LiveRamp (RAMP) 8-K Acxiom Announces Second Quarter Results

For more information, contact:

Lauren Dillard

Acxiom Investor Relations

(650) 372-2242

investor.relations@acxiom.com

EACXM

ACXIOM ANNOUNCES SECOND QUARTER RESULTS

Connectivity Revenue Increases 65% Year-over-Year

Total US Revenue Grows 6% Year-over-Year

LITTLE ROCK, Ark. – November 4, 2015 Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its second quarter ended September 30, 2015.

Financial Highlights

·   Revenue: Total revenue was $207 million, up approximately 2% compared to the second quarter of last year. US revenue of $189 million was up 6% year-over-year.

·   Operating Income (Loss): GAAP operating loss from continuing operations was $2 million compared to a loss of $6 million in the prior year. Non-GAAP operating income from continuing operations improved 30% to approximately $18 million compared to $14 million a year ago.

·   Earnings (Loss) per Share: GAAP loss per share from continuing operations was $0.02 compared to a net loss of $0.09 in the prior year. Non-GAAP diluted earnings per share from continuing operations were $0.14, up 40% from $0.10 a year ago.

·   Operating Cash Flow: Operating cash flow from continuing operations was $21 million, up from $14 million a year ago.

·   Free Cash Flow to Equity: Free cash flow to equity improved $11 million to negative $1 million. This measure excludes cash flows related to the IT Infrastructure Management divestiture.

Segment Results

Marketing Services and Audience Solutions

·   Revenue was $185 million, down 3% compared to the second quarter of last year. Excluding a negative currency impact of approximately $3 million, total Marketing Services and Audience Solutions revenue was down 2%. US revenue of $168 million was up 2% year-over-year.

·   Non-GAAP gross margin decreased from 44% to 41%.

·   Non-GAAP operating income was $43 million compared to $54 million in the prior year.

·   The declines were primarily driven by International results. In addition, operating income was impacted by continued investment in the US.

Connectivity

·   Revenue was $22 million, up approximately 65% compared to the second quarter of last year, driven by continued onboarding momentum. Connectivity exited the quarter with a $90 million revenue run-rate.

·   Non-GAAP gross margin improved from 19% to 62%.

·   Non-GAAP operating loss improved by approximately $11 million to a loss of roughly $1 million, driven by growth in subscriptions and royalties.

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Non-GAAP results exclude items including non-cash compensation, purchased intangible asset amortization, and separation and transformation costs. A reconciliation between GAAP and non-GAAP results is attached to this release.

“Connectivity had another impressive quarter highlighted by strong revenue growth, new customer additions and the launch of LiveRamp Customer Link™,” said Acxiom CEO Scott Howe. “At the same time, our Marketing Services and Audience Solutions businesses had a number of key wins during the quarter, including several large renewals.”

Business Highlights

·   LiveRamp™ added 40 new customers during the quarter and added over 30 new partner integrations. Marketers can now onboard and distribute their data to a growing network of more than 250 marketing platforms and data providers.

·   Connectivity powered $82 million of gross media spend in the second quarter, up 122% year-over-year. On a trailing twelve-month basis, Connectivity powered $268 million of gross media spend, up 167% over the comparable period.

·   LiveRamp announced the launch of Customer Link, a new software-as-a-service product that connects campaign and sales data across channels and devices, solving the linking challenge that prevents marketers from creating a unified view of customer activity. Customer Link extends LiveRamp’s suite of open connectivity services.

·   Acxiom repurchased approximately 607,000 shares for $12 million during the quarter. Since inception of the share repurchase program in August 2011, Acxiom has repurchased 14.3 million shares for $230 million.

Financial Outlook

Acxiom’s guidance excludes the impact of unusual items, non-cash compensation and acquired intangible asset amortization. Acxiom reconfirms the following estimates for fiscal 2016:

·  Revenue from continuing operations in the range of $815 million to $840 million

 ·   Non-GAAP diluted earnings per share from continuing operations in the range of $0.45 to $0.50

Conference Call

Acxiom will hold a conference call at 4:00 p.m. CST today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at investors.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 7,000+ global clients. For more information about Acxiom, visit Acxiom.com.

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Forward-Looking Statements

This release and today’s conference call contains 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 divisions 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 current and 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, 2015, which was filed with the Securities and Exchange Commission on May 27, 2015.

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.

