LiveRamp Holdings, Inc.
Q3 2021 Earnings Call Transcript

Published: 9 Feb 2021

[Operator:]

Good afternoon, ladies and gentlemen. And welcome to LiveRamp's Fiscal 2021 Third Quarter Earnings Call . I would now like to turn the call over to your host, Lauren Dillard, Chief Communications Officer.

[Lauren Dillard:]

Thank you, operator. Good afternoon and welcome. Thank you for joining us to discuss our fiscal 2021 third quarter results. With me today are Scott Howe, our CEO and Warren Jenson, President and CFO; Anneka Gupta, President and Head of Platforms and Products will join for the Q&A portion of the call.

[Scott Howe:]

Thank you, Lauren. Good afternoon and thanks for joining us today. I hope that you and your families have managed to stay safe and healthy since the last time we spoke. It's always a challenge to summarize an entire quarter into a short call and that's particularly true today given how much progress we've made and potential we see. We've got a lot to talk about and too little time. So above all else I would share three thoughts with you. One, our business continues to show strength in an unprecedented macro environment. Two, while we entered our fiscal year with some uncertainty stemming from the pandemic and an industry transition away from third party cookies. The past 12 months have definitively proven how important data is to our clients and how much they rely on us. As a result while most companies aren't providing longer term guidance. We feel well positioned to share some very early thoughts about next year with you today. And three, the innovations we have introduced to the market have been well received and position us for sustained revenue and profitability growth well beyond next year. Let me start by talking about the past quarter. We delivered another strong quarter in Q3 highlighted by solid top line growth, impressive operating performance and continued progress against a handful of key strategic imperatives. Total revenue was up 17% and subscription revenue up 15%. ARR exiting the quarter was up 17%. Marketplace and other growth accelerated to 27% driven by data marketplace which was up 60% and benefited from a strong recovery in digital advertising spend during the holiday season and the expansion of several large platform relationships. We also closed a record bookings quarter with total growth bookings up 35% compared to the same period last year. Our land, expand and extend motion continues to underpin our success. Upsell bookings in particular were very strong as we continue to make good progress upselling our existing customer base to new and more advanced used cases like measurements, Safe Haven and CTV. In fact the average ACV of brand deals won in Q3 was up nearly 30%. The continued growth in larger $1 million plus customers also reflects this trend. The total number of $1 million plus customers now stands at 65 an increase of 30% year-over-year. And importantly the strength of our model was again on display in Q3, scaling our business efficiently remains a top priority and I'm pleased to report our first ever double-digit operating margin an important milestone toward our long-term targets.

[Warren Jenson:]

Well thanks Scott and good afternoon, everyone and thanks for joining us today. We're pleased to have delivered another strong quarter and even half year to report that our key long-term growth initiatives are performing extremely well. As we've said before, we increasingly find LiveRamp's technology to be core to our customer's most important long-term strategies and initiatives. We're fast becoming critical infrastructure. Today I'd like to focus my remarks in three areas. first, give an update on Q3 and recent business trends highlighting the continued strength and durability of our model. Next, provide full year guidance and finally a few high-level observations for FY 2022. Q3 results, please turn to Slide 4. We're durable SaaS and our position of neutrality continues to pay dividend. Total revenue was up 17% and subscription revenue increased 15%. The variable portion of subscription revenue was approximately 13%. Overall marketplace was up 27%. Data marketplace which represents roughly 75% of ongoing marketplace and other revenue was up a strong 60%. As expected, where we felt pressure was in the transactional portion of our linear TV business. Customer counts were again up. In the quarter, we added 15 net new subscription customers and we had a record bookings quarter. Current RPO or our next 12-month backlog was up 15%. As a reminder, the timing and contract length of renewals can and will cause volatility in this metric. ARR ended the quarter up 17% and net retention was 105%, while platform net retention was $1.10. Next, our long-term growth levers are in place and thriving. Today, I'd like to focus my attention on Safe Haven. Safe Haven had another stand out quarter. revenue bookings and ARR were all up more than 150%. Safe Haven is fast becoming the foundational platform for global brands, retailers and their partners to establish a deep understanding of their customers, increased customer engagement and drive sales. Global retailers such as Carrefour trust Safe Haven to safely connect their data with their CPG partners. Expanding the breadth and depth of available used cases from local retail media and marketing activation to sales analytics and category management. The results have been transformational. CPG's are seeing triple-digit improvement in campaign performance and double-digit sales lift. Traditional supplier relationships are being transformed and new and significant high margin revenue streams are being created. Finally, we're proud to be judged by the company we keep. Our Safe Haven technology .

