LiveRamp Holdings, Inc.: Form 10-Q for the period ended Dec 31, 2024

Introduction and Overview

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. A groundbreaking leader in foundational identity, LiveRamp offers a connected customer view with 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. 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. 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. Our common stock is listed on the New York Stock Exchange under the symbol “RAMP.” We serve a global customer base from locations in the United States, Europe, and the Asia-Pacific (“APAC”) region. Our direct customer 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. Through our expansive partner ecosystem we serve thousands of additional companies, unlocking access to unique customer moments and creating powerful network effects.

Operating Segment

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

Sources of Revenues

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

/LiveRamp Data Collaboration Platform

As depicted in the graphic below, we power the industry’s leading enterprise platform for data collaboration. We enable organizations to access and leverage data more effectively across the applications they use to interact with their customers. At the core of our platform is an omnichannel, deterministic identity resolution technology that offers unparalleled accuracy, breadth, and depth. Leveraging deep expertise in data collaboration, the /LiveRamp Data Collaboration Platform enables an organization to unify customer and prospect data (first-, second-, or third-party) to build a single view of the customer in a way that protects consumer privacy. First-party data is data collected firsthand through a company's controlled channels. Second-party data is data that a company shares directly with a trusted business partner. Third-party data is data collected and sold by a company through an online data marketplace to companies with which it does not have a direct relationship. This single customer view can then be connected across any of the 500 partners in our ecosystem in order to support a variety of people-based marketing solutions.

The /LiveRamp Data Collaboration Platform provides customers with four core capabilities:

• Live/Identity. We provide enterprise identity infrastructure that resolves disparate consumer identities across different internal and external systems to create an accurate, connected view of the customer. Our approach to identity is built from two complementary graphs, combining offline data and online data and providing accuracy with a focus on privacy. LiveRamp technology for directly identifiable information (or "DII") gives brands and platforms the ability to connect and update what they know about consumers, resolving DII across enterprise databases and systems to deliver better customer experiences. Our digital identity graph, powered by our Authenticated Traffic Solution (or "ATS"), associates pseudonymous device IDs, TV IDs and other online customer IDs from premium publishers, platforms or data providers, around a RampIDTM, a durable and privacy-centric connector to the digital ecosystem. This provides marketers with a consistent view of the consumer that is necessary for personalized segmentation, targeting, and measurement.
• Live/Access. Our Data Marketplace provides customers with simplified access to industry-leading third-party data providers globally. The /LiveRamp Data Collaboration Platform allows for the search, discovery and distribution of data provided by third-party data providers to improve targeting, measurement, and customer intelligence. Data accessed through the LiveRamp Data Marketplace is connected via RampID and is utilized to enrich our customers’ first-party data and can be leveraged across technology and media platforms, agencies, analytics environments, and TV partners. Our platform also provides tools for data providers to manage the organization, distribution, and operation of their data and services across our network of customers and partners. Today we work with more than 200 data providers across all verticals and data types.
• Live/Connectivity. We enable organizations to leverage their customer and prospect data in the digital and TV ecosystems and across the customer experience applications they use through a safe and secure data matching process called data onboarding. Our technology ingests a customer’s first-party data, removes all DII, and replaces it with a pseudonymized RampID. RampID can then be distributed through direct integrations to the top platforms our customers work with, including leading marketing cloud providers, publishers and social networks, personalization tools, and connected TV services. We connect data across an ecosystem of more than 500 partners, representing one of the largest networks of connections in the digital marketplace.
• Live/Insights. Data Collaboration enables advanced measurement and analytics that helps produce insight-driven innovation. We enable trusted data collaboration between organizations and their trusted partners in a neutral, manageable environment. Our platform provides customers with collaborative opportunities to safely and securely build a more accurate, dynamic view of their customers by leveraging partner data. We power more accurate, more complete measurement with the measurement vendors and partners our customers use. Our platform allows customers to combine disparate data files, typically advertising exposure and customer sales transactions, replacing customer identifiers with RampID. Customers then can use that aggregated view of each customer to measure reach and frequency, sales lift, closed loop offline-to-online conversion and cross-channel attribution.

