LiveRamp Holdings, Inc. Net Income jumped on 472% while EBITDA Margin dropped on 54.7 pp from 11.2% to -43.6%
05/16/2018 • About LiveRamp Holdings, Inc. (
$RAMP) • By InTwits
LiveRamp Holdings, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- LiveRamp Holdings, Inc. is a company in decline: FY2018 revenue growth was -75.0%, 5 years revenue CAGR was -27.5%
- LiveRamp Holdings, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 4.6%. Average EBITDA Margin for the same period was 7.2%. In FY2018 SBC/Revenue was even higher: 24.0%
- LiveRamp Holdings, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.6%. At the same time it's in pair with industry average of 6.2%
- CAPEX is quite volatile: $13m in FY2018, $62m in FY2017, $62m in FY2016, $76m in FY2015, $39m in FY2014
- In the last 5 years the company invested considerably less than D&A: $252m vs. $389m. In FY2018 this situation was still the same: CAPEX was 13 while D&A was 38
- The company has unprofitable business model: ROIC is -13.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.6x while industry average is -0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 75.0%. Annual revenue decline showed slowdown in FY18Q4 - revenue dropped on 73.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 20.0% to 21.7% in 2018.
Gross Margin jumped on 10.5 pp from 45.7% to 56.2% in FY2018. Gross Margin followed a growing trend at 6.9 pp per annum in FY2014-FY2018. SG&A as a % of Revenue surged on 54.4 pp from 33.7% to 88.0% in FY2018. SG&A as a % of Revenue followed a growing trend in the last 5 years. Stock Based Compensation (SBC) as a % of Revenue jumped on 18.4 pp from 5.6% to 24.0% in FY2018. SBC as a % of Revenue pursued a growing trend in FY2014-FY2018.
Net Income margin jumped on 10.2 pp from 0.47% to 10.7% in FY2018.
Investments (CAPEX, working capital and M&A)
LiveRamp Holdings, Inc.'s CAPEX/Revenue was 5.7% in FY2018. CAPEX/Revenue decreased on 3.6 pp from 9.4% in FY2015 to 5.7% in FY2018. It's average level of CAPEX/Revenue for the last three years was 6.7%. During FY2014-FY2018 CAPEX as a % of Revenue topped in FY2015 at 9.4% and was declining since that time.
Accounts receivable as a % of Revenue increased on 7.4 pp from 16.2% to 23.6% in FY2018. Accounts payable as a % of Revenue surged on 11.0 pp from 8.4% to 19.5% in FY2018.
LiveRamp Holdings, Inc. has spent
$4m on M&A in FY2018 which accounts for 2.0% of revenue.
Return on investment
The company operates at negative ROIC (-13.1%) and low but positive ROE (3.2%). ROIC dropped on 14.7 pp from 1.6% to -13.1% in FY2018. ROE increased on 2.6 pp from 0.57% to 3.2% in FY2018.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 0.6x to in FY2018. Debt showed almost no change in FY2018 while cash dropped on 17.8%.
LiveRamp Holdings, Inc. has no short term refinancing risk: cash is higher than short term debt (8,845.1%).
Management team
At the end of financial year the company had 3.9% shares owned by insiders. Insider ownership didn't change in 2018.
At the end of financial year the company had 3,380 employees. The number of employees increased on 3.7%. Average revenue per employee in FY2018 was
$65,119 and it dropped on 75.9%.
