Good afternoon, ladies and gentlemen, and welcome to LiveRamp's Fiscal 2022 First Quarter Earnings Call. My name is Beth, and I will be coordinating this call. [Operator Instructions] I would now like to turn the conference over to your host, Lauren Dillard, Chief Communications Officer. You may proceed.

Thank you, operator. Good afternoon and welcome. Thank you for joining us to discuss our fiscal 2022 first quarter results. With me today are Scott Howe, our Chief Executive Officer; Warren Jenson, President and Chief Financial Officer; and Diego Panama, our new Chief Commercial Officer. Today's press release and this call may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed description of these risks, please read the Risk Factors section of our public filings in the press release. A copy of our press release and financial schedules, including any reconciliation to non-GAAP financial measures, is available at liveramp.com. Also during the call today, we'll be referring to the slide deck posted on our website. At this time, I'll turn the call over to Scott.

Thanks, Lauren. And thanks everyone, for joining us today. Q1 was a great quarter and FY22 is off to a strong start. We significantly exceeded our financial commitments, made strong progress against our strategic growth initiatives and momentum continues to build across the board. LiveRamp's vision is to make it safe and easy for companies to use data, and it's never been more relevant our opportunities continue to grow. There are so many positive things taking shape that validate my optimism, which I'll discuss in greater detail momentarily. I'll begin today by sharing some highlights from the quarter and discuss a few of the key trends driving our recent market momentum and finally conclude by highlighting a couple of recent leadership announcements. Q1 performance. While we evaluate many financial measures, there are three we view as particularly important. Revenue growth validates market demand for our offerings. Bookings growth highlights a stronger future and profit margins demonstrate the leverage of our business model. And each of these dimensions, investors should be pleased with our Q1 performance. For the quarter, total revenue grew 20% and subscription revenue was up 16%. Normalizing for the wholesale contraction, total revenue grew 30% and subscription revenue was up 29%, a nice acceleration from last quarter. Our land and expand's model is working and we continue to see strong platform adoption in terms of increased platform usage and cross-sell to new channels like connected television and more sophisticated use cases like measurement and data collaboration. International growth, it was also a driver of our strong subscription performance. Marketplace and other revenue was up 36%, driven by our data marketplace business, which was up more than 50% and continues to benefit from a steady rebound in digital advertising spend, especially across the large media platforms where our marketplace…

Thank you, Scott. And good afternoon, everyone. I am so excited to be here. I'm thrilled to be taking on the Chief Commercial Officer role. I've been at LiveRamp over seven years now and can confidently say the opportunity in front of us has never been bigger. Truly, our opportunity is huge and perhaps what's most exciting is that it is entirely up to us and our ability to execute to seize it. Echoing Scott's remarks on digital transformation. Never has using data effectively been more mission critical to every business out there. And I firmly believe there is no other company better positioned to help our customers succeed with data. Our customers love our dedicated focus on what matters to them when it comes to data infrastructure. They want enterprise-grade software with security privacy and flexibility. Being able to invest fully into what customers care about is what presents us with an incredible opportunity to accelerate our growth. Today, I thought I would share some detail on my planned approach for leading our commercial teams into our next wave of growth. Personally, I thrive in connecting the dots between day-to-day execution and a big bold vision. And my approach is simple. Focused on helping our customers and do it through operational excellence that sets us up for scale. Together, not only as the LiveRamp commercial team, but with the entire LiveRamp team, our work is all about helping our customers and, in turn, accelerating our company's growth. With our client success and growth acceleration top of mind, we are focusing all of our attention on three key levers: 1) Accelerating new logo bookings; 2) Expanding through higher product attach rates; and 3) Driving higher customer retention. Let me share a little bit more detail. First, increased land through acceleration…

