 | |
- close
- close
|
|
Topic
Top news source/blog that we're missing
Why do you recommend this news source?
|
||
WIKI ANALYSIS
Acxiom Corporation (NASDAQ:ACXM) is a data management and IT outsourcing company, earning revenue of $1.38 billion in fiscal 2008. Acxiom's products and services help clients such as Bank of America (BAC), General Electric Company (GE), and J P Morgan Chase (JPM) organize, manage, and protect their data. Acxiom competes with companies like Dun & Bradstreet (DNB), Harte-Hanks (HHS), and Experian Americas in the marketing data services and products industry.
In 2007, an industry-wide 50% decrease in the value of IT outsourcing contracts resulted in lower demand for Acxiom's outsourcing services.[1] At the same time, a key customer decided not to renew expiring contracts, leading to a slight decrease in Acxiom's fiscal 2008 revenue.[2] On the other hand, the loss of an estimated 221 million private records in the U.S. between 2005 and 2008 increases the demand for Acxiom's data management and protection products.[3] Additionally, the weak U.S. dollar added $6.9 million to Acxiom's international sales in 2008.[4]
Business Segments
Information Services (45%)
Information Services accounted for 45% of the Acxiom's FY2008 revenue. This segment creates customer relationship management (CRM) software and data management systems that help clients organize data and protect it from theft or loss. Acxiom tailors all of its products to the specific industries in which its clients operate. Information Services serves clients in the retail and consumer goods, credit card, automotive, and retail banking industries.[6]
Information Products (27%)
Information Products brought in 27% of the company's 2008 revenue. The segment offers products such as InfoBase-X, a marketing information database that contains over 40 billion data entries and has info on almost every household in the U.S.[7] Axciom gathers data for its Information Products segment from the public domain (phone books, etc.) as well as from its customers websites and databases.[8] The segment's products are commonly used to assemble mailing lists and match online consumers to advertisers.[9]
Infrastructure Management (28%)
Infrastructure Management accounted for 28% of Acxiom's 2008 revenue. Infrastructure Management helps clients organize their IT departments by providing IT outsourcing and consulting services. This segment's services include server outsourcing and desktop virtualization.[10]
Business Financials
Acxiom Revenue, Operating Income, and Net Income[12] ($ in millions)
| Year ending March 31 | 2008 | 2007 | 2006 |
| Information Services | 741 | 728 | 697 |
| Information Products | 431 | 415 | 385 |
| Infrastructure Management | 447 | 476 | 474 |
| Eliminations | -236 | -229 | -228 |
| Total Revenues | 1,384 | 1,391 | 1,329 |
| Operating Income | 40 | 154 | 127 |
| Net Income | -7.78 | 67.87 | 61.77 |
Key Trends and Forces
Ten customers account for 35% of Acxiom's total sales
Acxiom’s ten largest customers accounted for 35% of its revenue in fiscal 2008.[13] The largest of Acxiom's customers accounted for 10% of 2008 revenue by itself.[14] In fact, the 6.1% decrease in Infrastructure Management revenue between 2007 and 2008 was due, in part, to a large client deciding not to renew some of its contracts with Acxiom.[15] Acxiom attempts to minimize this risk by establishing long-term relationships with customers, but most of its customers sign only two-year contracts.[16]
Privacy leaks increase demand for Acxiom's Information Services
Between March 31, 2005 and March 31, 2008, over 221 million records containing sensitive personal information were reported lost or stolen from private companies and government institutions.[17] Robert Ellis Smith, a contributor to Forbes Magazine, even declared 2005 "The Year of the Stolen Laptop."[18] Partially because companies are placing greater emphasis on protecting customer records, Acxiom's Information Services revenue increased from $697 million in 2006 to $741 million in 2008.[19]
IT outsourcing contracts down 50% in 2007
According to Gartner (IT), the value of the entire industry's IT and business processing outsourcing contracts decreased 50% in calendar year 2007.[20] This trend is reflected in the 6.1% decrease in Acxiom's Infrastructure Management fiscal 2008 revenue.[21] Likewise, Acxiom's overall gross profit margins decreased from 23.6% to 18.3% between March 31, 2007 and March 31, 2008.[22]
A weak U.S. dollar boosted international sales in fiscal 2008 by $6.9 million
Between June 18, 2007 and June 18, 2008 the U.S. dollar depreciated in relation to both the euro and the Australian dollar.[24][25] Since 7% of Axciom's fiscal 2008 revenue came from Europe and Australia, this resulted in a $6.9 million revenue boost for Acxiom during the fiscal year ending March 31, 2008.[26] When foreign currencies depreciate, the USD value of Acxiom's international revenue decreases. On the other hand, when the USD weakens (foreign currencies appreciate), the dollar value of Acxiom's international revenue increases.
Key Competitors
- Dun & Bradstreet (DNB) offers risk management, marketing information, e-business, and supply management services. Its marketing information business competes with Acxiom's Information Products and Information Services.[27]
- Experian Americas is a privately held company that provides credit reporting and marketing data to customers in the financial services, utilities, and other industries. The company competes most directly with Acxiom's Information Products segment.[28]
- Harte-Hanks (HHS) helps its clients target ads at the customers who will most likely be interested in them. The company competes most directly with Acxiom's Information Products services.[29]
Acxiom and Key Competitors for Year Ending March 31, 2008 ($ in millions)
| Company | Revenue | Net Income | Net Profit Margin |
| Acxiom | 1,384 | -8 | -0.56% |
| Dun & Bradstreet (DNB) | 1,622 | 359 | 22.15% |
| Experian Americas | 282 | Pvt | Pvt |
| Harte-Hanks (HHS) | 1,130 | 106 | 9.40% |
References
- ↑ Gartner: Gartner Says Worldwide Outsourcing Market to Grow 8.1 Percent in 2008
- ↑ ACXM 2008 10-K: Results of Operations, pg F-6
- ↑ Forbes: Laptop Hall Of Shame
- ↑ ACXM 2008 10-K: Results of Operations, pg F-6
- ↑ ACXM 2008 10-K: Financial Supplement, pg F-65
- ↑ ACXM 2008 10-K: Business, pgs 13-14
- ↑ ACXM 2008 10-K: Business, pg 10
- ↑ Acxiom Code of Ethics
- ↑ ACXM 2008 10-K: Business, pg 10
- ↑ ACXM 2008 10-K: Business, pg 14
- ↑ ACXM 2008 10-K: Financial Supplement, pg F-65
- ↑ ACXM 2008 10-K: Financial Supplement, pg F-65
- ↑ ACXM 2008 10-K: Business, pg 14
- ↑ ACXM 2008 10-K: Business, pg 14
- ↑ ACXM 2008 10-K: Results of Operations, pg F-6
- ↑ ACXM 2008 10-K: Business, pg 14
- ↑ A Chronology of Data Breaches
- ↑ Forbes: Laptop Hall Of Shame
- ↑ ACXM 2008 10-K: Financial Supplement, pg F-65
- ↑ Gartner: Gartner Says Worldwide Outsourcing Market to Grow 8.1 Percent in 2008
- ↑ ACXM 2008 10-K: Results of Operations, pgs F-6, F-7
- ↑ ACXM 2008 10-K: Results of Operations, pgs F-6, F-7
- ↑ EUR to USD Exchange Rates
- ↑ EUR-USD Exchange Rates
- ↑ AUD-USD Exchange Rates
- ↑ ACXM 2008 10-K: Results of Operations, pg F-6
- ↑ Google Finance: DNB
- ↑ Google Finance: Experian Americas
- ↑ Google Finance: HSS
| ||||||
|
|
