LiveRamp Holdings, Inc. (RAMP) Q4 2017 Earnings Report, Transcript and Summary

Good afternoon, my name is [Mariama] and I will be your conference operator today. At this time, I would like to welcome everyone to the Acxiom Fiscal 2017 Fourth Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Mrs. Lauren Dillard, Head of Investor Relations.

Thank you, operator. Good afternoon and welcome. Thank you for joining us to discuss our fiscal 2017 fourth quarter and full year 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 sections 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. Let me just say upfront that Lauren and I are in different locations for this call. I just wrapped up an important client meeting on the East Coast and so I am dialing in on my mobile. Let me start with our results. I am very pleased to report another solid quarter and a strong finish to the year. By almost any measure, FY 2017 was a year of tremendous execution and progress. We posted double digit revenue growth for the first time in over a decade, delivered meaningful bottom line improvement, continued to win new clients at an unprecedented rate and achieved exceptional results for our clients. Over the past five years, Acxiom has undergone a remarkable transformation and we are a much stronger and better positioned company today than we were when we began this journey. We are at the forefront of a massive shift towards data driven people based marketing. We are aligned against the single clear strategy. We moved faster and are more innovative, relevant and influential. And our recent results give me confidence we have rounded the corner. Our vision at Acxiom is to transform data into value for everyone. In a space plagued by fragmentation and complexicity, transformation means many things. Connections, curation, enhancements and activation are just a few relevant examples. Data is at the core of everything we do. And it is not only about people but increasingly about channels, devices and locations. Value is what we deliver to clients in the form of better experiences, insights, decisions and importantly ROI. And we want to do this for everyone. While clients and partners are our primary focus we also recognize that consumers must have visibility and choice. The industry needs a common data and identify foundation of which to innovate and we are better positioned than anyone else to provide this. Each of our divisions made good progress against this vision in FY 2017 and I really like the business momentum we have generated. At the same time there is still a lot of work to be done to secure and extend our market leadership. In the coming year, we will focus on deepening the notes around our core capabilities and identity resolution, connectivity and data stewardship to aggressively pursue the opportunity ahead of us. During my portion of the call today, I will update you on each of our businesses and in that discussion share our strategic priorities for FY 2018. One of our top priorities in the coming year is to accelerate progress against our biggest, future growth leaders. Over the past year, LiveRamp took a major step forward broadening its focus beyond data on boarding to solve one of the industry’s biggest challenges; creating an Omni-channel view of the consumer. In doing so, it expanded its client base and opportunity set to include both brands and the company’s brands work with, agencies, marketing technology providers, publishers and data owners. Specifically in the last year, we launched IdentityLink; an industry platform that allows users to activate people based marketing across the entire ecosystem. As part of this launch, we also introduced the IdentityLink data store enabling data owners to seamlessly distribute and monetize their data assets across more than 150 marketing platforms and publishers. We acquired and successfully integrated Arbor and Circulate two companies at the forefront of helping publishers connect and monetize their people based data. These acquisitions expanded our deterministic reach, broadened our publisher relationships and materially increased the scale of our network. We expanded our business internationally. A year ago, we launched LiveRamp in the U.K. and France. Today, we have a viable product in both markets and dozens of new clients and partners utilizing the service. We invested in our product delivering higher match rates, improved functionality and new features. Our deterministic web match rate now exceeds 60% and our deterministic mobile match rates are north of 40%. In addition, we currently have over 70 clients participating in SmartReach and generating even greater reach as a result. We nearly doubled our partner ecosystem and are powering new and interesting news cases for our clients. Brands can now activate their data across our growing network of more than 500 publishers and marketing applications. We significantly grew our client base and now work with more than 400 direct clients worldwide. We scale the organization adding over 125 new employees during the year including several key leaders. LiveRamp was also recently recognized as one of the top 10 best places to work by Glassdoor. And finally, we grew revenue 44% while also delivering meaningful bottom line improvement. We accomplished a lot over the past year and all leading indicators suggest another year of strong growth ahead. If you’ll please turn to slide three, I will update you on our key metrics for Q4. Connectivity had an impressive finish to the year and the LiveRamp team yet again posted their largest ever booking this quarter. We added more than 25 new direct customers in Q4 and recently signed several key renewals including large multiyear deals with four of our more strategic clients. Segment revenue was approximately $44 million up 42% compared to the prior year and LiveRamp product revenue increased 59%. We exited Q4 with a revenue run rate of approximately $170 million up from $160 million at the end of Q3 and up 55% year-over-year. We continue to build out our partner ecosystem and added over 50 new integrations during the quarter, including an exciting new partnership with LinkedIn to help power its recently launched matched audiences tool. This partnership allows advertisers to onboard and distribute their offline customer data via LiveRamp to LinkedIn for audience targeting. We also continue to expand some of our more strategic existing partnerships. On our last call, I talked about the early success several of our clients were experiencing with Google customer match. People base search is a really, really big deal. And through