Subscription

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

Our solutions are sold to enterprise marketers and the companies they partner with to execute their marketing, including agencies, marketing technology providers, publishers and data providers. Today, we work with 865 direct customers world-wide and serve thousands of additional customers indirectly through our reseller partnership arrangements.

• Brands and Agencies. We work with over 500 of the largest brands and agencies in the world, helping them execute people-based marketing by creating an omni-channel understanding of the consumer and activating that understanding across their choice of best-of-breed digital marketing platforms.
• Marketing Technology Providers. We provide marketing technology providers with the identity foundation required to offer people-based targeting, measurement and personalization within their platforms. This adds value for brands by increasing audience reach, as well as the speed at which they can activate their marketing data.
• Publishers. We enable publishers of any size to offer people-based marketing on their properties. This adds value for brands by providing direct access to their customers and prospects in the publisher's premium inventory.
• Data Sellers. Leveraging our vast network of integrations, we allow data sellers to easily connect to the digital ecosystem and monetize their own data. Data can be distributed to customers or made available through the LiveRamp Data Marketplace feature. This adds value for brands as it allows them to augment their understanding of consumers and increase their understanding of customers and prospects.

Marketplace and Other

As we have scaled the LiveRamp network and technology, we have found additional ways to leverage our platform, deliver more value to customers and create incremental revenue streams. Leveraging our common identity system and broad integration network, the Data Marketplace seamlessly connects data sellers’ audience data across the marketing ecosystem. The Data Marketplace enables data sellers to easily monetize their data across hundreds of marketing platforms and publishers. At the same time, it provides a single platform where data buyers, including platforms and publishers, in addition to brands and their agencies, access third-party data from data sellers supporting all industries and encompassing all types of data. Data providers include sources and brands exclusive to LiveRamp, emerging platforms with access to previously unavailable deterministic data, and data partnerships enabled by our platform.

We generate revenue from the Data Marketplace primarily through revenue-sharing arrangements with data sellers that are monetizing their data assets via our marketplace platform service. We also generate Marketplace and Other revenue through transactional usage-based arrangements with certain publishers and addressable TV providers. Data Marketplace revenue is recognized net of the share of revenue earned by the data seller.

To complement our product offering, we provide professional services and enhanced support entitlements to help customers leverage our platform and drive business outcomes. Our services offering includes product implementation, data science analytics, audience measurement and general advisory. We generate revenue from services primarily from project fees paid by subscribers to our platform. Service projects are sold on an ad hoc basis as well as bundled with platform subscriptions. Professional services revenue is approximately 4% of total Company revenue.

Summary Results and Notable Events

A financial summary of the quarter ended December 31, 2024 compared to the same period in fiscal 2024 is presented below:

• Revenues were $195.4 million, a 12.4% increase from $173.9 million.
• Cost of revenue was $55.0 million, a 22.4% increase from $44.9 million.
• Gross margin decreased to 71.9% from 74.2%.
• Total operating expenses were $125.7 million, a 10.6% increase from $113.7 million.
• Cost of revenue and operating expenses for fiscal 2025 and 2024 included the following items:
• Non-cash stock compensation of $26.8 million and $17.5 million, respectively (cost of revenue of $1.5 million and $0.8 million, respectively, and operating expenses of $25.3 million and $16.7 million, respectively)
• Purchased intangible asset amortization of $3.7 million and $1.2 million, respectively (cost of revenue)
• Restructuring and other charges of $0.1 million and $2.5 million, respectively (operating expenses)
• Total other income, net was $4.0 million, a decrease of $2.6 million from $6.6 million.
• Net earnings were $11.2 million, or $0.17 per diluted share, compared to net earnings of $14.0 million, or $0.21 per diluted share.
• Net cash provided by operating activities was $45.1 million compared to $16.6 million.
• The Company repurchased 0.4 million shares of its common stock for $10.0 million compared to 0.3 million shares for $10.0 million under the Company's common stock repurchase program.

