acxiom q2 2017 conference call1non -gaap results exclude non cash stock compensation, purchased...
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© 2015 Acxiom Corporation. All Rights Reserved. © 2016 Acxiom Corporation. All Rights Reserved.
November 7, 2016
AcxiomQ2 2017 Conference Call
© 2013 Acxiom Corporation. All Rights Reserved.
Safe Harbor Statement
2 ©2016 Acxiom
Some of the matters discussed in this presentation contain forward-looking statements
regarding the company’s future business prospects which are subject to certain risks
and uncertainties, including competitive pressures, adverse economic conditions and
governmental regulations.
These issues and other factors that may be identified from time to time in the
Company’s reports filed with the SEC, could cause actual results to differ materially
from those indicated in the forward-looking statements.
Our discussion today will include non-GAAP financial measures. We refer you to the
Investor Relations section of our website, which includes a reconciliation to the
comparable GAAP measure for each non-GAAP financial measure included in this
discussion. The location of our website is www.acxiom.com.
© 2013 Acxiom Corporation. All Rights Reserved.
Q316A Q416A Q117A Q217A
3 ©2016 Acxiom
Key Growth Metrics
AS Digital Data Revenue
Q316A Q416A Q117A Q217A
Q/Q 8% 14% 26%
Direct Connectivity Customers1
Q/Q 5% 7% 13%
Connectivity Revenue Run-Rate2
Q/Q 10% 9% 13%
Q316A Q416A Q117A Q217A
Y/Y 47% 44% 37%
1Excludes agency and reseller deployments
2Revenue run-rate includes period ending LiveRamp product ARR and trailing-twelve month media spend royalties
Y/Y 204% 133% 118%
$8.6$100
272
$110
Y/Y 49% 50% 50%
$9.2
285
$120
$10.5
345 $13.3
$M $M
305
$135
© 2013 Acxiom Corporation. All Rights Reserved.4 ©2016 Acxiom
Summary Financial Results$M, except per share amounts
1Non-GAAP results exclude non-cash stock compensation, purchased intangible asset amortization, restructuring and impairment charges, separation and transformation
costs, and the net gain on the sale of Acxiom Impact
GAAP
Q217 Y/Y Change
$ 217 5%
$ 97 13%
44.7% 320 bps
$ 7 446%
3.3% 430 bps
$ 0.09 $ 0.11
79.3
Non-GAAP1
Q217 Y/Y Change
$ 217 5%
$ 102 13%
47.1% 360 bps
$ 25 34%
11.4% 250 bps
$ 0.18 $ 0.04
79.3
Revenue
Gross Profit
Gross Margin
Operating Income
Operating Margin
Diluted EPS
Share Count
© 2013 Acxiom Corporation. All Rights Reserved.5 ©2016 Acxiom
Revenue by Geography$M
Numbers may not foot due to rounding
Q217 Q216 Y/Y Change
US
Marketing Services $ 98 $ 103 (5%)
Audience Solutions $ 71 $ 65 9%
Connectivity $ 31 $ 21 50%
Total US $ 200 $ 189 6%
International:
Marketing Services $ 8 $ 10 (20%)
Audience Solutions $ 7 $ 7 6%
Connectivity $ 2 $ 2 38%
Total International $ 17 $ 18 (5%)
Total Company:
Marketing Services $ 106 $ 113 (6%)
Audience Solutions $ 79 $ 72 9%
Connectivity $ 33 $ 22 49%
Total Company $ 217 $ 207 5%
© 2013 Acxiom Corporation. All Rights Reserved.6 ©2016 Acxiom
Revenue on a Comparable Basis
1Both periods adjusted for the revenue associated with the disposed Acxiom Impact business
Numbers may not foot due to rounding
Q217 Q216 Y/Y Change
US $ 200 $ 189 6%
Acxiom Impact Divestiture1 $ (8) $ (16)
Adjusted US $ 192 $ 173 11%
International $ 17 $ 18 (5%)
Brazil Exit - $ (1)
ANZ Transition $ (1) $ (2)
FX $ 1 -
Adjusted International $ 18 $ 15 17%
Adjusted Total Revenue $ 210 $ 189 11%
$M
© 2013 Acxiom Corporation. All Rights Reserved.7 ©2016 Acxiom
Marketing Services Segment Results$M
Q217 Q216 Y/Y Change
US:
Revenue $ 98 $ 103 (5%)
Revenue ex. Impact1 $ 90 $ 87 3%
Gross Profit $ 32 $ 34 (5%)
Gross Margin 32.8% 32.7% 10 bps
Segment Income $ 19 $ 16 17%
Global:
Revenue $ 106 $ 113 (6%)
Revenue ex. Impact1 $ 98 $ 97 0%
Gross Profit $ 34 $ 38 (8%)
Gross Margin 32.6% 33.2% (60 bps)
Segment Income $ 20 $ 18 11%
Adjusted EBITDA $ 28 $ 25 9%
1Both periods adjusted for the revenue from the disposed Acxiom Impact business. A pro-forma view of Marketing Services and total Acxiom excluding the results of Acxiom
Impact is available in the appendix.