our integration with Google brands can now optimize their search campaigns by adjusting their bids based on what they know about their customers. We currently have over 40 clients taking advantage of this use case and achieving strong results. For example, a leading consumer electronics company is generating an 80% match rate when onboarding data to Google customer match through LiveRamp and in segments are performing 14% better than non customer match segments. And a second example at global cosmetics brand saw a 70% improvement in match rates when using our data pen service to send and target audiences on ad words. In addition a few weeks ago we launched an open industry consortium to improve, programmatic advertising in conjunction with several partners on both the demand and supply sides. These partners include AppNexus, MediaMath, OpenX, Rocket Fuel, LiveIntent and Index. Leveraging a common cookie and an open people based identifier provided by LiveRamp the partnership will provide a common identity framework for the BidStream that the entire industry will be able to use to implement people based programmatic advertising. Simply put, this means that both buyers and sellers of digital ads will have the opportunity to recognize who is actually viewing an ad in real time as the bidding occurs and adjust their bids accordingly. In addition, it represents another significant step forward in LiveRamp’s efforts to power the entire marketing ecosystem with identity resolution. The consortium is open to all industry participants and our goal is to build a neutral identity framework that benefits everyone. This coupled with people based search is a game changer for the industry. The current bidding process and search in programmatic which today represents over 80% of all digital spend in the U.S. relies heavily on cookies and other proprietary platform identifiers making it difficult to translate consumer identity across buyers and sellers and across devices. By standardizing on identity marketers are able to optimize their spend and deliver more relevant content to consumers and at the same time publishers can better monetize their inventory. In other words, this allows all marketers and publishers to perform the same type of people based targeting that had previously been reserved only for the large walled gardens. Moving onto Audience Solutions. Audience Solutions is a fundamentally different business today than it was just two years ago. Over the past year, it has cemented its position as our second growth driver and has transformed itself into a more modern and efficient data as a service business. Our momentum exiting the year was strong and we continue to make good progress against our key growth initiatives. For the quarter, total revenue was up 8% and revenue in the U.S. was up 9%. Equally as impressive gross margin improved 500 basis points to 64% representing the sixth consecutive quarter of growth and margin expansion for this segment. On a trailing 12-month basis, new bookings remain up over 20% and we closed several multiyear renewals during the quarter including large deals with two of our top financial services clients. We continue to expand our digital distribution and added 10 new data services partners in Q4. In addition, we recently expanded our data partnerships with Google to include mobile targeting and with AOL to help power their TV Solution. In total, our data is available to support targeted advertising and over 140 online and mobile publishers, television operators and ad tech platforms. And finally, our digital data revenue also continues to grow. During the quarter, digital data revenue was roughly $17 million up 85% year-over-year. On our last call we discussed some specific initiatives around expanding our global data footprint. While still early on, I am pleased to share that we are making good progress on this front. During the quarter, we entered into a partnership with Data Expand that allows us to activate 35% of the entire connected Spanish speaking world. Two quarters ago we offer Data products in eight countries representing 850 million addressable consumers for people based campaigns. Today, we offer data products in over 50 countries representing 2.5 billion addressable consumers or roughly 60% of the entire online connected population. In the coming year, we will invest in further building out our global data presence and will also remain focused on expanding our digital footprint. While invested in our future growth is a top priority, we must not forget the foundations of which we are growing and therefore nailing the basics is an equally important strategic imperative in the coming year. While this certainly applies to all of our businesses, it is most applicable to our marketing services division. This business has stabilized and is on the right track. In recent months, the marketing services team put up some nice client wins including two new logo deals with Embrace Home Loans and Opportune and a handful of large renewals. In every quarter a goal of marketing services is to retain and delighted to existing clients. We’ve done this really well. As an example, during the past year we celebrated a landmark 20 year anniversary with one of our largest financial services clients. Looking ahead, our marketing services division must remain focused on new logo acquisition and the upsell of packaged analytics and consulting services, while at the same time continue to do the right things operationally to drive margin growth. A final strategic imperative for the coming year is to explore expansion of our capabilities beyond just marketing. The data fragmentation silos, sub optimal insights and confusion that exist in marketing is prevalent in many other industries. Like marketing, other industries have desperate data sets. They lack data refinement, curation and enhancement capabilities. They cannot activate their insights as widely and effectively as desired and may need expert advice and service. These industries are desperate for the capabilities for which we are known. Identity Resolution, Connectivity and Data Stewardship. In coming months, we intend to explore opportunities to determine if this could be a future growth driver for us. With that, I would like to thank our associates for their dedication and hard work over the past year. As a company we delivered on our promises in FY 2017 and our enthusiasm heading into next year has never been higher. Thank you again for joining us today and look forward to updating you on our continued progress in the coming quarters. I will now turn the call over to Warren.