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
	For the Three Months Ended
	September 30,
							$				%
	2015			2014			Variance			Variance
Revenues		207,345			204,248			3,097			1.5	%
Cost of revenue		121,312			122,845			(1,533	)		(1.2	%)
Gross profit		86,033			81,403			4,630			5.7	%
% Gross margin		41.5	%		39.9	%
Operating expenses:
Research and development		19,078			19,798			(720	)		(3.6	%)
Sales and marketing		34,259			28,842			5,417			18.8	%
General and administrative		31,519			38,373			(6,854	)		(17.9	%)
Gains, losses and other items, net		3,233			833			2,400			288.1	%
Total operating expenses		88,089			87,846			243			0.3	%
Loss from operations		(2,056	)		(6,443	)		4,387			68.1	%
% Margin		-1.0	%		-3.2	%
Other income (expense):
Interest expense		(1,956	)		(1,821	)		(135	)		(7.4	%)
Other, net		59			(163	)		222			136.2	%
Total other expense		(1,897	)		(1,984	)		87			4.4	%
Loss from continuing operations before income taxes		(3,953	)		(8,427	)		4,474			53.1	%
Income taxes		(2,608	)		(1,326	)		(1,282	)		(96.7	%)
Net loss from continuing operations		(1,345	)		(7,101	)		5,756			81.1	%
Earnings from discontinued operations, net of tax		12,068			5,557			6,511			117.2	%
Net earnings (loss)		10,723			(1,544	)		12,267			794.5	%
Basic earnings (loss) per share:
Net loss from continuing operations		(0.02	)		(0.09	)		0.07			81.3	%
Net earnings from discontinued operations		0.15			0.07			0.08			114.8	%
Net earnings (loss)		0.14			(0.02	)		0.16			787.0	%
Diluted earnings (loss) per share:
Net loss from continuing operations		(0.02	)		(0.09	)		0.07			81.3	%
Net earnings from discontinued operations		0.15			0.07			0.08			114.8	%
Net earnings (loss)		0.14			(0.02	)		0.16			787.0	%
Some earnings (loss) per share amounts may not add due to rounding

4 

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
	For the Six Months Ended
	September 30,
							$				%
	2015			2014			Variance			Variance
Revenues		404,240			390,931			13,309			3.4	%
Cost of revenue		239,021			235,935			3,086			1.3	%
Gross profit		165,219			154,996			10,223			6.6	%
% Gross margin		40.9	%		39.6	%
Operating expenses:
Research and development		39,089			36,148			2,941			8.1	%
Sales and marketing		63,753			55,342			8,411			15.2	%
General and administrative		63,262			75,074			(11,812	)		(15.7	%)
Gains, losses and other items, net		4,040			7,961			(3,921	)		(49.3	%)
Total operating expenses		170,144			174,525			(4,381	)		(2.5	%)
Loss from operations		(4,925	)		(19,529	)		14,604			74.8	%
% Margin		-1.2	%		-5.0	%
Other income (expense):
Interest expense		(3,841	)		(3,769	)		(72	)		(1.9	%)
Other, net		363			(269	)		632			234.9	%
Total other expense		(3,478	)		(4,038	)		560			13.9	%
Loss from continuing operations before income taxes		(8,403	)		(23,567	)		15,164			64.3	%
Income taxes		(1,876	)		(5,725	)		3,849			67.2	%
Net loss from continuing operations		(6,527	)		(17,842	)		11,315			63.4	%
Earnings from discontinued operations, net of tax		16,211			8,694			7,517			86.5	%
Net earnings (loss)		9,684			(9,148	)		18,832			205.9	%
Basic earnings (loss) per share:
Net loss from continuing operations		(0.08	)		(0.23	)		0.15			63.9	%
Net earnings from discontinued operations		0.21			0.11			0.10			84.2	%
Net earnings (loss)		0.12			(0.12	)		0.24			204.6	%
Diluted earnings (loss) per share:
Net loss from continuing operations		(0.08	)		(0.23	)		0.15			63.9	%
Net earnings from discontinued operations		0.21			0.11			0.10			84.2	%
Net earnings (loss)		0.12			(0.12	)		0.24			202.7	%
Some earnings (loss) per share amounts may not add due to rounding

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
	For the Three Months Ended						For the Six Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Loss from continuing operations before income taxes		(3,953	)		(8,427	)		(8,403	)		(23,567	)
Income taxes		(2,608	)		(1,326	)		(1,876	)		(5,725	)
Net loss from continuing operations		(1,345	)		(7,101	)		(6,527	)		(17,842	)
Earnings from discontinued operations, net of tax		12,068			5,557			16,211			8,694
Net earnings (loss)		10,723			(1,544	)		9,684			(9,148	)
Earnings (loss) per share:
Basic		0.14			(0.02	)		0.12			(0.12	)
Diluted		0.14			(0.02	)		0.12			(0.12	)
Excluded items:
Purchased intangible asset amortization  (cost of revenue)		3,754			3,827			7,508			3,890
Non-cash stock compensation (cost of revenue and operating expenses)		7,360			7,725			15,483			11,650
Restructuring charges and other adjustments (gains, losses, and other)		3,233			833			4,040			7,961
Separation and transformation costs (general and administrative)		6,098			8,291			9,512			18,829
Accelerated amortization (cost of revenue)		78			-			1,520			-
Total excluded items, continuing operations		20,523			20,676			38,063			42,330
Earnings from continuing operations before income taxes
and excluding items		16,570			12,249			29,660			18,763
Income taxes		5,163			4,757			10,795			7,274
Non-GAAP net earnings		11,407			7,492			18,865			11,489
Non-GAAP earnings per share:
Basic		0.15			0.10			0.24			0.15
Diluted		0.14			0.10			0.24			0.15
Basic weighted average shares		77,960			77,123			77,939			76,978
Diluted weighted average shares		79,310			78,307			79,332			78,324

