to keep up with rapidly changing technologies and marketing practices could cause our products and services to become less competitive or obsolete, which could result in loss of market share and decreased revenues and results of operations.
If we fail to maintain our company culture, our business may be adversely impacted. Failure to keep up with rapidly changing technologies and marketing practices could cause our products and services to become less competitive or obsolete, which could result in loss of market share and decreased revenues, thereby impacting our results of operations.
During the last fiscal year, we received approximately 6% of our revenues from business outside the United States. In those non-U.S. locations where legislation restricting the collection and use of personal data currently exists, less data is available and at a much higher cost.
During the last fiscal year, we received approximately 7% of our revenues from business outside the United States. In those non-U.S. locations where legislation restricting the collection and use of personal data currently exists, less data is available and at a much higher cost.
Our growth strategy and future success depends in large part on our ability to attract, recruit, onboard, motivate and retain technical, client services, sales, consulting, research and development, marketing, administrative and management personnel, all of which has been made more difficult by the COVID-19 pandemic and the restrictions intended to prevent its spread.
Our growth strategy and future success depends in large part on our ability to attract, recruit, onboard, motivate and retain technical, client services, sales, consulting, research and development, marketing, administrative and management personnel, all of which was made more difficult by the COVID-19 pandemic and the restrictions intended to prevent its spread.
If we do not enforce our intellectual property rights vigorously and successfully, our competitive position may suffer, which could harm our operating results. 31 Item 1B. Unresolved Staff Comments None.
If we do not enforce our intellectual property rights vigorously and successfully, our competitive position may suffer, which could harm our operating results. 32 Item 1B. Unresolved Staff Comments None.
Though still subject to debate, the proposed ePrivacy Regulation may limit the lawful bases available to process digital data and require "opt-in" consent. The fines and penalties for breach of the proposed ePrivacy Regulation may be significant.
Though still subject to debate, the proposed ePrivacy Regulation may limit the lawful bases available to process digital data collected through cookies and require "opt-in" consent. The fines and penalties for breach of the proposed ePrivacy Regulation may be significant.
In the event that any of our third-party facilities arrangements is terminated, or if there is a lapse of service or damage to a facility, we could experience interruptions in our platform as well as delays and additional expenses in arranging new facilities and services. 25 Any damage to, or failure of, the systems of our third-party providers could result in interruptions to our platform.
In the event that any of our third-party facilities arrangements is terminated, or if there is a lapse of service or damage to a facility, we could experience interruptions in our platform as well as delays and additional expenses in arranging new facilities and services.
Because we, and our clients, rely upon large volumes of such data collected primarily through cookies and similar technologies, it is possible that these efforts may have a substantial impact on our ability to collect and use data from Internet users, and it is essential that we monitor developments in this area domestically and globally, and engage in responsible privacy practices, including providing consumers with notice of the types of data we collect and how we use that data to provide our services. 28 In the U.S., the U.S.
Because we, and our clients, rely upon data, including that collected through cookies and similar technologies, it is possible that Google's efforts may have a substantial impact on the ability to collect and use data from Internet users, and it is essential that we monitor developments in this area domestically and globally, and engage in responsible privacy practices, including providing consumers with notice of the types of data we collect and how we use that data to provide our services. 29 In the U.S., the U.S.
The loss of a contract upon which we rely for a significant portion of our revenues could adversely affect our operating results. Our ten largest clients represented approximately 28% of our revenues in fiscal year 2022.
The loss of a contract upon which we rely for a significant portion of our revenues could adversely affect our operating results. Our ten largest clients represented approximately 29% of our revenues in fiscal year 2023.
The CCPA, CPRA and VCDPA have prompted a number of proposals for federal and other state privacy legislation that, if enacted, could increase our exposure to potential liability, add additional complexity to compliance in the U.S. market and increase our compliance costs.
The State Consumer Privacy Acts have prompted a number of proposals for federal and other state privacy legislation that, if enacted, could increase our exposure to potential liability, add additional complexity to compliance in the U.S. market and increase our compliance costs.