This summary and the following discussion and analysis highlight financial results as well as other significant events and transactions of the Company during the quarter ended December 31, 2024 compared to the same period in fiscal 2024, unless otherwise stated. However, this summary is not intended to be a full discussion of the Company's results. This summary should be read in conjunction with the following discussion of Results of Operations and Capital Resources and Liquidity and with the Company's condensed consolidated financial statements and footnotes accompanying this Quarterly Report on Form 10-Q.

Key Performance Metrics

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

Subscription Net Retention

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

SNR at December 31, 2024 compared to December 31, 2023 increased 7%. The acquisition of Habu contributed approximately one percentage point to the current period growth. Lower contraction levels and increasing usage revenue were the primary contributors to the additional improvement.

Annualized Recurring Revenue

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

Our ARR growth of 10% was attributable to both new customer revenue and net growth (upsell revenue less downsell and churn) in existing customer revenue. The increasing growth rate compared to the 6% growth in the previous year is due to improvement in net growth in existing customer revenue, primarily from lower downsell and churn. The acquisition of Habu contributed approximately three percentage points to the current period growth.

Remaining Performance Obligations and Current Remaining Performance Obligations

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

While the Company believes RPO and CRPO are leading indicators of revenue as they represent sales activity not yet recognized in revenue, they are not necessarily indicative of future revenue growth as they are influenced by several factors, including seasonality of contract renewal timing and average contract terms. The Company monitors RPO and CRPO to manage the business and evaluate performance. RPO increased due to several large, multi-year renewals; however, the increase was partially offset by continued run-off of other large multi-year arrangements with future renewal dates. CRPO increased due to new customer additions, as well as the multi-year renewals. The relative decline in RPO and CRPO growth (in terms of % change) is primarily due to timing of multi-year renewals and revenue run-off from large multi-year arrangements subject to future renewal.

Results of Operations

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

Revenues

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

Total revenues for the quarter ended December 31, 2024 were $195.4 million, a $21.5 million, or 12.4%, increase from the same quarter a year ago. The increase was due to revenue growth in both Subscription and Marketplace and Other. The Subscription revenue growth was $13.2 million, or 10.0%, primarily due to new logo deals and higher variable revenue. Subscription revenue also included approximately $3.7 million of revenue associated with the fiscal 2024 acquisition of Habu. The Marketplace and Other revenue growth was $8.3 million, or 20.0%, primarily due to Data Marketplace and Services growth. On a geographic basis, U.S. revenue increased $21.9 million, or 13.4%. International revenue decreased $0.4 million, or 3.3%.

Total revenues for the nine months ended December 31, 2024 were $556.9 million, a $69.0 million, or 14.2%, increase compared to the same period a year ago. The increase was due to revenue growth in both Subscription and Marketplace and Other. The Subscription revenue growth was $43.7 million, or 11.5%, primarily due to upsell to existing customers, new logo deals and higher variable revenue. Subscription revenue also included approximately $10.4 million of revenue associated with the fiscal 2024 acquisition of Habu. The Marketplace and Other revenue growth was $25.3 million, or 23.5%, primarily due to Data Marketplace and Services growth. On a geographic basis, U.S. revenue increased $69.8 million, or 15.3%. International revenue decreased $0.8 million, or 2.5%.

Cost of Revenue and Gross Profit

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

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

Cost of revenue was $55.0 million for the quarter ended December 31, 2024, a $10.1 million, or 22.4%, increase from the same quarter a year ago. Gross profit increased to $140.4 million (71.9% gross margin) from $128.9 million (74.2% gross margin) in the prior year quarter due to the revenue increase of $21.5 million offset partially by an increase in cloud infrastructure costs (increased $6.9 million), services costs (increased $1.6 million) due to higher services revenue, intangible asset amortization (increased $2.5 million) and stock-based compensation expense (increased $0.7 million). U.S. gross margins decreased to 72.8% from 76.4% while International gross margins increased to 57.3% from 46.4%.