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except earnings (loss) per share)
		For the Three Months Ended
		September 30,			September 30,
		2015			2014
Basic loss per share from continuing operations:
Numerator - net loss			(1,345	)		(7,101	)
Denominator - weighted-average shares outstanding			77,960			77,123
Basic loss per share			(0.02	)		(0.09	)
Diluted loss per share from continuing operations:
Numerator - net loss			(1,345	)		(7,101	)
Denominator - weighted-average shares outstanding			77,960			77,123
Diluted loss per share			(0.02	)		(0.09	)
Basic earnings per share from discontinued operations:
Numerator - net earnings			12,068			5,557
Denominator - weighted-average shares outstanding			77,960			77,123
Basic earnings per share			0.15			0.07
Diluted earnings per share from discontinued operations:
Numerator - net earnings			12,068			5,557
Denominator - weighted-average shares outstanding			77,960			77,123
Dilutive effect of common stock options, warrants and restricted stock			-			-
			77,960			77,123
Diluted earnings per share			0.15			0.07
	��
Diluted earnings (loss) per share:
Numerator - net earnings (loss)			10,723			(1,544	)
Denominator - weighted-average shares outstanding			77,960			77,123
Dilutive effect of common stock options, warrants, and restricted stock			-			-
			77,960			77,123
Diluted earnings (loss) per share			0.14			(0.02	)

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except earnings (loss) per share)
	For the Six Months Ended
	September 30,			September 30,
	2015			2014
Basic loss per share from continuing operations:
Numerator - net loss		(6,527	)		(17,842	)
Denominator - weighted-average shares outstanding		77,939			76,978
Basic loss per share		(0.08	)		(0.23	)
Diluted loss per share from continuing operations:
Numerator - net loss		(6,527	)		(17,842	)
Denominator - weighted-average shares outstanding		77,939			76,978
Diluted loss per share		(0.08	)		(0.23	)
Basic earnings per share from discontinued operations:
Numerator - net earnings		16,211			8,694
Denominator - weighted-average shares outstanding		77,939			76,978
Basic earnings per share		0.21			0.11
Diluted earnings per share from discontinued operations:
Numerator - net earnings		16,211			8,694
Denominator - weighted-average shares outstanding		77,939			76,978
Dilutive effect of common stock options, warrants and restricted stock		-			-
		77,939			76,978
Diluted earnings per share		0.21			0.11
Diluted loss per share:
Numerator - net earnings (loss)		9,684			(9,148	)
Denominator - weighted-average shares outstanding		77,939			76,978
Dilutive effect of common stock options, warrants, and restricted stock		-			-
		77,939			76,978
Diluted earnings (loss) per share		0.12			(0.12	)

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-GAAP
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	September 30, 2015												September 30, 2014
	Marketing Services												Marketing Services
	& Audience Solutions			Connectivity			Corporate			Total			& Audience Solutions			Connectivity			Corporate			Total
Revenues		185,101			22,244			-			207,345			190,776			13,472			-			204,248
Gross profit (loss)		76,030			10,081			(78	)		86,033			82,652			(1,249	)		-			81,403
% Gross margin		41.1	%		45.3	%		n/a			41.5	%		43.3	%		-9.3	%		n/a			39.9	%
Operating income (loss)		41,586			(10,192	)		(33,450	)		(2,056	)		52,302			(20,277	)		(38,468	)		(6,443	)
% margin		22.5	%		-45.8	%		n/a			-1.0	%		27.4	%		-150.5	%		n/a			-3.2	%

9 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-GAAP
(Unaudited)
(Dollars in thousands)
	For the Six Months Ended
	September 30, 2015												September 30, 2014
	Marketing Services												Marketing Services
	& Audience Solutions			Connectivity			Corporate			Total			& Audience Solutions			Connectivity			Corporate			Total
Revenues		361,377			42,863			-			404,240			373,125			17,806			-			390,931
Gross profit (loss)		148,049			18,690			(1,520	)		165,219			159,876			(4,880	)		-			154,996
% Gross margin		41.0	%		43.6	%		n/a			40.9	%		42.8	%		-27.4	%		n/a			39.6	%
Operating income (loss)		79,873			(18,217	)		(66,581	)		(4,925	)		98,523			(34,538	)		(83,514	)		(19,529	)
% margin		22.1	%		-42.5	%		n/a			-1.2	%		26.4	%		-194.0	%		n/a			-5.0	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-NON-GAAP
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	September 30, 2015												September 30, 2014
	Marketing Services												Marketing Services
	& Audience Solutions			Connectivity			Corporate			Total			& Audience Solutions			Connectivity			Corporate			Total
Revenues		185,101			22,244			-			207,345			190,776			13,472			-			204,248
Gross profit		76,404			13,810			-			90,214			83,043			2,503			-			85,546
% Gross margin		41.3	%		62.1	%		n/a			43.5	%		43.5	%		18.6	%		n/a			41.9	%
Operating income (loss)		42,696			(664	)		(23,565	)		18,467			53,556			(11,702	)		(27,621	)		14,233
% margin		23.1	%		-3.0	%		n/a			8.9	%		28.1	%		-86.9	%		n/a			7.0	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP SEGMENT RESULTS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	September 30, 2015											September 30, 2014
	Marketing Services											Marketing Services
	& Audience Solutions		Connectivity			Corporate			Total			& Audience Solutions		Connectivity			Corporate			Total
Gross profit (loss)		76,030		10,081			(78	)		86,033			82,652		(1,249	)		-			81,403
Purchased intangible asset amortization		25		3,729			-			3,754			75		3,752			-			3,827
Non-cash stock compensation		347		-			-			347			316		-			-			316
Accelerated amortization		-		-			78			78			-		-			-			-
Restructuring charges and other adjustments		2		-			-			2			-		-			-			-
Gross profit (loss) before excluded items		76,404		13,810			-			90,214			83,043		2,503			-			85,546
Operating income (loss)		41,586		(10,192	)		(33,450	)		(2,056	)		52,302		(20,277	)		(38,468	)		(6,443	)
Purchased intangible asset amortization		25		3,729			-			3,754			75		3,752			-			3,827
Non-cash stock compensation		1,053		5,625			682			7,360			804		5,560			1,361			7,725
Restructuring charges and other adjustments		32		174			3,027			3,233			375		(737	)		1,195			833
Separation and transformation costs		-		-			6,098			6,098			-		-			8,291			8,291
Accelerated amortization		-		-			78			78			-		-			-			-
Operating income (loss) before excluded items		42,696		(664	)		(23,565	)		18,467			53,556		(11,702	)		(27,621	)		14,233

