Acxiom Announces Second Quarter Results

Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service Company, today announced financial results for its second quarter ended September 30, 2014.

Second Quarter Financial Highlights

Total revenue was down 3 percent compared to the second quarter of fiscal 2014 as a result of expected IT Infrastructure Management declines.

• Marketing and Data Services revenue was $204 million, up 2 percent compared to the second quarter of fiscal 2014.
• IT Infrastructure Management revenue was down approximately 17 percent compared to the same period a year ago.
• AOS® revenue, which includes LiveRamp, was approximately $15 million in the quarter.
• Gross media spend through the Audience Operating System was approximately $37 million, up 32 percent compared to the first quarter of fiscal 2015.

GAAP operating income and diluted earnings per share were down due to expenses associated with business separation and transformation activities, non-cash compensation and acquired intangible asset amortization, as well as declines in IT Infrastructure Management.

• Net loss per diluted share from continuing operations was $0.02 compared to earnings per share of $0.12 a year ago. Unusual items, non-cash compensation and intangible asset amortization impacted GAAP earnings per share by $0.20 in the quarter. Unusual items included expenses associated with the Company’s restructuring activities, separation and transformation initiatives and LiveRamp acquisition costs.
• Operating cash flow from continuing operations was $132 million for the trailing twelve months, down 22 percent compared to the same period a year ago. Free cash flow to equity was $33 million for the trailing twelve-month period compared to $69 million for the comparable period. The decline was primarily due to cash restructuring and business transformation expenses.

Non-GAAP operating income and diluted earnings per share were down as a result of the declines in the IT Infrastructure Management business.

• Non-GAAP diluted earnings per share were $0.18 compared to $0.23 a year ago.
• Non-GAAP operating income was $25 million, down from $32 million for the same period last year.
• Non-GAAP Marketing and Data Services operating margin improved to 10% from 9% a year ago.

Our non-GAAP results exclude unusual items, non-cash compensation and acquired intangible asset amortization. A reconciliation between GAAP and non-GAAP results is attached to this release.

The Company tightens its full year revenue and earnings per share guidance.

“While we remain hard at work rebuilding our U.S. Marketing and Data Services pipeline, we are excited that AOS adoption continues to accelerate,” said Acxiom CEO Scott Howe. “The second quarter was our best quarter to date. We signed 15 new AOS agreements during the quarter and gross media spend through the platform was up over 30 percent sequentially. With the addition of LiveRamp, our partner network expanded substantially. Advertisers can now connect their data to over 120 marketing applications.”

Second Quarter Business Highlights

• Acxiom signed several Marketing and Data Services agreements during the quarter including new database contracts with Duke Energy, Dennis Publishing and TD Bank Group, as well as renewals with a top three credit card issuer and a leading insurance agency.
• The Company signed 15 new AOS agreements during the quarter with several industry-leading companies including AT&T Inc., Toyota Motor Company, a global retailer and two major credit card issuers.
• Acxiom inked three new agency partnerships during the second quarter. The Company signed a European-wide partnership with Starcom Mediavest Group, the number one ranked global media network. Acxiom also struck partnerships with Hakuhodo Inc., Japan’s second largest advertising agency, and DMG Solutions, a leading multicultural marketing solutions provider.
• The Company signed a strategic partnership with Weibo Corporation, China’s leading social media platform. As part of the relationship, Weibo will leverage AOS to deliver greater digital marketing efficiency to its advertisers in a privacy-compliant and secure fashion.
• Acxiom repurchased approximately 529,000 shares for $9.9 million during the quarter. Since inception of the share repurchase program in August 2011, the Company has repurchased 12.9 million shares, or approximately 16 percent of the outstanding common stock, for $202 million.

Financial Outlook

Our guidance includes the impact of the LiveRamp acquisition but excludes the impact of unusual items, non-cash compensation and acquired intangible asset amortization. Acxiom’s estimates for fiscal 2015 are as follows:

• We now expect revenue from continuing operations for the fiscal year to be down roughly four percent compared to fiscal year 2014. The decline in revenue is primarily due to the impact of lost IT Infrastructure Management customers and the exit of our analog paper survey business in Europe.
• We now expect earnings per diluted share to be in the range of $0.73 to $0.78.

Conference Call

Acxiom will hold a conference call at 3:30 p.m. CT today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.

About Acxiom

Acxiom is an enterprise data, analytics and software-as-a-service Company that uniquely fuses trust, experience and scale to fuel data-driven results. For over 40 years, Acxiom has been an innovator in harnessing the most important sources and uses of data to strengthen connections between people, businesses and their partners. Utilizing a channel and media neutral approach, we leverage cutting-edge, data-oriented products and services to maximize customer value. Every week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our clients. For more information about Acxiom, visit Acxiom.com.

Forward-Looking Statements

This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that the expected revenue from the LiveRamp transaction may not be realized within the expected timeframe; the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce or cancel the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve anticipated cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2014, which was filed with the Securities and Exchange Commission on May 28, 2014.

With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.

We undertake no obligation to update the information contained in this press release or any other forward-looking statement.

Acxiom is a registered trademark of Acxiom Corporation.

To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.

Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20141103005378/en/