Cost of revenue was $158.0 million for the nine months ended December 31, 2024, a $26.2 million, or 19.9%, increase from the same period a year ago. Gross profit increased to $398.9 million (71.6% gross margin) from $356.0 million (73.0% gross margin) in the prior period due to the revenue increase of $69.0 million offset partially by an increase in cloud infrastructure costs (increased $12.4 million), services costs (increased $10.4 million) due to higher services revenue, intangible asset amortization (increased $5.6 million) and stock-based compensation expense (increased $2.5 million). U.S. gross margins decreased to 72.5% from 75.0%, and International gross margins increased to 56.1% from 43.1%.

Operating Expenses

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

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

R&D expenses were $42.7 million for the quarter ended December 31, 2024, an increase of $4.9 million, or 13.1%, compared to the same quarter a year ago, and are 21.9% of total revenues compared to 21.7% in the same quarter a year ago. The increase is primarily due to stock-based compensation expense (increased $3.1 million), cloud R&D hosting expenses (increased $1.1 million), and headcount-related expenses (increased $0.9 million). Stock-based compensation expense in the prior year quarter was favorably impacted due to the acceleration of stock-based compensation expense in the fourth quarter of fiscal 2023.

R&D expenses were $130.7 million for the nine months ended December 31, 2024, an increase of $24.7 million, or 23.3%, compared to the same period a year ago, and are 23.5% of total revenues compared to 21.7% in the prior year period. The increase is primarily due to stock-based compensation expense (increased $13.9 million), headcount-related expenses (increased $8.9 million) and cloud R&D hosting expenses (increased $1.3 million). Stock-based compensation expense in the prior year period was favorably impacted due to the acceleration of stock-based compensation expense in the fourth quarter of fiscal 2023.

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

S&M expenses were $50.9 million for the quarter ended December 31, 2024, an increase of $4.7 million, or 10.1%, compared to the same quarter a year ago, and are 26.0% of total revenues compared to 26.6% in the prior year period. The increase is primarily due to stock-based compensation expense (increased $3.2 million) and marketing expenses (increased $1.5 million). Stock-based compensation expense in the prior year quarter was favorably impacted due to the acceleration of stock-based compensation expense in the fourth quarter of fiscal 2023.

S&M expenses were $156.1 million for the nine months ended December 31, 2024, an increase of $20.9 million, or 15.5%, compared to the same period a year ago, and are 28.0% of total revenues compared to 27.7% in the prior year period. The increase is primarily due to stock-based compensation expense (increased $9.1 million), headcount-related expenses (increased $6.7 million), marketing expenses (increased $3.0 million), and professional services expenses (increased $1.6 million). Stock-based compensation expense in the prior year period was favorably impacted due to the acceleration of stock-based compensation expense in the fourth quarter of fiscal 2023.

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

G&A expenses were $32.0 million for the quarter ended December 31, 2024, an increase of $4.8 million, or 17.4%, compared to the same quarter a year ago, and are 16.4% of total revenues compared to 15.7% in the same quarter a year ago. The increase is primarily due to stock-based compensation expense (increased $2.3 million) and professional services expenses (increased $3.2 million). Stock-based compensation expense in the prior year quarter was favorably impacted due to the acceleration of stock-based compensation expense in the fourth quarter of fiscal 2023.

G&A expenses were $94.3 million for the nine months ended December 31, 2024, an increase of $14.4 million, or 18.0%, compared to the same period a year ago, and are 16.9% of total revenues compared to 16.4% in the prior year period. The increase is primarily due to stock-based compensation expense (increased $11.8 million) and professional services expenses (increased $5.1 million), offset partially by a decrease in transformation costs (decreased $1.9 million). Stock-based compensation expense in the prior year period was favorably impacted due to the acceleration of stock-based compensation expense in the fourth quarter of fiscal 2023.

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

Gains, losses and other items, net was $0.1 million for the quarter ended December 31, 2024, a decrease of $2.4 million compared to the same quarter a year ago. The prior year quarter costs primarily related to $1.3 million related to termination benefits for employees whose positions were eliminated, and $1.2 million of third-party merger costs associated with the Habu acquisition.