[Lauren Dillard:]

I think we lost Warren, so what I will do. This is Lauren, I'm just going to resume with reading his prepared remarks and when he joins, we'll have him hop back in. So finally, we're proud to be judged by the company we keep. Our Safe Haven technology is now being used by more than 40 customers worldwide including three of the top 10 largest retailers in the US and four of the top 10 retailers in Europe and we expect to exit our first full year with ARR of more $20 million. Next DataFleets, as Scott mentioned we're excited about the acquisition of DataFleets and what it means for both our near and long-term Safe Haven prospects. With the acquisition of DataFleets, we're firmly cementing our position as the leader in privacy preserving enterprise data collaboration. Extending our position as the trust neutral platform for enterprise identity and data management. For our Safe Haven customers this means access to a powerful set of cutting-edge privacy preserving tech that can be configured based on business needs. More specifically, this ensures that our clients can apply the right approach and level of privacy protection to their data wherever that data may live. Whether within LiveRamp or within their own cloud environment. And finally, not only does this technology benefit our existing customers the combined offering opens up new addressable markets and powerful used cases such as healthcare and financial services. Added all up and we see an even bigger opportunity for Safe Haven. Now a few specifics on the deal, the purchase price of $68 million in cash plus some assumed equity and additional retention incentives. We expect the deal to close this quarter. given the size there's no HSR filing requirement. We do not expect the deal to have any material impact in the current fiscal year. In terms of next year we expect these added capabilities to benefit growth across all areas of our business and any modest solution will be included in our FY 2022 guidance. And finally, our business model is working and trend lines point to the validity of our long-term performance objectives. Gross margin improved 400 basis points to 73% again another record for standalone LiveRamp. Productivity was driven by continued identity graph and hosting optimization. We were profitable again in Q3, marking our third consecutive quarter of profitability. In the quarter, we estimate COVID-related savings to been roughly $6 million. Our operating margin for the first time was in the double-digit and our EBITDA margin was 12%. Operating cash flow was $15 million and free cash flow was positive for $2 million. And finally our balance sheet continues to be in great shape. Our cash balance is $663 million, a slight increase from the end of September. In summary, the strength of our business performance is a reflection of who we are as a company. We're Switzerland an agnostic provider of critical technology. Now onto guidance for FY 2021. Please turn to Slide 12. For the fourth quarter, we expect revenue of up to $116 million and non-GAAP operating income to be slightly positive. For the full year we expect revenue of up to $440 million and non-GAAP operating income of up to $16 million. Please keep in mind this guidance excludes intangible amortization, stock-based comp.

[Warren Jenson:]

As you model Q4, please note of the expected increase in OpEx. We expect roughly half of it to be recurring. The remaining.

[Scott Howe:]

We lost you for almost your entire earnings stuff and you just rejoined. So Lauren, where should he start reading again.

[Lauren Dillard:]

Warren, do you mind starting to read at a few other call outs for Q4.

[Warren Jenson:]