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-NON-GAAP
(Unaudited)
(Dollars in thousands)
	For the Six Months Ended
	September 30, 2015												September 30, 2014
	Marketing Services												Marketing Services
	& Audience Solutions			Connectivity			Corporate			Total			& Audience Solutions			Connectivity			Corporate			Total
Revenues		361,377			42,863			-			404,240			373,125			17,806			-			390,931
Gross profit (loss)		148,877			26,148			-			175,025			160,602			(1,096	)		-			159,506
% Gross margin		41.2	%		61.0	%		n/a			43.3	%		43.0	%		-6.2	%		n/a			40.8	%
Operating income (loss)		82,949			(837	)		(48,974	)		33,138			100,826			(25,554	)		(52,471	)		22,801
% margin		23.0	%		-2.0	%		n/a			8.2	%		27.0	%		-143.5	%		n/a			5.8	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP SEGMENT RESULTS
(Unaudited)
(Dollars in thousands)
	For the Six Months Ended
	September 30, 2015											September 30, 2014
	Marketing Services											Marketing Services
	& Audience Solutions		Connectivity			Corporate			Total			& Audience Solutions		Connectivity			Corporate			Total
Gross profit (loss)		148,049		18,690			(1,520	)		165,219			159,876		(4,880	)		-			154,996
Purchased intangible asset amortization		50		7,458			-			7,508			106		3,784			-			3,890
Non-cash stock compensation		776		-			-			776			620		-			-			620
Accelerated amortization		-		-			1,520			1,520			-		-			-			-
Restructuring charges and other adjustments		2		-			-			2			-		-			-			-
Gross profit (loss) before excluded items		148,877		26,148			-			175,025			160,602		(1,096	)		-			159,506
Operating income (loss)		79,873		(18,217	)		(66,581	)		(4,925	)		98,523		(34,538	)		(83,514	)		(19,529	)
Purchased intangible asset amortization		50		7,458			-			7,508			106		3,784			-			3,890
Non-cash stock compensation		2,967		9,748			2,768			15,483			1,811		5,937			3,902			11,650
Restructuring charges and other adjustments		59		174			3,807			4,040			386		(737	)		8,312			7,961
Separation and transformation costs		-		-			9,512			9,512			-		-			18,829			18,829
Accelerated amortization		-		-			1,520			1,520			-		-			-			-
Operating income (loss) before excluded items		82,949		(837	)		(48,974	)		33,138			100,826		(25,554	)		(52,471	)		22,801

14 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
	September 30,			March 31,			$				%
	2015			2015			Variance			Variance
Assets
Current assets:
Cash and cash equivalents		180,945			141,010			39,935			28.3	%
Trade accounts receivable, net		135,894			126,896			8,998			7.1	%
Deferred income taxes		15,511			25,610			(10,099	)		(39.4	%)
Refundable income taxes		5,097			5,239			(142	)		(2.7	%)
Restricted cash held in escrow		130			31,000			(30,870	)		(99.6	%)
Other current assets		37,807			34,975			2,832			8.1	%
Assets of discontinued operations		2,000			172,284			(170,284	)		(98.8	%)
Total current assets		377,384			537,014			(159,630	)		(29.7	%)
Property and equipment		509,573			505,721			3,852			0.8	%
Less - accumulated depreciation and amortization		333,405			329,467			3,938			1.2	%
Property and equipment, net		176,168			176,254			(86	)		(0.0	%)
Software, net of accumulated amortization		59,975			68,962			(8,987	)		(13.0	%)
Goodwill		495,843			497,362			(1,519	)		(0.3	%)
Purchased software licenses, net of accumulated amortization		13,037			9,551			3,486			36.5	%
Other assets, net		30,214			33,281			(3,067	)		(9.2	%)
		1,152,621			1,322,424			(169,803	)		(12.8	%)
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt		32,205			32,232			(27	)		(0.1	%)
Trade accounts payable		40,798			30,094			10,704			35.6	%
Accrued payroll and related expenses		32,684			36,659			(3,975	)		(10.8	%)
Other accrued expenses		46,019			62,754			(16,735	)		(26.7	%)
Acquisition escrow payable		130			31,000			(30,870	)		(99.6	%)
Deferred revenue		36,051			33,620			2,431			7.2	%
Liabilities of discontinued operations		2,436			57,433			(54,997	)		(95.8	%)
Total current liabilities		190,323			283,792			(93,469	)		(32.9	%)
Long-term debt		176,744			247,855			(71,111	)		(28.7	%)
Deferred income taxes		70,875			80,675			(9,800	)		(12.1	%)
Other liabilities		10,703			6,845			3,858			56.4	%
Stockholders' equity:
Common stock		12,957			12,794			163			1.3	%
Additional paid-in capital		1,059,087			1,034,526			24,561			2.4	%
Retained earnings		601,482			591,798			9,684			1.6	%
Accumulated other comprehensive income		7,669			9,413			(1,744	)		(18.5	%)
Treasury stock, at cost		(977,219	)		(945,274	)		(31,945	)		(3.4	%)
Total stockholders' equity		703,976			703,257			719			0.1	%
		1,152,621			1,322,424			(169,803	)		(12.8	%)