Good afternoon, everyone. And thanks, Diego. It's great having you in this role. I've had the pleasure over the last several quarters of working closely with Diego and can tell everyone I have a great partner and that we have the right person in this job. Well, we are off to a great start to our new fiscal year. On our last call, we talked about building momentum and our Q1 results delivered. Today, I'll focus my remarks on three areas: first, share a few highlights from Q1; next, I'll share a bit more about Safe Haven ATS and our groundbreaking partnership with Carrefour; and finally, provide updated and raised guidance for Q2 in FY22. Q1 highlights. Please turn to Slide 04. First, our growth is accelerating. Revenue of $119 million was up 20%; International of $21 million. Subscription revenue of 16%, while ARR increased 12%. Our net new customer count increased by more than 30% this quarter. Net retention was 103 and platform net retention 108; and finally, marketplace performed beautifully, and was up 36%. As expected, our results were negatively impacted by the wholesale contraction which we discussed on our prior earnings call and as outlined on Slide 17. We continue to expect this impact to be $30 million for the fiscal year, and it was $8 million in the quarter. If you exclude the impact, consider the following: total revenue increased 30% and international of 39%. Subscription revenue was up 29% and ARR up 25%. And net retention would have been 114% and platform net retention 117%. In short, while we don't discount the impact of the wholesale contraction, the numbers speak for themselves. 2) Our momentum continues to build. While we do not intend to regularly provide this level of detail, we thought it might be…

[Operator Instructions] The first question is from the line of Shyam Patil with SIG. You may proceed.

Congrats on the great results and outlook. I had a couple of questions. The first question I had was with Google's delay of its cookie application, what kind of impact is that having on your business and sales cycles? And then the second question. Warren, you talked at length about Carrefour, and it seems like a pretty exciting opportunity. Can you maybe talk about it a little bit more and just other potential partners where you see a similar opportunity or discussions right now? Thank you.

Shyam, this is Scott. I'll take the first question. When I think about Google, I think about them beyond just third-party cookies. Obviously, they're an important partner to us from a direct integration perspective. In terms of the cookie decision though, we view that as neutral to positive really for the industry because it gives everybody time to prepare for the eventual duplication of cookies. On that, though, it doesn't change our strategy whatsoever. We're neutral from an identity perspective and whether its cookies or authentication, our clients can get the best of all worlds. And if they work with us now, they can certainly target using cookies but they're also preparing themselves to utilize authentication methods as well. Now we, obviously, have a view around which works better and we've shared that. We think of authentication, we've seen it repeatedly. We have a lot of case studies. It's generating higher ROI and better reach for advertisers, better yields for publishers. And we think it's a more privacy-friendly option for consumers. But in terms of the time line and what everyone does, that's ultimately a decision for the regulators in Google. And regardless of when it happens, we'll be ready, and our clients and partners will be ready for it.

And let me jump in on the second one. It's really interesting, I just got the headline. Obviously, Safe Haven has had a tremendous amount of momentum, which has gone well beyond Carrefour. However, speaking of Carrefour specifically, there are a few things to call out. First, let me remind everybody of the business model. We have a subscription base. We have a primary tenant, think Carrefour, and then we have partner tenants think CPG, and we have multiple countries. In the case of Carrefour, it's groundbreaking in several aspects. Many of these aspects, we believe you'll start to see throughout the world of global retail and global CPG. What are those things? First of all, Carrefour is opening up its entire transactional database, if you will. So, think of all the billions and billions of transactions that a global retailer, the scale has and they're making their data available to CPGs on a very detailed granular basis. So, think at a SKU level. That is transformational. We've also seen, in particular, in Europe, other retailers start to do the same thing. So, you're going to start to see this happen. So, number one, it's groundbreaking in terms of its depth; two, its groundbreaking in that it's global. So, now think about it if you're a major CPG and you can start to get these insights across nine major geographies. So, you can start to see the network flywheel start to build; third, in terms of its application and what it means for LiveRamp. I go back to my prepared remarks. What we're doing at Carrefour is so much more than simply a retail media network. All of this data is being used for assortment for pricing, being used for trade, for category management, for data science and then also for analytics. So, through the platform, all these analytics are being put in the hands of store managers being put in thousands of category managers out there. So, the scope and breadth of how our platform is being used really goes well beyond some of the early use cases. And then in summary, what I would say, I guess, which leads back to your original question, 100%, yes. What we're doing in Carrefour will translate to the world of not only retail but the world of CPG. And by the way, we're also seeing that now extend to other industries like pharma and financial services.