Thanks Scott and good afternoon everyone. In my portion of the call today I’d like to mention a few highlights then run through our results and finally provide guidance for FY 2018. FY 2017 was a milestone year. Acxiom has now re-established itself as an industry leader, innovator and a great place to work, and our results show it. For the year each segment posted top line growth, expanded gross margin and improved operating performance. Total revenue was up 11% and in three of the last four quarters revenue grew by more than 10%. Adjusted for items, international revenue was up 9%, representing a step function improvement. Gross margin expanded 370 basis points and was up by more than 200 basis points in each quarter of fiscal 2017. Our operating margin improved 250 basis points despite significant investments in connectivity. And finally our adjusted EBITDA margin was 19% up approximately 200 basis points, while FY 17 was a year of outstanding financial performance. What's more important is our trend line. If you’ll turn to slide four, over the last three years marketing services EBITDA margin has gone from the low 20s to the high 20s. Audience solutions has gone from a flattish business to 5% to 10% growth business and its gross margin has improved from the mid-50s to 60% plus. And finally connectivity gross margin has gone from the 40s to high 50s and EBITDA margin has gone from negative to approaching double digits. We are walking the talk. Now onto the fourth quarter. Starting with slide five our summary financial results. First, our GAAP results. Total revenue was up slightly, gross profit was $107 million, up 5% and gross margin improved 240 basis points to 47.4%. Operating loss for the quarter was $9 million compared to a loss of $8 million in the prior period, and GAAP diluted loss per share was $0.10 compared to a loss per share of $0.02 a year ago. Next our non-GAAP results, adjusted revenue was up 8%, gross profit was $114 million, up 7% and gross margin improved 340 basis points to 50.7%. Operating income was $21 million, up 5% year-over-year and earnings per share were $0.15 as compared to $0.18 a year ago. Excluding a $0.03 tax benefit in the prior year EPS was flat. In Q4 our tax rate was 37%. Excluded items totaled $30 million including stock-based comp of $15 million, intangible asset amortization of $6 million, separation related spend of $3 million and net restructuring and impairment charges of $4 million. In addition during the quarter we took steps to further consolidate our real estate footprint. Specifically we sold our Little Rock headquarters, consolidated our Arkansas operations and eliminated unused office space in California. In total these actions resulted in a $2 million charge. Slide six highlights our revenue results as reported and slide seven, adjust for the sale of Acxiom impact the Brazil shut down, the Australia transition and FX. Adjusted revenue was up 8% in the quarter. In the U.S. revenue as reported was up 1%, revenue adjusted for items was up 8% driven by strong growth in connectivity and audience solutions. International revenue as reported was down 8%. However, adjusted revenue was up 8% driven by our performance in Europe, most notably a strong quarter for connectivity in France. As discussed in our last call our adjusted results include Arbor and Circulate. Given the deep integration and consolidation of client contracts it is impractical to separate revenues. With that's said to assist you in your analysis, we have included our acquisition guidance as a footnote. Now turning to slides eight through 10 our segment results. First, marketing services. Revenue was reported was down 17%, revenue adjusted for impact was down 5% due to declines in strategy and analytics, gross margin contracted 230 basis points driven primarily by revenue declines, segment income was $20 million, up 1% and segment margin improved over 300 basis points to 21%. As a reminder in the appendix to our slide deck, we've included a historical view about marketing services and the total company excluding impact. Slide nine, audience solutions. Revenue was up 8% and 9% in the U.S. This represents the sixth consecutive quarter of growth. Digital data revenue was approximately $17 million, up 86%. Gross margin improved 580 basis points to 63.8% driven by a higher mix of digital revenue and operational cost savings in international. Segment income was $34 million, up 14% and segment margin improved 200 basis points. Adjusted EBITDA was $38 million, up 10% and EBITDA margin improved to 44%. Slide 