Lauren Dillard - Senior Director of Investor Relations Scott Howe - CEO Warren Jenson - CFO Travis May - President and General Manager of Connectivity Business.

Kip Paulson - Canton Fitzgerald Dan Salmon - BMO Capital Markets Brett Huff - Stephens Inc Bill Warmington - Wells Fargo Securities.

Good afternoon, ladies and gentlemen. And welcome to the Acxiom Fiscal 2017 Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time [Operator Instructions]. As a reminder, this conference call is being recorded.

I would now like to turn the call over to your host, Mrs. Lauren Dillard, Senior Director of Investor Relations..

Thank you, Abigail. Good afternoon and welcome. Thank you for joining us to discuss our fiscal 2016 second quarter results. With me today are Scott Howe, our CEO; Warren Jenson, our CFO; and Travis May, the President and General Manager of our Connectivity Business.

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 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 slide-deck posted on our Web site.

At this time, I will turn the call over to Scott Howe..

Thank you, Lauren. Good afternoon and thank you for joining us.

I'm pleased to report another solid quarter highlighted by three key themes; first, strong financial results, driven by continued top-line momentum; second, exciting product innovations, including the recent launch of LiveRamp IdentityLink; and finally, solid execution against our key growth initiatives. I like our business rhythm right now.

Each of our businesses is performing well, but has room for improvement. Each of them understands their risks and opportunities, and each is focused on better execution day-by-day. Notably, each business also has an opportunity to expand the breadth of how clients are using their products and services.

LiveRamp is building out new and different use-cases, and expanding its identity resolution services to new market segments. Audience Solutions continues to broaden the coverage of publishers and platforms that are ingesting Acxiom data to power targeted marketing.

And Marketing Services is focused on adding two its client roaster and expanding the ways in which marketers engage with Acxiom. I will now review each of our businesses in more detail, beginning with connectivity. Connectivity had an impressive quarter, and our results continue to demonstrate the network effects we are experiencing.

Despite headwinds from the first-party GMS transition, total revenue grew 49% and LiveRamp closed another strong bookings quarter. If you turn to slide three, I will update you on our key metrics for Q2. We signed dozens of connectivity deals in the second quarter, and added more than 40 new direct customers.

In total, our direct customer count grew to roughly 345. We generated approximately $33 million in revenue during the quarter, up 49% compared to prior year. And, we exited Q2 with a revenue run-rate of approximately $135 million, up from $120 million at the end of Q1 and up 50% year-over-year.

We continue to build out our partner network and added over 50 new integration partners in the second quarter. Equally, if not more importantly, we are broadening the use-cases we offer to our clients.

For example, during the quarter, we announced a new partnership with DialogTech to help marketers more accurately measure phone call conversions driven by display advertising. Our ultimate goal is to build-out the broadest and deepest coverage map of use-cases in the ecosystem.

And with more 400 partners part of this ecosystem today we are well on our way to achieving this. We expanded several existing partnerships during the quarter.

For example, we are now integrated with the recently launched DoubleClick conversions API enabling marketers to tie DoubleClick exposure data to offline activities, such as calls, store visits or transactions, for a more complete view of the customer journey.

Since DoubleClick is a clear market leader in online app serving, we hope that this use-case will introduce LiveRamp to an greater array of clients. And finally, I am pleased with the recent progress we are making in international.

We continue to build-out our match networks in both the UK and France, and at the same time, we are experiencing good traction with advertisers. We signed a handful of new clients during the quarter, including a top publisher in the UK and La Redoute, a leading online retailer in France.

While I am very pleased with our recent progress, perhaps the biggest highlight from the quarter was the launch of LiveRamp IdentityLink, which we formally announced last month.

IdentityLink is an identity resolution service that enables marketers and the companies that work with these marketers to create a unified view of the consumer and activate that understanding across the entire marketing ecosystem. This announcement marks the next step in our journey to power our world where all marketing is relevant.

Travis May will talk more about IdentityLink in a few minutes. But I am very, very excited about the opportunity ahead of us here. Switching gears now to our DaaS or Audience Solutions business. Audience Solutions again had a strong quarter, and the team continues to make good progress against the key initiatives we’ve laid out.

