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STOCK-BASED COMPENSATION: | 3 Months Ended
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Jun. 30, 2022
Equity [Abstract] |
STOCK-BASED COMPENSATION: | STOCK-BASED COMPENSATION: Stock-based Compensation Plans The Company has stock option and equity compensation plans for which a total of 39.1 million shares of the Company’s common stock have been reserved for issuance since the inception of the plans. At June 30, 2022, there were a total of 0.3 million shares available for future grants under the plans. Stock-based Compensation Expense The Company's stock-based compensation activity for the three months ended June 30, 2022 and 2021, by award type, was (dollars in thousands):
|  | For the three months ended
|  | June 30,
|  | 2022 |  | 2021
Stock options |  | $ | 309 |  |  | $ | 527 |
Restricted stock units |  | 19,062 |  |  | 10,228 |
Diablo restricted stock awards |  | 127 |  |  | 254 |
DPM acquisition consideration holdback |  | 2,030 |  |  | 2,031 |
Pacific Data Partners ("PDP") assumed performance plan |  | — |  |  | 2,298 |
Acuity performance plan |  | 354 |  |  | 779 |
DataFleets acquisition consideration holdback |  | 1,511 |  |  | 1,509 |
Employee stock purchase plan |  | 480 |  |  | 475 |
Directors stock-based compensation |  | 352 |  |  | 395 |
Total non-cash stock-based compensation included in the condensed consolidated statements of operations |  | 24,225 |  |  | 18,496 |
Less expense related to liability-based equity awards |  | (4,468) |  |  | (6,361) |
Total non-cash stock-based compensation included in the condensed consolidated statements of equity |  | $ | 19,757 |  |  | $ | 12,135 |
The effect of stock-based compensation expense on income, by financial statement line item, was (dollars in thousands):
|  | For the three months ended
|  | June 30,
|  | 2022 |  | 2021 |  |
Cost of revenue |  | $ | 1,163 |  |  | $ | 790 |  |  |
Research and development |  | 11,656 |  |  | 5,348 |  |  |
Sales and marketing |  | 5,884 |  |  | 6,793 |  |  |
General and administrative |  | 5,522 |  |  | 5,565 |  |  |
Total non-cash stock-based compensation included in the condensed consolidated statements of operations |  | $ | 24,225 |  |  | $ | 18,496 |  |  |
The following table provides the expected future expense for all of the Company's outstanding equity awards at June 30, 2022, by award type. The amount for 2023 represents the remaining nine months ending March 31, 2023. All other periods represent fiscal years ending March 31 (dollars in thousands).
|  | For the years ending March 31,
|  | 2023 |  | 2024 |  | 2025 |  | 2026 |  |  |  | Total
Stock options |  | $ | 747 |  |  | $ | 668 |  |  | $ | 158 |  |  | $ | — |  |  |  |  | $ | 1,573 |
Restricted stock units |  | 72,107 |  |  | 83,143 |  |  | 67,013 |  |  | 14,567 |  |  |  |  | 236,830 |
Diablo restricted stock awards |  | 392 |  |  | 518 |  |  | 89 |  |  | — |  |  |  |  | 999 |
Acuity performance plan |  | 461 |  |  | 165 |  |  | — |  |  | — |  |  |  |  | 626 |
DataFleets acquisition consideration holdback |  | 4,532 |  |  | 5,288 |  |  | — |  |  | — |  |  |  |  | 9,820 |
Employee stock purchase plan |  | 963 |  |  | — |  |  | — |  |  | — |  |  |  |  | 963 |
Expected future expense |  | $ | 79,202 |  |  | $ | 89,782 |  |  | $ | 67,260 |  |  | $ | 14,567 |  |  |  |  | $ | 250,811 |
Stock Options Activity Stock option activity for the three months ended June 30, 2022 was:
|  |  |  |  |  | Weighted-average |  |
|  |  |  | Weighted-average |  | remaining |  | Aggregate
|  | Number of |  | exercise price |  | contractual term |  | Intrinsic value
|  | shares |  | per share |  | (in years) |  | (in thousands)
Outstanding at March 31, 2022 |  | 730,004 |  |  | $ | 16.28 |  |  |  |  |
Exercised |  | (168,168) |  |  | $ | 13.00 |  |  |  |  | $ | 2,997 |
Forfeited or canceled |  | (2,287) |  |  | $ | 3.56 |  |  |  |  |
Outstanding at June 30, 2022 |  | 559,549 |  |  | $ | 17.31 |  |  | 2.5 |  | $ | 4,753 |
Exercisable at June 30, 2022 |  | 535,403 |  |  | $ | 18.06 |  |  | 2.2 |  | $ | 4,151 |
The aggregate intrinsic value at period end represents the total pre-tax intrinsic value (the difference between LiveRamp’s closing stock price on the last trading day of the period and the exercise price for each in-the-money option) that would have been received by the option holders had they exercised their options on June 30, 2022. This amount changes based upon changes in the fair market value of LiveRamp’s common stock. A summary of stock options outstanding and exercisable as of June 30, 2022 was:
|  |  |  |  |  | Options outstanding |  | Options exercisable
Range of |  |  |  | Weighted-average |  | Weighted-average |  |  |  | Weighted-average
exercise price |  | Options |  | remaining |  | exercise price |  | Options |  | exercise price
per share |  | outstanding |  | contractual life |  | per share |  | exercisable |  | per share
$ | — |  |  | — |  | $ | 9.99 |  |  | 75,611 |  |  | 5.2 years |  | $ | 0.98 |  |  | 51,465 |  |  | $ | 1.04 |
$ | 10.00 |  |  | — |  | $ | 19.99 |  |  | 182,603 |  |  | 2.9 years |  | $ | 17.49 |  |  | 182,603 |  |  | $ | 17.49 |
$ | 20.00 |  |  | — |  | $ | 24.99 |  |  | 301,335 |  |  | 1.5 years |  | $ | 21.31 |  |  | 301,335 |  |  | $ | 21.31 |
|  |  |  |  |  | 559,549 |  |  | 2.5 years |  | $ | 17.31 |  |  | 535,403 |  |  | $ | 18.06 |
Diablo Restricted Stock Awards During the three months ended June 30, 2022, in connection with the acquisition of Diablo, the Company replaced the unvested outstanding restricted stock shares held by a Diablo employee immediately prior to the acquisition with restricted shares of LiveRamp common stock having substantially the same terms and conditions as were applicable under the original restricted stock agreement. Changes in the Company's restricted stock awards for the three months ended June 30, 2022 was:
|  |  |  | Weighted-average |  |
|  |  |  | fair value per |  | Weighted-average
|  | Number |  | share at grant |  | remaining contractual
|  | of shares |  | date |  | term (in years)
Unvested restricted stock awards at March 31, 2022 |  | 24,766 |  |  | $ | 47.29 |  |  | 2.17
Vested |  | (2,842) |  |  | $ | 47.29 |  |  |
Unvested restricted stock awards at June 30, 2022 |  | 21,924 |  |  | $ | 47.29 |  |  | 1.92
The total fair value of RSAs vested during the three months ended June 30, 2022 was $0.1 million and is measured as the quoted market price of the Company's common stock on the vesting date for the number of shares vested. Restricted Stock Unit Activity Time-vesting restricted stock units ("RSUs") - During the three months ended June 30, 2022, the Company granted time-vesting RSUs covering 2,980,780 shares of common stock and having a fair value at the date of grant of $76.5 million. The RSUs granted in the current year primarily vest over three years. Grant date fair value of these units is equal to the quoted market price for the shares on the date of grant. RSU activity for the three months ended June 30, 2022 was:
|  |  |  | Weighted-average |  |
|  |  |  | fair value per |  | Weighted-average
|  | Number |  | share at grant |  | remaining contractual
|  | of shares |  | date |  | term (in years)
Outstanding at March 31, 2022 |  | 4,176,682 |  |  | $ | 47.00 |  |  | 2.85
Granted |  | 2,980,780 |  |  | $ | 25.65 |  |  |
Vested |  | (558,602) |  |  | $ | 45.50 |  |  |
Forfeited or canceled |  | (345,833) |  |  | $ | 43.61 |  |  |
Outstanding at June 30, 2022 |  | 6,253,027 |  |  | $ | 37.14 |  |  | 2.77
The total fair value of RSUs vested during the three months ended June 30, 2022 was $14.5 million and is measured as the quoted market price of the Company's common stock on the vesting date for the number of shares vested. Performance-based restricted stock units ("PSUs") - Fiscal 2023 plan: During the three months ended June 30, 2022, the Company granted PSUs covering 121,951 shares of common stock having a fair value at the date of grant of $3.7 million. The grants were made under a total shareholder return ("TSR") performance plan. The grant date fair value was determined using a Monte Carlo simulation model. The units vest subject to attainment of certain performance metrics established by the compensation committee of the board of directors (“compensation committee”) and continuous employment through the vesting date. The units may vest in a number of shares from 0% to 200% of the award, based on the TSR of LiveRamp common stock compared to the TSR of the Russell 2000 market index for the period from April 1, 2022 to March 31, 2025. Fiscal 2022 plans: Units under the Company's fiscal 2022 special incentive performance plan covering 36,425 shares of common stock will be measured and vesting evaluated on a quarterly basis beginning with the period ending March 31, 2023 and continuing through the end of the performance period. The units may