Sure. I apologize everyone. It's the real-world implications of the Zoom world in which we live. All right, well here we go. A few other call outs for Q4. We expect subscription net retention to be roughly 100% and platform net retention to be between 100 and 105. Our retention metrics in Q4 growth rates are being pressured by anticipated contraction from a few platform relationships. This contraction is being driven by the sunsetting of certain cookie-based licensing relationships. We expect gross margin to be roughly 73%. As you model Q4, please note of the expected increase in OpEx. We expect roughly half of it to be recurring. The remaining increase is being driven by payroll tax seasonality and one-time project cost. We are exploring certain tax strategies that could generate a meaningful cash tax benefit. These tax strategies may result in an incremental non-cash stock charge during the quarter. Other guidance related items can be found on Slide 14. With that, let me spend a couple of minutes and talk about FY 2022 and share a few high-level observations. This past year has been challenging but one of accomplishment too. We like others face the daunting challenge of COVID and as a result, a rapidly changing business environment. But through all that disruption and change the following held through. The strength of our business model was clear. We're having a strong growth here in both our subscription business and marketplace too. We have been profitable in every quarter and expect to be profitable for the year. And perhaps most importantly, we have the products and technology that people want to use and buy. ATS, connected TV and Safe Haven. As we look ahead to FY 2022, we are confident in our prospects. Our business is healthy, getting stronger every day and our growth initiatives continue to build momentum. However as the industry moves away from third party cookies and device identifiers to more durable solutions like ATS. We do expect some continued downward pressure on a few platform relationships during this period of transition. This could represent as much as the $30 million headwind next year. As a reminder, as we've said before as cookies go away so will the cost associated with the cookie-based components of our graph. Adding up the positives and the challenges. Our ongoing business remain strong and as a result, we expect topline growth of up to 15% in FY 2022. Factoring for the $30 million headwind this implies underlying growth is accelerating and should be an excess of 20%. In FY 2022, as I mentioned on our last call. We will be stepping up our R&D investment to take advantage of our global strength in TV and Safe Haven. But at the same time we again expect to be profitable. Finally, as always, we ask that you be conservative with your estimates for FY 2022 much uncertainty remains. Before opening the call to questions. I'll close with a few final thoughts. First, thank you to all our customers and employees. It's you who make this company great. And to our new colleagues at DataFleets. Welcome to our team. Next, we're SaaS and our model is demonstrating its durability and leverage and finally, it's a fabulous time to be at LiveRamp. Our products and technology center of a strong secular growth trend and our global role has never been more important. Operator, we'll now open the call to questions.

[Operator:]

Your first question comes from the line of Shyam Patil from Susquehanna Financial. Your line is open.

[Shyam Patil:]

Congrats on the results and the DataFleets acquisition.

[Scott Howe:]

Shyam, thank you and sorry again to you and everybody else out there for our Zoom fiasco there. Hopefully when you piece together the script. It makes sense to you. But we're happy to spend time addressing anything that might have gotten muddled in all that.

[Shyam Patil:]

Just from our perspective everything came in pretty clear with Lauren taking over and then Warren coming back, what that's worth. I had a couple of questions. One for you Scott and then one for Warren. On the DataFleets acquisition, could you guys talk about kind of where they were in terms of any marquee relationships to call out there? And how are you guys are just thinking through how it could benefit or even accelerate the Safe Haven opportunity? And then Warren thank you for the early fiscal 2022 commentary. I was just curious the 15% year-over-year growth is there just a framework for how we should think about subscription growth versus marketplace growth for the next fiscal year?

[Scott Howe:]

So Shyam, it's Scott. But I'll tell you what, we announced at the start of this call that Anneka was joining us for the Q&A and everybody knows that Anneka is our President and Chief Product Engineering Officer as well. I mean she's so deeply involved in all our technology. So I'm going to hand all your question on DataFleets over to her because she's done a ton of technical due diligence on this acquisition.

[Anneka Gupta:]

Yes. Thanks Scott. Happy to jump in here. so when we went to look for some assets that can help accelerate our position within by offering privacy preserving analytics and collaboration. We evaluated a lot of different companies in the phase and frankly like the technology and the advancements that are being made here are early. But what really impresses about DataFleets is the product and the team are really strong and we did a PoC early on in evaluating the company and what that led us to believe, is that we can want DataFleets technology within Safe Haven by mid FY 2022 and offer the ability for our customers to keep data assets that are sitting in different data silos and without actually moving the data, enabling you to do complex analytics and measurement on top of that.

[Warren Jenson:]

And then let me address the second question. We're not going to give too much - any additional deal about FY 2022 on this call as obviously we'll be giving more detailed guidance on our call in May. I would simply reiterate a couple of things that I said in my prepared remarks and that is, we expect to have a strong year in FY 2022 underneath the 15% growth business that is growing quite rapidly again excluding the $30 million our growth should be up in excess to 20% and we expect to have a strong year in both market place and in subscription.

[Shyam Patil:]

Great, thank you guys.

[Operator:]

Your next question comes from the line of Kirk Materne from Evercore ISI. Your line is open.

[Kirk Materne:]

I guess Warren or Scott. Can you just run through the platform relationships? I mean maybe I missed something, but it's kind of the first time I think most of us are hearing about that, sort of headwind on your business and well I think your bookings growth looks great this quarter. can you just walk through why that's dropping off? I guess there's just going to be some questions about why this is kind of coming up now? So if you could just kind of walk through that a little bit, that will be helpful and then I have just one follow-up.