18 months ago, we shared a strategy for accelerating growth and reinvigorating Audience Solutions into a more modern, relevant, and efficient data-as-a-service business. At that time, our thesis was predicated on the belief that we had a strong foundation for growth, but needed to invest in three specific areas.

Number one, building-out of very skilled specialist data sales team to supplement our journalist marketing services sales force; number two, expanding distribution to capture demand from areas of the market where we hadn’t previously focused, like digital; and finally, number three, tightening our procurement and delivery approach to drive operational efficiencies.

Six quarters later, I am extremely pleased to report that our results are tracking ahead of expectations and our thesis remains valid. Audience Solutions revenue was up 9% in Q2, marking the fourth consecutive quarter of growth and margin expansion for this business.

We closed several important deals during the quarter, including a large multi-year renewal with a leading auto manufacturer and new deal with Claris Footwear and Coles. On a trailing 12-month basis, new bookings remain up more than 20% over the comparable period.

We continue to expand distribution to digital channels, and added 10 new data services providers in Q2. In addition, we recently announced the premier partnership with Adobe, allowing marketers to more easily access Acxiom data via the Adobe audience manager.

Also during the quarter, we expanded our existing relationships with Publicis to now include Zenith, Optimedia, Performics. These are in addition to the relationship already in place with Starcom and Mediavest Spark.

Today, our data is available to support targeted advertising at approximately 130 online and mobile publishers, television operators, and the ad-tech platforms. This is up from 50 a year ago. As usage of our data in the digital ecosystem expands, our digital data revenue also continues to grow.

During the quarter, digital data revenue was roughly $13 million, up over 100% year-over-year. And finally Audience Solutions margins continue to trend in the right direction, despite continued investments in sales and marketing.

As I mentioned on our last call, our biggest challenge for Audience Solutions will be to maintain and accelerate our turnaround. In order to sustain our trend-lines, we must remain focused on expanding distribution, and at the same time continue to invest in some of our more promising initiatives, like Acxiom Television.

While we are still in the very early innings of addressable TV, I am very excited about the longer-term opportunity here. Our Acxiom TV Audience Interconnect platform is now live at four of the five MVPDs. And we are on pace to power more than 250 targeted television campaigns this year, up nearly 100% year-over-year.

Finally, I'll discuss marketing services. I am pleased to share that we've successfully completed the sale of our Impact email business to Zeta Interactive on August 31st. As a reminder, proceeds from the sale will be used to fund our recently expanded share repurchase program.

During the quarter, our core marketing data base and consulting businesses grew modestly, but were more than offset by declines in Impact. We signed several key deals in Q2, including a new prospect database contract with Orchard Brands, and a large renewal with a leading global retailer.

In addition, we recently signed a new multi-year contract with a long-time financial services client to help power its precision targeting analytics capabilities.

This exciting new solution will allow this clients to bring together its CRM and transaction data, and third-party data, including Acxiom info-base, to create very specific audiences that can be leveraged by our client and network of partners. In summary, we've made solid progress in marketing services in recent quarters.

Our biggest challenge in this business is sustaining growth while also delivering margin improvements. I like what our marketing services leadership is doing to get out ahead of this. We have a lot of work to do in the back-half of the year to set this business up for growth in fiscal ’18 and beyond. With that, thank you again for joining us today.

I'm very pleased with our execution in the second quarter and the year-to-date. Given the recent progress, I remain more optimistic than even about our future, and look forward to updating you on our continued progress in the quarters ahead. I will now turn the call over for a special treat with Travis May..

Thanks, Scott, and good afternoon everyone. I'm excited to talk to you today about our launch of IdentityLink. Simply put, our launch of IdentityLink is the biggest that we've made since we founded the LiveRamp business, and is best to power for the future of marketing.

Marketing today is exceptionally fragmented, and a typical retail customer journey has been driven by specific catalog visit the Web site for the retailer, see a search ad, see a mobile ad, a Facebook ad, and a programmatic display ad, see a TV ad, and finally visit the store and purchase the product.

Even within digital, the number of marketing applications have exploded from just over 2,050 platforms in 2011 to over 3,500 platforms in 2016. This explosion of data, channels and mediums, has resulted in increasing complexity and decreasing consistency in the customer experience. IdentityLink solves for this complexity.