Financial and operational results
FY ended 03/31/2018
LiveRamp Holdings, Inc. ($RAMP) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 1,062 | 805 | 850 | 880 | 220 | -75.0% |
| Gross Profit | 267 | 311 | 362 | 403 | 124 | -69.3% |
| SG&A | 169 | 247 | 282 | 296 | 194 | -34.6% |
| EBITDA | 153 | 48 | 72 | 98 | -96 | -197.5% |
| EBIT | 50 | -33 | -13 | 16 | -134 | -951.1% |
| Interest expence | 12 | 8 | 8 | 7 | | |
| Tax | 30 | -15 | -12 | 5 | -66 | -1,549.6% |
| Net Income | 9 | -11 | 7 | 4 | 23 | 471.6% |
| Stock Based Compensation | 14 | 28 | 31 | 49 | 53 | 7.6% |
Balance Sheet
|
|---|
| Cash | 419 | 141 | 190 | 170 | 140 | -17.8% |
| Accounts Receivable | 161 | 127 | 139 | 143 | 52 | -63.5% |
| Accounts Payable | 36 | 30 | 38 | 40 | 19 | -53.3% |
| Short Term Debt | 29 | 32 | 32 | 40 | 2 | -96.0% |
| Long Term Debt | 289 | 245 | 158 | 189 | 228 | 20.4% |
Cash flow
|
|---|
| Capex | 39 | 76 | 62 | 62 | 13 | -79.8% |
| Acquisitions | 1 | 266 | 5 | 137 | 4 | -96.7% |
Ratios
|
|---|
| Revenue growth | -3.4% | -24.2% | 5.6% | 3.5% | -75.0% | |
| EBITDA growth | -30.2% | -68.8% | 51.6% | 35.9% | -197.5% | |
|
|---|
| Gross Margin | 25.1% | 38.6% | 42.5% | 45.7% | 56.2% | 10.5% |
| EBITDA Margin | 14.4% | 5.9% | 8.5% | 11.2% | -43.6% | -54.7% |
| EBIT Margin | 4.8% | -4.1% | -1.5% | 1.8% | -60.7% | -62.4% |
| SG&A, % of revenue | 15.9% | 30.7% | 33.1% | 33.7% | 88.0% | 54.4% |
| SBC, % of revenue | 1.3% | 3.5% | 3.7% | 5.6% | 24.0% | 18.4% |
| Net Income Margin | 0.8% | -1.4% | 0.8% | 0.5% | 10.7% | 10.2% |
| CAPEX, % of revenue | 3.7% | 9.4% | 7.3% | 7.1% | 5.7% | -1.4% |
|
|---|
| ROIC | 5.0% | -3.1% | -1.3% | 1.6% | -13.1% | -14.7% |
| ROE | 1.4% | -1.6% | 1.0% | 0.6% | 3.2% | 2.6% |
| Net Debt/EBITDA | -0.7x | 2.8x | 0.0x | 0.6x | |
| Interest coverage ratio (ICR) | 4.3x | | | 2.1x | |
| Interest expence / Average debt | 3.7% | 2.6% | 3.3% | 3.5% | | |
People
|
|---|
| Insider ownership | 3.9% | 3.9% | 3.9% | 3.9% | 3.9% | 0.0% |
| Employees | 5,555 | 4,320 | 3,475 | 3,260 | 3,380 | 3.7% |
| Revenue/Employee, th. $ | 191 | 186 | 245 | 270 | 65 | -75.9% |
LiveRamp Holdings, Inc. ($RAMP) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 213 | 54 | 59 | 60 | | -1.1% | -75.1% | -73.5% | -73.2% |
| Net Income | -1 | -3 | 23 | 5 | | -132.7% | -146.7% | | |
Balance Sheet
|
|---|
| Cash | 163 | 170 | 178 | 140 | | 8.6% | -3.4% | 29.0% | -17.8% |
| Short Term Debt | 2 | 2 | 2 | 2 | | -92.7% | -93.5% | -94.9% | -96.0% |
| Long Term Debt | 228 | 228 | 228 | 228 | | 52.0% | 60.2% | 13.5% | 20.4% |
Ratios
|
|---|
| Gross Margin | 46.4% | 55.5% | 58.5% | 60.5% | | 3.6% | 10.8% | 10.7% | 13.1% |
| Net Income Margin | -0.6% | -6.2% | 38.8% | 8.6% | | -2.5% | -9.5% | 40.4% | 12.2% |
Peers in IT Consulting & Other Services
Below you can find LiveRamp Holdings, Inc. benchmarking vs. other companies in IT Consulting & Other Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Gopher Protocol Inc ($GOPH) | | -25.0% | 83.3% | 5,471.1% | 461.0% |