15 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	September 30,
	2015			2014
Cash flows from operating activities:
Net earnings (loss)		10,723			(1,544	)
Earnings from discontinued operations, net of tax		(12,068	)		(5,557	)
Non-cash operating activities:
Depreciation and amortization		20,635			18,257
Loss (gain) on disposal or impairment of assets		(57	)		47
Impairment of goodwill and other		706			-
Deferred income taxes		1,806			(4,179	)
Non-cash stock compensation expense		7,360			7,725
Changes in operating assets and liabilities:
Accounts receivable		(1,244	)		(848	)
Other assets		(2,007	)		1,778
Deferred costs		(398	)		-
Accounts payable and other liabilities		(6,806	)		967
Deferred revenue		2,707			(2,321	)
Net cash provided by (used in) operating activities		21,357			14,325
Cash flows from investing activities:
Capitalized software		(3,936	)		(5,608	)
Capital expenditures		(10,244	)		(15,362	)
Data acquisition costs		(281	)		(468	)
Net cash paid in acquisitions		-			(265,672	)
Net cash used in investing activities		(14,461	)		(287,110	)
Cash flows from financing activities:
Payments of debt		(63,039	)		(4,839	)
Sale of common stock, net of stock acquired for withholding taxes		2,033			(1,813	)
Income tax impact of stock options, warrants and restricted stock		(475	)		-
Acquisition of treasury stock		(12,310	)		(9,868	)
Net cash used in financing activities		(73,791	)		(16,520	)
Cash flows from discontinued operations:
From operating activities		(1,938	)		11,547
From investing activities		127,315			(4,034	)
From financing activities		(53	)		(517	)
Net cash provided by discontinued operations		125,324			6,996
Effect of exchange rate changes on cash		(676	)		(801	)
Net change in cash and cash equivalents		57,753			(283,110	)
Cash and cash equivalents at beginning of period		123,192			392,918
Cash and cash equivalents at end of period		180,945			109,808
Supplemental cash flow information:
Cash paid during the period for:
Interest		2,152			2,516
Income taxes		6,310			59
Payments on capital leases and installment payment arrangements		53			1,084
Other debt payments, excluding line of credit		8,039			4,272
Prepayment of debt		55,000			-

16 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Six Months Ended
	September 30,
	2015			2014
Cash flows from operating activities:
Net earnings (loss)		9,684			(9,148	)
Earnings from discontinued operations, net of tax		(16,211	)		(8,694	)
Non-cash operating activities:
Depreciation and amortization		42,410			34,177
Loss (gain) on disposal or impairment of assets		184			(207	)
Impairment of goodwill and other		706			-
Deferred income taxes		284			(6,022	)
Non-cash stock compensation expense		15,483			11,650
Changes in operating assets and liabilities:
Accounts receivable		(9,281	)		10,551
Other assets		(1,198	)		5,368
Deferred costs		(823	)		(211	)
Accounts payable and other liabilities		(10,336	)		(28,090	)
Deferred revenue		2,452			(10,505	)
Net cash provided by (used in) operating activities		33,354			(1,131	)
Cash flows from investing activities:
Capitalized software		(6,733	)		(10,577	)
Capital expenditures		(23,120	)		(32,140	)
Data acquisition costs		(711	)		(1,103	)
Net cash paid in acquisitions		-			(265,672	)
Net cash used in investing activities		(30,564	)		(309,492	)
Cash flows from financing activities:
Payments of debt		(71,138	)		(9,756	)
Sale of common stock, net of stock acquired for withholding taxes		4,102			(2,487	)
Income tax impact of stock options, warrants and restricted stock		(552	)		(9,868	)
Acquisition of treasury stock		(27,261	)		-
Net cash used in financing activities		(94,849	)		(22,111	)
Cash flows from discontinued operations:
From operating activities		9,715			28,857
From investing activities		122,831			(3,330	)
From financing activities		(206	)		(1,102	)
Net cash provided by discontinued operations		132,340			24,425
Effect of exchange rate changes on cash		(346	)		(469	)
Net change in cash and cash equivalents		39,935			(308,778	)
Cash and cash equivalents at beginning of period		141,010			418,586
Cash and cash equivalents at end of period		180,945			109,808
Supplemental cash flow information:
Cash paid during the period for:
Interest		4,337			5,391
Income taxes		5,266			356
Payments on capital leases and installment payment arrangements		269			2,319
Other debt payments, excluding line of credit		16,075			8,539
Prepayment of debt		55,000			-