10, connectivity. Revenue was $44 million, up 42% and LiveRamp product revenue grew 59%. Gross margin contracted slightly to approximately 63% due to continued international match pool investments. Segment income improved to $2 million and segment margin was 3%. Adjusted EBITDA was $4 million, up from 2 million a year ago and for the full year adjusted EBITDA was approximately $13 million. Finally, please turn to slide 11. This segment is scaling beautifully. As you can see in the U.S. where we’re more mature we are already operating with gross margins approaching 70%, and EBITDA margins approaching 20%. Next, please turn to slide 12. For the quarter operating cash flow was $31 million compared to $43 million in the prior year. This decrease was primarily driven by lower cash earnings and unfavorable changes in working capital. Free cash flow to equity was up 59% and included proceeds from the sale of real estate assets. For the year free cash flow to equity was up over 200%. Now on the guidance, please turn to slide 13. As a reminder our guidance excludes items including non-cash stock comp, purchased intangible asset, amortization restructuring charges and separation costs. You’ll also see we have adjusted our revenue base line for the divestiture of impact. With that for fiscal 2018 we expect total revenue of approximately $945 million, an increase of roughly 10% compared to our adjusted baseline. GAAP loss per share of approximately $0.09 and adjusted EPS of roughly $0.80 Finally a few additional comments on FY 2018. Please turn to slide 14. While things could easily change as a percentage of the total, we see our revenue facing per quarter as follows; in Q1, roughly 23%, Q2 24%, Q3 26%, and finally in Q4 roughly 27%. Looking at Q1, we expect EPS to be approximately 16% of our full-year guidance. Next, building on our commentary from our last call let me provide some additional perspective on our segments. Connectivity, we expect revenue growth in connectivity to accelerate both organically and inorganically, in fact segment growth could be as much as 50% year-over-year. In addition, we expect connectivity to generate a meaningful level of incremental cash flow during the year. In other words you should see another step function improvement in operating leverage. Gross margin could easily be as high as 65% for the year and we expect segment margin to approach 10%. Audience solutions, we expect audience solutions revenue to be up mid-single digits driven by growth in digital data and our global data initiatives. On the bottom line, we expect margins to be flat. Marketing services, we expect marketing services to be stable and revenue to be roughly flat. However, given our ongoing efficiency efforts we expect segment income to be up mid-single digits and EBITDA margins to again improve year-over-year. International, we expect continued international revenue growth, in fact, we expect every geography outside of the U.S. to grow double digits in FY 2018. Moving on, for the year we expect CapEx to be approximately $70 million. As discussed on our last call we expect stock-based comp to be roughly $66 million. As a reminder, over 40% of this expense is associated with acquisitions. We project our stock-based comp associated with ongoing programs to be approximately 4% of revenue and in line with industry benchmarks. For tax rate, we recommend you use 40%. We expect our shared count to be approximately $83 million. This share count account assumes no buyback. We expect one-time expenditures to be between $10 million and $15 million. These expenditures are entirely associated with business separation. As a result of this spent we expect to have clear lines of performance accountability, separate balance sheet and documented in functioning intercompany agreements. And finally, we expect restructuring charges of roughly $5 million associated with further real estate consolidation. With that, let me close with three final thoughts. First FY 2017 was a milestone year. We introduced groundbreaking new products. We materially improved our financial performance and we continued to invest for the future. In short, we leave fiscal 2017 from a position of industry leadership and strategic strength. Second the Acxiom story is no longer just a story. It is a clear trend line with multiple connected proof points. And finally, we are not slowing down, in fact now is the time to accelerate. Thank you for joining us today on behalf of my colleagues. We look forward to updating you throughout fiscal 2018. Operator, we will now open the call to questions.

