Acxiom Q2 2017 Conference Call1Non -GAAP results exclude non cash stock compensation, purchased...

© 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.


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


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:




Total International $ 17 $ 18 (5%)

Total Company:




Total Company $ 217 $ 207 5%


Revenue on a Comparable Basis

1Both periods adjusted for the revenue associated with the disposed Acxiom Impact business



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


Marketing Services Segment Results$M


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)


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.


Audience Solutions Segment Results$M


US:

Revenue $ 71 $ 65 9%

Gross Profit $ 45 $ 38 18%



Global:

Revenue $ 79 $ 72 9%






Connectivity Segment Results$M


Revenue $ 33 $ 22 49%


Gross Margin 60.0% 60.7% (70 bps)

Segment Income (Loss) $ 2 $ (1) 256%



Cash Flow Results


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


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


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


IdentityLink Overview

13 ©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


Case Study: Global Electronics Provider

Marketing Database

AdobeIn-house Analytics

Pinterest

Snapchat

DoubleClick

Connected TV

Client

In-house DSP

LiveRampIdentityLink


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


FY15 – Q217 Pro-Forma Ex. Impact$M, Non-GAAP

Pro-forma amounts exclude the results of Acxiom Impact business for all periods


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


Adjusted EBITDA$M, Non-GAAP


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$


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


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


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


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


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.


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

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