Good afternoon, ladies and gentlemen, and welcome to the Acxiom Fiscal 2019 First Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer-session. [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, Head of Investor Relations.

Thank you, operator. Good afternoon and welcome. Thank you for joining us to discuss our fiscal 2019 first 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 and 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'll turn the call over to Scott Howe.

Thanks, Lauren. Good afternoon and thanks for joining us. This is an exciting time for the company and we are very pleased to report another solid quarter highlighted by strong top line growth, expanding margins, and continued execution across all areas of the business. During my portion of today's call, I'll provide a brief update on the AMS transaction, discuss our first quarter results to the high level and update you on our various growth initiatives inside LiveRamp. Warren will then walk through our results and outlook in more detail. Early last month, we entered into a definitive agreement to sell our Acxiom Marketing Solutions business to Interpublic Group for $2.3 billion in cash. To reiterate what I said at announcement, we believe this deal represents a big win for all constituents. The entire industry gains a new powerhouse for data-driven marketing solutions. Clients benefit from greater scale and an even broader set of solution offerings. And associates get the chance to be part of a much larger organization with ample opportunities for growth. LiveRamp sees a massive opportunity to execute on its vision, attract top talent, and have a much bigger impact on how consumers experience the world. And finally, shareholders receive certain and immediate value. Client reaction following the announcement has been universally positive, and the market is excited by and eager for the combined solutions IPG and AMS will be able to offer. The transaction remains on track to close early in our third fiscal quarter at which point we will rebrand and emerge as LiveRamp, a best-in-class SaaS platform. Shifting gears now to the quarter, the first quarter represented a strong start to the year. Total company revenue was up 7% as reported and up 13% adjusted for the Facebook impact. Excluding Facebook, revenue grew in…

Thanks, Scott, and good afternoon, everyone. As we prepared for today's call, we did so with mixed emotions. This is likely the last quarter that we will report consolidated results for both AMS and LiveRamp as we are well down the road with the sale and final separation of AMS. We have already filed our proxy and expect the definitive proxy will be released within the next few weeks. We have also received early HSR clearance. It's highly likely that the AMS transaction will be closed ahead of our next quarterly earnings call. At the same time, we're incredibly proud of where we are today and the progress we have made over the last six plus years. Acxiom is a transformed company and an industry leader. AMS is a healthy business with the unique set of assets, people, and skills and we believe it will be a great addition to the IPG family. LiveRamp has created and now leads an entirely new category. We are the middleware which enables powerful customer experiences by connecting data with devices and people. What we do is fundamental to the next generation of the customer experience. Our company's performance speaks for itself. Consider that we just finished what is arguably the strongest growth quarter in a long, long time. Excluding Facebook, our revenue was up 13%, AMS up 5%, and LiveRamp up 44%. Our gross margin has now settled in a rarified zone. In each of the last seven quarters, our gross margin has been at least 50%. Our operating margin is now comfortably in double-digit. In fact, at 13%, this was a record for any first quarter. And finally, our EBITDA margin is now comfortably in the high-teens. And for AMS, it's comfortably in the mid-30s. This strong performance has enabled us to…

[Operator Instructions] Your first question comes from the line of Dan Salmon from BMO Capital Markets. Your line is open.

A lot of detail there on all the opportunities for LiveRamp, all the horizons and whatnot and I think you touched on a lot of different questions that I had there. So maybe I'll switch and just say we've been focused obviously on separation of assets lately. But LiveRamp has been acquisitive in the past and maybe, Scott, would just love to hear your thoughts. I'm sure you're not going to identify the areas that you're potentially looking at, but just how you see the market in general out there and whether there may be opportunities for more acquisitions for LiveRamp. And then just second, we've gotten through GDPR or at least or we're starting to deal with it properly as enforcement in place. But there's a lot of other pieces of legislation out there, ePrivacy in Europe, California, you guys sort of invest more time in D.C. and other regulatory jurisdictions as much as anyone else. Would love to hear if there's anything you're seeing on the horizon you think is different or unexpected in some of the pieces of legislation cover?