17 

ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
	06/30/14			09/30/14			12/31/14			03/31/15			YTD FY2015			06/30/15			09/30/15			YTD FY2016
Net cash provided by operating activities - continuing operations		(15,456	)		14,325			32,890			29,372			61,131			11,997			21,357			33,354
Less:
Capitalized software		(4,969	)		(5,608	)		(4,408	)		(3,602	)		(18,587	)		(2,797	)		(3,936	)		(6,733	)
Capital expenditures		(16,778	)		(15,362	)		(10,212	)		(14,600	)		(56,952	)		(12,876	)		(10,244	)		(23,120	)
Data acquisition costs		(635	)		(468	)		(394	)		(374	)		(1,871	)		(430	)		(281	)		(711	)
Payments on capital leases and installment payment arrangements		(650	)		(567	)		(471	)		(315	)		(2,003	)		(63	)		-			(63	)
Other required debt payments		(4,267	)		(4,272	)		(8,027	)		(8,032	)		(24,598	)		(8,036	)		(8,039	)		(16,075	)
Total		(42,755	)		(11,952	)		9,378			2,449			(42,880	)		(12,205	)		(1,143	)		(13,348	)

18 

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-GAAP
(Unaudited)
(Dollars in thousands, except earnings per share)
																									Q2 FY16 to Q2 FY15
	06/30/14			09/30/14			12/31/14			03/31/15			YTD FY2015			06/30/15			09/30/15			YTD FY2016			%			$
Revenues		186,683			204,248			208,246			205,734			804,911			196,895			207,345			404,240			1.5	%	3,097
Cost of revenue		113,090			122,845			123,290			123,712			482,937			117,709			121,312			239,021			-1.2	%	(1,533	)
Gross profit		73,593			81,403			84,956			82,022			321,974			79,186			86,033			165,219			5.7	%	4,630
% Gross margin		39.4	%		39.9	%		40.8	%		39.9	%		40.0	%		40.2	%		41.5	%		40.9	%
Operating expenses
Research and development		16,350			19,798			18,973			19,080			74,201			20,011			19,078			39,089			-3.6	%	(720	)
Sales and marketing		26,500			28,842			30,997			32,319			118,658			29,494			34,259			63,753			18.8	%	5,417
General and administrative		36,701			38,373			33,895			30,230			139,199			31,743			31,519			63,262			-17.9	%	(6,854	)
Gains, losses and other items, net		7,128			833			3,381			11,258			22,600			807			3,233			4,040			288.1	%	2,400
Total operating expenses		86,679			87,846			87,246			92,887			354,658			82,055			88,089			170,144			0.3	%	243
Loss from operations		(13,086	)		(6,443	)		(2,290	)		(10,865	)		(32,684	)		(2,869	)		(2,056	)		(4,925	)		68.1	%	4,387
% Margin		-7.0	%		-3.2	%		-1.1	%		-5.3	%		-4.1	%		-1.5	%		-1.0	%		-1.2	%
Other income (expense)
Interest expense		(1,948	)		(1,821	)		(2,005	)		(1,898	)		(7,672	)		(1,885	)		(1,956	)		(3,841	)		-7.4	%	(135	)
Other, net		(106	)		(163	)		35			(757	)		(991	)		304			59			363			136.2	%	222
Total other expense		(2,054	)		(1,984	)		(1,970	)		(2,655	)		(8,663	)		(1,581	)		(1,897	)		(3,478	)		4.4	%	87
Loss from continuing operations before income taxes		(15,140	)		(8,427	)		(4,260	)		(13,520	)		(41,347	)		(4,450	)		(3,953	)		(8,403	)		53.1	%	4,474
Income taxes		(4,399	)		(1,326	)		(4,597	)		(4,483	)		(14,805	)		732		��	(2,608	)		(1,876	)		-96.7	%	(1,282	)
Net earnings (loss) from continuing operations		(10,741	)		(7,101	)		337			(9,037	)		(26,542	)		(5,182	)		(1,345	)		(6,527	)		81.1	%	5,756
Earnings from discontinued operations, net of tax		3,137			5,557			3,819			2,998			15,511			4,143			12,068			16,211			117.2	%	6,511
Net earnings (loss)		(7,604	)		(1,544	)		4,156			(6,039	)		(11,031	)		(1,039	)		10,723			9,684			794.5	%	12,267
Diluted earnings (loss) per share		(0.10	)		(0.02	)		0.05			(0.08	)		(0.14	)		(0.01	)		0.14			0.12			775.3	%	0.16