[Operator Instructions] Your first question comes from the line as Bill Warmington with Wells Fargo. You line is open.

Good afternoon everyone.

Hey, Bill.

Hey, Bill.

So a couple of questions for you. On the connectivity side, the 50% growth rate that you gave, you talk about it accelerating on both organic and reported basis. I just wanted to be clear. The 50% is for both organic and reported or just want to make sure I follow that?

Bill, for the coming year we’re not going to break it down between product in organic or inorganic, simply on that side what we’ve said is that, we are fully integrated both Arbor and Circulate and breaking out the results next year is virtually impossible. Now, what we have done though is we've footnoted our acquisition, assumptions in our slides so that you can do the math, but we’re not going to break that down as part of our calls, but we do expect growth to be north of 50% organically and inorganically no matter how you do the math.

Got it. And then on the business separation front, what inning are we in, in terms of the separation of marketing services. I know you highlighted some of the spent for the quarter on that. I just want to know where we were in that process?

Bill, I would say middle of the fifth.

Okay.

What we’re doing right now is if you look back, I’ll just spend just a second on that Scott may want to add to is, if you think back over the last call it 18 months, the big accelerator for us has been divisionalization where we’ve added just a whole new level of accountability and transparency. We’re taken another step function forward with what we’re doing right now in driving a whole new level of performance management, accountability and transparency. What we get out of this a balance sheets, intercompany agreements with which we will operate the company and we believe just a whole new level of transparency and clarity, so we plan to take those steps, would put it probably right about middle of the fifth.

So you had mentioned some rationalization of the real estate portfolio, a couple million dollars charge this past year. It sounds like there’s another $5 million coming in FY 2018. Help me understand what’s – if you give us a sense for the annual savings that are going to be generated going forward from those moves?

I think 2 to 3 million bucks.

Okay.

And that’s factored into our guidance.

Got it. And the last question. I just wanted o ask how smart reach was going. How many clients you’re here up to at this point?

Hold on Bill. I have those numbers at my finger tips and I just have to find it for you. And so, over 70 clients signed up for smart reach. Over 30 of those clients actually implemented. And more importantly the results continue to really please us and our clients. I think we’ve mentioned in the past that 30% plus improvements in match rates are kind of the norm, so it’s really powerful.

All right. Well, thank you very much.

Thanks, Bill.

Your next question comes from Brett Huff with Stephens. Your line is open.

Good afternoon. Can you hear me okay?

We can Brett. Thank you.

Great. Thanks. Can you talk little bit more about the Google results that you're seeing and also the aggressively market, I’m not sure you kind of identified that for us, but I just had a lot of question about and just kind of -- what kind of benefits are Acxiom getting and what is the addressable market on that?