Sure, Dan. It's Scott, and I'll handle both questions here. So first off, on the acquisition front, we really like what's going on at LiveRamp right now. We feel like we have an open road in front of us and we have a ton of levers to pull to fuel growth, both near term and also longer term. So first and foremost, our focus is on execution of the opportunities that we already have on our plate that we're so enthusiastic about. That said, as we have for the last seven years, we will always kick the tires of anything that's interesting. I think our track record somewhat speaks for itself because in seven years, we've looked at hundreds of different things and we've really only pursued three sizable acquisitions. In every case, number one, they were incredibly strategic. We felt like when we made those acquisitions whether it's LiveRamp, Arbor, or Circulate, it added important capabilities that catalyzed things we were already doing. And second, always with an eye towards what's the best use of shareholder capital. And in hindsight, even though at the time those looked like pricey deals, very quickly, we believe the economics were borne out. So I don't think you'll see any shift in our philosophy. We intend to be efficient stewards of capital but also very, very strategic. On the legislation front, you're right in highlighting some of the recent things. We felt like we were pretty well prepared for GDPR. I think the one thing that we see on the horizon that might be new is kind of an explosion or potential explosion of activity at the state front. And so you highlighted what's happened in California. And I wouldn't be surprised to see, come November, a half a dozen or more additional states adopt similar legislation. Our belief is that complexity is wind at our back. The more complexity that exists in the regulatory and privacy landscape, the more difficult it is for any company to choose to go it alone. It becomes really important for everyone in the industry to partner with companies like us that think about privacy and regulation all the time across all of our clients and partners. As that progresses, we think that's going to be an opportunity for us to build privacy into our products and commercialize privacy and regulation over time in our business.

And your next question comes from the line of Brett Huff from Stephens. [Operator Instructions] Go ahead. Your line is open.

Question on the use cases, I think it went up to 13%. And if I recall, it was a little bit below that for several quarters. And I think one of the things you would often say is that with many new logos, those new logos come on at a lower number of use cases. So it was difficult to kind of get over the hump on that kind of low 11%, 12% range. What changed this quarter that got us up a little bit? Was it -- you still won a bunch of logos, but is there a change going on? Did the existing clients do more use cases or was there something else?

Yes. Well, I think two things. And first off, you're right. It has been increasing steadily. I think the first time we shared that statistic it was, like, literally 1.2 on average and that was a couple of years ago and it kind of gone up by one or two use cases every quarter, so kind of a slow steady march. I think a couple of things have happened. One is we've added some pretty exciting new use cases. I will tell you I am really, really excited about what we're doing in the advanced television space. Television is still -- yet most people don't buy it utilizing data. However, if you think about addressable TV, over-the-top television or linear television that's data-driven, those three segments, while small, each one of them is less than a couple of billion dollars today, represent some of the most fastest growing media segments across any tactics. And we're right in the middle of all three of those. In fact, I think we're the only player in the space who offers all three of those capabilities, all three of the ways that advertisers and agencies increasingly want to buy. So that's one. A second thing that I mentioned, we've been talking for a while about people based search, that's continued to grow primarily through Google today. But now that we are also launching Bing which -- I come from the Bing world that launched under -- I was part of the team that launched that back at Microsoft. They have a 20% share now. And so for every advertiser that's buying search whether they're buying Google or want to extend that to Bing, we have the use case that satisfies their full suite of needs. So that's another really neat one. So we got a lot of those things going on. And then the other thing that we've done is you've heard me talk about evangelization for a while. And so under the leadership of a woman named Laura Desmond, Laura used to be the CEO of Starcom and now she's working with us and really an advisory capacity. But she's built up this evangelization team under her leadership and it's still small but they're going out and they're teaching clients what to do with LiveRamp. And so marketing is nothing if not a need to industry as something works then you do more of it and other people copy. And so I think this evangelization should pay dividends for us in the quarters to come.

And then, Warren, can you just kind of go through again for me the point you're making about, the slide that you gave us kind of looking forward on the allocation of that overhead? Can you just go through that again for me? I think I missed some of it.