If all of our individual client contractual relationships were aggregated at the holding company level, one client, The Interpublic Group of Companies, accounted for 11% of our revenues in fiscal year 2022.
If all of our individual client contractual relationships were aggregated at the holding company level, one client, The Interpublic Group of Companies, accounted for 12% of our revenues in fiscal year 2023.
To provide our platform, we utilize third-party cookies, which are cookies owned and used by parties other than the owners of the website visited by the Internet user.
We utilize third-party cookies, which are cookies owned and used by parties other than the owners of the website visited by the Internet user.
Pursuant to the CPRA, the CCPA will be amended by creating additional privacy rights for California consumers and additional obligations on businesses, which could subject us to additional compliance costs as well as possible fines, individual claims and commercial liabilities for certain compliance failures.
Pursuant to the CPRA, effective January 1, 2023, the CCPA was amended by creating additional privacy rights for California consumers and additional obligations on businesses, which could subject us to additional compliance costs as well as possible fines, individual claims and commercial liabilities for certain compliance failures.
As the use of “third-party cookies” or other tracking technology continues to be pressured by Internet users, restricted or otherwise subject to unfavorable regulation, blocked or limited by technical changes on end users’ devices, or our and our clients’ ability to use data on our platform is otherwise restricted, our business could be materially impacted.
As a result, our operating results may be significantly worse than forecasted. 26 As the use of “third-party cookies” or other tracking technology continues to be pressured by Internet users, restricted or otherwise subject to unfavorable regulation, blocked or limited by technical changes on end users’ devices, or our and our clients’ ability to use data on our platform is otherwise restricted, our business could be materially impacted.
We cannot yet fully predict the full impact of the CCPA, CPRA or VCDPA on our business or operations, but they may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
We cannot yet predict the full impact of the State Consumer Privacy Acts on our business or operations, but they may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
The loss or prolonged absence of the services of highly trained personnel like our current team of executives and employees, or the inability to recruit, attract, onboard and retain additional, qualified employees, could have a material adverse effect on our business, financial position or operating results.
The loss or prolonged absence of the services of highly trained personnel like our current team of executives and employees, or the inability to recruit, attract, onboard and retain additional, qualified employees, could have a material adverse effect on our business, financial position or operating results. In addition, effective succession planning is important to our long-term success.
In Europe, the European General Data Protection Regulation ("GDPR") took effect on May 25, 2018 and applies to products and services that we provide in Europe, as well as the processing of personal data of EU citizens, wherever that processing occurs.
In Europe, the European General Data Protection Regulation ("GDPR") took effect on May 25, 2018 and applies to products and services that we provide in Europe, as well as the processing of personal data of EU citizens, wherever that processing occurs. The GDPR includes operational requirements for companies that receive or process personal data of residents of the European Union.
Further modifications and regulations to these Acts, or new rules promulgated by the FTC, could create additional liability and require costly expenditures to ensure continued compliance.
Further modifications and regulations under the State Consumer Privacy Acts, enforcement actions and guidance, or new rules promulgated by the FTC, could create additional liability and require costly expenditures to ensure continued compliance.
The U.S. federal and various state and foreign governments have adopted or proposed limitations on the collection, distribution, use and storage of data relating to individuals, including the use of contact information and other data for marketing, advertising and other communications with individuals and businesses.
Our data handling also is subject to contractual obligations and may be deemed to be subject to industry standards. 28 The U.S. federal and various state and foreign governments have adopted or proposed limitations on the collection, distribution, use and storage of data relating to individuals, including the use of contact information and other data for marketing, advertising and other communications with individuals and businesses.
Finally, while we maintain cyber liability insurance coverage that may cover certain liabilities in connection with a cyber security incident, we cannot be certain that our insurance coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on commercially reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
Accordingly, we are subject to any flaw in or breaches of their systems, which could materially impact our business, operations and financial results. 25 Finally, while we maintain cyber liability insurance coverage that may cover certain liabilities in connection with a cyber security incident, we cannot be certain that our insurance coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on commercially reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
In addition, in the EU, Directive 2002/58/EC (as amended by Directive 2009/136/EC), commonly referred to as the ePrivacy or Cookie Directive, directs EU member states to ensure that accessing information on an Internet user’s computer, such as through a cookie and other similar technologies, is allowed only if the Internet user has been informed about such access and given his or her consent.