© 2013 Acxiom Corporation. All Rights Reserved.8 ©2016 Acxiom
Audience Solutions Segment Results$M
Q217 Q216 Y/Y Change
US:
Revenue $ 71 $ 65 9%
Gross Profit $ 45 $ 38 18%
Gross Margin 63.4% 58.7% 470 bps
Segment Income $ 29 $ 26 11%
Global:
Revenue $ 79 $ 72 9%
Gross Profit $ 48 $ 39 23%
Gross Margin 61.1% 54.3% 680 bps
Segment Income $ 30 $ 25 19%
Adjusted EBITDA $ 35 $ 31 15%
© 2013 Acxiom Corporation. All Rights Reserved.9 ©2016 Acxiom
Connectivity Segment Results$M
Q217 Q216 Y/Y Change
Revenue $ 33 $ 22 49%
Gross Profit $ 20 $ 13 47%
Gross Margin 60.0% 60.7% (70 bps)
Segment Income (Loss) $ 2 $ (1) 256%
Adjusted EBITDA $ 3 $ 1 482%
© 2013 Acxiom Corporation. All Rights Reserved.
Cash Flow Results
Q217 Q216 Y/Y Change
Operating Cash Flow $ 35 $ 21 66%
Free Cash Flow to Equity $ 30 $ (1) NM
Total Capital Spending1 $ 14 $ 14 (3%)
1Includes: capital expenditures, capitalized software and data acquisition costs
$M
10 ©2016 Acxiom
© 2013 Acxiom Corporation. All Rights Reserved.11 ©2016 Acxiom
Fiscal 2017 Guidance
GAAP Non-GAAP1
Revenue $ 860 – $ 870 $ 860 – $ 870
Diluted Earnings Per Share ~$ 0.12 ~$ 0.60
$M, except per share amounts
1Non-GAAP guidance excludes non-cash stock compensation, purchased intangible asset amortization, restructuring and impairment charges, separation and transformation
costs, and the net gain on the sale of Acxiom Impact
© 2013 Acxiom Corporation. All Rights Reserved.12 ©2016 Acxiom
Fiscal 2017 Revenue Guidance Reconciliation$M
FY17E FY16 Baseline Y/Y Change
Current Revenue Guidance $ 860 – $ 870 $ 8401 2 – 4%
FY Impact of Acxiom Impact $ (20) $ (60) NM
Revenue Guidance Excl. Acxiom
Impact$ 840 – $ 850 $ 780 8 – 9%
1Adjusted for the $10 million revenue impact associated with the Brazil shutdown and Australia transition
© 2013 Acxiom Corporation. All Rights Reserved.
IdentityLink Overview
13 ©2016 Acxiom
© 2013 Acxiom Corporation. All Rights Reserved.14 ©2016 Acxiom
IdentityLink: An Industry Platform
Brands AgenciesData Owners Tech Partners Publishers
…By Helping their Partners in the Digital Ecosystem
Helping Marketers Build an Omnichannel Understanding of the Consumer…
Benefits to
Marketers
• Improved Identity Resolution • New Data Sources: 2nd / 3rd party data via
Data Store
• Improved Integrations: faster, automated
• New Destinations
o Across platforms and devices
o Across silos of consumer data
© 2013 Acxiom Corporation. All Rights Reserved.15 ©2016 Acxiom
Case Study: Global Electronics Provider
Marketing Database
AdobeIn-house Analytics
Snapchat
DoubleClick
Connected TV
Client
In-house DSP
LiveRampIdentityLink
© 2013 Acxiom Corporation. All Rights Reserved.16 ©2016 Acxiom
IdentityLink: An Industry Platform
BRANDS PLATFORMS DATA OWNERS PUBLISHERSAGENCIES
Execute people-based
marketing to deliver a
seamless customer
experience
Offer people-based
marketing to brands
and agencies
Monetize their data
across the people-
based marketing
ecosystem
Better compete with
Google and Facebook by
offering people-based
marketing
Offer people based
advertising campaigns to
their brand customers at
scale
© 2013 Acxiom Corporation. All Rights Reserved.