Hi, Brett, this is Scott. So, first off, addressable market, I think the stat we shared in the earnings script was together search and programmatic represent 80% of digital advertising. And so, we think that together those comprise to significant use cases, the most significant use cases. With customer matches, currently configured the first advertisers off the rank tend to be bigger advertisers, because they relies on them bringing their own data as opposed to creating any kind of standard data targeting schemes. So it’s the search advertisers. The results have been impressive and in two-fold, one is when you use us for identity, we often times are able to make a more accurate match, but I talked about the lift in the ability to make that match in the script today. And then the second is by bidding more granularly on certain words and adjusting that campaigns accordingly depending on whether someone is existing customer, what segment they fall into, we were able to generate better search results. And so it’s really a one or two punch. The answer is varied by client, but based on the adoption thus far, in some cases material lift seen, we’re really pleased with our performance today, still very early though, very early.

Okay. That’s helpful. And then other bigger picture question. Just talk a little bit about the main growth driver that are driving [Indiscernible]? Thank you.

Yes. The main growth drivers, there are handful, unfortunately Brett, I don’t think I can break for you top of mind, this is something we can do if we spend some time doing the math, but what I’m really pleased with – I think we’ve been able to do over the last few years at Acxiom is we've reseeded constant innovation in growth. And to me there’s kind of four levers, three of which we’re pulling today. Number one, is new client adoption. And this is true in both AS and LiveRamp. It is still the case that our share of the market is barely small relative to the size of the market. We’ve been adding sales people in both AS and LiveRamp and that’s – as they have hit the ground and started to win clients that has been I think our biggest growth driver. The second is use case expansion, The number that I’ve given in past in the last couple of calls, I’ve talked about the average number of use cases that our clients have embraced. And if you recall over year ago, the first time I share that stat. I think the average was 1.2, mean that most clients came on board and they activated Facebook or Google. Last quarter that number was in excess of nine. This quarter it is actually in double-digits. It’s broken ten. And so, as client expand their use cases, we get paid more in connectivity, likewise we typically purchase more data and utilize more data as they activate more channels. The third is geographic expansion, and I quite frankly I think this is for me, the most pleasant surprise of the quarter for us and it’s a huge credit to Warren Jenson. In my time at Acxiom every year we put Warren against one of our most difficult problems. Remember a few years we put him in-charge of IT to get those expenses under controlled, to modernize our architecture. He did a wonderful job. More recently international was an area that hasn’t been going well for Acxiom for 20 years. And he’s spend a lot of overseas and you can see it in the results, strong revenue growth in each of international markets and you heard the guidance, double-digit growth in every single non-U.S. market. That’s a credit to Warren and the leadership team internationally. This has gone from being something that quite frankly we view this problematic to something that when built around connectivity and data, we believe it can be real growth level for us. And then the final thing that I just touched on it at the very end, but you don’t see it all in our growth, but I want people to be aware that we’re exploring this is the whole concept of adjacent sectors beyond marketing.

Your next question comes from Dan Salmon from BMO Capital Markets. Your line is open.

Good afternoon, everyone. Scott, I am certainly going to follow-up on that comment about exploring adjacent sectors. When you first join the company five or six years ago, one of you key purposes was to move Acxiom to being more and solely focus on the marketing department, recognizing that the assets have changed significantly since then with the addition of LiveRamp and you’re clearly talking about areas of that side of the marketing department that were different from those that you were in previously, but just at the highest level possible in addition to having a different set of services if you can expand a little bit on why you think that is a winning strategy right now when there is a still a fair amount of low hanging fruit for you in the marketing area. And then just maybe as a part B to that for either you or Warren, does this signal any changes in your uses of free cash flow and potentially seeing more dedicated acquisitions in this area. And then maybe just a quick one for either you or Warren, marketing services guidance for revenue flat for the year, but a little dips here in the quarter just hoping that you can expand on that and help us understand the difference between the two? Thanks.