Substantial increases in the rate and number of people opting out of various data collection processes could have a negative impact on our business and the ecosystems in which we operate. 27 In addition, in the EU, Directive 2002/58/EC (as amended by Directive 2009/136/EC), commonly referred to as the ePrivacy or Cookie Directive, directs EU member states to ensure that accessing information on an Internet user’s computer, such as through a cookie and other similar technologies, is allowed only if the Internet user has been informed about such access and given his or her consent.
Changing market dynamics, global policy developments and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S. and elsewhere have the potential to disrupt our business, the business of our third-party suppliers and the business of our customers, and may cause us to experience higher churn, losses and additional costs to maintain or resume operations. 27 Risks Related to Government Regulation and Taxation Changes in legislative, judicial, regulatory, or cultural environments relating to information collection and use may limit our ability to collect and use data.
Changing market dynamics, global policy developments and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S. and elsewhere have the potential to disrupt our business, the business of our third-party suppliers and the business of our customers, and may cause us to experience higher churn, losses and additional costs to maintain or resume operations.
We incur significant costs with our third-party data hosting services. If the costs for such services increase due to vendor consolidation, regulation, contract renegotiation, or otherwise, we may not be able to increase the fees for our products and services to cover the changes. As a result, our operating results may be significantly worse than forecasted.
We are dependent on the continued availability of third-party data hosting and transmission services. We incur significant costs with our third-party data hosting services. If the costs for such services increase due to vendor consolidation, regulation, contract renegotiation, or otherwise, we may not be able to increase the fees for our products and services to cover the changes.
The failure to attract, recruit, onboard and retain qualified personnel could hinder our ability to successfully execute our business strategy, which could have a material adverse effect on our financial position and operating results.
Any future public health emergencies could materially and adversely affect our business, our operating results, financial condition and prospects, and the value of our common stock. The failure to attract, recruit, onboard and retain qualified personnel could hinder our ability to successfully execute our business strategy, which could have a material adverse effect on our financial position and operating results.
In April 2021, Google began releasing software updates to its Chrome browser with features intended to phase out third-party cookies.
In April 2021, Google began releasing software updates to its Chrome browser with features intended to phase out third-party cookies. In May 2023, Google stated that it would deprecate third-party cookies by mid-2024.
The regulatory framework for data privacy issues worldwide is currently evolving and is likely to remain uncertain for the foreseeable future. The occurrence of unanticipated events often rapidly drives the adoption of legislation or regulation affecting the use, collection or other processing of data and manners in which we conduct our business.
The occurrence of unanticipated events often rapidly drives the adoption of legislation or regulation affecting the use, collection or other processing of data and manners in which we conduct our business.
In such event, we could experience a decline in market share and revenues and be forced to reduce our prices, resulting in lower profit margins for the Company. 20 The extent to which the ongoing COVID-19 pandemic, including the resulting global economic uncertainty, and measures taken in response to the pandemic could continue to impact our business and future results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict.
In such event, we could experience a decline in market share and revenues and be forced to reduce our prices, resulting in lower profit margins for the Company. 21 Public health emergencies, such as the COVID-19 pandemic, may result in global, national and/or regional economic uncertainty, and measures taken in response to such emergencies could impact our business and future results of operations and financial condition.
Although we have recently reopened our offices and hold in-person meetings and events in compliance with applicable government orders and guidelines, the majority of our employees continue to work remotely.
Any failure to preserve our culture could negatively affect our ability to retain and recruit personnel and to proactively focus on and pursue our corporate objectives. Although we have recently reopened our offices and hold in-person meetings and events in compliance with applicable government orders and guidelines, the majority of our employees continue to work remotely.
We have not entered into any foreign currency forward exchange contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates. 23 Additional risks inherent in our non-U.S. business activities generally include, among others, the costs and difficulties of managing international operations, potentially adverse tax consequences, and greater difficulty enforcing intellectual property rights.