Appendix
17 ©2016 Acxiom
© 2013 Acxiom Corporation. All Rights Reserved.18 ©2016 Acxiom
FY15 – Q217 Pro-Forma Ex. Impact$M, Non-GAAP
Pro-forma amounts exclude the results of Acxiom Impact business for all periods
Numbers may not foot due to rounding
Marketing Services Pro Forma
Q115A Q215A Q315A Q415A Q116A Q216A Q316A Q416A Q117A Q217A YTD
Revenue 93$ 97$ 97$ 94$ 92$ 97$ 101$ 100$ 97$ 98$ 195$
Gross Profit 33 35 35 31 31 33 34 37 36 34 70
GM % 36% 36% 36% 34% 33% 34% 34% 37% 37% 34% 36%
EBIT 16 16 16 14 13 15 18 18 20 20 40
EBIT % 17% 17% 17% 15% 15% 15% 18% 18% 21% 20% 20%
Adjusted EBITDA 23$ 22$ 23$ 20$ 20$ 21$ 24$ 24$ 27$ 27$ 54$
EBITDA % 25% 22% 24% 22% 22% 22% 24% 24% 28% 28% 28%
Acxiom Pro Forma
Q115A Q215A Q315A Q415A Q116A Q216A Q316A Q416A Q117A Q217A YTD
Revenue 170$ 189$ 191$ 190$ 181$ 192$ 206$ 211$ 202$ 209$ 412$
Gross Profit 65 79 80 82 79 86 96 103 96 101 197
GM % 38% 42% 42% 43% 44% 45% 46% 49% 47% 48% 48%
EBIT 4 10 15 18 11 15 20 19 21 25 46
EBIT % 2% 5% 8% 9% 6% 8% 10% 9% 10% 12% 11%
Adjusted EBITDA 18$ 23$ 31$ 34$ 26$ 31$ 35$ 34$ 37$ 40$ 77$
EBITDA % 11% 12% 16% 18% 15% 16% 17% 16% 18% 19% 19%
FY15A FY16A
FY15A FY16A FY17
FY17
© 2013 Acxiom Corporation. All Rights Reserved.19 ©2016 Acxiom
Adjusted EBITDA$M, Non-GAAP
Numbers may not foot due to rounding
FY15A Q116A Q216A Q316A Q416A FY16A Q117A Q217A YTD17A
Revenue 805$ 197$ 207$ 221$ 225$ 850$ 215$ 217$ 432$
Y/Y Change 0% 5% 2% 6% 9% 6% 9% 5% 7%
Loss from Operations (EBIT) (33)$ (3)$ (2)$ (0)$ (8)$ (13)$ 8$ 7$ 15$
Gains, losses, and other items, net 23$ 1$ 3$ 4$ 5$ 12$ 0$ 0$ 1$
Impairment of goodwill and other -$ -$ 1$ -$ 6$ 7$ -$ -$ -$
Business separation & transformation costs 31$ 3$ 6$ 7$ 5$ 21$ -$ 1$ 1$
Non-cash stock compensation expense 28$ 8$ 7$ 8$ 8$ 31$ 9$ 12$ 21$
Purchased intangible asset amortization 11$ 4$ 4$ 4$ 4$ 15$ 4$ 4$ 8$
Accelerated software amortization 4$ 1$ 0$ 0$ 0$ 2$ -$ -$ -$
Adjusted EBIT 65$ 15$ 18$ 22$ 20$ 76$ 21$ 25$ 46$
Y/Y Change 3% 71% 30% 7% -7% 16% 44% 34% 38%
Depreciation and amortization 64$ 16$ 16$ 17$ 17$ 67$ 17$ 16$ 33$
Adjusted EBITDA 129$ 31$ 35$ 39$ 38$ 142$ 38$ 41$ 79$
Y/Y Change 8% 28% 23% 4% -4% 10% 22% 18% 20%
Adjusted Earnings per Share 0.49$ 0.09$ 0.14$ 0.18$ 0.18$ 0.59$ 0.15$ 0.18$ 0.32$
Capital Spending 77$ 16$ 14$ 15$ 19$ 64$ 15$ 14$ 29$
Total Depreciation and Amortization 80$ 22$ 21$ 21$ 22$ 85$ 21$ 20$ 41$
© 2013 Acxiom Corporation. All Rights Reserved.