It enables our clients to resolve the hundreds of different identifiers for consumers used across all these touch-points to a real person in priority case way, and it activates that understanding across the marketing ecosystem.

If you’ll turn to next slide, this is a great example of what our market specific clients already leveraging the capabilities of IdentityLink. In this example, our client first send PRM data to LiveRamp.

We mask that data to IdentityLink and on-board it to several digital marketing platforms that the client works with, its DSP, its GMP, as well as premium publishers like Pinterest and Snapchat. Post campaign impressive data is collected by DoubleClick and Adobe and sent to LiveRamp.

Within that, the impression logs to IdentityLink and send the data back to other clients’ in-house analytics team. At the same time, Adobe is also sending data back to LiveRamp and that data is heading back to IdentityLink and distributed to help build audiences for its connected TV product.

As you can see, there are several flows of data, all leveraging IdentityLink to power omni-channel people-based marketing and measurement. Finally, while this first focus has been on brands, with the launch of IdentityLink, we now see our ecosystem as five constituencies; brands, agencies, marketing applications, publishers, and data providers.

Each of these five constituencies benefits from people-based marketing capabilities of being able to connect data across the entire ecosystem. These products provided revenue opportunities in themselves, but also enhance the value we offer to brand, strengthening our network effect, and creating additional stickiness.

For example, we announced IdentityLink for marketing applications last week, and already have several platforms using the service, including Adobe, comScore, and The Trade Desk. IdentityLink gives marketing applications the ability to run and measure omni-channel people-based marketing campaigns as opposed to solely cookie-based.

This makes every platform we work with better, but also improves the experience for the brands that work with us. You will also hear more in the coming months about our lawsuit of IdentityLink for agencies, IdentityLink for publishers, and IdentityLink for data providers.

The Important takeaway here is that this is the same product since the year towards the different needs and different audiences. Brands leverage IdentityLink to execute people-based marketing. Agencies, platforms, data owners, and publishers, leverage IdentityLink to provide better access to people-based marketing to brand.

And in doing so makes much more data available to brands. The more data we’ve resolved on behalf of brands, the more value we create and capture. Brands achieve higher ROI on the targeting and personalization efforts and this ultimately increases the budgets that are available to their partners.

Basically, this is a network effect business where everyone wins. In terms of overall revenue opportunity, we view the launch of IdentityLink as significantly expanding our total addressable market, and estimate the TAM for identity resolution and data activation to be in the range of $10 billion by 2020.

We would also expect that as we layered on new and different use-cases, our team will continue to grow. With that, thank you for having me online today. We at LiveRamp are very excited about the launch of IdentityLink, and the overall opportunity it represents. Warren, I would now turn the call to you..

Great, and thanks Travis, and good afternoon everyone. In my portion of the call today, I'd like to first run through the quarter, then talk about each of our segments, and finally provide an update on our full-year outlook. A few highlights from the quarter.

First, this was another strong quarter for the Company, and the trend-line continues to move in the right direction. Revenue was up 5% as reported and up 11% adjusted for items. Excluding items, total revenues increased 5% or more in six of the last nine quarters, and also in each of the last four.

I'm also pleased to share that in the quarter revenue increased in each of our segments. Our adjusted gross margin has improved in each of the last nine quarters, and was up more than 300 basis-points in Q2. And in nine of the last 10 quarters, our adjusted EBITDA was up on average double digits year-over-year.

Both Connectivity and Audience Solutions continue to demonstrate the power of their respective models. Connectivity revenue was up 49% and LiveRamp products revenue was up 68%. Audience Solutions revenue grew 9% in total and digital data revenue was up over 100% again this quarter. Our presence in the ecosystem also continues to expand.

Today, our data products are available at over 130 digital destinations, up from 50 a year ago. And LiveRamp's network is now well in excess of 400 integration partners. International, International had another nice quarter.

In fact excluding items, revenue increased 17%, driven by strong double-digit growth in Europe, and specifically in the UK and Germany. In summary, more work ahead, but this quarter marks another strong data point in the formation of a meaningful trend. Now, I'll discuss our second quarter results in more detail, starting with slide four.

Our summary financial results, first our GAAP results; total revenue was up approximately 5%; gross profit was $97 million, up 13%; and gross margins improved 320 basis-points to 44.7%. Operating income for the quarter was $7 million compared to a loss of $2 million in the prior period.

And GAAP diluted earnings per share were $0.09 in the quarter compared to a loss per share of $0.02. Next, our adjusted results. Revenue adjusted for items was up 11%. Adjusted gross profit was $102 million, up 13%, and gross margin improved 360 basis-points to 47.1%.

Excluding items, operating income was $25 million, up 34% year-over-year, and earnings-per share were $0.18 as compared to $0.14 a year ago. In Q2, our tax rate was 39%.

Excluded items in the quarter totaled $18 million, including stock-based comp of $12 million, intangible asset amortization of $4 million, restructuring charges of $1 million, and separation and transformation related spend of $1 million. Further, we have excluded $1 million gain on the sale of the Impact, and the related tax benefit of $4 million.

Slide five highlights our revenue results as reported and slide six adjust for the sale of Acxiom Impact; the Brazil shutdown; the Australia transition; and FX. In the U.S., revenue, as reported, was up 6%. Revenue adjusted for items was up 11%, driven by growth in Connectivity and Audience Solutions. International revenue, as reported, was down 5%.

However, revenue adjusted for items was up 17%, driven by strong growth in Europe. Now, turning to slides seven through nine, our segment results; first, Marketing Services. Revenue, as reported, was down 6%. Revenue associated with marketing database and consulting grew slightly, but was more than offset by the sales of our Acxiom Impact.

Globally, gross margins remained roughly flat. Segment income was $20 million, up 11% and segment margin improved to 18.8%. This improvement was primarily driven by cost savings in the U.S. Adjusted EBITDA was $28 million, up 9% year-over-year despite headwinds from Impact.

As a reminder, in the appendix of our slide-deck, we’ve included a historical view of both marketing services and the total Company, excluding Impact. Slide eight, Audience Solutions. For the quarter, global revenue was up 9%, representing the fourth consecutive quarter of growth for this business.

Inside of Audience Solutions, digital data revenue was approximately $13 million, up over 100% compared to Q2 of last year. As I mentioned, our data products are now available at over 130 digital destinations. While we are pleased with the strength of our digital revenues, we ask everyone to remember a couple of things.

The importance of data in driving targeted advertising is only going to increase. And we expect the usage of our data in the digital ecosystem to continue to expand. However, at the same time, as our publisher and platform relationships mature, our business model will evolve.

Some royalty-based arrangements will turn into license fees, and some publishers will simply chose to go in alone. Therefore, while the trend is very positive no one should assume that our long-term growth in our digital revenues will be linear or uninterrupted.

Globally, gross margin improved by more than 600 basis-points to 61.1%, driven by revenue mix and operational cost savings. Segment income was $30 million, up 19% and segment margin improved to 38.2%. Adjusted EBITDA was $35 million, up 15% compared to Q2 of last year. Slide nine, Connectivity. Connectivity had another strong quarter.

Total revenue was $33 million, up 49% year-over-year. Inside of this segment, LiveRamp products revenue grew 68%, but was offset by anticipated declines in first-party GMS. During the quarter, gross margin declined slightly to 60% due to higher hosting expenses and continued match-pool of investment. A few data points, our mobile match pool in the U.S.

is now in excess of 19 million deterministic matches, and we made significant progress in building on our match pools in both the UK and France. Equally, if not more importantly, we continue to built-out our Smart Reach network, and now have more than 50 clients signed up.

Despite our investments, segment income improved to $2 million and adjusted EBITDA was $3 million, up from $1 million a year ago. Year-to-date, adjusted EBITDA is $5 million. Next, please turn to slide 10. For the quarter, operating cash flow was $35 million compared to $21 million in the prior year period.

This improvement was driven by higher earnings and positive working capital changes. Free cash flow to equity improved to $30 million, and includes $17 million of net proceeds, associated with the sale of Acxiom Impact. On a trailing 12-month basis, both operating cash flow and free cash flow to equity, are up strong double-digits. Now, onto guidance.

First, our guidance excludes items, including non-cash stock-comp, purchase intangible asset amortization, restructuring and impairment charges, and separation and transformation costs. Given the strength of our year-to-date performance, we are tightening our ranges.

We now expect total revenue to be in the range $860 million to $870 million, GAAP EPS to be approximately $0.12, and adjusted EPS to be approximately $0.60. Included in our full-year revenue guidance is five months of actual, or approximately $20 million from our disposed Impact business. Before closing, a few additional comments.

In connectivity, we continue to expect segment revenue growth to be between 40% and 45%, and LiveRamp product revenue to be between 55% and 60%. We expect CapEx to be roughly $65 million for the year or flat compared to FY16. We continue to expect one-time expenses to be as much as $10 million.

As a reminder, this spend is associated with the further separation of our businesses to maintain clear lines of sight and optionality. And finally, for tax rate, we recommend you continue to use 40%.

In summary, we had another solid quarter and remained committed to our goals; double-down on connectivity and digital data in order to drive sustained high growth and global leadership in key markets; create value through performance improvements, in both Marketing Services and Audience Solutions; carefully manage our cash and maintain financial flexibility; and finally, do as we have done toward each of the last four years, steadily return capital to our shareholders.

With that, thank you again for joining us today. We look forward to updating you in the quarters ahead. Operator, we will now open the call to questions..

Thank you [Operator Instructions]. Our first question comes from Kip Paulson with Canton Fitzgerald. Your line is open..

First, Audience Solutions revenue continued to accelerate the quarter, now positive 8.9% growth. Any update on your $50 million digital revenue target for fiscal ’17? And then second, the Audience Solutions gross margins actually picked-up materially in the quarter, already up to 61% versus 60% to 65%, I believe you’re targeting for the segment.

Is long-term gross margin target now closer to connectivity 70%? Thank you..

I’d be happy. And then Scott may want to jump-in and provide some color, and I’ll bounce around each of your questions. Our long-term goal remains gross margins in the 60% to 65%. I think it's important that we establish a framework of being able to demonstrate that before we want to think about raising our long-term guidance.

Digital revenue, pretty much right on track, I mean we don’t intend to give that as a routine guidance measure. But we’re right in that for the year..

Yes. And then in terms of just overall revenue tracking, I mean, hats-off to Rick Ervin and his entire team. I mean, they've done a really nice job of transforming that business. And they've done it in a couple of ways.

One is by freshening the data sets such that even our existing legacy manufactured data has greater appeal, but more importantly by tapping into new distribution channels. And so the digital data growth represents one aspect of that.

We're not going to be satisfied until if you were to look at say the media metrics top 100 publishers, we want every single online publisher, every single cable provider, every single platform to have APIs into our data, such that you can purchase those audiences or purchase that media and then audience basis using data as opposed to just on a broadcast basis.

That's really been the main focus of that business over the last year, and we expect that continuing that focus can unlock future growth for us as well..

And then just one more, if I could, as far as connections per customers, I didn’t hear that in the prepared remarks this time around. But how many were there, and what was the growth rate year-on-year? Thanks a lot guys, and congrats on the quarter..

Yes, so let me just make sure I have the right number. So this is connections per customer. So for LiveRamp customers, I think what I had said last quarter, and correct me if I'm wrong here.

A year ago, we were at about 1.2 average connections and that was across, say the 100 direct advertisers that we had greatest line of sight to, and those are the direct advertisers through LiveRamp. And typically what was happening there is with someone activating Facebook with their typical first-use case.

Now, the latest number that we've pulled, and so this might be a couple of months old here, is a little bit north of eight. And what's good about that number is the new activations are still just doing one or two.

And so what it suggests is that without a whole lot of push, because we haven’t really been accelerating, hiring aggressively behind our clients service business or really making this a point of emphasis. Almost organically, folks have decided that their targeting efforts work and then they've expanded.

And so, not on a big bully kind of grown up in technology businesses and seen the classic S-curve all my life.

And so going from one to eight is fantastic, but we think overtime, there is even greater jump to be made, we think on average a Fortune 1000 advertiser has 300 to 500 different partners when you add-up all their different cable providers, their online publishers, their email programs, their site personalization and there is the call centers.

And so what that would suggest is we are still in the very early stages of expanding share of wallet with our clients. So, we think that gives us some room for growth there overtime..

Thank you. Our next question comes from Dan Salmon with BMO Capital Markets. Your line is open..

One for Travis and then one for Scott. Travis it sounds like product has been very much in focus for you lately as you get IdentityLink rolled out and there is a number of stages to go still for that. But as you roll at the top of the Company, I am not so sure you’re keeping a close eye on LiveRamp’s international roll-out as well.

Scott mentioned a couple of new wins in the Western Europe along the way.

But just if you could give us a quick update on how you see the next 12 months progressing as you begin to move, expand the geographic footprint of your business? And then for Scott, you’ve always maintained that return of capital to shareholders as Warren just reiterated is important.

But always willing to remain opportunistic in M&A versus three months ago, and any change, just -- and what I’m trying to get at is, as macro conditions at all I am sure tomorrow will sell the lot of macro or at least one element of macro uncertainty.

But just curious on how you feel that the macro these days and your general uses of capital?.

I’ll start and answer the second question, and then give Travis a chance. And just warn him that Dan is very clearly asking you to give guidance for next year. So talk about that in broad brush terms, otherwise Warren will hit you under the table. So in terms of M&A, Dan, we’re always looking.

And as I’ve always said, we’re not going to comment on, specifically, what we’re doing, either from an acquisition perspective or from a portfolio management perspective. Other than to say that if there are tires to be kicked, we will kick them.

That said, I will also say that when we see an opportunity that makes sense for our shareholders, and make sense to get to kind of the strategic end-game, we’ll be very aggressive. And the one example of that that you’ve seen in the last five years with us was LiveRamp.

And so one of the things as we think about the connectivity business and its growth trajectory, if we saw similar opportunities where we could rapidly close the product gap, extend our coverage through a new set of use cases, or expanding our coverage internationally, those would be opportunities that would in intriguing for us..

And then adding in for international, the way I think about it is we’re following our key customers and our key partners into the markets that they care about. We’re going to keep investing aggressively to build-out the match rates and give them a product that works in those markets..

And then I would just add on top up what Travis said, internationally. We have just an incredibly strong relationship with the folks at LiveRamp. We have people come internationally, spend time here, train, learn the technology.

And then number two, between Travis [indiscernible] and others is we’re really porting our technology over the course of this year and next that we can scale much more rapidly internationally as we move going forward..

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

One question each on LiveRamp or Connectivity and then one on Audience Solutions. On LiveRamp and Connectivity, and I don’t know if this is one for you Travis or not. But it seems like the measure of the day is always match rates, and what they are and what those mean.

What I found is that match rates definition vary a lot, can you tell us a little bit about how you guys think about it, how you think you fair? And then maybe give us a little insight into our match rates, probabilistic or deterministic, and do you guys win and won, do you have more depth than one versus the other?.

Sure. So we’re totally focused deterministic, which is different than a lot of the other match rates you might hear out there. We look at a number of different match rates, and ultimately we care about the number of people that we can reach any channel.

We think about, from an e-mail address or from a name and address; how many devices can you reach, how many mobile devices can you reach, how many users can you reach, in different walk gardens, so there are end up being lots of different metrics based on what type of data the customer has and where the customers wants to be able to address their the audience.

In each of those areas, I think we have a pretty wide gap between us and then Acxiom’s competitors. And we’re pretty comfortable with the investments we’ve been making, and we’ll continue to make aggressive investments and making sure that we have the best match rates in the industry..

Just to rip-off that real quickly, if I might. For those of you on the call, if you haven’t read Forster’s report, it was released two weeks ago on the identity resolution. I really think it’s must reading, because it talks about the concept of match rates probabilistic versus deterministic, and the factor for building great identity resolution.

It mentions us but it mentions other companies in the space as well. And it’s really good background education. The second thing I would say is while there are some nuanced views about whether deterministic or probabilistic are better, I mean there are those would say probabilistic is just fine.

And I would tell you that we generally disagree with that. And we think deterministic is far superior for a couple of reasons; number one is it generate a much better customer experience.

And so the example I sometimes give, because I still look from a client who operates a theme park, if he would talk about bringing their daughter to the theme park and through the RFID reader, someone could say, hey Lauren, which is my daughter’s name, your favorite princesses is just down the street, and it's sleeping beauty and don’t you want to go talk to her.

And for my daughter, that would make an incredible impact. And I would pay you almost any amount of money to give her that customer experience. However, if they greeted her at the theme park and said, hello Sally, your favorite princess, Jasmine, is down the street. It would destroy her experience.

And so, you can imagine if you get it wrong, it can have a lasting brand impact on consumers. In addition, I can say with fair certainty based on the conversations I have about in the regulatory space that regardless of who wins the election tomorrow, heightened regulations are in our future for data.

And if you can get HIPAA or COPPA wrong, because of bad match rates, the damages start 2,500 bucks and up in a instance. And so that adds up really, really quickly and it is super-important that if you want to stay within the law, you better know exactly how you’re matching, which I think plays to all those strength we built over the last 40 years..

That's helpful, and then second question was on Audience Solutions. There is a lot of data providers out there, I think one of the benefits you guys have is you kind of resolved it down using your various tools to one person better than others.

But is there anything else about your data that as you distributed to more people that's going to keep it more unique than the other competitors out there? I mean there are some really good well funded smart competitors out there. How do you keep differentiating yourself? Thank you..

Yes, it's a great question Brett. And I think you’re going to see a bifurcation. And the good news is that we’re going to win on both of these legs of the three.

And so on the one hand, I think you will see more commoditization of classic manufactured data, because as the Internet of Things comes online and more elements are available, that means more substitutes for traditional data-sets are available as well.

And so to the extent that you could offer in the form of a data-store, or one shop data-store, anything that a client would ever want, so they can create their own data models, the raw data sources. And instead of building it for them, allow them to build it, we can take a small fee on that.

And so, increasingly, we don’t want to just be manufactured data, we want to be the world's source for all data. And we're doing that by connecting all these data suppliers into our pipes, that's LiveRamp’s tasks. And so we think we will win their overtime.

But then on the other end of the spectrum, there are increasingly an array of customers that are saying we have to be smart about how we cook our data, and we don’t have those skill sets internally to be build the next credit model, to build the next insurance model, to build the next marketing model.

And so, we need better curation on top of the overwhelming array of data that's available out there.

And so Rick and his team at Audience Solutions are really focused on building that curation layer and all by the way, because he is building that on top of a AbiliTec and an info based ID, it means that he can combine multiple data-sets together and build more enduring models across channels than potentially other companies can.

So once again, a commoditization where we think we can play and then also an explosion in curation where we think we can play..

Thank you [Operator Instructions]. Our next question comes from Bill Warmington with Wells Fargo Securities. Your line is open..

A question for you on LiveRamp, and Fast Lane, I know that a couple of years ago you used to take two to three weeks to do the on-boarding. A year ago, maybe a five to seven days, a few months ago it's probably one to three days, and now you've gotten it down to an hour.

And I wanted to ask what does this mean in terms of revenue with existing customers and also new use cases?.

I think it allows a number of new use cases where the data can flow more in a cycle. So immediately measurement data in store can be used to optimize the campaign that can very quickly change the results and change the actual group that’s been targeted.

And then a new campaign to be built based on the campaign -- based on the target audience that should be reached. So we think that by getting it closer and closer real-time, we’ll able to enable a real-time optimization of the campaign itself. And ultimately the campaigns become much more targeted..

And then a question for us on connectivity margins, they came in stronger than our expectations.

And despite the investments that you’re making in IdentityLink, just wanted to ask what was happening there, and to get some thoughts in terms of where we should think those margins, where we would expect those margins to be for the rest of the year?.

A couple of things, Bill, I would say, headline number one is, I think we’re living out to what we said we would do, which is just we’re investing. But yes, it's not going deep into the last category where we do that.

So, we’ve got a lot of initiatives going on at LiveRamp and in connectivity around our match rates, our mobile match pool, around scaling, around international investments. So we are investing. I think we’re going to be slightly ahead of breakeven for the year..

Thank you. I'm showing no further questions. I would like to turn the call back to Warren Jenson for closing remarks..

Great. Well, thank you everybody. And Travis, it's great to having you on the call today. One thing that I would iterate that Scott didn’t mentioned. If you haven’t gone to LiveRamp and walk-through the demo of IdentityLink, you should read the first two reports, and go do that, it’s a great education.

I think you will see that with literally every quarter and iteration of our model that, just as Travis said, our opportunity just gets larger. Thank you all for joining us. And we look forward to talking to you in the next couple of days. Thanks..

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day..