I'd be happy to. And just for frame of reference for everybody else on the call, what Brett's referring to is disc ops accounting. So the presentation which we shared with you is also found in our proxy. And again, I'm going to repeat a little bit of what I said in our formal remarks. When you do disc ops accounting and you have obviously any cost that is directly associated with the discontinued operations or in this case AMS, goes to AMS, if the cost has a shared benefit meaning some of the benefit in our case would flow to AMS and some of it would flow to LiveRamp, that goes to continuing ops. So the first point that we made of the $100 million of overhead, $58 million of that went to -- went into continuing operations. When we think about our go-forward model, we don't think that -- particularly when you look as a percentage of revenue, that those costs are representative of our long-term model or our performance as we move ahead. Now, what we would tell you are a few things, just to add a little additional color, Brett, is when we think about FY 2019, in particular when you think about expenses for continuing ops or for LiveRamp, expect that they're going to be a little bit lumpy and a little bit messy. So for example, let me talk about G&A. Well, over the course of the coming months and quarters, we're going to be building out a new corporate for LiveRamp. We have transition agreements that are in place as between IPG and Acxiom that go back and forth. We'll be terminating some comp arrangements given the separation and some of this lumpiness, honestly, will be mostly in Q2. The other thing that I'd mention just on the cost side is expect a little bit of pressure on gross margin as we'll now be bringing the AbiliTec cost into LiveRamp. And then obviously, starting in the third quarter presuming an early close, we'll have considerable levels of interest income. So in short, the next few quarters are going to be quarters of transition. What we are focused on doing is creating operational stability during these months and then making sure that as we move into FY 2020 that we deliver a strong performance both on the top and the bottom line.

Your next question comes from the line of Adam Klauber from William Blair. Your line is open.

Just following up on one or two factors. Scott, I know you've talked a lot about addressable TV and it seems like a big opportunity. Could you give us any just size of revenue over a couple of years, how big that opportunity be? Even just a band of revenue just to give us some idea.

Yes. For us, I mean we're still growing off a fairly small base here but it's growing faster than our overall business. And while today is not the time for guidance, I mean we'll do that in the coming months at our Analyst Day, what I would tell you is that as we look at this market, what we really focus in on is the $70 billion, $80 billion overall U.S. television spend as the stake in the ground and what percentage of that can actually be data enabled. Today, it's 5% at most -- certainly less than 10%. It's probably closer to 5%. There's no reason that that percentage in a decade's time shouldn't be well in excess of 70%, 80%. It's how clients want to buy. And there are now a whole host of clients who have cut their teeth in digital advertising. They're experienced with people-based marketing and they're saying, wait a minute, if I can capture that kind of value doing data-driven personalization on digital tactics, why can't I do that on the biggest element of my media spend in television. And so we think that there is a lot of pent up demand. Quite frankly, we think we're in a really good position to capture that, considering we play across all three of the big levers in video where data will be important and our ability to capture that is predicated only on our ability to execute over the next couple of years.

Okay. And then as far as international revenue GDPR, I think you gave a good description of what's going on. So with all that back and forth by the end of the year, and again international grew which is a good sign, but by the end of the year or is it next year, do you think that growth will maybe normalize to what we're seeing before?

We would continue to expect strong growth internationally. So as Scott mentioned in the quarter, we were up over 50% excluding Facebook. We believe there is a lot of opportunity internationally and opportunities for every one of our growth initiatives. So we're looking for international to be accretive to our growth rate for the foreseeable future.

And we have no further questions. So I will turn the call over to Warren Jenson for closing remarks.

Terrific. Well, thank you, operator, and thanks, everyone, for joining us today. We're going to wrap up our call with just four quick thoughts that we believe really summarize our messages today in our call. First of all, the AMS transaction is on track for an early Q3 close. Secondly, we want to reiterate that our guidance is reconfirmed and, in fact, our guidance is de-risked for the year. FY 2019 will be a year of transition. So again, we would expect in the back part of this year from continuing operations expect some lumpiness. But at the bottom line, and finally, we are committed to building a strong platform for growth in FY 2020 both on the top and the bottom line. Thanks, everyone, for joining us. We look forward to talking later on today and tomorrow.

And this concludes today's conference call. You may now disconnect.