vest in a number of shares from 0% to 100% of the award, based on the attainment of key productivity metrics for the period from January 1, 2023 to December 31, 2023. Units under the Company's fiscal 2022 total shareholder return ("TSR") performance plan covering 49,977 shares of common stock will reach maturity of their relevant performance period at March 31, 2024. The units may vest in a number of shares from 0% to 200% of the award, based on the TSR of LiveRamp common stock compared to the TSR of the Russell 2000 market index for the period from April 1, 2021 to March 31, 2024. The initial measurement date for the fiscal 2022 operating metrics performance plan was June 30, 2022. Through June 30, 2022 performance metrics have resulted in an accumulated 50% achievement, or 58,312 total earned units under this plan. Of the earned amount, one-half will vest immediately, while the remaining one-half will vest one year later. As of June 30, 2022, there remains a maximum potential of 174,930 additional units eligible for attainment under the plan. Quarterly measurements of attainment will continue through March 31, 2024. Fiscal 2021 plans: Units under the Company's fiscal 2021 TSR PSU plan covering 59,634 shares of common stock will reach maturity of their relevant performance period at March 31, 2023. The units may vest in a number of shares from 0% to 200% of the award, based on the TSR of LiveRamp common stock compared to TSR of the Russell 2000 market index for the period from April 1, 2020 to March 31, 2023. The initial measurement date for the fiscal 2021 operating metrics performance plan was June 30, 2021. Through June 30, 2022 performance measurements have resulted in an accumulated 50% achievement, or 71,666 total earned units under this plan. Of the earned amount, one-half vested immediately, while the remaining one-half vests one year later. As of June 30, 2022, there remains a maximum potential of 208,746 additional units eligible for attainment under the plan. Quarterly measurements of attainment will continue through March 31, 2023. Fiscal 2019 plans: The initial measurement date for the fiscal 2019 operating metrics performance plan was June 30, 2020. Through June 30, 2022 performance measurements have resulted in an accumulated 96% achievement, or 243,378 total earned units under this plan. Of the earned amount, one-half vested immediately, while the remaining one-half vests one year later. As of June 30, 2022, there remains a maximum potential of 224,177 additional units eligible for attainment under the plan. Quarterly measurements of attainment will continue through September 30, 2022. PSU activity for the three months ended June 30, 2022 was:
|  |  |  | Weighted-average |  |
|  |  |  | fair value per |  | Weighted-average
|  | Number |  | share at grant |  | remaining contractual
|  | of shares |  | date |  | term (in years)
Outstanding at March 31, 2022 |  | 584,468 |  |  | $ | 51.26 |  |  | 1.01
Granted |  | 121,951 |  |  | $ | 30.36 |  |  |
Vested |  | (29,628) |  |  | $ | 53.72 |  |  |
Forfeited or canceled |  | (138,050) |  |  | $ | 62.11 |  |  |
Outstanding at June 30, 2022 |  | 538,741 |  |  | $ | 43.61 |  |  | 1.52
The total fair value of PSUs vested in the three months ended June 30, 2022 was $0.8 million and is measured as the quoted market price of the Company’s common stock on the vesting date for the number of shares vested. Contingent Equity Awards - During the three months ended June 30, 2022, the Company granted contingent time-based restricted stock units ("contingent RSUs") covering 338,101 shares of common stock and contingent performance-based stock units ("contingent PSUs") covering 284,550 shares of common stock (collectively, the "contingent awards") to certain Company executives. The contingent awards were issued subject to shareholder approval of an amendment to increase the shares available for issuance under the 2005 Plan (the "2005 Plan Share Increase Amendment") at the 2022 Annual Meeting of Shareholders to be held on August 9, 2022, and will be automatically forfeited if shareholder approval is not obtained. In light of the nature of the contingent awards, the Company concurrently awarded the contingent award recipients long-term cash awards subject to similar terms and conditions as the contingent awards that will only remain effective in the event that the shareholders do not approve the 2005 Plan Share Increase