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

ACXIOM ANNOUNCES FIRST QUARTER RESULTS

First Quarter Revenue Increases 7%

LiveRamp Top-Line Grows 34% - Segment Margin Reaches a Record 15%

IPG AMS Deal on Track to Close in Third Fiscal Quarter

Repurchases 1.9 Million Shares in the Quarter

CONWAY, Ark., August 9, 2018-Acxiom® (Nasdaq: ACXM), the data foundation for the world's best marketers, today announced financial results for its first quarter ended June 30, 2018.

First Quarter Financial Highlights

• Revenue: Total revenue was $227 million, up 7% compared to the first quarter of last year.

• Operating Income (Loss): GAAP operating loss was $6 million compared to an operating loss of $6 million in the prior year. Non-GAAP operating income improved 29% to $29 million.

• Earnings (Loss) per Share: GAAP loss per share was $0.04 compared to a loss per share of $0.02 in the prior year. Non-GAAP diluted earnings per share were $0.24 compared to $0.14 a year ago. Current period results include a $0.02 GAAP and non-GAAP benefit associated with the adoption of ASC 606.

• Operating Cash Flow: Operating cash flow was $17 million, up from $5 million in the prior year.

• Free Cash Flow to Equity: Free cash flow to equity was $8 million, up from negative $6 million in the prior year.

Segment Results

$M

LiveRamp™	Q119	Q118	Y/Y Ä
Revenue	$ 62	$ 47	34%
Gross Profit	$ 44	$ 28	57%
Gross Margin	71%	60%	1,040 bps
Segment Operating Income (Loss)	$ 9	($0)	NM
Segment Margin	15%	(0%)	1,490 bps

Acxiom Marketing Solutions	Q119	Q118	Y/Y Ä
Revenue	$ 165	$ 166	(1%)
Gross Profit	$ 73	$ 78	(6%)
Gross Margin	44%	47%	(250 bps)
Segment Operating Income	$ 47	$ 48	(2%)
Segment Margin	29%	29%	(40 bps)

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A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules attached to this press release.

“This is an inflection point for our Company. The first quarter was another strong performance for both AMS and LiveRamp,” said Acxiom CEO Scott Howe. “We look forward to finalizing the IPG transaction and to the emergence of LiveRamp as a pure-play public SaaS platform.”

Recent Business Highlights

• On July 2^nd, Acxiom entered into a definitive agreement to sell Acxiom Marketing Solutions to Interpublic Group for $2.3 billion.

◦ The combination of IPG and AMS creates an industry powerhouse for data-driven marketing.

◦ The Company expects to realize approximately $1.7 billion in net cash proceeds, after taxes and fees, and intends to return up to $1 billion to shareholders.

◦ The transaction is expected to close in the third fiscal quarter, subject to Acxiom shareholder approval and other customary closing conditions.

◦ Following the transaction close, the Company will be renamed LiveRamp and, shortly thereafter, begin trading its common stock under the new ticker symbol “RAMP.”

• LiveRamp added approximately 30 new direct clients during the quarter and added several new partner integrations. On a direct basis, LiveRamp now works with more than 600 clients worldwide and serves hundreds of additional brands through its expansive ecosystem of partners and resellers.

• LiveRamp and Adobe are partnering to integrate LiveRamp’s IdentityLink™ for TV solution across Adobe Advertising Cloud and Adobe Audience Manager. The partnership enables advertisers to engage in addressable TV advertising using the same first- or third-party audiences they already deploy through Adobe, while unlocking household level insight.

• Acxiom Marketing Solutions posted another strong bookings quarter, driven by six new logo wins and two key renewals.

• Acxiom repurchased 1.9 million shares for approximately $46 million during the first quarter. Since the inception of its share repurchase program in August 2011, Acxiom has repurchased a total of 22 million shares for $420 million.

Financial Outlook

Non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, restructuring charges and business separation costs.

The Company does not intend to update its existing guidance until the pending IPG AMS transaction is complete.

Therefore, for fiscal 2019, the Company reaffirms its previously issued guidance and continues to expect:

• Total revenue of between $935 million and $955 million.

• GAAP loss per share of between $0.23 and $0.18.

• Non-GAAP diluted earnings per share of between $0.90 and $0.95.

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Conference Call

Acxiom will hold a conference call at 3:30 p.m. CT today to further discuss this information. Interested parties are invited to listen to the call which will be broadcast via the Internet and can be found on our investor site. A slide presentation will be referenced during the call and can be accessedhere.

About Acxiom

Acxiom provides the data foundation for the world’s best marketers. We enable people-based marketing everywhere through a simple, open approach to connecting systems and data that drives seamless customer experiences and higher ROI. A leader in identity and ethical data use for nearly 50 years, Acxiom helps thousands of clients and partners around the globe work together to create a world where all marketing is relevant. Acxiom is a registered trademark of Acxiom Corporation. For more information, visit Acxiom.com.

Forward-Looking Statements

This release and today’s conference call contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that the proposed sale of Acxiom Marketing Solutions to Interpublic Group is not completed; the possibility of business disruption associated with the proposed sale; the possibility that the expected revenue from the divisions may not be realized within the expected timeframe;

the possibility that the integration of acquired businesses may not be successful as planned; 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 purchasers will reduce their reliance on us by developing and using their own, or alternative, sources of data generally or with respect to certain data elements or categories; 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 the European General Data Protection Regulation, which became effective May 25, 2018, will make it more difficult and/or costly for us to do business in the EU; 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 the possibility that other risks and uncertainties may emerge, 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, 2018, which was

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filed with the Securities and Exchange Commission on May 25, 2018 and the discussion under the caption “Item 1A. RISK FACTORS” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, which was filed with the Securities and Exchange Commission today.

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.

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

For more information, contact:

Lauren Dillard

Acxiom Investor Relations

(650) 372-2242

investor.relations@acxiom.com

EACXM

Acxiom, LiveRamp, IdentityLink, InfoBase and all other Acxiom marks contained herein are trademarks or service marks of Acxiom Corporation. All other marks are the property of their respective owners.

4

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
	For the Three Months Ended
	June 30,
					$		%
	2018		2017		Variance		Variance
Revenues	226,960		212,514		14,446		6.8	%
Cost of revenue	117,271		113,960		3,311		2.9	%
Gross profit	109,689		98,554		11,135		11.3	%
% Gross margin	48.3	%	46.4	%
Operating expenses:
Research and development	24,536		23,563		973		4.1	%
Sales and marketing	54,850		48,440		6,410		13.2	%
General and administrative	34,718		32,356		2,362		7.3	%
Gains, losses and other items, net	1,286		(98	)	1,384		1,412.2	%
Total operating expenses	115,390		104,261		11,129		10.7	%
Loss from operations	(5,701	)	(5,707	)	6		0.1	%
% Margin	(2.5	)%	(2.7	)%
Other income (expense):
Interest expense	(2,838	)	(2,342	)	(496	)	(21.2	)%
Other, net	524		(672	)	1,196		178.0	%
Total other expense	(2,314	)	(3,014	)	700		23.2	%
Loss before income taxes	(8,015	)	(8,721	)	706		8.1	%
Income taxes	(5,000	)	(7,421	)	2,421		32.6	%
Net loss	(3,015	)	(1,300	)	(1,715	)	(131.9	)%
Basic loss per share	(0.04	)	(0.02	)	(0.02	)	(100.0	)%
Diluted loss per share	(0.04	)	(0.02	)	(0.02	)	(100.0	)%
Basic weighted average shares	76,935		78,672
Diluted weighted average shares	76,935		78,672

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
	For the Three Months Ended
	June 30,
	2018		2017
Loss before income taxes	(8,015	)	(8,721	)
Income taxes	(5,000	)	(7,421	)
Net loss	(3,015	)	(1,300	)
Loss per share:
Basic	(0.04	)	(0.02	)
Diluted	(0.04	)	(0.02	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)	6,054		5,966
Non-cash stock compensation (cost of revenue and operating expenses)	20,360		15,031
Restructuring and merger charges (gains, losses, and other)	1,286		(98	)
Separation and transformation costs (general and administrative)	6,822		7,119
Total excluded items	34,522		28,018
Income before income taxes
and excluding items	26,507		19,297
Income taxes (2)	7,467		7,720
Non-GAAP net earnings	19,040		11,577
Non-GAAP earnings per share:
Basic	0.25		0.15
Diluted	0.24		0.14
Basic weighted average shares	76,935		78,672
Diluted weighted average shares	79,311		81,440

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

(2) Income taxes were calculated using an effective non-GAAP tax rate of 28.2% and 40.0% in the first quarter of fiscal 2019 and 2018, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the net tax effects of the excluded items. The rates in the first quarter of fiscal 2019 reflect the impact of the Tax Acts and Jobs Act.

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1)
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	June 30,
	2018		2017
Loss from operations	(5,701	)	(5,707	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)	6,054		5,966
Non-cash stock compensation (cost of revenue and operating expenses)	20,360		15,031
Restructuring and merger charges (gains, losses, and other)	1,286		(98	)
Separation and transformation costs (general and administrative)	6,822		7,119
Total excluded items	34,522		28,018
Income from operations before excluded items	28,821		22,311

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	June 30,
					$		%
	2018		2017		Variance		Variance
Revenues
LiveRamp	62,458		46,757		15,701		33.6	%
Acxiom Marketing Solutions	164,502		165,757		(1,255	)	(0.8	)%
Total operating segment revenues	226,960		212,514		14,446		6.8	%
Gross profit
LiveRamp	44,200		28,229		15,971		56.6	%
Acxiom Marketing Solutions	73,174		77,864		(4,690	)	(6.0	)%
Total operating segment gross profit	117,374		106,093		11,281		10.6	%
Gross margin %
LiveRamp	70.8	%	60.4	%
Acxiom Marketing Solutions	44.5	%	47.0	%
Total operating segment gross margin	51.7	%	49.9	%
Income (loss) from operations
LiveRamp	9,203		(97	)	9,300		9,587.6	%
Acxiom Marketing Solutions	47,458		48,374		(916	)	(1.9	)%
Total operating segment income from operations	56,661		48,277		8,384		17.4	%
Operating income (loss) margin %
LiveRamp	14.7	%	(0.2	)%
Acxiom Marketing Solutions	28.8	%	29.2	%
Total operating segment operating margin	25.0	%	22.7	%
Some totals may not add due to rounding.

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF SEGMENT RESULTS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	June 30,
	2018		2017
Total operating segment gross profit	117,374		106,093
Less:
Purchased intangible asset amortization	6,054		5,966
Non-cash stock compensation	1,631		1,573
Gross profit	109,689		98,554
Total operating segment income from operations	56,661		48,277
Less:
Corporate expenses	27,840		25,966
Purchased intangible asset amortization	6,054		5,966
Non-cash stock compensation	20,360		15,031
Restructuring charges	1,286		(98	)
Separation and transformation costs	6,822		7,119
Loss from operations	(5,701	)	(5,707	)
Some totals may not add due to rounding.

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA (1)
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	June 30,
	2018		2017
Net loss	(3,015	)	(1,300	)
Income taxes	(5,000	)	(7,421	)
Other expense	(2,314	)	(3,014	)
Loss from operations	(5,701	)	(5,707	)
Depreciation and amortization	21,529		21,110
EBITDA	15,828		15,403
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)	20,360		15,031
Restructuring and merger charges (gains, losses, and other)	1,286		(98	)
Separation and transformation costs (general and administrative)	6,822		7,119
Other adjustments	28,468		22,052
Adjusted EBITDA	44,296		37,455

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
	June 30,		March 31,		$		%
	2018		2018		Variance		Variance
Assets
Current assets:
Cash and cash equivalents	95,099		142,279		(47,180	)	(33.2	)%
Trade accounts receivable, net	163,767		167,188		(3,421	)	(2.0	)%
Refundable income taxes	11,761		9,733		2,028		20.8	%
Other current assets	40,167		41,145		(978	)	(2.4	)%
Total current assets	310,794		360,345		(49,551	)	(13.8	)%
Property and equipment	492,602		491,266		1,336		0.3	%
Less - accumulated depreciation and amortization	341,195		334,733		6,462		1.9	%
Property and equipment, net	151,407		156,533		(5,126	)	(3.3	)%
Software, net of accumulated amortization	31,719		34,984		(3,265	)	(9.3	)%
Goodwill	595,795		595,995		(200	)	—	%
Purchased software licenses, net of accumulated amortization	6,670		7,703		(1,033	)	(13.4	)%
Deferred income taxes	11,488		12,225		(737	)	(6.0	)%
Deferred commissions, net	18,137		—		18,137		—	%
Other assets, net	40,958		41,468		(510	)	(1.2	)%
	1,166,968		1,209,253		(42,285	)	(3.5	)%
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt	1,327		1,583		(256	)	(16.2	)%
Trade accounts payable	47,668		46,688		980		2.1	%
Accrued payroll and related expenses	21,939		42,499		(20,560	)	(48.4	)%
Other accrued expenses	58,938		55,865		3,073		5.5	%
Deferred revenue	31,621		31,720		(99	)	(0.3	)%
Total current liabilities	161,493		178,355		(16,862	)	(9.5	)%
Long-term debt	227,435		227,837		(402	)	(0.2	)%
Deferred income taxes	42,258		40,243		2,015		5.0	%
Other liabilities	13,726		13,723		3		—	%
Stockholders' equity:
Common stock	13,773		13,609		164		1.2	%
Additional paid-in capital	1,256,442		1,235,679		20,763		1.7	%
Retained earnings	638,043		628,331		9,712		1.5	%
Accumulated other comprehensive income	8,899		10,767		(1,868	)	(17.3	)%
Treasury stock, at cost	(1,195,101	)	(1,139,291	)	(55,810	)	(4.9	)%
Total stockholders' equity	722,056		749,095		(27,039	)	(3.6	)%
	1,166,968		1,209,253		(42,285	)	(3.5	)%

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	June 30,
	2018		2017
Cash flows from operating activities:
Net loss	(3,015	)	(1,300	)
Non-cash operating activities:
Depreciation and amortization	21,529		21,110
Loss on disposal or impairment of assets	48		163
Accelerated deferred debt costs	—		720
Deferred income taxes	(1,335	)	2,497
Non-cash stock compensation expense	20,360		15,038
Changes in operating assets and liabilities:
Accounts receivable	4,329		11,960
Deferred commissions	(2,939	)	—
Other assets	(56	)	(3,377	)
Accounts payable and other liabilities	(21,704	)	(37,073	)
Deferred revenue	(33	)	(4,787	)
Net cash provided by operating activities	17,184		4,951
Cash flows from investing activities:
Capitalized software	(3,606	)	(3,388	)
Capital expenditures	(4,399	)	(6,888	)
Data acquisition costs	(179	)	(190	)
Equity investments	(2,500	)	—
Net cash used in investing activities	(10,684	)	(10,466	)
Cash flows from financing activities:
Proceeds from debt	—		230,000
Payments of debt	(592	)	(225,572	)
Fees from debt refinancing	(300	)	(4,001	)
Sale of common stock, net of stock acquired for withholding taxes	(5,928	)	(2,539	)
Acquisition of treasury stock	(45,766	)	—
Net cash used in financing activities	(52,586	)	(2,112	)
Effect of exchange rate changes on cash	(1,094	)	430
Net change in cash and cash equivalents	(47,180	)	(7,197	)
Cash and cash equivalents at beginning of period	142,279		170,343
Cash and cash equivalents at end of period	95,099		163,146
Supplemental cash flow information:
Cash paid during the period for:
Interest	2,607		2,375
Income taxes	1,100		354

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)
		06/30/17		09/30/17		12/31/17		03/31/18		FY2018		06/30/18
Net Cash Provided by Operating Activities		4,951		27,810		43,630		35,762		112,153		17,184
Less (plus):
	Capitalized software	(3,388	)	(3,756	)	(3,188	)	(3,407	)	(13,739	)	(3,606	)
	Capital expenditures	(6,888	)	(7,630	)	(12,432	)	(17,247	)	(44,197	)	(4,399	)
	Data acquisition costs	(190	)	(233	)	(198	)	(286	)	(907	)	(179	)
	Required debt payments	(572	)	(578	)	(582	)	(588	)	(2,320	)	(592	)
	Net cash received in disposition	—		4,000		—		—		4,000		—
Free Cash Flow to Equity		(6,087	)	19,613		27,230		14,234		54,990		8,408

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
														Q1 FY19 to Q1 FY18
		06/30/17		09/30/17		12/31/17		03/31/18		FY2018		06/30/18		%		$
	Revenues	212,514		225,240		234,871		244,781		917,406		226,960		7	%	14,446
	Cost of revenue	113,960		115,072		115,920		121,484		466,436		117,271		3	%	3,311
	Gross profit	98,554		110,168		118,951		123,297		450,970		109,689		11	%	11,135
	% Gross margin	46.4	%	48.9	%	50.6	%	50.4	%	49.2	%	48.3	%
	Operating expenses
	Research and development	23,563		24,013		23,318		23,979		94,873		24,536		4	%	973
	Sales and marketing	48,440		50,118		53,730		63,311		215,599		54,850		13	%	6,410
	General and administrative	32,356		31,924		30,886		28,360		123,526		34,718		7	%	2,362
	Gains, losses and other items, net	(98	)	3,660		(41	)	2,852		6,373		1,286		1,412	%	1,384
	Total operating expenses	104,261		109,715		107,893		118,502		440,371		115,390		11	%	11,129
	Income (loss) from operations	(5,707	)	453		11,058		4,795		10,599		(5,701	)	—	%	6
	% Margin	(2.7	)%	0.2	%	4.7	%	2.0	%	1.2	%	(2.5	)%
	Other income (expense)
	Interest expense	(2,342	)	(2,524	)	(2,566	)	(2,699	)	(10,131	)	(2,838	)	(21	)%	(496	)
	Other, net	(672	)	192		419		302		241		524		178	%	1,196
	Total other expense	(3,014	)	(2,332	)	(2,147	)	(2,397	)	(9,890	)	(2,314	)	23	%	700
	Income (loss) before income taxes	(8,721	)	(1,879	)	8,911		2,398		709		(8,015	)	8	%	706
	Income taxes	(7,421	)	1,457		(14,030	)	(2,777	)	(22,771	)	(5,000	)	33	%	2,421
	Net earnings (loss)	(1,300	)	(3,336	)	22,941		5,175		23,480		(3,015	)	(132	)%	(1,715	)
	Diluted earnings (loss) per share	(0.02	)	(0.04	)	0.28		0.06		0.29		(0.04	)	(137	)%	(0.02	)
	Some earnings (loss) per share amounts may not add due to rounding.
	Basic shares	78,672		79,235		79,043		78,614		78,891		76,935
	Diluted shares	81,440		81,472		81,869		81,282		81,516		76,935

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
														Q1 FY19 to Q1 FY18
		06/30/17		09/30/17		12/31/17		03/31/18		FY2018		06/30/18		%		$
Revenues:
	LiveRamp	46,757		54,043		59,095		60,231		220,125		62,458		33.6	%	15,701
	Acxiom Marketing Solutions	165,757		171,198		175,776		184,550		697,281		164,502		(0.8	)%	(1,255	)
	Total operating segment revenues	212,514		225,240		234,871		244,781		917,406		226,960		6.8	%	14,446
Gross profit:
	LiveRamp	28,229		36,105		40,553		42,679		147,566		44,200		56.6	%	15,971
	Acxiom Marketing Solutions	77,864		81,828		85,981		89,067		334,739		73,174		(6.0	)%	(4,690	)
	Total operating segment gross profit	106,093		117,932		126,533		131,746		482,305		117,374		10.6	%	11,281
Gross margin %:
	LiveRamp	60.4	%	66.8	%	68.6	%	70.9	%	67.0	%	70.8	%
	Acxiom Marketing Solutions	47.0	%	47.8	%	48.9	%	48.3	%	48.0	%	44.5	%
	Total operating segment gross margin	49.9	%	52.4	%	53.9	%	53.8	%	52.6	%	51.7	%
Income (loss) from operations:
	LiveRamp	(97	)	5,883		9,022		8,128		22,936		9,203		9,587.6	%	9,300
	Acxiom Marketing Solutions	48,374		51,203		52,962		50,421		202,959		47,458		(1.9	)%	(916	)
	Total operating segment income from operations	48,277		57,086		61,983		58,548		225,895		56,661		17.4	%	8,384
Operating income (loss) margin %:
	LiveRamp	(0.2	)%	10.9	%	15.3	%	13.5	%	10.4	%	14.7	%
	Acxiom Marketing Solutions	29.2	%	29.9	%	30.1	%	27.3	%	29.1	%	28.8	%
	Total operating segment operating margin	22.7	%	25.3	%	26.4	%	23.9	%	24.6	%	25.0	%
Some totals may not add due to rounding.

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
	06/30/17		09/30/17		12/31/17		03/31/18		FY2018		06/30/18
Earnings (loss) before income taxes	(8,721	)	(1,879	)	8,911		2,398		709		(8,015	)
Income taxes	(7,421	)	1,457		(14,030	)	(2,777	)	(22,771	)	(5,000	)
Net earnings (loss)	(1,300	)	(3,336	)	22,941		5,175		23,480		(3,015	)
Earnings (loss) per share:
Basic	(0.02	)	(0.04	)	0.29		0.07		0.30		(0.04	)
Diluted	(0.02	)	(0.04	)	0.28		0.06		0.29		(0.04	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)	5,966		6,021		5,971		5,963		23,920		6,054
Non-cash stock compensation (cost of revenue and operating expenses)	15,031		15,757		15,919		16,527		63,234		20,360
Restructuring and merger charges (gains, losses, and other)	(98	)	3,660		(41	)	2,852		6,373		1,286
Separation and transformation costs (general and administrative)	7,119		5,442		5,214		3,070		20,846		6,822
Accelerated amortization (cost of revenue)	—		—		—		999		999		—
Total excluded items	28,018		30,880		27,063		29,411		115,372		34,522
Income before income taxes
and excluding items	19,297		29,001		35,974		31,809		116,081		26,507
Income taxes	7,720		11,289		10,704		10,045		39,758		7,467
Non-GAAP net earnings	11,577		17,712		25,270		21,764		76,323		19,040
Non-GAAP earnings per share:
Basic	0.15		0.22		0.32		0.28		0.97		0.25
Diluted	0.14		0.22		0.31		0.27		0.94		0.24
Basic weighted average shares	78,672		79,235		79,043		78,614		78,891		76,935
Diluted weighted average shares	81,440		81,472		81,869		81,282		81,516		79,311
Some totals may not add due to rounding

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS GUIDANCE (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
	For the year ending
	March 31, 2019
	Low Range			High Range
Loss before income taxes	(15,500		)	(10,000		)
Income taxes	3,000			4,500
Net loss	(18,500		)	(14,500		)
Diluted loss per share	$	(0.23	)	$	(0.18	)
Excluded items:
Purchased intangible asset amortization	16,000			16,000
Non-cash stock compensation	84,000			84,000
Gains, losses and other items, net	3,000			3,000
Separation and related costs	16,000			16,000
Total excluded items	119,000			119,000
Income before income taxes and excluding items	103,500			109,000
Income taxes (2)	29,000			30,500
Non-GAAP net earnings	74,500			78,500
Non-GAAP diluted earnings per share	$	0.90		$	0.95
Basic weighted average shares	81,000			81,000
Diluted weighted average shares	83,000			83,000

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

(2) Income taxes were calculated using an effective non-GAAP tax rate of approximately 28.0%. The difference between our GAAP and Non-GAAP tax rates was due to the effect of excluded items.

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APPENDIX A

ACXIOM CORPORATION

Q1 FISCAL 2019 FINANCIAL RESULTS

EXPLANATION OF NON-GAAP MEASURES

To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in understanding our past performance and our future results. Our non-GAAP financial measures and schedules are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. These measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is also based in part on the performance of our business based on these non-GAAP measures.

Our non-GAAP financial measures, including non-GAAP earnings per share, income from operations and adjusted EBITDA reflect adjustments based on the following items, as well as the related income tax effects when applicable:

• Purchased intangible asset amortization: We incur amortization of purchased intangibles in connection with our acquisitions. Purchased intangibles include (i) developed technology, (ii) customer and publisher relationships, and (iii) trade names. We expect to amortize for accounting purposes the fair value of the purchased intangibles based on the pattern in which the economic benefits of the intangible assets will be consumed as revenue is generated. Although the intangible assets generate revenue for us, we exclude this item because this expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance.

• Non-cash stock compensation: Non-cash stock compensation consists of charges for associate restricted stock units, performance shares and stock options in accordance with current GAAP related to stock-based compensation including expense associated with stock-based compensation related to unvested options assumed in connection with our acquisitions. As we apply stock-based compensation standards, we believe that it is useful to investors to understand the impact of the application of these standards to our operational performance. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations.

• Restructuring charges: During the past several years, we have initiated certain restructuring activities in order to align our costs in connection with both our operating plans and our business strategies based on then-current economic conditions. As a result, we recognized costs related to termination benefits for associates whose positions were eliminated, lease termination charges, and leasehold improvement write offs. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations.

• Separation and transformation costs: In previous years, we incurred significant expenses in connection with the separation of our IT Infrastructure Management ("ITO") and the subsequent transformation of our remaining operating segments. This work enabled us to transform our external reporting and provide investors with enhanced transparency and more granular segment-level disclosures in addition to facilitating the ITO disposition. In the prior year, we also incurred expenses to further separate the financial statements of our three operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding separation and transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, we incurred transaction analysis and support expenses related to the Company's announced evaluation of strategic options for its Marketing Solutions business. Our criteria for excluding these transaction related costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.

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Our non-GAAP financial schedules are:

• Non-GAAP EPS and Non-GAAP Income from Operations: Our non-GAAP earnings per share and Non-GAAP income from operations reflect adjustments as described above, as well as the related tax effects where applicable.

• Adjusted EBITDA: Adjusted EBITDA is defined as net income from continuing operations before income taxes, other expenses, depreciation and amortization, and including adjustments as described above. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. We believe that the inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company's performance and trends. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as an alternative to net earnings as an indicator of our performance.

• Free Cash Flow to Equity: To supplement our statement of cash flows, we use a non-GAAP measure of cash flow to analyze cash flows generated from operations. Free cash flow to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt, and excluding the impact of discontinued operations. Management believes that this measure of cash flow is meaningful since it represents the amount of money available from continuing operations for the Company's discretionary spending after funding all required obligations including scheduled debt payments. The presentation of non-GAAP free cash flow to equity is not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

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