Additional risks inherent in our non-U.S. business activities generally include, among others, the costs and difficulties of managing international operations, potentially adverse tax consequences, and greater difficulty enforcing intellectual property rights.
The spread of infectious diseases may also result in, and, in the case of the COVID-19 pandemic has resulted in, regional quarantines, labor shortages or stoppages, changes in consumer purchasing patterns, disruptions to service providers to deliver data on a timely basis, or at all, and overall economic instability.
Similar to the COVID-19 pandemic, future public health emergencies could result in significant disruptions to the global financial markets and economic uncertainty, as well as regional quarantines, labor shortages or stoppages, changes in consumer purchasing patterns, disruptions to service providers to deliver data on a timely basis, or at all, and overall economic instability.
The passage of these acts may prompt further legislative developments in other states. In addition, in April 2022, the FTC Chair called for a new approach to consumer data protection from procedural protections, such as the notice and consent framework in which consumers are asked to agree to privacy policies, to substantive limits.
In addition, the FTC Chair has called for a new approach to consumer data protection, such as the notice and consent framework in which consumers are asked to agree to privacy policies.
These factors in turn could further reduce our revenue, subject us to liability and cause us to issue credits or cause customers to fail to renew their subscriptions, any of which could materially adversely affect our business. We are dependent on the continued availability of third-party data hosting and transmission services.
Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur. These factors in turn could further reduce our revenue, subject us to liability and cause us to issue credits or cause customers to fail to renew their subscriptions, any of which could materially adversely affect our business.
New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of our domestic and foreign earnings. Our existing corporate structure and intercompany arrangements have been implemented in a manner we believe is in compliance with current prevailing tax laws.
New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of our domestic and foreign earnings and materially affect our financial position and results of operations.
If more Internet users adopt these settings or delete their cookies more frequently than they currently do, or restrictions are imposed by advertisers and publishers, there are changes in technology or new developments in laws, regulations or industry standards around cookies, our business could be harmed. 26 For in-app advertising, data regarding interactions between users and devices are tracked mostly through stable, pseudonymous mobile device identifiers that are built into the device operating system with privacy controls that allow users to express a preference with respect to data collection for advertising, including to disable the identifier.
If more Internet users adopt these settings or delete their cookies more frequently than they currently do, or restrictions are imposed by advertisers and publishers, there are changes in technology or new developments in laws, regulations or industry standards around cookies, our business could be harmed.
For example, other states have enacted or are considering legislation similar to that of the CCPA, CPRA and VCDPA statutory frameworks, including legislation that, if enacted, would require persons to “opt-in” to the collection of certain consumer data.
For example, other states have enacted or are considering legislation similar to that of the State Consumer Privacy Act statutory frameworks, including legislation that would require individuals to “opt-in” to the collection of certain consumer data. Decreased availability and increased costs of information could adversely affect our ability to meet our clients’ requirements and could result in decreased revenues.
In addition, the GDPR includes significant penalties for non-compliance of up to the greater of €20 million or 4% of an enterprise’s global annual revenue. Further, the European Union is expected to replace the EU Cookie Directive governing the use of technologies to collect consumer information with the ePrivacy Regulation.
Further, the European Union is expected to replace the EU Cookie Directive governing the use of technologies to collect consumer information with the ePrivacy Regulation.
The COVID-19 pandemic has disrupted the flow of the economy and put unprecedented strains on governments, health care systems, educational institutions, businesses and individuals around the world. The ongoing impact on the global population and the duration of the COVID-19 pandemic is difficult to assess or predict as new variants emerge.
The COVID-19 pandemic disrupted the flow of the economy and put unprecedented strains on governments, health care systems, educational institutions, businesses and individuals around the world, and future public health emergencies could result in the same.
Without the timely introduction of new products, services and enhancements, our offerings will become technologically or commercially obsolete over time, in which case our revenue and operating results would suffer. 22 Consumer needs and expectations and the business information industry as a whole are in a constant state of change.
Without the timely introduction of new products, services and enhancements, including through the use of new and emerging technologies (e.g., artificial intelligence and machine learning), we could be at a competitive disadvantage and our offerings will become technologically or commercially obsolete over time, in which case our revenue and operating results would suffer.