Gains, losses and other items, net was $0.8 million for the nine months ended December 31, 2024, a decrease of $8.4 million compared to the same period a year ago. The prior year costs primarily related to $2.8 million related to the impairment of APAC goodwill, $2.3 million in lease impairments and restructuring, $2.8 million related to termination benefits for employees whose positions were eliminated, and $1.2 million of third-party merger costs associated with the Habu acquisition.

Income from Operations and Operating Margin

Income from operations was $14.7 million for the quarter ended December 31, 2024 compared to income from operations of $15.2 million in the same quarter a year ago. Operating margin for the quarter ended December 31, 2024 was 7.5% compared to 8.7% in the same quarter a year ago. Margins in the prior year quarter were positively impacted by the acceleration of stock-based compensation previously discussed.

Income from operations was $16.9 million for the nine months ended December 31, 2024 compared to income from operations of $25.7 million in the same period a year ago. Operating margin was 3.0% compared to 5.3% in the prior year period. Margins in the prior year period were positively impacted by the acceleration of stock-based compensation previously discussed.

Total Other Income and Income Taxes

Total other income, net was $4.0 million for the quarter ended December 31, 2024 compared to total other income, net of $6.6 million in the same quarter a year ago. Total other income, net was $12.7 million for the nine months ended December 31, 2024 compared to $17.9 million in the same period a year ago. The quarter and year-to-date decreases are primarily attributable to lower invested cash and short-term investments (the prior year invested cash balance reflected cash prior to the acquisition of Habu) and slightly lower interest rates in the current fiscal year.

Income tax expense was $9.2 million on income from continuing operations before income taxes of $18.7 million for the quarter ended December 31, 2024, resulting in a 49.1% effective tax rate. This compares to a prior year quarter income tax expense of $8.4 million on income from continuing operations before income taxes of $21.8 million, or a 38.7% effective tax rate. Income tax expense was $25.8 million on income from continuing operations before income taxes of $29.6 million for the nine months ended December 31, 2024, resulting in an 87.3% effective tax rate. This compares to a prior year period income tax expense of $27.3 million on income from continuing operations before income taxes of $43.6 million, or a 62.7% effective tax rate. Tax expense for all periods reflects the impact of the capitalization of research and development expenditures in accordance with Internal Revenue Code ("IRC") Section 174, as modified by the Tax Cuts and Jobs Act of 2017, without a corresponding deferred tax benefit, the valuation allowance, and nondeductible stock-based compensation.

Discontinued Operations

Earnings from discontinued operations, net of tax, was $1.7 million for the three months ended December 31, 2024 compared to $0.6 million in the same quarter a year ago. Earnings from discontinued operations, net of tax, was $1.7 million for the nine months ended December 31, 2024 compared to $1.0 million in the same period a year ago. During fiscal 2019, the Company completed the sale of its Acxiom Marketing Solutions ("AMS") business, and the business qualified for treatment as discontinued operations. Significant income taxes were incurred and paid on the gain from the sale of AMS. During fiscal 2025, 2024 and 2023, the Company recovered certain previously paid state income taxes arising from the sale of AMS.

Capital Resources and Liquidity

The Company’s cash and cash equivalents are primarily located in the United States. At December 31, 2024, approximately $19.8 million of the total cash balance of $376.8 million, or approximately 5.3%, was located outside of the United States. The Company has no current plans to repatriate this cash to the United States.

Trade accounts receivable, net balances were $210.6 million at December 31, 2024, an increase of $20.3 million, compared to $190.3 million at March 31, 2024. Days sales outstanding ("DSO"), a measurement of the time it takes to collect receivables, was 99 days at December 31, 2024, compared to 101 days at March 31, 2024. DSO can fluctuate due to the timing and nature of contracts that lead to up-front billings related to deferred revenue on services not yet performed, and Data Marketplace contracts, which are billed on a gross basis, recognized on a net basis, but for which the amount that is due to data sellers is not reflected as an offset to accounts receivable. Compared to March 31, 2024, DSO at December 31, 2024 was positively impacted by approximately two days as the increased impact of Data Marketplace gross accounts receivable was offset by collections of Data Marketplace receivables. All customer accounts are actively managed, and no losses in excess of amounts reserved are currently expected.