[Warren Jenson:]

Kirk, why don't I go ahead and jump in and then Scott may want to add to what I'm going to say. First of all we have a handful of platform relationships and in those relationships, we license component parts of our digital identity graph and it's that revenue that we expect to sunset. If you think back to the last year. I mean it's been a really remarkable year. We started with the ATS and the great news is that, as we're rounding out FY 2021. ATS is in a very strong position, not only for LiveRamp, but for the entire industry and also throughout the year. There's been a lot of cookies, going away cookies not going away in a lot of different kinds of speculation. We've obviously also been having discussions without partners through the year and then as we came to really doing our budgeting for FY 2022 and over the last few weeks. It became clear that we had some clarity around what if any exposure we would have and that is the $30 million headwind that we talked about.

[Kirk Materne:]

Got it, that's helpful. Thanks Warren. And I guess just on the quarter itself obviously bookings were up nicely this quarter. can you just talk about the macro backdrop, you seem more upbeat than last quarter in terms of I'd assume, what your pipelines are looking like and there's like Safe Haven, ATS. Can you just talk about sort of what you're seeing? Just in terms of customer conversations - customers willing to spend and just kind of have the tone is maybe today versus three months ago? Thanks.

[Scott Howe:]

Kirk, it's Scott. So I think a couple of things have been consistent throughout the year and give us a lot more confidence in the strength of our business and the importance of what we do to our customers. But more specifically this past quarter, I think we saw a little bit of the continued improvement of the macro economy, despite concerns about COVID. We really didn't see kind of the national shutdowns rather what we're seeing with our clients is a real biased towards action, a real recognition that data is increasingly important in delivering great experiences to their consumers and delivering better results for their bottom line. And I think an increased appreciated that the playing field is a little bit tilted right now and that to compete with the walled garden. Most companies have to get a lot more sophisticated about the ingestion and utilization of their data. That in turn has helped spur a lot of interest in Safe Haven and in measurement and that's been great for our core subscription business and our upsells. And then in addition in my prepared remarks, I talked about the explosion of ATS adoption that we've seen not only on the publisher side but increasingly on the advertiser side where they have discovered that it has scale, they're increasing the reach and they're generating far better results. And so those two secular trends of clients knowing that they have to be more sophisticated about their data and also recognizing that it's time to migrate off of cookie solutions, to authenticated consumer friendly solutions, really has given us some fuel in this quarter and quite frankly it's a big reason that we're comfortable giving forward guidance at a time that most companies in the world just simply unable to do.

[Warren Jenson:]

Scott, I might just add a couple of things that came to mind as you were talking and I would just add the world, global. The one thing that's happening is ATS is a global solution as is Safe Haven, as is our TV offering in Europe is example. To give you a good example of the growth, our bookings in Europe this quarter were up 85% year-over-year and we had a strong double-digit performance globally. So I would also say that our products are not only working in the US. But they're global too and it's opening up a global for us.

[Kirk Materne:]

Thank you.

[Operator:]

Your next question comes from the line of Brian Fitzgerald from Wells Fargo. Your line is open.

[Brian Fitzgerald:]

Thanks guys. maybe a little differently as well and thanks for the breakout on marketplace for seller. Marketplace reaccelerated pretty strongly in the quarter and it looked like you had a plan there in terms of marketplaces, other revenue as well and maybe even new customers, subscription revenue. So at a high level, can you say anything about where you saw unexpected pockets of strength in quarter? or was it - you highlighted CPG were there other areas as well in terms of it beating what you expected? And then a sense of how that meters intra quarter as we get out of the holiday season and Warren to your points, on a global basis too. How should we think about for the quarter and for the first half of the year?

[Warren Jenson:]

I would say, I'm just trying to go through the breadth of our performance during the quarter and really the strength was across the board. We had an exceptionally strong upsell quarter. two, if you look at our bookings for whether it's for measurement, whether it was for Safe Haven, whether it was for TV. We had a very strong bookings performance and as I mentioned internationally, we saw strength too. In terms of the numbers in Q3, the usage portion of our subscription revenue was strong that came in perhaps a little strong than expected and then on top of that. We had also strength in marketplace generally. So pretty much across the board a very strong performance and as we mentioned, I think the thing that really bodes well for us is strength of our booking performance in Q3 and we expect to have another solid booking performance in Q4 as well.

