Good afternoon, ladies and gentlemen and welcome to the Acxiom Fiscal 2016 Third Quarter Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Ms. Lauren Dillard, Senior Director of Investor Relations.

Thank you, operator. Good afternoon and welcome. Thank you for joining us to discuss our fiscal 2016 third quarter results. With me today are Scott Howe, our CEO and Warren Jenson, our CFO. Today’s press release and this call may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed description of these risks, please read the Risk Factors section of our public filings in the press release. Acxiom undertakes no obligation to release publicly any revisions to any of our forward-looking statements. A copy of our press release and financial schedules, including any reconciliation to non-GAAP financial measures is available at acxiom.com. Also during the call today, we will be referring to the slide deck posted on our website. At this time, I will turn the call over to Scott Howe.

Thank you, Lauren. Good afternoon and thank you for joining us. I am pleased to report another solid quarter highlighted by continued momentum and top line growth across the board. Similar to past quarters, I would like to spend my portion of the call updating you on each of our businesses: our LiveRamp Connectivity business; our Audience Solutions data business; and our Marketing Services portfolio. I continue to be encouraged by our progress and believe we are just beginning to reap the benefits of our divisional alignment. Each piece of the business is executing soundly against its unique opportunity set and at the same time working together toward the shared vision of powering the world where all marketing is relevant. For each division, I will share some highlights from the quarter and talk about where we are focused in Q4 and FY ‘17. Let me start with our SaaS or connectivity business. Connectivity had another impressive quarter, highlighted by strong top line momentum, new customer and partner additions and continued product innovation. If you turn to Slide 3, I will update you on our key metrics. We signed over 40 new connectivity deals in the third quarter and added approximately 20 new direct customers. In total, our direct customer count grew to over 270. If we included indirect customers, whose data we onboard through our reseller partnerships, this number would be multiples higher. We generated approximately $28 million in revenue during the quarter, up 28% from Q2 and up almost 60% compared to prior year. We exited Q3 with a revenue run-rate of $100 million, up from $90 million at the end of Q2 and up over 60% year-over-year. As a reminder, this measure represents our quarter ending subscription ARR plus our trailing 12-month royalties on first-party media spend. We…

Thanks Scott and good afternoon everyone. In my portion of the call today, I would like to first run through the quarter, then talk about each of our segments, provide an update to our fiscal ‘16 guidance and finally mention a few preliminary thoughts for fiscal ‘17. A few highlights from the quarter. Overall, while there is still much to demonstrate, this was the strongest quarter we reported since I have been at Acxiom. As Scott mentioned, each of our divisions posted revenue growth and we had meaningful margin improvements in two of our three segments. Next, equally, if not more important, each of our divisions is finding its stride and our teams are clear on their direction and accountabilities. And finally, this quarter marks the final leg in our journey to report in three clear and transparent segments. In addition to updating our external filings, we have also prepared a trended view of our historical financials. This data can be accessed through our IR site under Financials and Filings. From a financial perspective, each of our divisions reported top line growth and total company revenue was up 6%. Excluding an unfavorable $2 million FX impact and the EU restructuring, total revenue was up 8%. In the U.S., total revenue also increased 8%, representing the sixth sequential quarter of positive growth. In fact, in four of those quarters, the U.S. grew by 5% or more. Adjusted EBITDA improved 5% year-over-year and has been up in each of the last seven quarters. On a trailing 12-month basis, adjusted EBITDA is up 12% over the comparable period. Connectivity had another strong quarter. Revenue was up approximately 59%. And I am excited to share that our revenue run rate exiting the quarter grew to over $100 million. Connectivity gross margin improved to 57%…

Thank you, sir. [Operator Instructions] Our first question comes from the line of Bill Warmington of Wells Fargo. Your question please.

Good evening everyone.

Hi Bill.

So I want to start out by asking about the strong gross media spend and then ask a little bit about what the vertical mix was there and how much, if any of that was being driven by political spend?

Well, I mean first off, its calendar Q4, our Q3 and so you always get a holiday boost. In addition, yes there is some driver of political spend, but we haven’t broken it out by industry vertical. I think if you looked at us, though Bill, we would track almost exactly with kind of overall industry trends, with the exception of the fact our business mix as a whole tends to skew a little bit more towards financial services than the overall industry norm.

Got it. And then I was hoping you would comment on renewals that you are seeing in Marketing Services and Audience Solutions, how have those been trending?

We are really pleased. Last quarter, we had what I believe to be kind of a record renewal quarter. And we talked about the multi-year renewal of one of our largest clients and that’s continued. I think as we look to next year, the combination of bookings and renewals gives us confidence that we are on the right path forward.

Okay. And then one other question on LiveRamp Connect, so if you could talk a little bit about how long does it take today to onboard a client and what are clients asking for in terms of that timeframe, where would they like to see it and what do you need to do in terms of investment to meet those requests by the client?

It’s fast, relative – let me give you a frame or reference. In Marketing Services, to setup a database it takes months. In connectivity, to launch a campaign, it takes mere days and I don’t hear a lot of pushback from clients around the timeframe there. It’s a rather – if we are getting a request around timing, it’s from the constant desire to refresh data elements and traffic new segments and immediately push new use cases. So as you think about our development path going forward, that’s an element and we will just kind of wrap that under improving the usability of everything that we do. And that sits alongside improving our match rates, expanding our use cases and as Warren mentioned also expanding connectivity from where we are today, which is a very strong position, a leadership position in the U.S., to extending that to a handful of key international markets.

Hey Bill, one thing that I might add, this is a principal focus of our development efforts and investment this year. It’s really driving speed and scalability into LiveRamp. And I think it really marks something that is very powerful given the network effect. Just simply given the volume that we now have coming through LiveRamp, it allows you to make investments that just simply – that others cannot.

