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

For more information, contact:

Lauren Dillard

Acxiom Investor Relations

(650) 372-2242

investor.relations@acxiom.com

EACXM

ACXIOM ANNOUNCES THIRD QUARTER RESULTS

Revenue Grows 6% Year-over-Year

Connectivity Revenue Run-Rate Exceeds $100 Million

Company Raises Fiscal 2016 Full Year Guidance

LITTLE ROCK, Ark. – February 4, 2016 Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its third quarter ended December 31, 2015.

Financial Highlights

·   Revenue: Total revenue was $221 million, up approximately 6% compared to the third quarter of last year. Excluding an unfavorable currency impact of approximately $2 million, revenue was up 7%. US revenue of $199 million was up 8% year-over-year.

·   Operating Income (Loss): GAAP operating loss from continuing operations improved to nearly break-even compared to a loss of $2 million in the prior year. Non-GAAP operating income from continuing operations improved 7% to approximately $22 million.

·   Earnings (Loss) per Share: GAAP loss per share from continuing operations was $0.01 compared to earnings per share of $0.00 in the prior year. Non-GAAP diluted earnings per share from continuing operations were $0.18, up from $0.17 a year ago.

·   Operating Cash Flow: Operating cash flow from continuing operations was $37 million, up 13% from $33 million last year.

·   Free Cash Flow to Equity: Free cash flow to equity was $14 million, up 52% from $9 million in the prior year. This measure excludes cash flows related to the IT Infrastructure Management divestiture.

Segment Results

Marketing Services

·   Revenue was $116 million, up 1% compared to the third quarter of last year. US revenue of $106 million was up 3% year-over-year.

·   Gross margin decreased from 36% to 33%.

·   Operating income was $20 million, down 7% compared to the prior year.

·   The declines in gross margin and operating income were driven by infrastructure investments in the US.

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Audience Solutions

·   Revenue was $77 million, up 1% compared to the prior year period. US revenue of $66 million was up 3% year-over-year.

·   Gross margin improved from 52% to 59%.

·   Operating income was $31 million, up 6% compared to the prior year.

·   The improvements in gross margin and operating income were driven by revenue growth and operational cost efficiencies, partially offset by investments in R&D and sales and marketing.

Connectivity

·   Revenue was $28 million, up approximately 59% compared to the third quarter of last year, driven by continued onboarding momentum. Connectivity exited the quarter with a $100 million annualized revenue run-rate.

·   Gross margin improved from 33% to 57%.

·   Operating loss improved by $7 million to a slight loss of roughly $1 million.

·   The improvements in gross margin and operating results were driven by growth in subscriptions and royalties, partially offset by on-going investments to support growth.

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

“We are pleased to report a solid quarter highlighted by new customer additions and revenue growth across all of our divisions,” said Acxiom CEO Scott Howe. “Our divisional structure is beginning to pay dividends, and the investments we are making against our long-term strategy continue to build the foundation for sustainable future growth.”

Business Highlights

·   Connectivity added over 20 new customers during the quarter and added 25 new partner integrations. Marketers can now onboard and distribute their data to a growing network of more than 275 marketing platforms and data providers.

·   Acxiom powered $122 million of gross media spend in the third quarter, up 66% year-over-year. On a trailing twelve-month basis, Acxiom powered $317 million of gross media spend, up 107% over the comparable period.

·   Acxiom expanded its addressable TV offering with the acquisition of the Audience Interconnect data platform from Allant Group. This capacity provides partners with the leading ability to reach targeted US households via data-driven ad campaigns. Ad sellers, agencies and brands can activate data across an expanded ecosystem that includes TV partners representing nearly 50 million addressable homes and over 100 million individuals.

·   Dennis Self was appointed President and General Manager of Marketing Services. Self has held several mission critical roles within Acxiom, including senior vice president of delivery for Marketing Services, where he led the transformation and modernization of the company’s client delivery function. Prior to that, he served as the company’s chief information officer and senior vice president of technical operations.

·   Acxiom repurchased 463,000 shares for approximately $10 million during the quarter. Since inception of the share repurchase program in August 2011, Acxiom has repurchased 14.8 million shares for $240 million.

2

Financial Outlook

Acxiom’s guidance excludes the impact of non-cash compensation, purchased intangible asset amortization, restructuring charges and separation and transformation costs. Estimates for fiscal 2016 have been raised as follows:

·   Revenue from continuing operations in the range of $835 million to $840 million as compared to Acxiom’s previous estimate of $815 million to $840 million

·   Non-GAAP diluted earnings per share from continuing operations to be as much as $0.54 as compared to the company’s previous estimate of between $0.45 and $0.50

Conference Call

Acxiom will hold a conference call at 4:00 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 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.

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.

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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.