[Brian Fitzgerald:]

Got and then maybe one quick follow-up on the cookie-based relationships that roll off in 2022. Do those definitively go away even if Google kicks back the of third-party cookies as that gets delayed. Can you talk about the phasing of that impact?

[Warren Jenson:]

I would not expect any incremental upside beyond that which we've talked about for next year. We think it's just prudent to plan for the $30 million that we've mentioned. The second thing that I would like to say however is, we will have ongoing relationships with these platforms. If you think ahead to James's new role for example. We're really bullish on the opportunities we have with all of the cloud providers and what's ahead for us. So I would not factor any incremental upside. But we think the $30 million risk is real. That said, if anything changes, we'll of course let you know.

[Scott Howe:]

I'll just add to that. I want to be definitive on this. It doesn't matter what Google does cookies are going away. They're already gone away in Safari, in Firefox and Edge and together that represents 40% plus of US inventory and a much bigger chunk of non-US inventory. What we're also seeing is that authenticated identifiers like ATS it just works better than what it's replacing. And so quite frankly even if somehow Google had an about face on their decision which I don't see happening given the fact that authenticated ATS type solutions are far more consumer friendly and privacy compliant, even if Google had a about change of face though. We would still encourage clients and publishers to make the transition.

[Brian Fitzgerald:]

Great, thanks guys. Appreciated.

[Operator:]

Your next question comes from the line of Stan Zlotsky from Morgan Stanley. Your line is open.

[Stan Zlotsky:]

So just on the 20% core growth, the day you were looking for 2022 or fiscal 2022 rather. When you think about the components of that 20% growth, is it uptick maybe in pace of customer acquisition? Is it strength of an existing? And is it - which product areas are you thinking are going to be main drivers of that? And I have a quick follow-up for Scott - rather Warren.

[Scott Howe:]

I would tell you and Warren hop in here. but as we sit looking forward. We think that there's going to be a few drivers. Number one, is this year we really relied a lot on upsell and in part, the one causality of COVID world is face-to-face meetings. Where you're building trust and rapport and that absolutely hamstrings new logo prospecting. That said, ATS is one of the greatest new logo opportunities that we've seen, as it succeeds a whole legion of clients that haven't previously dipped their toe into programmatic with LiveRamp can really take advantage of our services across both the programmatic channels and the walled gardens to which they're probably already advertising. So I think that's an opportunity. The second thing that we're going to benefit from is, Safe Haven and really the flywheel there. It's an incredible business and as much as we win any single retail client. They in turn introduce us to all of their packaged goods partners and encourage those packaged goods partners to become clients as well. We often said that many of our partners have been our best sources of leads over the last decade. I think that's going to continue and even accelerate in the coming years because these Safe Haven clients are going to be introducing us to their partners and we'll benefit from that. And then the final driver is and one of the things that gives us a lot of confidence right now is we've now seen it couple of quarters of ATS performance. We know it works really well. And so we can go out and show the case studies, share client testimonials to new and existing clients and they get really excited about the opportunity to generate more reach and better results at the same time. So there's no one single thing. It's a whole lot of elements of our business working together and I think that's why you hear a lot of enthusiasm in our voices today.

[Stan Zlotsky:]

Got it, that's perfect. And then quick follow-up for Warren. The 100% net revenue retention guide for Q4, is some of that cookie-based relationship deprecation with partners that if it's going to be $30 million for next year, is that already some of its starting in Q4, is that some of the pressure can be seen?

[Warren Jenson:]

Great question, Stan. Yes. The entire decline from 105 to 100 is directly associated with that in the fourth quarter.

[Stan Zlotsky:]

Got it. Okay, perfect and just 105 in the current quarter was any of that dynamic impacting Q3 at all?

[Warren Jenson:]

No, nothing material.

[Stan Zlotsky:]

Got it, all right. Thank you so much guys.

[Operator:]

Your next question comes from the line Jack Andrews from Needham. Your line is open.

[Jack Andrews:]

I wanted to drill down on the remarkable ATS progress you achieved. Could you just share was there a specific catalyst that really drove this jump in people on the spot? Former just you think that the message you've been saying for the last several quarters is finally keeping in all of a sudden? Any color on what really drove the jump and adoption, would be super helpful?