Great. Thank you for all of the colors, guys.

Thank you.

Thank you, Mr. Patil. The next question is from the line of Stan Zlotsky with Morgan Stanley.

This is Elizabeth Eliot on for Stan. Congrats on the quarter. It was great to see that strong kind of new customer additions. And I wanted to dig in on some of the large customers of over one million. It looks like that cohort stayed flat after getting some strong growth over the last six quarters. So, is there any trends to kind of call out there on kind of the limited expansion in that group?

Yes, Elizabeth. I wouldn't read anything into that. I think the more important metric is what's been happening with our underlying ACV where our average contract value was up just under 30%, so a really nice growth there. So, as I think about that, it bodes really positively for the future as we get more and more clients that can make the leap to $1 million plus.

Great. And then, just a follow-up on my end. So, the subscription retention rate of 114 was really impressive. And even including kind of a headwind, the 103 surpassed the 101 rate you guys put up last quarter, kind of despite the wholesale contracts being a headwind. So, what are the other factors that you're seeing that are allowing you to more than offset that head in the contract?

Thanks, Elizabeth. This is Diego. Let me take on that question. We're very happy with the trends we're seeing on net retention and continue to focus on that. And perhaps the biggest lever that we have on that front is all about our attach rates. We're spending a lot of time really focusing on making sure that our customers are using multiple products in multiple markets, and that's just an awesome opportunity for us.

Listen, if I could add this one, let me add a couple of other things just to put some math behind that. If you look at upsell, you look at the variable contribution, we look at even lower contraction aside, obviously, from the wholesale contraction, all of those improved year-over-year. So, really a strong performance across the board. I think the focus that Diego and his team are putting on this is really paying off.

Great. Thank you, so much.

Thank you.

Thank you. The next question is from the line of Kirk Materne with Evercore. You may proceed.

Okay. Thank you, very much. Congrats on a really good quarter. I don't know who wants to take this one, but just obviously, trends in both bookings have been really strong. It's great to see the pickup there and what that likely means for revenue growth going forward. Can you just talk about what you're seeing in the pipeline and sort of your confidence on this maybe not the exact level of growth continuing but this kind of execution continuing and the demand in the market not just being say maybe a rebound in offer of COVID but sustainable as we look out over the next, call it, six to 12 months?

This is Diego, again. I'm happy to jump in on this question and the trends that we're seeing in bookings and what we're seeing in the pipeline. So, we're super, super happy with our bookings results over the last three quarters and excited for the quarters ahead. We've done a lot to focus on growth, both new logo and attach, and that's showing up in our bookings. One example that I'll point out to is we've really gone to the detail of focusing on specific industry verticals and the one that we're talking a lot about today because we're seeing great results is retail and CPG, for example. We have an awesome opportunity in retail in CPG, centered around Safe Haven but also the flywheel let that opens up for us. So, the focus that we have on initiatives around both new logo and attach really gives us a lot of optimism on our bookings trajectory.

Kirk, one other thing that I might do and just point out is, in the quarter, obviously, we had the contraction of the wholesale contraction. And so ARR all-in was up 12%. I'm sure it's not lost on people on this call, but if you look at our guidance and you start to look at the out quarters, you're going to see some pretty interesting increases in the rate of growth of ARR.

Yes. I'm looking forward to that as well. And maybe along those lines, the linearity of the wholesale sort of weighing down. Should we sort of be anticipating that sort of like just this $8 million per quarter for the next three and then we kind of get past that or could it be a little bit more in the next two and then say the fourth quarter frankly helping you all show the aggregate results sort of accelerating a little bit.

It's really the fourth quarter where you start to see this ease off a little bit. And we detailed this as we did last quarter. It's on Slide 17, everybody. But its $8 million Q1; $8 million Q2; $8 million Q3; $6 million impact in Q4; that's revenue. On ARR, the impact is 32; 32; 32; 25.