Because of such loan or investment, exchange rate movements of foreign currencies may have an impact on our future costs of, or future cash flows from, foreign investments.
Because of such loans or investments, exchange rate movements of foreign currencies may have an impact on our future costs of, or future cash flows from, foreign investments. We have not entered into any foreign currency forward exchange contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.
Consequently, no assurance can be given about the impact of the outcome and our business may be seriously harmed.
The full effect of Brexit is uncertain and depends on any agreements the United Kingdom may make to retain access to European Union markets. Consequently, no assurance can be given about the impact of the outcome and our business may be seriously harmed.
Our handling of this data is subject to a variety of federal, state, and foreign laws and regulations and is subject to regulation by various government authorities. Our data handling also is subject to contractual obligations and may be deemed to be subject to industry standards.
We receive, store and process personal information and other data from and about consumers in addition to our clients, employees, and services providers. Our handling of this data is subject to a variety of federal, state, and foreign laws and regulations and is subject to regulation by various government authorities.
If we cannot maintain our culture as we grow, we could lose the innovation, teamwork, passion and focus on execution that we believe contribute to our success, and our business may be harmed. We believe that a critical component to our success has been our company culture, which is based on transparency and personal autonomy.
This reduction, or any location strategy or similar actions taken in the future, could negatively impact our ability to attract, integrate, retain and motivate key executives and employees. 22 If we cannot maintain our culture as we grow, we could lose the innovation, teamwork, passion and focus on execution that we believe contribute to our success, and our business may be harmed.
Such developments could cause revenues to decline, increase the cost and availability of data and adversely affect the demand for our products and services. We receive, store and process personal information and other data from and about consumers in addition to our clients, employees, and services providers.
Risks Related to Government Regulation and Taxation Changes in legislative, judicial, regulatory, or cultural environments relating to information collection and use may limit our ability to collect and use data. Such developments could cause revenues to decline, increase the cost and availability of data and adversely affect the demand for our products and services.
In January 2020, Google publicly stated it intends for Chrome to block third-party cookies at some point in the following 24 months. In April 2021, Google began releasing software updates to its Chrome browser with features to phase-out third party cookies. Mobile devices allow users to opt out of the use of mobile device IDs for targeted advertising.
In May 2023, Google announced it will continue with its previously announced timeline to end Chrome's support for third party cookies in the second half of 2024. Mobile devices allow users to opt out of the use of mobile device IDs for targeted advertising.
We have invested substantial time and resources in building our team within this company culture. Any failure to preserve our culture could negatively affect our ability to retain and recruit personnel and to proactively focus on and pursue our corporate objectives.
We believe that a critical component to our success has been our company culture, which is based on transparency and personal autonomy. We have invested substantial time and resources in building our team within this company culture.
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It is even more difficult to predict the future impact on the global economic market, which will be highly dependent upon the actions of governments, businesses and other enterprises in response to the pandemic and the effectiveness of those actions. The pandemic has caused, and is likely to result in further, significant disruption of global financial markets and economic uncertainty.
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If we do not develop effective succession planning, the loss of one or more of our key executive or employees or groups of executives or employees could seriously harm our business.
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While the COVID-19 pandemic has not materially adversely impacted our sales or operations, we continue to monitor our operations, the operations of our customers and corporate partners, and government recommendations.
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In November 2022, we 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 which occurred during our fiscal year second quarter.
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A recession, depression or other sustained adverse market events resulting from the spread of COVID-19 could materially and adversely affect our business and the value of our common stock.
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The headcount reduction is part of a broader strategic reprioritization to build a stronger, more profitable company by tightening our focus and simplifying and driving efficiency into our business processes.
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Our customers or potential customers, particularly in industries most impacted by the COVID-19 pandemic including transportation, travel and hospitality, retail and energy, may reduce their advertising spending or delay their advertising initiatives, which could materially and adversely impact our business.
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Consumer needs and expectations and the business information industry as a whole are in a constant state of change.