Working capital at December 31, 2024 totaled $412.2 million, a $26.7 million increase when compared to $385.5 million at March 31, 2024.

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

Cash Flows

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

Operating Activities

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

In the nine months ended December 31, 2024, net cash provided by operating activities of $91.4 million resulted primarily from operating results adjusted for non-cash items of $102.3 million offset by changes in operating assets and liabilities of $10.9 million. Net cash used by changes in operating assets and liabilities was primarily related to an increase in accounts receivable of $21.6 million primarily due to revenue growth and the timing of cash receipts from customers, offset partially by an increase in deferred revenue of $13.9 million. The change in accounts receivable is primarily due to revenue growth and the timing of cash receipts from customers. The change in deferred revenue is primarily due to growth in quarterly and annual upfront billings to customers.

In the nine months ended December 31, 2023, net cash provided by operating activities of $78.0 million resulted primarily from operating results adjusted for non-cash items of $77.2 million and changes in operating assets and liabilities of $0.8 million. Net cash provided by changes in operating assets and liabilities was primarily related to a net reduction in refundable income taxes of $29.6 million, an increase in deferred revenue of $9.7 million, and an increase in other assets of $8.8 million, offset partially by an increase in accounts receivable of $41.0 million. The change in accounts receivable is primarily due to revenue growth and the timing of cash receipts from customers.

Investing Activities

Our investing activities have primarily consisted of business acquisitions, capital expenditures, purchases and sales of investments and strategic investments. Capital expenditures may vary from period to period due to the timing of the expansion of our operations, the addition of new headcount, new facilities, and acquisitions. Investing activities also include purchases and sales of short-term investments using available cash reserves.

In the nine months ended December 31, 2024, net cash provided by investing activities consisted of the proceeds from the sale of short-term investments of $27.0 million, partially offset by purchases of short-term investments of $2.0 million, net cash paid in acquisitions of $2.0 million, purchases of strategic investments of $1.4 million, and capital expenditures of $0.7 million.

In the nine months ended December 31, 2023, net cash used in investing activities consisted of capital expenditures of $2.5 million, purchases of strategic investments of $1.0 million, and purchases of investments of $24.4 million partially offset by the proceeds from the sale of investments of $25.8 million.

Financing Activities

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

In the nine months ended December 31, 2024, net cash used in financing activities was $76.4 million, consisting of the acquisition of treasury shares pursuant to the board of directors' approved stock repurchase plan of $75.7 million (2.8 million shares) and $9.3 million for shares repurchased for tax withholdings upon vesting of stock-based awards. These uses of cash were partially offset by proceeds of $8.6 million from the sale of common stock from our equity compensation plans.

In the nine months ended December 31, 2023, net cash used in financing activities was $43.2 million, consisting of the acquisition of treasury shares pursuant to the board of directors' approved stock repurchase plan of $45.3 million (1.7 million shares) and $5.1 million for shares repurchased for tax withholdings upon vesting of stock-based awards. These uses of cash were partially offset by proceeds of $7.2 million from the sale of common stock from our equity compensation plans.

Common Stock Repurchase Program

On August 14, 2024, the Company's board of directors approved an amendment to the existing common stock repurchase program, which was initially adopted in 2011. The amendment authorized an additional $200.0 million in share repurchases, increasing the total amount authorized for repurchase under the common stock repurchase program to $1.3 billion. In addition, it extended the common stock repurchase program duration through December 31, 2026.

During the nine months ended December 31, 2024, the Company repurchased 2.8 million shares of its common stock for $75.7 million under the modified common stock repurchase program. Through December 31, 2024, the Company had repurchased a total of 40.5 million shares of its common stock for $1.0 billion under the program, leaving remaining capacity of $281.6 million. The repurchase amounts included in the condensed consolidated statements of stockholders' equity include immaterial amounts related to the 1% excise tax on share repurchases, net of share issuances, as a result of the IRA.