[Scott Howe:]

I'm not even sure I'd characterize it is this incredible jump quarter-over-quarter. yes, the stats are meaningful. But it's really been a step-by-step journey for us really over the past year and it really is a flywheel business. So as we sign up more and more publishers now, we have 325 direct publishers that represents tens of thousands of individual websites and I think I said last quarter that we now believe in the US for instance. We have the capability to reach 95% plus of US household. So the reach is there. But then that coupled with the results that folks are seeing. I mean the biggest barrier that we've had in ATS is 20 years of inertia. 20 years of folks building all of their processes and all of their workflows around cookies. Well, we're proving that these new technologies work better and now I would expect that as we get out of the holiday quarter and cookie deprecation is now officially on the clock, it's happening in less than a year. We're going to see the adoption just continue to increase. Lot of excitement around advertisers when they hear the case studies and for publishers who are starved for yield, there's no better message than being able to go to them and say, hey your yield will go up by 3x.

[Warren Jenson:]

Jack, I might also just weigh in. I'm going to again emphasize the world global. ATS is a global solution. So if you're a multinational CPG and you're looking to have a consistent approach across all geographies, ATS is the solution. So again this is opening up a wonderful set of global opportunities for the company and also doing some terrific things for our customers globally.

[Jack Andrews:]

I appreciate the color around that. Just a quick follow-up question on the DataFleets acquisition. Could you just talk about how you're planning on I guess monetizing this? Is it something that you're going to be directly charging customers for, is this going to be part of the broader guide proposition around LiveRamp in your platform?

[Anneka Gupta:]

This is Anneka, I can jump in here. our approach with DataFleets is that it's going to be foundational technology that's embedded in the platform and what we think the way that this is going to get monetized is as part of our Safe Haven solution and as part of our broader product suite. What we anticipate and are planning for, is that this was going to open up new and new opportunities in verticals like healthcare and financial services where we have low penetration today. So we're really excited about that potential. But it is something that's not going to be separate product but rather embedded into the platform.

[Jack Andrews:]

Got it, that's helpful. Thanks for taking my questions.

[Operator:]

Your next question comes from the line of Kyle Evans from Stephens. Your line is open.

[Kyle Evans:]

I'm going to beat the reseller question to death here. is the $30 million exposure, is that a single relationship or is that all of your reseller relationships?

[Warren Jenson:]

Kyle, it's across a number. Think about a handful of relationships. And again these relationships are not going away, they're just going to change in their nature.

[Kyle Evans:]

Okay, so that's your total reseller business within subscription, the $30 million.

[Warren Jenson:]

Yes, think of the way we would put it is, this is where we've licensed component parts of our identity graph to a handful of platform partners.

[Kyle Evans:]

And why wouldn't the handful of partners simply replace the cookie-based components with the new ATS based components?

[Scott Howe:]

So the short answer to that is, in a world where you require dual authentication on both the publisher and advertiser side. It's more difficult for them to materially add value. We think that there is an opportunity, all of their clients will be using ATS. But in terms of them being the private label identity solution themselves really doesn't make a lot of sense. Overtime, we think that there is an opportunity to actually extend the relationship not just on identity but by ensuring that our measurements, Safe Haven capabilities are built in on top of their cloud offerings. And so I think that quite frankly long-term that's going to be a bigger TAM than when it replaces. But short-term it just doesn't make sense to continue to license them cookies, when cookies are going away.

[Kyle Evans:]

Got it. And then Warren you warned us pretty specifically as the Linear transactional TV headwinds. Did those play out as you expected and when do you expect to lap those tougher comps?

[Warren Jenson:]

Let me take the last part of the question, first. I'd say mid-year next year we should start to lap these trends and then also, we're working our way through some legacy revenues that are hold over, receiving going back to Acxiom. The trend definitely held through this quarter. we had an exceptionally strong quarter in data marketplace. It was up over 60% year-over-year where total marketplace and other was up 27%. So we definitely felt it this quarter. I might add that we'll feel it also next quarter. we expect to have again in Q4 a very strong performance, solid double-digit growth in data marketplace. But some headwinds in the Linear TV and again this small set of legacy revenues.

[Kyle Evans:]

Got segue to my last question. It sounds like you had some new relationships on the marketplace side that maybe helped drive some of that performance in the period or any of those once you could comment on?

[Scott Howe:]

Kyle, you cut out for just a second there. Could you repeat that question?

[Kyle Evans:]

Yes, it sounded like your marketplace business benefitted from some new relationships. Is there anything you could comment publicly on that?