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We may also experience curtailed customer demand, reduced customer spend or contract duration, delayed collections, lengthened payment terms and increased competition due to changes in terms and conditions and pricing of our competitors’ products and services that could materially adversely impact our business, results of operations and overall financial performance in future periods.
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Although we have developed systems and processes that are designed to protect our data, our client data, and data transmissions to prevent data loss, and to prevent or detect security breaches, our databases have in the past been and in the future may be subject to unauthorized access by third parties, and we may incur significant costs in protecting against or remediating cyberattacks.
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Existing and potential customers may choose to reduce or delay technology spending in response to the COVID-19 pandemic, or may attempt to renegotiate contracts and obtain concessions, which may materially and negatively impact our operating results, financial condition and prospects.
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Any damage to, or failure of, the systems of our third-party providers could result in interruptions to our platform.
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In response to the COVID-19 pandemic, we temporarily closed most of our offices (including our headquarters), encouraged our employees to work remotely, implemented restrictions on all non-essential travel, and shifted certain of our customer, industry, investor, and employee events to virtual-only experiences. Certain costs incurred in preparation for these events could not be recovered.
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Even with current and planned disaster recovery arrangements, our business could be harmed, and there is no assurance can be provided that any interruptions would be remediated without significant cost or in a timely manner or at all.
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With the widespread availability of vaccines and treatment, and the ebb and flow of variants and decreases in hospitalizations we have eased those restrictions substantially, reopening all offices in the U.S., Europe, and Asia-Pacific where permitted.
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For in-app advertising, data regarding interactions between users and devices are tracked mostly through stable, pseudonymous mobile device identifiers that are built into the device operating system with privacy controls that allow users to express a preference with respect to data collection for advertising, including to disable the identifier.
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If the COVID-19 pandemic worsens, especially in regions in which we have material operations or sales, our business activities originating from affected areas, including sales-related activities, could be adversely affected.
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In addition, the European Union has been developing new requirements related to the use of data, including in the Digital Services Act, that may impose additional rules and restrictions on the use of the data. The regulatory framework for data privacy issues worldwide is currently evolving and is likely to remain uncertain for the foreseeable future.
Removed
Disruptive activities could include business closures in impacted areas, further restrictions on our employees’ and other service providers’ ability to travel, impacts to productivity if our employees or their family members experience health issues, and potential delays in hiring and onboarding of new employees. Further, we may experience increased cyberattacks and security challenges as our global employee base works remotely.
Added
For example, in the U.S., in August 2022 the FTC released an advance notice of proposed rulemaking concerning commercial surveillance and data security and is seeking comment on whether it should implement new trade regulation rules or other regulatory alternatives concerning the ways in which companies (1) collect, aggregate, protect, use, analyze, and retain consumer data, as well as (2) transfer, share, sell, or otherwise monetize that data in ways that are unfair or deceptive.
Removed
Our employees' ability to effectively work remotely is also impacted by continued availability of internet connectivity and a general degradation of such would negatively impact their ability to work effectively. The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which are not within our control, are highly uncertain and cannot be predicted.
Added
In addition, a potential federal data privacy law remains the subject of active discussion, and, in June 2022, a bipartisan group of lawmakers introduced a bill that would substantially impact on the online advertising ecosystem if passed.
Removed
Such future developments may include, among others, the duration and spread of the outbreak, new information that may emerge concerning the severity of COVID-19 (including new variants) and government actions to contain COVID-19 or treat its impact, impact on our customers and our sales cycles, impact on our customer, industry or employee events, and effect on our partners, vendors and supply chains.
Added
Since the CCPA, ten other state legislatures so far have passed comprehensive privacy legislation, including Virginia, Colorado, Connecticut, Utah, Indiana, Iowa, Tennessee, Montana, Florida and Texas, and other states have passed sector or data-specific legislation, such as Illinois and Washington .