Adjusted EBITDA by Segment$M, Non-GAAP
20 ©2016 Acxiom
D&A by segment includes allocated corporate D&A for shared facilities and infrastructure based on usage
Numbers may not foot due to rounding
Q116A Q216A Q316A Q416A FY16A Q117A Q217A V% V$
Adjusted EBIT
Marketing Services 17 18 20 19 74 20 20 11% 2
Audience Solutions 24 25 31 30 110 25 30 19% 5
Connectivity (1) (1) (1) (0) (3) 0 2 256% 3
Corporate (25) (23) (28) (28) (105) (24) (27) -14% (3)
Total 15 18 22 20 76 21 25 34% 6
D&A
Marketing Services 8 8 8 8 32 8 8 4% 0
Audience Solutions 5 6 5 5 21 6 5 -5% (0)
Connectivity 2 2 2 2 7 2 2 10% 0
Corporate 2 2 2 2 7 1 1 -17% (0)
Total 16 17 17 17 67 17 16 0% (0)
Adjusted EBITDA
Marketing Services 25 25 28 27 106 28 28 9% 2
Audience Solutions 29 31 36 35 131 31 35 15% 4
Connectivity 1 1 1 2 4 2 3 482% 3
Corporate (24) (22) (26) (26) (98) (23) (25) -16% (4)
Total 31 35 39 37 142 38 41 18% 6
FY16A FY17A Q2 Y/Y Change
© 2013 Acxiom Corporation. All Rights Reserved.21 ©2016 Acxiom
GAAP to Non-GAAP Reconciliation$M, Non-GAAP
All reconciling items tax effected at 39.0%. Tax adjustment to balance to non-GAAP tax expense.
Numbers may not foot due to rounding
Q217 Impact Intangible Separation/ Q217
GAAP Restructuring Gain Amort. SBC Transformation Tax Non-GAAP
Revenue 217.3$ -$ -$ -$ -$ -$ -$ 217.3$
Cost of revenue 120.1 - - (3.9) (1.2) - - 115.0
Gross profit 97.2 - - 3.9 1.2 - - 102.3
% Gross margin 44.7% 47.1%
Operating expenses:
Research and development 19.0 - - - (1.8) - - 17.3
Sales and marketing 37.8 - - - (2.7) - - 35.2
General and administrative 32.9 - - - (6.3) (1.5) - 25.1
Gains, losses and other items, net 0.3 (0.9) 0.6 - - - - -
Total operating expenses 90.0 (0.9) 0.6 - (10.7) (1.5) - 77.6
Income (loss) from operations 7.1 0.9 (0.6) 3.9 11.9 1.5 - 24.7
% Margin 3.3% 11.4%
Other income (expense):
Interest expense (1.7) - - - - - - (1.7)
Other, net (0.2) - - - - - - (0.2)
Total other expense (1.9) - - - - - - (1.9)
Income (loss) from cont. operations before income taxes 5.2 0.9 (0.6) 3.9 11.9 1.5 - 22.8
Income taxes (benefit) (1.9) 0.4 4.1 1.5 4.7 0.6 (0.4) 8.9
Net earnings (loss) 7.1 0.6 (4.8) 2.4 7.3 0.9 0.4 13.9
Diluted earnings (loss) per share: 0.09$ 0.01$ (0.06)$ 0.03$ 0.09$ 0.01$ 0.01$ 0.18$
Basic shares 77.4 77.4 77.4 77.4 77.4 77.4 77.4 77.4
FDWA Shares 79.3 79.3 79.3 79.3 79.3 79.3 79.3 79.3