19 

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-NON GAAP
(Unaudited)
(Dollars in thousands, except earnings per share)
																									Q2 FY16 to Q2 FY15
	06/30/14			09/30/14			12/31/14			03/31/15			YTD FY2015			06/30/15			09/30/15			YTD FY2016			%			$
Revenues		186,683			204,248			208,246			205,734			804,911			196,895			207,345			404,240			1.5	%	3,097
Cost of revenue		112,723			118,702			119,136			115,243			465,804			112,084			117,131			229,215			-1.3	%	(1,571	)
Gross profit		73,960			85,546			89,110			90,491			339,107			84,811			90,214			175,025			5.5	%	4,668
% Gross margin		39.6	%		41.9	%		42.8	%		44.0	%		42.1	%		43.1	%		43.5	%		43.3	%
Operating expenses
Research and development		15,911			16,529			15,559			15,956			63,955			16,384			15,400			31,784			-6.8	%	(1,129	)
Sales and marketing		25,854			27,040			28,941			30,150			111,985			28,170			32,945			61,115			21.8	%	5,905
General and administrative		23,627			27,744			23,869			22,656			97,896			25,586			23,402			48,988			-15.7	%	(4,342	)
Gains, losses and other items, net		-			-			-			-			-			-			-			-			-		-
Total operating expenses		65,392			71,313			68,369			68,762			273,836			70,140			71,747			141,887			0.6	%	434
Income from operations		8,568			14,233			20,741			21,729			65,271			14,671			18,467			33,138			29.7	%	4,234
% Margin		4.6	%		7.0	%		10.0	%		10.6	%		8.1	%		7.5	%		8.9	%		8.2	%
Other income (expense)
Interest expense		(1,948	)		(1,821	)		(2,005	)		(1,898	)		(7,672	)		(1,885	)		(1,956	)		(3,841	)		-7.4	%	(135	)
Other, net		(106	)		(163	)		35			(757	)		(991	)		304			59			363			136.2	%	222
Total other expense		(2,054	)		(1,984	)		(1,970	)		(2,655	)		(8,663	)		(1,581	)		(1,897	)		(3,478	)		4.4	%	87
Earnings from continuing operations before income taxes		6,514			12,249			18,771			19,074			56,608			13,090			16,570			29,660			35.3	%	4,321
Income taxes		2,517			4,757			5,755			5,324			18,353			5,632			5,163			10,795			8.5	%	406
Net earnings from continuing operations		3,997			7,492			13,016			13,750			38,255			7,458			11,407			18,865			52.3	%	3,915
Earnings from discontinued operations, net of tax		-			-			-			-			-			-			-			-			-		-
Net earnings		3,997			7,492			13,016			13,750			38,255			7,458			11,407			18,865			52.3	%	3,915
Diluted earnings per share		0.05			0.10			0.17			0.17			0.49			0.09			0.14			0.24			50.3	%	0.05

20 

ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
	06/30/14			09/30/14			12/31/14			03/31/15			FY2015			06/30/15			09/30/15			YTD FY2016
Loss from continuing operations before income taxes		(15,140	)		(8,427	)		(4,260	)		(13,520	)		(41,347	)		(4,450	)		(3,953	)		(8,403	)
Income taxes		(4,399	)		(1,326	)		(4,597	)		(4,483	)		(14,805	)		732			(2,608	)		(1,876	)
Net earnings (loss) from continuing operations		(10,741	)		(7,101	)		337			(9,037	)		(26,542	)		(5,182	)		(1,345	)		(6,527	)
Earnings loss from discontinued operations, net of tax		3,137			5,557			3,819			2,998			15,511			4,143			12,068			16,211
Net earnings (loss)		(7,604	)		(1,544	)		4,156			(6,039	)		(11,031	)		(1,039	)		10,723			9,684
Earnings (loss) per share:
Basic		(0.10	)		(0.02	)		0.05			(0.08	)		(0.14	)		(0.01	)		0.14			0.12
Diluted		(0.10	)		(0.02	)		0.05			(0.08	)		(0.14	)		(0.01	)		0.14			0.12
Unusual items:
Purchased intangible asset amortization  (cost of revenue)		63			3,827			3,783			3,781			11,454			3,754			3,754			7,508
Non-cash stock compensation (cost of revenue and operating expenses)		3,925			7,725			8,450			8,216			28,316			8,123			7,360			15,483
Restructuring charges and other adjustments (gains, losses, and other)		7,128			833			3,381			11,258			22,600			807			3,233			4,040
Separation and transformation costs (general and administrative)		10,538			8,291			7,417			5,023			31,269			3,414			6,098			9,512
Accelerated amortization (cost of revenue)		-			-			-			4,316			4,316			1,442			78			1,520
Total unusual items, continuing operations		21,654			20,676			23,031			32,594			97,955			17,540			20,523			38,063
Earnings from continuing operations before income taxes
and excluding unusual items		6,514			12,249			18,771			19,074			56,608			13,090			16,570			29,660
Income taxes		2,517			4,757			5,755			5,324			18,353			5,632			5,163			10,795
Non-GAAP net earnings		3,997			7,492			13,016			13,750			38,255			7,458			11,407			18,865
Non-GAAP earnings per share:
Basic		0.05			0.10			0.17			0.18			0.50			0.10			0.15			0.24
Diluted		0.05			0.10			0.17			0.17			0.49			0.09			0.14			0.24
Basic weighted average shares		76,833			77,123			77,039			77,427			77,106			77,918			77,918			77,918
Diluted weighted average shares		78,341			78,307			78,302			79,027			78,494			79,352			79,352			79,352