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Item 2. Properties
Properties — owned and leased real estate
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Item 2. Properties
Properties — owned and leased real estate
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2022 filing
2023 filing
Biggest changeLocation Held Use United States: San Francisco, California Lease Office space New York, New York Lease Office space Little Rock, Arkansas Lease Office space Philadelphia, Pennsylvania Lease Office space Boston, Massachusetts Lease Office space Tempe, Arizona Lease Office space Seattle, Washington Lease Office space Europe: London, England Lease Office space Paris, France Lease Office space Amsterdam, Netherlands Lease Office space Asia-Pacific: Shanghai, China Lease Office space Nantong, China Lease Office space Singapore, Singapore Lease Office space Tokyo, Japan Lease Office space Sydney, Australia Lease Office space
Biggest changeLocation Held Use United States: San Francisco, California Lease Office space New York, New York Lease Office space Little Rock, Arkansas Lease Office space Seattle, Washington Lease Office space Europe: London, England Lease Office space Paris, France Lease Office space Asia-Pacific: Shanghai, China Lease Office space Nantong, China Lease Office space Singapore, Singapore Lease Office space Tokyo, Japan Lease Office space Sydney, Australia Lease Office space
Item 2. Properties LiveRamp is headquartered in San Francisco, California with additional locations in the United States. We also have a physical presence in Europe and Asia-Pacific. As we have only one business segment, all of the properties listed below are used exclusively by it.
Item 2. Properties LiveRamp is headquartered in San Francisco, California with additional locations in the United States. We also have a physical presence in Europe and the Asia-Pacific region. As we have only one business segment, all of the properties listed below are used exclusively by it.
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
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Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
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2022 filing
2023 filing
Biggest changeItem 3. Legal Proceedings The information required by this item is set forth under Note 13, "Commitments and Contingencies" to our Consolidated Financial Statements, which appears in the Financial Supplement at page F- 47 , and is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 32 PART II
Biggest changeItem 3. Legal Proceedings The information required by this item is set forth under Note 13, "Commitments and Contingencies" to our Consolidated Financial Statements, which appears in the Financial Supplement at page F- 49 , and is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 33 PART II
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
9 edited+1 added−0 removed1 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
9 edited+1 added−0 removed1 unchanged
2022 filing
2023 filing
Biggest changeMarch 2017 March 2018 March 2019 March 2020 March 2021 March 2022 LiveRamp Holdings, Inc. 100.00 79.77 191.68 115.63 182.23 131.33 Russell 2000 100.00 111.79 114.09 86.72 168.96 159.19 S&P 400 IT Consulting and Other Services 100.00 121.91 132.92 133.93 164.79 107.18 The performance graph and the related chart and text, are being furnished solely to accompany this Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of ours, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Biggest changeMarch 2018 March 2019 March 2020 March 2021 March 2022 March 2023 LiveRamp Holdings, Inc. 100.00 240.29 144.96 228.45 164.64 96.57 Russell 2000 100.00 102.05 77.57 151.14 142.39 125.87 S&P 400 IT Consulting and Other Services 100.00 109.02 109.86 135.17 87.92 84.92 The performance graph and the related chart and text, are being furnished solely to accompany this Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of ours, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
The stock price performance included in this graph is not necessarily indicative of future stock price performance. Copyright© 2022 Standard and Poor's, a division of S&P Global. All rights reserved. Copyright© 2022 Russell Investment Group.
The stock price performance included in this graph is not necessarily indicative of future stock price performance. Copyright© 2023 Standard and Poor's, a division of S&P Global. All rights reserved. Copyright© 2023 Russell Investment Group.
All rights reserved. 34 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The table below provides information regarding purchases by LiveRamp of its common stock during the periods indicated.
All rights reserved. 35 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The table below provides information regarding purchases by LiveRamp of its common stock during the periods indicated.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The outstanding shares of LiveRamp's common stock are listed and traded on the New York Stock Exchange under the symbol "RAMP". Stockholders As of May 19, 2022, the approximate number of record holders of the Company’s common stock was 1,010.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The outstanding shares of LiveRamp's common stock are listed and traded on the New York Stock Exchange under the symbol "RAMP". Stockholders As of May 19, 2023, the approximate number of record holders of the Company’s common stock was 982.
That program was subsequently modified and expanded, most recently on November 3, 2020. Under the modified common stock repurchase program, the Company may purchase up to $1.0 billion of its common stock through the period ending December 31, 2022.