I didn't make it back to '17 yet. And maybe the last one for me. Just, the marketplace is really strong. How should we think about that for I don't know if you called out on your guide but how should we think about that just sort of either seasonally over the next couple of quarters just so we sort of stay within the framework of what you're thinking?

I'd say two things. First of all, our marketplace performance was strong, although we would be the first to say that probably Q1 was an easier comp for us. So, keep that in mind. But nonetheless, our marketplace business as Diego talked about is strong. Inherently in our guide would put if we call revenue up 18%, we'd put marketplace and subscription up roughly the same, so in the high teens. And then finally, I would say, just inherently, we're going to be more conservative in the outer quarters in our marketplace guide given the fact that it is variable.

That's great. Thank you all, congrats.

Thank you.

Thank you, Mr. Materne. The next question is from the line of Tim Nollen with Macquarie. You may proceed.

A couple for me too if I could. First, I appreciate the comments on the different verticals that you're getting into. It's not just a marketing services supported business that you're working in. I wonder if you could talk a little bit more about some of those other sectors and are these more longer tail type of smaller customers. Scott, you used to talk about breaking into the Fortune 2000 or whatever that number was getting to a certain level there. So, any comment on sort of how far down that tail you're moving and what types of verticals those are in? And then another question on the CTV topic. Could you maybe help explain what is it that LiveRamp does that can help CTV become a more real-time bid business? I think you referenced it being 10% or so only driven by data, which seems kind of ironic. So, what can LiveRamp do to really help the TV industry convert CTV to a real-time bidding marketplace? Thanks.

Tim, its Scott. I'll start by answering the second question on the real-time bidding. The way that we work with CTV is very similar to the way we work across all aspects of the media plan. We're so much bigger than just programmatic. And so while there are other players out there who really specialize in that we don't. Whether it's premium and sold or whether it's remnant. Our applicability to it is equally important. And so what do we bring to the CTV space, well, 1) it's addressability, the ability to micro target users; 2) it is measurability, including potentially different payment models around outcomes as opposed to just reach. And together those two things, coupled with the changes that have happened over the last 18 months, explosion and connected device usage bodes really well. There's just a big appetite that we see. And I given the fact that we skew to larger clients, almost without exception, our clients are spending on television. That's a really nice opportunity for us to go tap.

This is Diego. Let me jump in on the vertical question and actually connected to and talk about CTV. And one of my favorite examples of that deal we did in Q1, for example, is a newly public Fintech company. Obviously, they are doing a lot of customer acquisition and they're investing in CTV and linear TV. They came to us to be able to use data on that investment and then quickly also use their outcomes to measure their investment. And what's really neat is that they were not only measuring a user acquisition, but they were able to measure their investment against first trade, site of trade and the details like that, that it's just a really data-driven approach that we're seeing our customers take that's awesome to see. I think it's also a great example of how we're applicable in other verticals. So, that's why I'm connecting the dots there because we are super excited about retail and CPG like we called out but there's fast followers like Vince is an awesome vertical for us. They are data-rich companies, very progressive, and we have a great history with them. So, that's exciting. Travel is coming back. What I would say about our verticals is that -- to your point, we are focused on the Global 2000 accounts. We see we have a lot of runway there and by really focusing on their industry vertical and the specific needs that they have, we're able to deliver a much better solution that adds value to the customer and in turn, gives us a lot more traction.

That's great. Thanks.

Thank you.

Thank you, Mr. Nollen. The next question is from the line of Jason Kreyer with Craig-Hallum. You may proceed.

This is Bill for Jason. I appreciate you taking the call. Just had another question kind of related to the TV side, we've heard a lot in the channel about strength of upfront commitments to spring, do you benefit from that increase on a volume basis in any way or does that the structure of that channel allow you to accelerate your exposure to the Connected TV side?

Yes Bill, its Scott. And what I would tell you is, once again, we're pretty unique in as much as we're not limited to any single part of television. I think we're probably the only player that serves both linear television and CTV. So, if it's good for television, it's good for us. Over time, we've seen the mix change between the two. And certainly, we benefited from the growth of CTV relative to linear. But as a general rule, whatever actually increases spend across marketing as long as it can be accountable and as long as it can use data, it is going to be good for us.