Sure. I’ll start and Warren I let you handle the two guidance questions. If you think back to a few years ago as we rationalized our portfolio what we realize Dan was that we were rationalizing to be a marketing services provider, in fact you heard me talk about the two paths that competitors on ours space have taken. We really retrench around the concept of identity resolution, connectivity and data stewardship. We believe that we would win by creating a data foundation that anyone and everyone could plug into, nowhere in that definition is it limited to solely marketing. Now other competitors have really double down on marketing services provision and created full scale agencies and for those companies in many cases that’s been a successful strategy. But here’s the thing. I grew up in the digital world and remember I grew up in Seattle for much of that time. And I am certain that 20 years ago, Jeff Bezos never has satisfied with building a retail infrastructure that could only be used for books and music. He was far more ambitious, and so are we. We built an infrastructure around ingesting, curative and activating data anywhere and for everyone. And so that’s what I’m looking to leverage. And what I’m communicating today is that is something that we’ll pursue, not for growth next year. Next year our growth will be predicated on expanding within marketing, building out the connectivity set, selling more data and upselling services. But this is about creating the growth trajectory that’s spends decade. We’re in the really, really early stages of assessing the opportunities, and we have a frame work for it. So, we’re trying to do this in intelligent way. We look at what are the overlaps between datasets, client overlaps, fragmentation of the industries, potential value that we can create for clients in those industries. The overall market size and a bunch of other things, and we’ll in the coming months approach this very methodically, very deliberately as we think about where and when we might want to expand beyond marketing services, but I will tell you that this is something I’m really excited about and as we talk about it within Acxiom, the biggest comment I get back from our associates is finally they are really excited that finally we’re thinking about doing more with our data than just improving marketing.

Yes. Let me take the last couple of questions. First on acquisitions, I’d say more of the same. If you think almost recent acquisition, acquisitions of Arbor and Circulate, I’ll say what’s terrific is the integration could not have gotten better. So far as Scott mentioned we've had over 50 new publisher integrations near and dear to my heart internationally, we better not in the short time since acquiring Arbor and Circulate we've already extended over 135 U.S.-based agreements internationally. That's real operating leverage plus the fact that we are now 100% integrated. So, we’re to look for acquisitions that fit within our culture and where we can drive real synergy. So I'd say more of more of the same, we’ll be looking to leverage the same things that we have in the past. On marketing data base, we do see a very stable business. We’ve got a great management team that is executing their strategy, there are going to be some quarters that are going to be down and quarters that are going to be up in a stable business. Now Q4 happened to be a quarter that was down. Q1 will be a quarter that will likely be down as well. I might add though for Q4 marketing data base was actually up where the weakness existed in Q4 was in our strategy and analytics consulting business but the marketing data base business was actually up for the quarter. And in Q1 we had a pretty tough comp lists and one time spend that we highlighted a year ago. So overall, got a great team leading the business, their strategy is sound, the business is stable doing the right things, but you are going to have some quarters that are going to be up and down.

If I can slip in just one follow up to tie together the two questions, Warren just to be clear is there anything in this fiscal year guidance for the potential to expand into different verticals in this year or is it fully at idea stage right now?

It’s fully at Idea stage.

Okay, great. Thank you.

Your next question comes from Kip Paulson with Cantor Fitzgerald. Your line is open

Hi, thanks for taking my questions. Just a couple from me, first given the slight topline be it in the fiscal fourth quarter and the nearly 60% LiveRamp product growth, the inline fiscal 2018 guide versus street estimates anyway seems a big conservative, what would need to happen to get adjusted revenue growth in the low teens year-on-year and what could [potentially way] growth down into the single digits. And then second question, could you just talk about your progress with IdentityLink for data owners and the availability of that data store, to what extent have you seen more data come online and maybe you could just talk a little bit about how this further differentiates the business? Thanks.