| CLPS Incorporation ($CLPS) | | | | 8.1% | 56.0% |
| EPAM Systems, Inc. ($EPAM) | | 25.2% | 26.9% | 25.0% | 27.1% |
| Gartner, Inc. ($IT) | | 7.0% | 13.0% | 35.5% | 20.1% |
| Computer Task Group, Incorporated ($CTG) | | -6.0% | -12.1% | -7.3% | 19.1% |
| |
|---|
| Median (35 companies) | | 3.5% | 8.3% | 4.0% | 3.9% |
|---|
| LiveRamp Holdings, Inc. ($RAMP) | | -24.2% | 5.6% | 3.5% | -75.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inpixon ($INPX) | 29.8% | 28.9% | 28.1% | 68.7% | 71.4% |
| Gartner, Inc. ($IT) | 60.5% | 61.2% | 61.3% | 60.1% | 63.1% |
| InterXion Holding N.V. ($INXN) | 59.2% | 60.8% | 61.5% | 61.1% | 60.9% |
| Booz Allen Hamilton Holding Corporation ($BAH) | 50.4% | 50.8% | 52.3% | 53.6% | 53.5% |
| Teradata Corporation ($TDC) | 54.1% | 50.4% | 51.2% | 47.5% | 47.4% |
| |
|---|
| Median (36 companies) | 27.1% | 30.9% | 28.1% | 27.7% | 29.4% |
|---|
| LiveRamp Holdings, Inc. ($RAMP) | 25.1% | 38.6% | 42.5% | 45.7% | 56.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 41.3% | 44.9% | 43.3% | 42.2% | 42.8% |
| Switch, Inc. ($SWCH) | | 50.7% | 37.0% | 28.5% | 39.8% |
| Cognizant Technology Solutions Corporation ($CTSH) | 20.4% | 19.9% | 19.8% | 19.7% | 20.5% |
| Taoping Inc. ($TAOP) | -54.0% | -237.5% | -117.7% | 13.2% | 18.7% |
| DXC Technology Company ($DXC) | | | | 8.0% | 16.3% |
| |
|---|
| Median (35 companies) | 4.8% | 3.3% | 6.7% | 6.3% | 7.2% |
|---|
| LiveRamp Holdings, Inc. ($RAMP) | 14.4% | 5.9% | 8.5% | 11.2% | -43.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 62.5% | 48.1% | 57.4% | 50.5% | 78.3% |
| Switch, Inc. ($SWCH) | | 71.5% | 90.2% | 106.4% | 67.9% |
| Taoping Inc. ($TAOP) | 1.4% | 29.2% | 34.0% | 20.8% | 8.7% |
| Teradata Corporation ($TDC) | 2.0% | 2.1% | 2.3% | 3.6% | 7.1% |
| ServiceSource International, Inc. ($SREV) | 3.4% | 4.7% | 10.4% | 7.2% | 6.5% |
| |
|---|
| Median (34 companies) | 0.9% | 0.8% | 1.1% | 1.2% | 1.5% |
|---|
| LiveRamp Holdings, Inc. ($RAMP) | 3.7% | 9.4% | 7.3% | 7.1% | 5.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Accenture plc ($ACN) | 80.5% | 81.0% | 81.3% | 61.7% | 66.1% |
| The Hackett Group, Inc. ($HCKT) | 11.2% | 19.5% | 31.7% | 23.8% | 24.6% |
| Cognizant Technology Solutions Corporation ($CTSH) | 24.7% | 22.0% | 21.3% | 21.9% | 23.8% |
| Booz Allen Hamilton Holding Corporation ($BAH) | 25.3% | 26.5% | 23.1% | 22.6% | 22.5% |
| EPAM Systems, Inc. ($EPAM) | 19.7% | 18.4% | 18.2% | 18.9% | 21.2% |
| |
|---|
| Median (43 companies) | 7.5% | 6.9% | 7.7% | 5.6% | 6.9% |
|---|
| LiveRamp Holdings, Inc. ($RAMP) | 5.0% | -3.1% | -1.3% | 1.6% | -13.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Infinite Group Inc ($IMCI) | | | 169.6x | | 10.5x |
| InterXion Holding N.V. ($INXN) | 3.3x | 2.9x | 3.4x | 3.8x | 4.6x |
| Gartner, Inc. ($IT) | 0.1x | 1.3x | 0.6x | 11.7x | 4.1x |
| Switch, Inc. ($SWCH) | | 2.2x | 4.0x | 3.2x | 3.3x |
| Presidio, Inc. ($PSDO) | 0.0x | | 5.6x | 3.6x | 3.1x |
| |
|---|
| Median (28 companies) | -0.2x | -0.3x | 0.4x | 0.5x | 0.6x |
|---|