Great. I appreciate that. And if I can one more quickly. Regarding standing out of the new professional service you guys mentioned last quarter, just wondering if you might be able to comment on what that opportunity could look like going forward because you've mentioned it. Gone out to a promising start. I wonder if that moment can continue.

This is Diego. And I'm happy to talk about our momentum of professional services. It's a critical component of what we're doing around the customer experience and really making that enterprise grade together with our support teams and our customer success teams, the service team is truly delivering. And what we find is that it's really a services business in service of our software business. When we include services, our customers have faster time to value, their ROI just really improves, and we're really pleased with the traction the team is getting and how the customers are reacting and really using the offering.

I appreciate that.

Thank you. The next question is from the line of William Lowden with BMO.

Good afternoon, everyone. And welcome to Diego. The breakout of gross bookings on Slide 10 is really interesting and sort of backed up everything you've been saying about the strength of Safe Haven, especially over the last year. And so maybe this is for Scott and Diego and I'm trying not to have you sort of pick among your children here but is Safe Haven becoming the lead product? And the context of that, I think we all know that there's some different views on alternate IDs in the ecosystem, but what's IronClad's using consented first-party data and co-mingling it together in clean room like environment. And so has Safe Haven really risen to lead your conversations more and more these days? And then just the second one for Warren is a follow-up on everything you were discussing about with Carrefour and European retailers. What are your discussions like with U.S. retailers, is the market particularly different there or do you expect this momentum to slow back across the Atlantic as well? Thanks.

So Lowden, on the -- first on Safe haven, what I would tell you is, yes, with about 10 exclamation points behind it. There's not a conversation that we're having with clients that typically doesn't involve safe even because safe really encompasses all of the disparate products that we've been talking to clients about over time. It gives us access to all of the world's ethical data. It allows identity to tie that data together. It provides a client with a segmentation UI to make sense of the data. It allows a client to activate the data at all the places that matter. It allows clients to potentially collaborate with partners using configurable permissions always securely. And it allows them to measure and optimize and improve over time. So, it links everything together. Now the other thing that I rip off in your comment is around the ID space. And you are exactly right. I mean this, you and I have had this conversation before where I think one of the great misperceptions about LiveRamp is somehow we're in competition with all these other IDs that are out there. I mean, Facebook, Google, Amazon, Trade Desk, they all have their own IDs and that makes sense because that powers their own algorithms and we work with all of them but when we talk to clients, we're not a media company, we're not a DSP, they want to work with someone to optimize their spend with each of those destinations, but also importantly across all of those destinations. And so it's so important for us to be unbiased and have a solution that's neutral for data and measurement as well because that allows us to work across the entire industry. And I think that's why so many of the largest companies in the world are working with us because we in turn work across all the other players in the industry in a neutral agnostic interoperable way.

Lowden, let me jump in on the second question. The short answer is yes. I mean the percent of discussions with U.S. retailers continue to be very, very strong. I mean we're incredibly proud that in just a year, we have a 30% share of big box grocery. And that's phenomenal relative to where we are. A few things that I call out to just for everybody to think about is, I guess, three things. First of all, best practice sharing. So, this is really a network effect. So, we're able to share best practices globally with retail. And one of the more interesting things is you think about the privacy standards that we built into with Carrefour and GDPR, well, we're bringing those best practices to the U.S. as well. Also from a product perspective, the analytics environment that we're launching with Carrefour for all of their CPG partners will, by year-end, have some 300 standardized reports available to CPG and also people inside of the card for network as well. That's a product that has 100% global applicability for any retail, any retailer. And then finally, the network effect as CPG. CPG's by almost by definition are global companies. They work in almost every major geography in the world, and they want a common standard. And it just helps them a ton to have ATS to have Safe Haven to have a common way of looking at things. And that's helping us in all of our discussions, not only with CPGs, but also with retailers everywhere.