Yes Paul, I’ll go ahead and take the first one and then Scott maybe wants to jump in on the second one. Our guidance is very consistent with the way we’ve always given guidance which is we just call it right down the middle and our philosophy or practices have not changed a bit. What would take for us to be it’s all about execution. The great news across each of our segment is we have growth initiatives in place, we have plans in place and now what we need to do is execute on those plans. So if we can execute well and if things go our way, we’ll get to be if we can execute then we’ve got problems and we’ve got to go through and do some things to first correct and hopefully make up for it elsewhere. But in short, it’s one word and that’s about, it’s all about execution and taking advantage of the opportunities that the market is put in front of us.

And Kip on the data store question, if I were to take I think it was maybe Brad or Bill earlier asked what inning are we in to Warren. If you were to ask that similar question for Data Store, it’s the leadoff batter right now. It is very, very early. That said, we are making films from significant progress. For us to scale on data store we have to grow both sides simultaneously. So we need to constantly search the world for new data providers while also ensuring that more and more clients and platforms are injesting data procuring their data from the data store. Up from virtually zero on both measures a year ago, we are now just shy of 100 data store contributors and we are well over a 150 distribution partners or injestors. Most of them are in their very early stages of working with data store both from a supply and a demand side, but our success in attracting both publisher, both providers and buyers we feel pretty good about. That said, if you look at the overall revenue of data store, it’s not moving the needle yet amongst LiveRamp I think it’s for the year less than 10% and for the coming year I think that could be one of the things that could surprise us but it’s – we would have to make significant progress relative to where we are today and I think we’re still a year or two away from seeing that be a material contributor.

Hey Kip, one thing and Scott could weigh in on this too, but what another place where it’s literally a first batter is the definition of the old provider because what we are seeing is what first, how first parties are thinking about becoming providers. And even outside of the U.S. I can tell you in Europe there are some pretty big players that are really defining their role in the data world, and traditionally we’ve thought of them as first party clients that increasingly they are evaluating their place in the world of becoming data providers. So I’d concur a 100% with what Scott said, its first batter, first inning and the definitions are just going to continue to broaden.

All right. Great, very helpful. Thank you.

Your next question comes from Katelyn Young with William Blair. Your line is open.

Hi, good afternoon, thank you.

Hi Katelyn.

Hi, most of my questions are taken care of; I just wanted to follow up on the use case expansion that she mentioned earlier Scott from 1.2 to over 10 in the recent quarter. I know you mentioned a lot of initial to options with the Facebooks and Googles and I know there is a lot of use in the programmatic use cases. My question is, is there a common use case theme or area that clients are expanding into now recently beyond programmatic and if so what areas are you seeing from an optic perspective?

Yes I would say three areas. First off, I think you nailed it with search and programmatic hasn’t really started yet. We only announced that a couple of weeks ago but I think that could be a big use case for us, that’s number one. Number two, is a great expansion into torso publishers beyond just the mega walled gardens and that’s a real credit to Arbor and Circulate [Indiscernible] I mean they brought into LiveRamp a real great network of publishers that increasingly clients can activate with their data and the equivalent of activating a number of those torso publishers gives you the benefits of a walled garden. It’s the combination of reach and targeting efficacy. And then the third, but still small is things like addressable television where still very early stages of that but we continue to see more advertisers experiment with digital television typically by suppressing ads through addressable television as they are successful we hope that that will continue to scale in the years to come.

Great. Thank you very much.

There are no further questions at this time. I will now turn the call back over to Warren Jenson for closing remarks.

Well thank you operator and thanks to all of you on the call. Let me just wrap up the way I concluded my formal remarks today. FY 2017 was a milestone year for us. We’re pleased that we’ve been able to invest in some ground breaking new products and those products are changing the world of marketing. Our financial performance is showing the results. We believe that we are leaving fiscal 2017 in a position of real strategic strike. Two, it’s not just about FY 2017; it’s really about the trend lines. And those trend lines today are very, very clear. And then finally, everybody should rest assure we are not slowing down in fact, it’s now time for us to accelerate. Thanks so much for joining us today. We look forward to reporting on our results in the quarters ahead.

This concludes today’s conference call. You may now disconnect.