Amendment (the “contingent cash awards”). The Company will initially account for these units as liability-classified contingent cash awards under the terms of the related contingent RSU and PSU awards. If shareholder approval is obtained for the 2005 Plan Share Increase Amendment, the contingent RSU and PSU contingency will be met. On that date, the RSUs and PSUs will be deemed granted for accounting purposes, having a grant date value equal to the quoted market price for the shares on the shareholder approval date. Concurrently, upon the receipt of shareholder approval of the 2005 Plan Share Increase Amendment, the contingent cash awards will terminate. The 338,101 contingent RSUs were granted having a fair value at the date of grant of $8.6 million, which was equal to the quoted market price for the shares on the date of grant. The contingent RSUs will vest over three years. Accounted for as liability-classified contingent cash awards, through June 30, 2022, the Company has recognized $0.3 million as stock-based compensation expense related to the contingent RSUs. At June 30, 2022, the recognized, but unpaid, balance in other accrued expense in the condensed consolidated balance sheet was $0.3 million (see Note 11). The awards were revalued as of June 30, 2022 using the closing stock price on that day, resulting in no material change to the grant date value of the contingent RSUs. The 284,550 contingent PSUs were granted having a fair value at the date of grant of $7.2 million, which was equal to the quoted market price for the shares on the date of grant. The units vest subject to attainment of performance criteria established by the compensation committee and continuous employment through the vesting date. The units may vest in a number of shares from 0% to 200% of the award at the end of the performance period, based on the average attainment of annual revenue growth and EBITDA margin targets for fiscal years 2023, 2024, and 2025. Accounted for as liability-classified contingent cash awards, through June 30, 2022, the Company has recognized $0.3 million as stock-based compensation expense related to the contingent PSUs. At June 30, 2022, the recognized, but unpaid, balance in other accrued expense in the condensed consolidated balance sheet was $0.3 million (see Note 11). The awards were revalued as of June 30, 2022 using the closing stock price on that day, resulting in no material change to the grant date value of the contingent PSUs. Other Stock Compensation Activity Acquisition-related Performance Plan Through June 30, 2022, the Company has recognized a total of $4.5 million as stock-based compensation expense related to the Acuity performance earnout plan. At June 30, 2022, the recognized, but unpaid, balance in other accrued expense in the condensed consolidated balance sheet was $2.8 million. The next annual settlement of $1.7 million is expected to occur in the second quarter of this fiscal year. Acquisition-related Consideration Holdback Through June 30, 2022, the Company has recognized a total of $8.3 million as stock-based compensation expense related to the DataFleets consideration holdback. At June 30, 2022, the recognized, but unpaid, balance related to the DataFleets consideration holdback in other accrued expenses in the condensed consolidated balance sheet was $2.3 million. The next annual settlement of $6.0 million is expected to occur in the fourth quarter of this fiscal year. Through June 30, 2022, the Company has recognized a total of $24.4 million as stock-based compensation expense related to the DPM consideration holdback. The final annual settlement occurred in the current fiscal quarter. Qualified Employee Stock Purchase Plan ("ESPP") During the three months ended June 30, 2022, 109,396 shares of common stock were purchased under the ESPP at a weighted-average price of $21.76 per share, resulting in cash proceeds of $2.4 million over the relevant offering periods. Stock-based compensation expense associated with the ESPP was $0.5 million for the three months ended June 30, 2022. At June 30, 2022, there was approximately $1.0 million of total unrecognized stock-based compensation expense related to the ESPP, which is expected to be recognized on a straight-line basis over the remaining term of the current offering period.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 + Details
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