Okay. Thank you, both.

Thank you.

Thank you, Mr. Lowden. We do have an additional question from the line of Brian Fitzgerald with Wells Fargo. You may proceed.

We want to ask a couple of questions about the synergy between ATS and Safe Haven and some of the commentary in your prepared remarks. Lauren, we can see why that would be important since you might have a customer that's a Carrefour knows well, who's been in their stores, maybe hasn't been online. But then recently, and perhaps we were an iOS user who can't be reached through cookie targeting. So, given Google's announcement of the deprecation delay, I'm just wondering if Safe Haven helps to create such additional urgency around ATS deployment in need. And then I have another quick follow-up.

Yes. What I would tell you, Brian, is I think that Safe Haven creates more opportunities to accelerate on ATS and anything that involves measurement or data collaboration or sophisticated data usage. But the real pressure for migrating to ATS doesn't come from Google's date. It comes from the results that we're seeing. And we have real case studies, real data. Our product has been live for well over a year. And so we've seen very consistent and very quite frankly spectacular results. Consistently, ATS is generating strong double-digit lifts for advertisers. I mean, numbers well in excess of 50% lift are not only not uncommon but they're actually the norm because these advertisers are reaching previously un-addressable users on Safari and Firefox. And rather than just hitting saturated users on cookies with the same message, they're reaching new audiences. As a result, we're seeing the reach increase as well. For publishers who are the other side of the authentication, when they deploy this, and we have so many of the world's largest publishers already embracing this, they're seeing a strong yield increase, so they're making more money. And of course, what shouldn't be lost in this is it's just a better experience for consumers and everybody in the industry should want that because that is the fuel that keeps the industry going. So, I think it's a really good story to tell and that's why we've taken a position of we no longer really care too much about what else happens in the industry. We believe authentication is a better way to go. And so we're sharing those results with our clients and then letting them make the decision.

Got it. And then a quick follow-up. And sorry, for going long. We know that you've said you have minimal IDFA exposure, but we've heard some talk of their plans to mitigate impacts with service side solutions. So, we want to ask your role in supporting some of those solutions. Are you seeing your customers increase their utilization of targeting products such as uploaded custom audiences, can that be a catalyst for your business as well?

Yes. I think you've hit on something interesting here is that we don't normally see a huge impact as the industry changes around us. Now there are certainly winners and losers in the industry but what we found over time is addressability trumps all others. And so if one tactic goes away, clients will just redirect their dollars to other tactics. And so not surprisingly, Facebook and Google and other walled gardens have been the big winners. And there are other companies who have lost over time. But once again, we're agnostic. All we do is make data addressable and allow it to be utilized at the destinations that matter, so whoever does win, we expect that we'll underpin that and we'll benefit from wherever the spend as a result goes. Thank you.

Got it. I appreciate it, thanks guys.

Thank you, Mr. Fitzgerald. There are no additional questions sitting at this time. I would like to pass the conference back over to Warren Jenson with any closing remarks.

Great. Well, thank you operator. I was sitting here listening to Scott and thinking about what I might say to conclude our call. Probably if I were to say simply one thing, 1) you should walk away with from this call is that at LiveRamp we're incredibly excited and we're leaning in. Our foundations are strong, and we love our position. 2) Is if you think of all the incredible things that we've talked about today, Global Safe Haven, CTV, what we're doing across industry groups, we think our technology equips us incredibly well for the future, whether it's privacy preserving technology, ATS, federated identity management, Safe Haven, CTV, et cetera, we believe we're in great shape. And then, 3) we're incredibly proud of the personnel announcements that were made over the course of the past month or so. Whether it's Diego, David or Mohsin, our team is incredibly strong and we have an even stronger, an equally strong bench underneath this team as well. So, on behalf of our entire team here in San Francisco and LiveRampers everywhere, thank you so much for joining us today. We love our customers. We're incredibly appreciative of your support. Thank you very much.

Thank you all for joining today's LiveRamp fiscal 2022 first quarter earnings call. You may now disconnect your line. And have a lovely day.