21 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-GAAP
(Unaudited)
(Dollars in thousands)
																									Q2 FY16 to Q2 FY15
	06/30/14			09/30/14			12/31/14			03/31/15			YTD FY2015			06/30/15			09/30/15			YTD FY2016			%			$
Revenues:
Marketing services and audience solutions		182,349			190,776			190,336			186,478			749,939			176,276			185,101			361,377			-3.0	%	(5,675	)
Connectivity		4,334			13,472			17,910			19,256			54,972			20,619			22,244			42,863			65.1	%	8,772
Total revenues		186,683			204,248			208,246			205,734			804,911			196,895			207,345			404,240			1.5	%	3,097
Gross profit from continuing operations:
Marketing services and audience solutions		77,224			82,652			82,991			81,937			324,804			72,019			76,030			148,049			-8.0	%	(6,622	)
Connectivity		(3,631	)		(1,249	)		1,964			4,400			1,484			8,609			10,081			18,690			907.1	%	11,330
Corporate		-			-			-			(4,315	)		(4,315	)		(1,442	)		(78	)		(1,520	)		n/a		(78	)
Total gross profit from continuing operations		73,593			81,403			84,955			82,022			321,973			79,186			86,033			165,219			5.7	%	4,630
Gross margin:
Marketing services and audience solutions		42.3	%		43.3	%		43.6	%		43.9	%		43.3	%		40.9	%		41.1	%		41.0	%
Connectivity		-83.8	%		-9.3	%		11.0	%		22.9	%		2.7	%		41.8	%		45.3	%		43.6	%
Total		39.4	%		39.9	%		40.8	%		39.9	%		40.0	%		40.2	%		41.5	%		40.9	%
Income (loss) from continuing operations:
Marketing services and audience solutions		46,221			52,302			51,268			48,065			197,856			38,287			41,586			79,873			-20.5	%	(10,716	)
Connectivity		(14,261	)		(20,277	)		(16,876	)		(17,444	)		(68,858	)		(8,025	)		(10,192	)		(18,217	)		49.7	%	10,085
Corporate		(45,046	)		(38,468	)		(36,682	)		(41,486	)		(161,682	)		(33,131	)		(33,450	)		(66,581	)		13.0	%	5,018
Total loss from continuing operations		(13,086	)		(6,443	)		(2,290	)		(10,865	)		(32,684	)		(2,869	)		(2,056	)		(4,925	)		68.1	%	4,387
Margin:
Marketing services and audience solutions		25.3	%		27.4	%		26.9	%		25.8	%		26.4	%		21.7	%		22.5	%		22.1	%
Connectivity		-329.0	%		-150.5	%		-94.2	%		-90.6	%		-125.3	%		-38.9	%		-45.8	%		-42.5	%
Total		-7.0	%		-3.2	%		-1.1	%		-5.3	%		-4.1	%		-1.5	%		-1.0	%		-1.2	%

22 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT - NON GAAP
(Unaudited)
(Dollars in thousands)
																									Q2 FY16 to Q2 FY15
	06/30/14			09/30/14			12/31/14			03/31/15			YTD FY2015			06/30/15			09/30/15			YTD FY2016			%			$
Revenues:
Marketing services and audience solutions		182,349			190,776			190,336			186,478			749,939			176,276			185,101			361,377			-3.0	%	(5,675	)
Connectivity		4,334			13,472			17,910			19,256			54,972			20,619			22,244			42,863			65.1	%	8,772
Total revenues		186,683			204,248			208,246			205,734			804,911			196,895			207,345			404,240			1.5	%	3,097
Gross profit from continuing operations:
Marketing services and audience solutions		77,559			83,043			83,411			82,355			326,368			72,473			76,404			148,877			-8.0	%	(6,639	)
Connectivity		(3,599	)		2,503			5,699			8,136			12,739			12,338			13,810			26,148			451.7	%	11,307
Corporate		-			-			-			-			-			-			-			-			n/a		0
Total income from continuing operations		73,960			85,546			89,110			90,491			339,107			84,811			90,214			175,025			5.5	%	4,668
Gross margin:
Marketing services and audience solutions		42.5	%		43.5	%		43.8	%		44.2	%		43.5	%		41.1	%		41.3	%		41.2	%
Connectivity		-83.0	%		18.6	%		31.8	%		42.3	%		23.2	%		59.8	%		62.1	%		61.0	%
Total		39.6	%		41.9	%		42.8	%		44.0	%		42.1	%		43.1	%		43.5	%		43.3	%
Income from continuing operations:
Marketing services and audience solutions		47,270			53,556			52,445			50,803			204,074			40,253			42,696			82,949			-20.3	%	(10,860	)
Connectivity		(13,852	)		(11,702	)		(7,391	)		(5,809	)		(38,754	)		(173	)		(664	)		(837	)		94.3	%	11,038
Corporate		(24,850	)		(27,621	)		(24,313	)		(23,265	)		(100,049	)		(25,409	)		(23,565	)		(48,974	)		14.7	%	4,056
Total income from continuing operations		8,568			14,233			20,741			21,729			65,271			14,671			18,467			33,138			29.7	%	4,234
Margin:
Marketing services and audience solutions		25.9	%		28.1	%		27.6	%		27.2	%		27.2	%		22.8	%		23.1	%		23.0	%
Connectivity		-319.6	%		-86.9	%		-41.3	%		-30.2	%		-70.5	%		-0.8	%		-3.0	%		-2.0	%
Total		4.6	%		7.0	%		10.0	%		10.6	%		8.1	%		7.5	%		8.9	%		8.2	%

23