Contractual Commitments

The following tables present the Company’s contractual cash obligations and purchase commitments at December 31, 2024 (dollars in thousands). Operating leases primarily consist of our various office facilities. Purchase commitments primarily include contractual commitments for the purchase of data, hosting services, software-as-a-service arrangements, and leasehold improvements. The tables do not include the future payment of liabilities related to uncertain tax positions of $28.3 million as the Company is not able to predict the periods in which the payments will be made. The amount for 2025 represents the remaining three months ending March 31, 2025. All other periods represent fiscal years ending March 31 (dollars in thousands):

Future minimum payments as of December 31, 2024 related to restructuring plans as a result of the Company's exit from certain leased office facilities are (dollars in thousands): Fiscal 2025: $675; and Fiscal 2026: $1,799.

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

For a description of certain risks that could have an impact on results of operations or financial condition, including liquidity and capital resources, see “Risk Factors” contained in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024 ("2024 Annual Report") as filed with the Securities and Exchange Commission ("SEC") on May 22, 2024 and Part II, Item 1A of this Quarterly Report on Form 10-Q.

Non-U.S. Operations

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

Critical Accounting Policies

We prepare our condensed consolidated financial statements in conformity with U.S. GAAP as set forth in the FASB ASC, and we consider the various staff accounting bulletins and other applicable guidance issued by the SEC. These accounting principles require management to make certain judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The consolidated financial statements in the 2024 Annual Report include a summary of significant accounting policies used in the preparation of the Company’s consolidated financial statements. In addition, the Management’s Discussion and Analysis of Financial Condition and Results of Operations filed as part of the 2024 Annual Report contains a discussion of the policies that management has identified as the most critical because they require management’s use of complex and/or significant judgments. None of the Company’s critical accounting policies have materially changed since the date of the 2024 Annual Report other than as described in the "Accounting Pronouncements Adopted during the Current Year" section of Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” of the Notes to Condensed Consolidated Financial Statements accompanying this Quarterly Report on Form 10-Q.

Recent Accounting Pronouncements

For information on recent accounting pronouncements, see “Accounting Pronouncements Adopted During the Current Year" and “Recent Accounting Pronouncements Not Yet Adopted” under Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” of the Notes to Condensed Consolidated Financial Statements accompanying this Quarterly Report on Form 10-Q.

We believe there have been no material changes in our market risk exposures for the nine months ended December 31, 2024, as compared with those discussed in the 2024 Annual Report.

(a) Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial and accounting officer), evaluated the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based on this evaluation, our principal executive officer and our principal financial and accounting officer concluded that as of December 31, 2024, our disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The risks described in Part I, Item 1A, “Risk Factors” in the 2024 Annual Report, remain current in all material respects, except as set forth below.

In January 2020, Google announced that at some point in the following 24 months the Chrome browser would block 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 and in January 2024 started by deprecating third-party cookies for 1% of users globally. In April 2024, Google announced that the deprecation of third-party cookies will not be completed in 2024.

In July 2024, Google announced that instead of deprecating third-party cookies, it would introduce new user choice controls in Chrome. The timing and details of such controls have not yet been released. While Google has determined not to deprecate cookies at this time, it is possible that Google's ongoing efforts in this area may have a substantial impact on the ability to collect and use data from Internet users.

The foregoing shall be deemed to update the risks described in Part I, Item 1A, “Risk Factors” in the 2024 Annual Report, including, but not limited to those risks described under the headings “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 customers’ ability to use data on our platform is otherwise restricted, our business could be materially impacted.” and “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.”

The risk factors in the 2024 Annual Report, as updated above, do not identify all risks that we face. Our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. If any of the identified risks or others not specified in our SEC filings materialize, our business, financial condition, or results of operations could be materially adversely affected. In these circumstances, the market price of our common stock could decline.