That program was subsequently modified and expanded, most recently on December 20, 2022. Under the modified common stock repurchase program, the Company may purchase up to $1.1 billion of its common stock through the period ending December 31, 2024.
The graph tracks the performance of a $100 investment in our common stock and in each index, (with the reinvestment of dividends) from 3/31/2017 to 3/31/2022.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 3/31/2018 to 3/31/2023.
The Board of Directors may consider paying dividends in the future but has no plans to pay dividends in the short term. 33 Performance Graph The graph below compares the 5-year cumulative total return of holders of our common stock with the cumulative total returns of the Russell 2000 index and S&P 400 IT Consulting and Other Services index.
The board of directors may consider paying dividends in the future but has no plans to pay dividends in the short term. 34 Performance Graph The graph below compares LiveRamp Holdings, Inc.'s cumulative 5-year total shareholder return on common stock with the cumulative total returns of the Russell 2000 index and S&P 400 IT Consulting and Other Services index.
Through March 31, 2022, the Company had repurchased 29.6 million shares of its stock for $732.2 million, leaving remaining capacity of $267.8 million under the stock repurchase program. Item 6. Reserved
Through March 31, 2023, the Company had repurchased 35.6 million shares of its common stock for $882.2 million, leaving remaining capacity of $217.8 million under the stock repurchase program. Item 6. [Reserved]
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs January 1, 2022 - January 31, 2022 119,643 43.45 119,643 $ 272,021,556 February 1, 2022 - February 28, 2022 97,708 42.97 97,708 $ 267,823,268 March 1, 2022 - March 31, 2022 — — — $ 267,823,268 Total 217,351 43.23 217,351 N/A On August 29, 2011, the board of directors adopted a common stock repurchase program.
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs January 1, 2023 - January 31, 2023 — — — $ 217,827,014 February 1, 2023 - February 28, 2023 — — — $ 217,827,014 March 1, 2023 - March 31, 2023 — — — $ 217,827,014 Total — — — N/A On August 29, 2011, the board of directors adopted a common stock repurchase program.
Added
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among LiveRamp Holdings, Inc., the Russell 2000 Index and the S&P 400IT Consulting & Other Services *$100 invested on 3/31/18 in stock or index, including reinvestment of dividends. Fiscal year ending March 31.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
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2022 filing
2023 filing
Biggest changeThere have been no changes since the end of the last fiscal year in our primary market risk exposures or the management of those exposures, and we do not expect any changes going forward. Inflation . We do not believe that inflation has had a material effect on our business.
Biggest changeOur inability or failure to do so could harm our business, operating results and financial condition. There have been no changes since the end of the last fiscal year in our primary market risk exposures or the management of those exposures, and we do not expect any changes going forward. 36
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market Risk Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our primary market risk is foreign currency exchange rate risk and inflation. Foreign Currency Exchange Rate Risk .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market Risk Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our primary market risks are foreign currency exchange rate risk and inflation. Foreign Currency Exchange Rate Risk .
Therefore, exchange rate movements of foreign currencies may have an impact on LiveRamp’s future costs or on future cash flows from foreign investments. LiveRamp has not entered into any foreign currency forward exchange contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.
Therefore, exchange rate movements of foreign currencies may have an impact on the Company’s future costs or on future cash flows from foreign investments. The Company has not entered into any foreign currency forward exchange contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates. Inflation .
LiveRamp has a presence in the United Kingdom, France, Netherlands, Australia, China, Singapore and Japan. Most of the Company's exposure to exchange rate fluctuation is due to translation gains and losses as there are no material transactions that cause exchange rate impact.
LiveRamp has a presence in the United Kingdom, France, Italy, Spain, Brazil, India, Australia, China, Singapore and Japan. Most of the Company's exposure to exchange rate fluctuation is due to translation gains and losses.
However, if our costs, in particular sales and marketing and hosting costs, were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, operating results and financial condition. 35
We do not believe that inflation has had a material effect on our business. However, if our costs, in particular sales and marketing and hosting costs, were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases.