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Acxiom Corp reported non-GAAP earnings of 31 cents per share in third-quarter fiscal 2018, beating the Zacks Consensus Estimate by 7 cents. The figure improved 29.2% from the year-ago quarter.
Revenues were $234.9 million, up 5.2% from the year-ago quarter but lagged the Zacks Consensus Estimate of $239 million. Excluding divestitures, Australia transition and foreign exchange effect, the company’s revenues increased 5%.
Adjusted domestic revenues were $213 million, up 5% year over year. Excluding revenues related to Australia transition and foreign exchange effect, international revenues increased 7% year over year to $21 million.
Acxiom also announced plans to realign portfolio into two distinct business units — LiveRamp and Acxiom Marketing Solutions. The company currently reports results into three units — Marketing Services, Audience Solutions and Connectivity. Beginning first-quarter fiscal 2019, Acxiom expects to report results under the realigned business units.
Acxiom Corporation Price, Consensus and EPS Surprise
Revenues in the Marketing Services segment fell 7% year over year to $94 million. The company added three new customers during the quarter.
Marketing Services segment revenues from the U.S. markets were $88 million, down 6% year over year. International revenues fell 17% to $7 million.
Audience Solutions segment revenues inched up 1% to $84 million. Sales from the U.S. markets were $74 million, flat year over year. International revenues increased 9% to $10 million.
The Connectivity segment continued to show strong momentum, as revenues surged 45% year over year to $56 million.
Sales from the U.S. markets were $51 million, advancing 40% year over year. International revenues soared 100% to $5 million.
Acxiom’s partner network continues to expand. The company has partnered with the likes of Adobe Systems (ADBE - Free Report) , Microsoft’s (MSFT - Free Report) LinkedIn and Yelp (YELP - Free Report) Local Audiences in the recent past. During the quarter, the company announced extended partnership with RedPoint Global and 4INFO.
Operating Details
Non-GAAP gross margin expanded 300 basis points (bps) on a year-over-year basis to 53.9%. Connectivity and Marketing Services segment gross margins surged 810 bps and 80 bps, respectively. Audience Solutions gross margin contracted 110 bps.
Reported operating expenses surged 10.4% to $107.9 million. Research and development (R&D) and Sales and marketing (S&M) increased 11.3% and 24.8%, respectively. However, General and administrative (G&A) declined 2.3% from the year-ago quarter.
Total segment operating margin expanded 60 bps to 26.4%. Connectivity and Marketing Services operating margin expanded 740 and 450 bps, respectively. However, Audience Solutions operating margin contracted 230 bps from the year-ago quarter.
Non-GAAP operating margin expanded 120 bps on a year-over-year basis to 16.2% in the reported quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2017, Acxiom had cash and cash equivalents of approximately $177.8 million compared with $169.5 million as of Sep 31, 2017.
Cash flow from operations was $43.6 million, up from $27.8 million in the prior quarter.
Acxiom repurchased 729,000 shares for approximately $20 million.
Guidance
For fiscal 2018, Acxiom expects revenues in the range of $910-$915 million (down from previous range of $920-$930 million), up 6% (down from previous range 7-8%) from fiscal 2017. The slashed guidance reflects lower anticipated revenues from the Audience Solutions segment.
Non-GAAP earnings are projected in the range of 85-89 cents per share (down from previous range of 80-85 cents), up 20-25% year over year (previous range was 13-20% year over year). The current guidance includes tax reform benefit of 4-5 cents.
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Acxiom (ACXM) Beats Q3 Earnings Estimates, Raises '18 View
Acxiom Corp reported non-GAAP earnings of 31 cents per share in third-quarter fiscal 2018, beating the Zacks Consensus Estimate by 7 cents. The figure improved 29.2% from the year-ago quarter.
Revenues were $234.9 million, up 5.2% from the year-ago quarter but lagged the Zacks Consensus Estimate of $239 million. Excluding divestitures, Australia transition and foreign exchange effect, the company’s revenues increased 5%.
Adjusted domestic revenues were $213 million, up 5% year over year. Excluding revenues related to Australia transition and foreign exchange effect, international revenues increased 7% year over year to $21 million.
Acxiom also announced plans to realign portfolio into two distinct business units — LiveRamp and Acxiom Marketing Solutions. The company currently reports results into three units — Marketing Services, Audience Solutions and Connectivity. Beginning first-quarter fiscal 2019, Acxiom expects to report results under the realigned business units.
Acxiom Corporation Price, Consensus and EPS Surprise
Acxiom Corporation Price, Consensus and EPS Surprise | Acxiom Corporation Quote
Segment Details
Revenues in the Marketing Services segment fell 7% year over year to $94 million. The company added three new customers during the quarter.
Marketing Services segment revenues from the U.S. markets were $88 million, down 6% year over year. International revenues fell 17% to $7 million.
Audience Solutions segment revenues inched up 1% to $84 million. Sales from the U.S. markets were $74 million, flat year over year. International revenues increased 9% to $10 million.
The Connectivity segment continued to show strong momentum, as revenues surged 45% year over year to $56 million.
Sales from the U.S. markets were $51 million, advancing 40% year over year. International revenues soared 100% to $5 million.
Acxiom’s partner network continues to expand. The company has partnered with the likes of Adobe Systems (ADBE - Free Report) , Microsoft’s (MSFT - Free Report) LinkedIn and Yelp (YELP - Free Report) Local Audiences in the recent past. During the quarter, the company announced extended partnership with RedPoint Global and 4INFO.
Operating Details
Non-GAAP gross margin expanded 300 basis points (bps) on a year-over-year basis to 53.9%. Connectivity and Marketing Services segment gross margins surged 810 bps and 80 bps, respectively. Audience Solutions gross margin contracted 110 bps.
Reported operating expenses surged 10.4% to $107.9 million. Research and development (R&D) and Sales and marketing (S&M) increased 11.3% and 24.8%, respectively. However, General and administrative (G&A) declined 2.3% from the year-ago quarter.
Total segment operating margin expanded 60 bps to 26.4%. Connectivity and Marketing Services operating margin expanded 740 and 450 bps, respectively. However, Audience Solutions operating margin contracted 230 bps from the year-ago quarter.
Non-GAAP operating margin expanded 120 bps on a year-over-year basis to 16.2% in the reported quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2017, Acxiom had cash and cash equivalents of approximately $177.8 million compared with $169.5 million as of Sep 31, 2017.
Cash flow from operations was $43.6 million, up from $27.8 million in the prior quarter.
Acxiom repurchased 729,000 shares for approximately $20 million.
Guidance
For fiscal 2018, Acxiom expects revenues in the range of $910-$915 million (down from previous range of $920-$930 million), up 6% (down from previous range 7-8%) from fiscal 2017. The slashed guidance reflects lower anticipated revenues from the Audience Solutions segment.
Non-GAAP earnings are projected in the range of 85-89 cents per share (down from previous range of 80-85 cents), up 20-25% year over year (previous range was 13-20% year over year). The current guidance includes tax reform benefit of 4-5 cents.
Zacks Rank
Acxiom has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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