So when you think about investment for speed and scalability, are we thinking in terms of this fiscal year or are we thinking in terms of 2017?

It has been a priority for this fiscal year and it will continue to be. With growth, scalability always has to be a priority, but speeding up our ability to onboard more quickly has been a direct focus of our engineering team at LiveRamp.

Well, thank you very much for the insight.

Thank you.

Thank you. [Operator Instructions] Our next question comes from the line of Brett Huff of Stephens Inc. Your line is open.

Good afternoon guys.

Hi Brett.

A couple of questions, one is kind of a housekeeping one. First of all, thanks for the additional disclosures by segment, that’s very helpful. It definitely gives us better insight into the businesses. But could you give us by segment the stats that are going to get us from pro forma EBIT to pro forma EBITDA. And I think that would mean the D by segment and the A that is not intangibles, do you have that or can you provide that?

Here is what we can do, Brett, is if you take our – I would call it the DA, it’s about 85% associated with Marketing Services and Audience Solutions and probably 15% associated with connectivity. We do not intend nor do we think it – we don’t intend to break that out as between Marketing Services and Audience Solutions. But I think you can – I mean, to the extent you want to make an estimate, you can do that pretty easily. But it’s just given the interconnections between the two we don’t see ourselves breaking it out. But that’s a pretty good estimate.

And is that DA, that D and A, that includes all the A, that’s intangibles as well as the amortization not from intangibles, that the holes should match?

Yes.

Okay. And then any just directionally, you would split of that 85% between those two, I know you – I don’t want to get too detailed, but majority one way or the other?

I would – again, they are sufficiently connected that it wouldn’t be really appropriate for me to split them. We are taking – if I were doing it, I would simply base it largely on the revenue.

Okay, that’s helpful. And then Scott, you mentioned bookings of about 15% up TTM for Audience Solutions, can you provide that insight for us for Marketing Services as well?

Yes. As I did last quarter, if you just look at straight bookings, you don’t get the real picture for Marketing Services. So the way you got to think about it is, any given year, what are my bookings, what are my renewals and then what’s my variable. If you look at our bookings and renewals for Marketing Services on a trailing 12-month basis, we are in the strong, strong double-digit growth kind of position. And so all this to say is we like where we are relative to past years as we transition into FY ‘17.

Okay, that’s helpful. And then just a little bit on your – go ahead.

Brett, while you are on, one other thing is on your EBITDA question, I would just focus your attention on Chart 14 in our deck and I think that lays it out pretty well between EBIT and then getting down to an adjusted EBIT for some of the intangible items you mentioned.

Okay, that’s helpful. Thank you. And then in the – as we think about fiscal ‘17, you have given us some sort of qualitative sense to that, which is appreciated. In terms of Marketing Services and Audience Solutions, it sounds like we got good bookings growth TTM in Marketing or in Audience Solutions. I am assuming Scott your answer would yield positive bookings even ex-renewals in Marketing Services, should that roll forward and sustain that positive revenue growth we have seen this quarter, which I think is great, into ’17, I mean should we expect a positive number in those two segments from a revenue growth point of view?

Yes. I will start and Warren will probably jump in. So first off, it’s too early to be issuing guidance for next year. We are working on that right now. And I will also say going forward in this year, I think Audience Solutions, our data business in particular, has some headwinds in Q4 that we have talked about before. But our goal all along has been to deliver sustainable top line growth for each element of our portfolio and we have always talked about this year as being kind of the transition year to accomplish that. So we like the path we are on and we feel good about next year.

That’s great. And then last question is just any commentary on – you talked about investing instead of doubling down and really going after the connectivity business, both geographic expansion-wise and new product-wise, Warren I think you said in the past, expect continued investments through this year, even though you are closer to breakeven than maybe we all expected, is that – are we going to – I don’t want to be too specific, but do we expect breakeven at some point here in the next 12 months or is it still in investment mode through most of next year?

Well, we have been operating virtually at breakeven. It’s been a slight loss. I think it was about $1 million this year. So we – I would pretty much feel we have been operating at breakeven. In building our operating plan for next year, we looked at really just trying to appropriately invest our capital to the growth opportunity. And we don’t think we are anywhere close to a place where we should stop investing in connectivity. We have all kinds of opportunity in on-boarding. We have new products that are exciting and are being well received into the market and we have opportunities for global expansion. And I think the fourth quarter was a great example of that, adding 40 new contracts, adding 20 new customers. I can tell you internationally from having visited with some very sophisticated multinational companies, in particular, in Europe or you can go to China, data-driven marketing is every bit as much on their agenda as it is on any agenda in the U.S. So, this is a time to be all-in on connectivity. Optimizing margin is not our objective. It’s really optimizing the opportunity for growth and leadership in this important category.

Great. That’s what I needed. Thanks for the detailed answers, guys. Great quarter.

Great, thank you.

[Operator Instructions] As there are no questions in queue at this time, I would like to turn the call over CFO, Warren Jenson for any closing remarks.

Great. Thank you, operator and thanks to all of you for joining us today. We are pleased to report this quarter. On behalf of all of our associates at Acxiom, we want to thank you. I would also like to remind everyone that on February 23 in San Francisco is RampUp! which is the premier data-driven marketing event of the year. And this looks like a great program. Lot of people are going to be there and all of you are more than welcome. If you haven’t registered, simply go to the LiveRamp website and the registration form awaits you. We hope to see you then. Thanks a million and we will be talking.

Thank you, sir and thank you, ladies and gentlemen, for your participation. That does conclude your program. You may disconnect your lines at this time. Have a great day.