[Scott Howe:]

Yes, I would tell you that, I'm not sure I can comment, can I comment? So one of the big new destinations is Amazon and that was just activated. I think we hinted out in past quarters but it's a - we think it's going to be a really exciting way for all of our clients to activate data on the Amazon platform.

[Kyle Evans:]

Great, thank you.

[Operator:]

Your next question comes from the line of Tim Nollen from Macquarie. Your line is open.

[Tim Nollen:]

Sorry, I've got another question about $30 million and that is simply - actually I appreciate you've given that number because we can now quantify what the cookie deprecation impact can be next year. But is it possible to quantify what the upside would be from ATS and other things that would offset that probably not next year but in the subsequent years? I assume you're going to say that, that can more than make up for the $30 million loss beyond fiscal 2022. But if you could comment on that, would be great. And secondly and somewhat relatedly, we haven't talked about IDFA's on this call at all. I know it doesn't affect you in the way the third-party cookies do. But maybe Scott any thoughts on what near term disruption might be in the market? When the IDFA is officially supposedly do go away in the next few weeks or months?

[Scott Howe:]

Well to start with the IDFA question, Tim. I actually think that's going to be a catalyst for us. I think when posed with real dates and real migration it makes the change real. And so ATS from the get go was architected to work on both display as well as mobile and so we're ready to go with solutions. In fact most of the publishers that we've signed up will deploy on both display and on mobile as well. We're recommending to them that they follow the Apple procedures about obtaining the authentication on the actual device itself as opposed to simply on the app. But we again - we think that's a real opportunity for us and just the fact that it's becoming real is going to force change in the industry and I think that's good. In terms of your question on the subs, Warren mentioned aside from that $30 million that we're going to sunset that our subs business is growing at 20% expected next year. And we think continued strong growth is something that we're pretty optimistic about. I don't want to get in to specifics around what that could look like in 2023 or 2024. But we think just as cookies set some players up for two decades of growth. So too , we think more people-based authentication set us up to really help the ecosystem for the next 10 or 20 years. The other thing we haven't factored in at all, is well the cookie graph goes away and we'll save some money in our cost structure there. There is an opportunity as DMPs are replaced in mass by CDPs for us to really license our PII identity graph, and that's part of the opportunity that James is going to lead the charge on. we're pretty optimistic about that. But we've always been a show company as opposed to a tell company. So we'll start to forecast that revenue when it actually becomes real. Right now, we know that we're going to sunset a portion of the revenue and we have plans to broaden the relationships. But those aren't real contracts yet, so we won't build those into the forecasts.

[Tim Nollen:]

Thanks Scott.

[Operator:]

Your next question comes from the line of Jason Kreyer from Craig Hallum. Your line is open.

[Jason Kreyer:]

One from me on Safe Haven. It seems like you're identifying more used cases there. Just thinking through the existing customer base, can you give any context on what the mix or what percentage of the opportunity for Safe Have you'd have across your existing customers?

[Warren Jenson:]

Scott maybe I can jump in and I'll kick off and then you can jump in. we really think demand both across our existing customer base and new logos and in particular as we build out new used cases and add new features and functionality. Those used cases just expand. DataFleets will without a doubt increase used cases for both our existing customers and for new customers as well and should also open up whole new TAM for us specifically thinking about financial services and also in healthcare. Another market which is really opening us to us as Scott mentioned and I did too is really CPG. The flywheel between retailers and CPG how suppliers' relationships are being transformed is really taking place right in front of us right now. So it's incredibly exciting. I would look at this as an opportunity both for upsell to existing customers as well as new logos with whom we're able to forge new relationships.

[Jason Kreyer:]

Thanks Warren.

[Operator:]

There are no further questions at this time. I turn the call back over to Warren Jenson for closing remarks.

[Warren Jenson:]

Well again, thank you everyone for joining us today and again we apologize for the technical glitch. We want to thank you for joining us. We want to thank our customers and our employees. As I mentioned earlier, it's you who make this company great. To the team at DataFleets a hearty welcome. We really look forward to working with you and I know our customers are going to love your technology as well. We believe our model is solid. It's demonstrating its durability and its leverage and we just couldn't think of a better time to be at LiveRamp. Our products and technology do sit at the center of very powerful secular growth trend and our global role has truly never been more important. With that, thank you so much for joining us today.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you for your participating. You may now disconnect.