4 

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
	For the Three Months Ended
	December 31,
							$				%
	2015			2014			Variance			Variance
Revenues		221,193			208,246			12,947			6.2	%
Cost of revenue		125,735			125,807			(72	)		(0.1	%)
Gross profit		95,458			82,439			13,019			15.8	%
% Gross margin		43.2	%		39.6	%
Operating expenses:
Research and development		18,400			18,973			(573	)		(3.0	%)
Sales and marketing		36,581			30,554			6,027			19.7	%
General and administrative		36,793			31,821			4,972			15.6	%
Gains, losses and other items, net		4,058			3,381			677			20.0	%
Total operating expenses		95,832			84,729			11,103			13.1	%
Loss from operations		(374	)		(2,290	)		1,916			83.7	%
% Margin		-0.2	%		-1.1	%
Other income (expense):
Interest expense		(1,948	)		(2,005	)		57			2.8	%
Other, net		303			35			268			765.7	%
Total other expense		(1,645	)		(1,970	)		325			16.5	%
Loss from continuing operations before income taxes		(2,019	)		(4,260	)		2,241			52.6	%
Income taxes		(1,580	)		(4,597	)		3,017			65.6	%
Net earnings (loss) from continuing operations		(439	)		337			(776	)		(230.3	%)
Earnings (loss) from discontinued operations, net of tax		(971	)		3,819			(4,790	)		(125.4	%)
Net earnings (loss)		(1,410	)		4,156			(5,566	)		(133.9	%)
Basic earnings (loss) per share:
Net earnings (loss) from continuing operations		(0.01	)		0.00			(0.01	)		(228.9	%)
Net earnings (loss) from discontinued operations		(0.01	)		0.05			(0.06	)		(125.2	%)
Net earnings (loss)		(0.02	)		0.05			(0.07	)		(133.6	%)
Diluted earnings (loss) per share:
Net earnings (loss) from continuing operations		(0.01	)		0.00			(0.01	)		(231.1	%)
Net earnings (loss) from discontinued operations		(0.01	)		0.05			(0.06	)		(125.6	%)
Net earnings (loss)		(0.02	)		0.05			(0.07	)		(134.1	%)
Some earnings (loss) per share amounts may not add due to rounding
Basic shares		77,831			77,039
FDWA shares		79,346			78,302

5 

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
	For the Nine Months Ended
	December 31,
							$				%
	2015			2014			Variance			Variance
Revenues		625,433			599,177			26,256			4.4	%
Cost of revenue		364,756			366,329			(1,573	)		(0.4	%)
Gross profit		260,677			232,848			27,829			12.0	%
% Gross margin		41.7	%		38.9	%
Operating expenses:
Research and development		57,489			55,121			2,368			4.3	%
Sales and marketing		100,334			85,410			14,924			17.5	%
General and administrative		100,055			102,794			(2,739	)		(2.7	%)
Gains, losses and other items, net		8,098			11,342			(3,244	)		(28.6	%)
Total operating expenses		265,976			254,667			11,309			4.4	%
Loss from operations		(5,299	)		(21,819	)		16,520			75.7	%
% Margin		-0.8	%		-3.6	%
Other income (expense):
Interest expense		(5,789	)		(5,774	)		(15	)		(0.3	%)
Other, net		666			(234	)		900			384.6	%
Total other expense		(5,123	)		(6,008	)		885			14.7	%
Loss from continuing operations before income taxes		(10,422	)		(27,827	)		17,405			62.5	%
Income taxes		(3,456	)		(10,322	)		6,866			66.5	%
Net loss from continuing operations		(6,966	)		(17,505	)		10,539			60.2	%
Earnings from discontinued operations, net of tax		15,240			12,513			2,727			21.8	%
Net earnings (loss)		8,274			(4,992	)		13,266			265.7	%
Basic earnings (loss) per share:
Net loss from continuing operations		(0.09	)		(0.23	)		0.14			60.7	%
Net earnings from discontinued operations		0.20			0.16			0.03			20.4	%
Net earnings (loss)		0.11			(0.06	)		0.17			263.8	%
Diluted earnings (loss) per share:
Net loss from continuing operations		(0.09	)		(0.23	)		0.14			60.7	%
Net earnings from discontinued operations		0.20			0.16			0.03			20.4	%
Net earnings (loss)		0.11			(0.06	)		0.17			263.8	%
Some earnings (loss) per share amounts may not add due to rounding
Basic shares		77,903			76,998
FDWA shares		79,336			78,317

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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 Nine Months Ended
	December 31,						December 31,
	2015			2014			2015			2014
Loss from continuing operations before income taxes		(2,019	)		(4,260	)		(10,422	)		(27,827	)
Income taxes		(1,580	)		(4,597	)		(3,456	)		(10,322	)
Net loss from continuing operations		(439	)		337			(6,966	)		(17,505	)
Earnings from discontinued operations, net of tax		(971	)		3,819			15,240			12,513
Net earnings (loss)		(1,410	)		4,156			8,274			(4,992	)
Earnings (loss) per share:
Basic		(0.02	)		0.05			0.11			(0.06	)
Diluted		(0.02	)		0.05			0.11			(0.06	)
Excluded items:
Purchased intangible asset amortization  (cost of revenue)		3,754			3,783			11,262			7,673
Non-cash stock compensation (cost of revenue and operating expenses)		8,046			8,450			23,529			20,100
Restructuring charges and other adjustments (gains, losses, and other)		4,058			3,381			8,098			11,342
Separation and transformation costs (general and administrative)		6,628			7,417			16,140			26,246
Accelerated amortization (cost of revenue)		78			-			1,598			-
Total excluded items, continuing operations		22,564			23,031			60,627			65,361
Earnings from continuing operations before income taxes
and excluding items		20,545			18,771			50,205			37,534
Income taxes		6,399			5,755			17,194			13,029
Non-GAAP net earnings		14,146			13,016			33,011			24,505
Non-GAAP earnings per share:
Basic		0.18			0.17			0.42			0.32
Diluted		0.18			0.17			0.42			0.31
Basic weighted average shares		77,831			77,039			77,903			76,998
Diluted weighted average shares		79,346			78,302			79,336			78,317

7 

ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except earnings (loss) per share)
	For the Three Months Ended
	December 31,			December 31,
	2015			2014
Basic earnings per share from continuing operations:
Numerator - net earnings (loss)		(439	)		337
Denominator - weighted-average shares outstanding		77,831			77,039
Basic earnings (loss) per share		(0.01	)		0.00
Diluted earnings per share from continuing operations:
Numerator - net earnings (loss)		(439	)		337
Denominator - weighted-average shares outstanding		77,831			77,039
Dilutive effect of common stock options, warrants and restricted stock		-			1,263
		77,831			78,302
Diluted earnings (loss) per share		(0.01	)		0.00
Basic earnings (loss) per share from discontinued operations:
Numerator - net earnings (loss)		(971	)		3,819
Denominator - weighted-average shares outstanding		77,831			77,039
Basic earnings (loss) per share		(0.01	)		0.05
Diluted earnings (loss) per share from discontinued operations:
Numerator - net earnings (loss)		(971	)		3,819
Denominator - weighted-average shares outstanding		77,831			77,039
Dilutive effect of common stock options, warrants and restricted stock		-			1,263
		77,831			78,302
Diluted earnings (loss) per share		(0.01	)		0.05
Basic earnings (loss) per share:
Numerator - net earnings (loss)		(1,410	)		4,156
Denominator - weighted-average shares outstanding		77,831			77,039
Basic earnings (loss) per share		(0.02	)		0.05
Diluted earnings (loss) per share:
Numerator - net earnings (loss)		(1,410	)		4,156
Denominator - weighted-average shares outstanding		77,831			77,039
Dilutive effect of common stock options, warrants, and restricted stock		-			1,263
		77,831			78,302
Diluted earnings (loss) per share		(0.02	)		0.05

8 

ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except earnings (loss) per share)
	For the Nine Months Ended
	December 31,			December 31,
	2015			2014
Basic loss per share from continuing operations:
Numerator - net loss		(6,966	)		(17,505	)
Denominator - weighted-average shares outstanding		77,903			76,998
Basic loss per share		(0.09	)		(0.23	)
Diluted loss per share from continuing operations:
Numerator - net loss		(6,966	)		(17,505	)
Denominator - weighted-average shares outstanding		77,903			76,998
Diluted loss per share		(0.09	)		(0.23	)
Basic earnings per share from discontinued operations:
Numerator - net earnings		15,240			12,513
Denominator - weighted-average shares outstanding		77,903			76,998
Basic earnings per share		0.20			0.16
Diluted earnings per share from discontinued operations:
Numerator - net earnings		15,240			12,513
Denominator - weighted-average shares outstanding		77,903			76,998
Diluted earnings per share		0.20			0.16
Diluted loss per share:
Numerator - net earnings (loss)		8,274			(4,992	)
Denominator - weighted-average shares outstanding		77,903			76,998
Diluted earnings (loss) per share		0.11			(0.06	)

9 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	December 31,
							$				%
	2015			2014			Variance			Variance
Revenues
Marketing Services		115,725			114,403			1,322			1.2	%
Audience Solutions		77,046			75,933			1,113			1.5	%
Connectivity		28,422			17,910			10,512			58.7	%
Total operating segment revenues		221,193			208,246			12,947			6.2	%
Gross profit
Marketing Services		38,561			41,572			(3,011	)		(7.2	%)
Audience Solutions		45,265			39,215			6,050			15.4	%
Connectivity		16,130			5,858			10,272			175.3	%
Total operating segment gross profit		99,956			86,645			13,311			15.4	%
Gross profit margin %
Marketing Services		33.3	%		36.3	%
Audience Solutions		58.8	%		51.6	%
Connectivity		56.8	%		32.7	%
Total operating segment gross margin		45.2	%		41.6	%
Income (loss) from operations
Marketing Services		20,309			21,859			(1,550	)		(7.1	%)
Audience Solutions		30,723			28,919			1,804			6.2	%
Connectivity		(1,015	)		(7,802	)		6,787			87.0	%
Total operating segment income from operations		50,017			42,976			7,041			16.4	%
Operating income (loss) margin %
Marketing Services		17.5	%		19.1	%
Audience Solutions		39.9	%		38.1	%
Connectivity		-3.6	%		-43.6	%
Total operating segment operating margin		22.6	%		20.6	%

10 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Nine Months Ended
	December 31,
							$				%
	2015			2014			Variance			Variance
Revenues
Marketing Services		336,430			336,441			(11	)		(0.0	%)
Audience Solutions		217,718			227,020			(9,302	)		(4.1	%)
Connectivity		71,285			35,716			35,569			99.6	%
Total operating segment revenues		625,433			599,177			26,256			4.4	%
Gross profit
Marketing Services		112,139			120,275			(8,136	)		(6.8	%)
Audience Solutions		121,258			116,245			5,013			4.3	%
Connectivity		41,582			5,088			36,494			717.3	%
Total operating segment gross profit		274,979			241,608			33,371			13.8	%
Gross profit margin %
Marketing Services		33.3	%		35.7	%
Audience Solutions		55.7	%		51.2	%
Connectivity		58.3	%		14.2	%
Total operating segment gross margin		44.0	%		40.3	%
Income (loss) from operations
Marketing Services		55,070			63,263			(8,193	)		(13.0	%)
Audience Solutions		80,000			84,484			(4,484	)		(5.3	%)
Connectivity		(2,874	)		(34,043	)		31,169			91.6	%
Total operating segment income from operations		132,196			113,704			18,492			16.3	%
Operating income (loss) margin %
Marketing Services		16.4	%		18.8	%
Audience Solutions		36.7	%		37.2	%
Connectivity		-4.0	%		-95.3	%
Total operating segment operating margin		21.1	%		19.0	%

11 

ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF SEGMENT RESULTS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended						For the Nine Months Ended
	December 31,						December 31,
	2015			2014			2015			2014
Total operating segment gross profit		99,956			86,645			274,979			241,608
Less:
Purchased intangible asset amortization		3,754			3,783			11,262			7,673
Non-cash stock compensation		666			423			1,442			1,087
Accelerated amortization		78			-			1,598			-
Gross profit		95,458			82,439			260,677			232,848
Total operating segment income from operations		50,017			42,976			132,196			113,704
Less:
Corporate expenses		27,827			22,235			76,868			70,162
Purchased intangible asset amortization		3,754			3,783			11,262			7,673
Non-cash stock compensation		8,046			8,450			23,529			20,100
Gains, losses and other items, net		4,058			3,381			8,098			11,342
Separation and transformation costs		6,628			7,417			16,140			26,246
Accelerated amortization		78			-			1,598			-
Loss from operations		(374	)		(2,290	)		(5,299	)		(21,819	)

12 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
	December 31,			March 31,			$				%
	2015			2015			Variance			Variance
Assets
Current assets:
Cash and cash equivalents		186,390			141,010			45,380			32.2	%
Trade accounts receivable, net		140,821			126,896			13,925			11.0	%
Deferred income taxes		16,475			25,610			(9,135	)		(35.7	%)
Refundable income taxes		6,899			5,239			1,660			31.7	%
Restricted cash held in escrow		-			31,000			(31,000	)		(100.0	%)
Other current assets		35,918			34,975			943			2.7	%
Assets of discontinued operations		-			172,284			(172,284	)		(100.0	%)
Total current assets		386,503			537,014			(150,511	)		(28.0	%)
Property and equipment		520,262			505,721			14,541			2.9	%
Less - accumulated depreciation and amortization		341,868			329,467			12,401			3.8	%
Property and equipment, net		178,394			176,254			2,140			1.2	%
Software, net of accumulated amortization		58,947			68,962			(10,015	)		(14.5	%)
Goodwill		497,628			497,362			266			0.1	%
Purchased software licenses, net of accumulated amortization		10,043			9,551			492			5.2	%
Other assets, net		30,049			33,281			(3,232	)		(9.7	%)
		1,161,564			1,322,424			(160,860	)		(12.2	%)
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt		32,223			32,232			(9	)		(0.0	%)
Trade accounts payable		30,690			30,094			596			2.0	%
Accrued payroll and related expenses		46,662			36,659			10,003			27.3	%
Other accrued expenses		49,705			62,754			(13,049	)		(20.8	%)
Acquisition escrow payable		-			31,000			(31,000	)		(100.0	%)
Deferred revenue		42,681			33,620			9,061			27.0	%
Liabilities of discontinued operations		4,065			57,433			(53,368	)		(92.9	%)
Total current liabilities		206,026			283,792			(77,766	)		(27.4	%)
Long-term debt		168,681			247,855			(79,174	)		(31.9	%)
Deferred income taxes		66,709			80,675			(13,966	)		(17.3	%)
Other liabilities		15,705			6,845			8,860			129.4	%
Stockholders' equity:
Common stock		12,988			12,794			194			1.5	%
Additional paid-in capital		1,071,145			1,034,526			36,619			3.5	%
Retained earnings		600,072			591,798			8,274			1.4	%
Accumulated other comprehensive income		8,141			9,413			(1,272	)		(13.5	%)
Treasury stock, at cost		(987,903	)		(945,274	)		(42,629	)		(4.5	%)
Total stockholders' equity		704,443			703,257			1,186			0.2	%
		1,161,564			1,322,424			(160,860	)		(12.2	%)

13 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	December 31,
	2015			2014
Cash flows from operating activities:
Net earnings (loss)		(1,410	)		4,156
Loss (earnings) from discontinued operations, net of tax		971			(3,819	)
Non-cash operating activities:
Depreciation and amortization		20,811			20,510
Loss (gain) on disposal or impairment of assets		48			(68	)
Deferred income taxes		(5,140	)		4,002
Non-cash stock compensation expense		8,046			8,450
Changes in operating assets and liabilities:
Accounts receivable		(5,957	)		(978	)
Other assets		(622	)		(4,064	)
Accounts payable and other liabilities		13,518			1,411
Deferred revenue		6,753			3,290
Net cash provided by operating activities		37,018			32,890
Cash flows from investing activities:
Capitalized software		(3,627	)		(4,408	)
Capital expenditures		(10,702	)		(10,212	)
Data acquisition costs		(424	)		(394	)
Net cash paid in acquisitions		(5,386	)		-
Net cash used in investing activities		(20,139	)		(15,014	)
Cash flows from financing activities:
Payments of debt		(8,045	)		(8,498	)
Sale of common stock, net of stock acquired for withholding taxes		2,241			1,680
Excess tax benefits from stock-based compensation		2,574			-
Acquisition of treasury stock		(10,274	)		-
Net cash used in financing activities		(13,504	)		(6,818	)
Cash flows from discontinued operations:
From operating activities		562			9,916
From investing activities		1,675			(2,920	)
From financing activities		-			(459	)
Net cash provided by discontinued operations		2,237			6,537
Effect of exchange rate changes on cash		(167	)		(512	)
Net change in cash and cash equivalents		5,445			17,083
Cash and cash equivalents at beginning of period		180,945			109,808
Cash and cash equivalents at end of period		186,390			126,891
Supplemental cash flow information:
Cash paid during the period for:
Interest		1,883			809
Income taxes		738			182
Payments on capital leases and installment payment arrangements		-			930
Other debt payments, excluding line of credit		8,045			8,027

14 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Nine Months Ended
	December 31,
	2015			2014
Cash flows from operating activities:
Net earnings (loss)		8,274			(4,992	)
Earnings from discontinued operations, net of tax		(15,240	)		(12,513	)
Non-cash operating activities:
Depreciation and amortization		63,221			54,687
Loss (gain) on disposal and impairment of goodwill and other assets		938			(275	)
Deferred income taxes		(4,856	)		(2,020	)
Non-cash stock compensation expense		23,529			20,100
Changes in operating assets and liabilities:
Accounts receivable		(15,238	)		9,573
Other assets		(1,820	)		1,409
Deferred costs		(823	)		(316	)
Accounts payable and other liabilities		3,182			(26,679	)
Deferred revenue		9,205			(7,215	)
Net cash provided by operating activities		70,372			31,759
Cash flows from investing activities:
Capitalized software		(10,360	)		(14,985	)
Capital expenditures		(33,822	)		(42,352	)
Data acquisition costs		(1,135	)		(1,497	)
Net cash paid in acquisitions		(5,386	)		(265,672	)
Net cash used in investing activities		(50,703	)		(324,506	)
Cash flows from financing activities:
Payments of debt		(79,183	)		(18,254	)
Sale of common stock, net of stock acquired for withholding taxes		6,343			(807	)
Excess tax benefits from stock-based compensation		2,022			-
Acquisition of treasury stock		(37,535	)		(9,868	)
Net cash used in financing activities		(108,353	)		(28,929	)
Cash flows from discontinued operations:
From operating activities		10,277			38,773
From investing activities		124,506			(6,250	)
From financing activities		(206	)		(1,561	)
Net cash provided by discontinued operations		134,577			30,962
Effect of exchange rate changes on cash		(513	)		(981	)
Net change in cash and cash equivalents		45,380			(291,695	)
Cash and cash equivalents at beginning of period		141,010			418,586
Cash and cash equivalents at end of period		186,390			126,891
Supplemental cash flow information:
Cash paid during the period for:
Interest		6,220			6,200
Income taxes		6,004			538
Payments on capital leases and installment payment arrangements		269			3,249
Other debt payments, excluding line of credit		24,120			16,566
Prepayment of debt		55,000			-

15 

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			12/31/15			YTD FY2016
Net cash provided by operating activities - continuing operations		(15,456	)		14,325			32,890			29,372			61,131			11,997			21,357			37,018			70,372
Less:
Capitalized software		(4,969	)		(5,608	)		(4,408	)		(3,602	)		(18,587	)		(2,797	)		(3,936	)		(3,627	)		(10,360	)
Capital expenditures		(16,778	)		(15,362	)		(10,212	)		(14,600	)		(56,952	)		(12,876	)		(10,244	)		(10,702	)		(33,822	)
Data acquisition costs		(635	)		(468	)		(394	)		(374	)		(1,871	)		(430	)		(281	)		(424	)		(1,135	)
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	)		(8,045	)		(24,120	)
Total		(42,755	)		(11,952	)		9,378			2,449			(42,880	)		(12,205	)		(1,143	)		14,220			872

16 

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-GAAP
(Unaudited)
(Dollars in thousands, except earnings per share)
																												Q3 FY16 to Q3 FY15
	06/30/14			09/30/14			12/31/14			03/31/15			YTD FY2015			06/30/15			09/30/15			12/31/15			YTD FY2016			%			$
Revenues		186,683			204,248			208,246			205,734			804,911			196,895			207,345			221,193			625,433			6.2	%	12,947
Cost of revenue		115,564			124,958			125,807			127,708			494,037			117,709			121,312			125,735			364,756			-0.1	%	(72	)
Gross profit		71,119			79,290			82,439			78,026			310,874			79,186			86,033			95,458			260,677			15.8	%	13,019
% Gross margin		38.1	%		38.8	%		39.6	%		37.9	%		38.6	%		40.2	%		41.5	%		43.2	%		41.7	%
Operating expenses
Research and development		16,350			19,798			18,973			19,080			74,201			20,011			19,078			18,400			57,489			-3.0	%	(573	)
Sales and marketing		26,265			28,591			30,554			31,084			116,494			29,494			34,259			36,581			100,334			19.7	%	6,027
General and administrative		34,462			36,511			31,821			27,469			130,263			31,743			31,519			36,793			100,055			15.6	%	4,972
Gains, losses and other items, net		7,128			833			3,381			11,258			22,600			807			3,233			4,058			8,098			20.0	%	677
Total operating expenses		84,205			85,733			84,729			88,891			343,558			82,055			88,089			95,832			265,976			13.1	%	11,103
Loss from operations		(13,086	)		(6,443	)		(2,290	)		(10,865	)		(32,684	)		(2,869	)		(2,056	)		(374	)		(5,299	)		83.7	%	1,916
% Margin		-7.0	%		-3.2	%		-1.1	%		-5.3	%		-4.1	%		-1.5	%		-1.0	%		-0.2	%		-0.8	%
Other income (expense)
Interest expense		(1,948	)		(1,821	)		(2,005	)		(1,898	)		(7,672	)		(1,885	)		(1,956	)		(1,948	)		(5,789	)		2.8	%	57
Other, net		(106	)		(163	)		35			(757	)		(991	)		304			59			303			666			765.7	%	268
Total other expense		(2,054	)		(1,984	)		(1,970	)		(2,655	)		(8,663	)		(1,581	)		(1,897	)		(1,645	)		(5,123	)		16.5	%	325
Loss from continuing operations before income taxes		(15,140	)		(8,427	)		(4,260	)		(13,520	)		(41,347	)		(4,450	)		(3,953	)		(2,019	)		(10,422	)		52.6	%	2,241
Income taxes		(4,399	)		(1,326	)		(4,597	)		(4,483	)		(14,805	)		732			(2,608	)		(1,580	)		(3,456	)		65.6	%	3,017
Net earnings (loss) from continuing operations		(10,741	)		(7,101	)		337			(9,037	)		(26,542	)		(5,182	)		(1,345	)		(439	)		(6,966	)		-230.3	%	(776	)
Earnings from discontinued operations, net of tax		3,137			5,557			3,819			2,998			15,511			4,143			12,068			(971	)		15,240			-125.4	%	(4,790	)
Net earnings (loss)		(7,604	)		(1,544	)		4,156			(6,039	)		(11,031	)		(1,039	)		10,723			(1,410	)		8,274			-133.9	%	(5,566	)
Diluted earnings (loss) per share		(0.10	)		(0.02	)		0.05			(0.08	)		(0.14	)		(0.01	)		0.14			(0.02	)		0.11			-134.1	%	(0.07	)
Diluted earnings (loss) per share continuing operations		(0.14	)		(0.09	)		0.00			(0.12	)		(0.34	)		(0.07	)		(0.02	)		(0.01	)		(0.09	)		-231.1	%	(0.01	)

17 

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-NON GAAP
(Unaudited)
(Dollars in thousands, except earnings per share)
																												Q3 FY16 to Q3 FY15
	06/30/14			09/30/14			12/31/14			03/31/15			YTD FY2015			06/30/15			09/30/15			12/31/15			YTD FY2016			%			$
Revenues		186,683			204,248			208,246			205,734			804,911			196,895			207,345			221,193			625,433			6.2	%	12,947
Cost of revenue		115,197			120,771			121,601			119,239			476,808			112,084			117,131			121,237			350,452			-0.3	%	(364	)
Gross profit		71,486			83,477			86,645			86,495			328,103			84,811			90,214			99,956			274,981			15.4	%	13,311
% Gross margin		38.3	%		40.9	%		41.6	%		42.0	%		40.8	%		43.1	%		43.5	%		45.2	%		44.0	%
Operating expenses
Research and development		15,911			16,529			15,559			15,956			63,955			16,384			15,400			15,647			47,431			0.6	%	88
Sales and marketing		25,619			26,789			28,498			28,915			109,821			28,170			32,945			34,664			95,779			21.6	%	6,166
General and administrative		21,388			25,926			21,847			19,895			89,056			25,586			23,402			27,455			76,443			25.7	%	5,608
Gains, losses and other items, net		-			-			-			-			-			-			-			-			-			-		-
Total operating expenses		62,918			69,244			65,904			64,766			262,832			70,140			71,747			77,766			219,653			18.0	%	11,862
Income from operations		8,568			14,233			20,741			21,729			65,271			14,671			18,467			22,190			55,328			7.0	%	1,449
% Margin		4.6	%		7.0	%		10.0	%		10.6	%		8.1	%		7.5	%		8.9	%		10.0	%		8.8	%
Other income (expense)
Interest expense		(1,948	)		(1,821	)		(2,005	)		(1,898	)		(7,672	)		(1,885	)		(1,956	)		(1,948	)		(5,789	)		2.8	%	57
Other, net		(106	)		(163	)		35			(757	)		(991	)		304			59			303			666			765.7	%	268
Total other expense		(2,054	)		(1,984	)		(1,970	)		(2,655	)		(8,663	)		(1,581	)		(1,897	)		(1,645	)		(5,123	)		16.5	%	325
Earnings from continuing operations before income taxes		6,514			12,249			18,771			19,074			56,608			13,090			16,570			20,545			50,205			9.5	%	1,774
Income taxes		2,517			4,757			5,755			5,324			18,353			5,632			5,163			6,399			17,194			11.2	%	644
Net earnings from continuing operations		3,997			7,492			13,016			13,750			38,255			7,458			11,407			14,146			33,011			8.7	%	1,130
Earnings from discontinued operations, net of tax		-			-			-			-			-			-			-			-			-			-		-
Net earnings		3,997			7,492			13,016			13,750			38,255			7,458			11,407			14,146			33,011			8.7	%	1,130
Diluted earnings per share		0.05			0.10			0.17			0.17			0.49			0.09			0.14			0.18			0.42			7.3	%	0.01

18 

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			12/31/15			YTD FY2016
Loss from continuing operations before income taxes		(15,140	)		(8,427	)		(4,260	)		(13,520	)		(41,347	)		(4,450	)		(3,953	)		(2,019	)		(10,422	)
Income taxes		(4,399	)		(1,326	)		(4,597	)		(4,483	)		(14,805	)		732			(2,608	)		(1,580	)		(3,456	)
Net earnings (loss) from continuing operations		(10,741	)		(7,101	)		337			(9,037	)		(26,542	)		(5,182	)		(1,345	)		(439	)		(6,966	)
Earnings loss from discontinued operations, net of tax		3,137			5,557			3,819			2,998			15,511			4,143			12,068			(971	)		15,240
Net earnings (loss)		(7,604	)		(1,544	)		4,156			(6,039	)		(11,031	)		(1,039	)		10,723			(1,410	)		8,274
Earnings (loss) per share:
Basic		(0.10	)		(0.02	)		0.05			(0.08	)		(0.14	)		(0.01	)		0.14			(0.02	)		0.11
Diluted		(0.10	)		(0.02	)		0.05			(0.08	)		(0.14	)		(0.01	)		0.14			(0.02	)		0.11
Unusual items:
Purchased intangible asset amortization  (cost of revenue)		63			3,827			3,783			3,781			11,454			3,754			3,754			3,754			11,262
Non-cash stock compensation (cost of revenue and operating expenses)		3,925			7,725			8,450			8,216			28,316			8,123			7,360			8,046			23,529
Restructuring charges and other adjustments (gains, losses, and other)		7,128			833			3,381			11,258			22,600			807			3,233			4,058			8,098
Separation and transformation costs (general and administrative)		10,538			8,291			7,417			5,023			31,269			3,414			6,098			6,628			16,140
Accelerated amortization (cost of revenue)		-			-			-			4,316			4,316			1,442			78			78			1,598
Total unusual items, continuing operations		21,654			20,676			23,031			32,594			97,955			17,540			20,523			22,564			60,627
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			20,545			50,205
Income taxes		2,517			4,757			5,755			5,324			18,353			5,632			5,163			6,399			17,194
Non-GAAP net earnings		3,997			7,492			13,016			13,750			38,255			7,458			11,407			14,146			33,011
Non-GAAP earnings per share:
Basic		0.05			0.10			0.17			0.18			0.50			0.10			0.15			0.18			0.42
Diluted		0.05			0.10			0.17			0.17			0.49			0.09			0.14			0.18			0.42
Basic weighted average shares		76,833			77,123			77,039			77,427			77,106			77,918			77,960			77,831			77,903
Diluted weighted average shares		78,341			78,307			78,302			79,027			78,494			79,352			79,310			79,346			79,336

19 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
																												Q3 FY16 to Q3 FY15
	06/30/14			09/30/14			12/31/14			03/31/15			YTD FY2015			06/30/15			09/30/15			12/31/15			YTD FY2016			%			$
Revenues:
Marketing services		109,288			112,750			114,403			109,662			446,103			107,726			112,979			115,725			336,430			1.2	%	1,322
Audience Solutions		73,061			78,026			75,933			76,816			303,837			68,550			72,122			77,046			217,718			1.5	%	1,113
Connectivity		4,334			13,472			17,910			19,256			54,972			20,619			22,244			28,422			71,285			58.7	%	10,512
Total operating segment revenues		186,683			204,248			208,246			205,735			804,911			196,895			207,345			221,193			625,433			6.2	%	12,947
Gross profit:
Marketing services		39,452			39,251			41,572			36,169			156,444			36,033			37,545			38,561			112,139			-7.2	%	(3,011	)
Audience Solutions		35,605			41,425			39,215			42,141			158,386			36,823			39,170			45,265			121,258			15.4	%	6,050
Connectivity		(3,527	)		2,757			5,858			8,234			13,322			11,953			13,499			16,130			41,582			175.3	%	10,272
Total operating segment gross profit		71,530			83,433			86,645			86,544			328,152			84,809			90,214			99,956			274,979			15.4	%	13,311
Gross margin:
Marketing services		36.1	%		34.8	%		36.3	%		33.0	%		35.1	%		33.4	%		33.2	%		33.3	%		33.3	%
Audience Solutions		48.7	%		53.1	%		51.6	%		54.9	%		52.1	%		53.7	%		54.3	%		58.8	%		55.7	%
Connectivity		-81.4	%		20.5	%		32.7	%		42.8	%		24.2	%		58.0	%		60.7	%		56.8	%		58.3	%
Total operating segment gross margin		38.3	%		40.8	%		41.6	%		42.1	%		40.8	%		43.1	%		43.5	%		45.2	%		44.0	%
Income from continuing operations:
Marketing services		20,828			20,576			21,859			17,984			81,247			16,853			17,908			20,309			55,070			-7.1	%	(1,550	)
Audience Solutions		24,190			31,375			28,919			30,594			115,078			24,087			25,190			30,723			80,000			6.2	%	1,804
Connectivity		(14,089	)		(12,152	)		(7,802	)		(6,026	)		(40,069	)		(791	)		(1,068	)		(1,015	)		(2,874	)		87.0	%	6,787
Total operating segment income from operations		30,929			39,799			42,976			42,552			156,256			40,149			42,030			50,017			132,196			16.4	%	7,041
Margin:
Marketing services		19.1	%		18.2	%		19.1	%		16.4	%		18.2	%		15.6	%		15.9	%		17.5	%		16.4	%
Audience Solutions		33.1	%		40.2	%		38.1	%		39.8	%		37.9	%		35.1	%		34.9	%		39.9	%		36.7	%
Connectivity		-325.1	%		-90.2	%		-43.6	%		-31.3	%		-72.9	%		-3.8	%		-4.8	%		-3.6	%		-4.0	%
Total operating segment operating margin		16.6	%		19.5	%		20.6	%		20.7	%		19.4	%		20.4	%		20.3	%		22.6	%		21.1	%

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