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TOPIC 606 ADOPTION IMPACT AND REVENUE FROM CONTRACTS WITH CUSTOMERS: (Notes) | 3 Months Ended
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Jun. 30, 2018
Revenue from Contract with Customer [Abstract] |
Topic 606 Adoption Impact and Revenue from Contracts with Customers | TOPIC 606 ADOPTION IMPACT AND REVENUE FROM CONTRACTS WITH CUSTOMERS: On April 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of April 1, 2018. Results for reporting periods beginning after April 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic reporting under Topic 605. Under Topic 606, revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company determines revenue recognition through the following steps:
• | Identification of the contract, or contracts, with a customer
• | Identification of the performance obligations in the contract
• | Determination of the transaction price
• | Allocation of the transaction price to the performance obligations in the contract
• | Recognition of revenue when, or as, the Company satisfies a performance obligation
We recorded a net increase to our opening retained earnings of $12.7 million, net of tax, due to the cumulative impact of adopting Topic 606, with the impact primarily related to the capitalization of costs of obtaining customer contracts. The details of the significant changes and quantitative impact of the changes are disclosed below. Costs of Obtaining Customer Contracts The Company previously recognized commission payments made for obtaining a contract as an operating expense when incurred. Under Topic 606, the Company capitalizes incremental costs to acquire contracts and amortizes them over the expected period of benefit, which we have determined as a range of two to five years. As of June 30, 2018, the remaining unamortized contract costs were $18.1 million and are included in deferred commissions, net, in the condensed consolidated balance sheet. Net capitalized costs of $2.9 million were recorded as a reduction to operating expense for the three months ended June 30, 2018. No impairment was recognized for the three months ended June 30, 2018. Contingent Revenue The Company previously limited revenue recognition to the amount that was not contingent on the provision of future services. This was typically from fees paid over the contract term for services delivered at the beginning of the contract term. Impacts on Financial Statements
Condensed Consolidated Balance Sheet |  | Impact of changes in accounting policies
|  | As reported June 30, 2018 |  | Adjustments |  | Balances without adoption of Topic 606
Trade accounts receivable, net |  | $ | 163,767 |  |  | $ | (1,943 | ) |  | $ | 161,824 |
Refundable income taxes |  | 11,761 |  |  | 540 |  |  | 12,301 |
Deferred income taxes |  | 11,488 |  |  | (64 | ) |  | 11,424 |
Deferred commissions, net |  | 18,137 |  |  | (18,137 | ) |  | — |
Others |  | 961,815 |  |  | — |  |  | 961,815 |
Total assets |  | $ | 1,166,968 |  |  | $ | (19,604 | ) |  | $ | 1,147,364 |
Deferred revenue |  | $ | 31,621 |  |  | $ | (232 | ) |  | $ | 31,389 |
Deferred income taxes |  | 42,258 |  |  | (4,761 | ) |  | 37,497 |
Others |  | 371,033 |  |  | — |  |  | 371,033 |
Total liabilities |  | 444,912 |  |  | (4,993 | ) |  | 439,919 |
Retained earnings |  | 638,043 |  |  | (14,611 | ) |  | 623,432 |
Other equity |  | 84,013 |  |  | — |  |  | 84,013 |
Total equity |  | 722,056 |  |  | (14,611 | ) |  | 707,445 |
Total liabilities and equity |  | $ | 1,166,968 |  |  | $ | (19,604 | ) |  | $ | 1,147,364 |
Condensed Consolidated Statement of Operations |  | Impact of changes in accounting policies
|  | As reported for the three months ended June 30, 2018 |  | Adjustments |  | Balances without adoption of Topic 606
Revenues |  | $ | 226,960 |  |  | $ | 296 |  |  | $ | 227,256 |
Cost of revenue |  | 117,271 |  |  | — |  |  | 117,271 |
Gross profit |  | $ | 109,689 |  |  | $ | 296 |  |  | $ | 109,985 |
Operating expenses: |  |  |  |  |  |
Sales and marketing |  | $ | 54,850 |  |  | $ | 2,939 |  |  | $ | 57,789 |
Other operating expenses |  | 60,540 |  |  | — |  |  | 60,540 |
Total operating expenses |  | 115,390 |  |  | 2,939 |  |  | 118,329 |
Loss from operations |  | (5,701 | ) |  | (2,643 | ) |  | (8,344 | )
Total other expense |  | (2,314 | ) |  | — |  |  | (2,314 | )
Loss before income taxes |  | (8,015 | ) |  | (2,643 | ) |  | (10,658 | )
Income taxes |  | (5,000 | ) |  | (695 | ) |  | (5,695 | )
Net loss |  | $ | (3,015 | ) |  | $ | (1,948 | ) |  | $ | (4,963 | )
Condensed Consolidated Statement of Comprehensive Loss |  | Impact of changes in accounting policies
|  | As reported for the three months ended June 30, 2018 |  | Adjustments |  | Balances without adoption of Topic 606
Net loss |  | $ | (3,015 | ) |  | $ | (1,948 | ) |  | $ | (4,963 | )
Other comprehensive loss: |  |  |  |  |  |
Change in foreign currency translation adjustment |  | (1,868 | ) |  | — |  |  | (1,868 | )
Comprehensive loss |  | $ | (4,883 | ) |  | $ | (1,948 | ) |  | $ | (6,831 | )
Condensed Consolidated Statement of Cash Flows |  | Impact of changes in accounting policies
|  | As reported for the three months ended June 30, 2018 |  | Adjustments |  | Balances without adoption of Topic 606
Net loss |  | $ | (3,015 | ) |  | $ | (1,948 | ) |  | $ | (4,963 | )
Adjustments for: |  |  |  |  |  |
Deferred income taxes |  | (1,335 | ) |  | (695 | ) |  | (2,030 | )
Others |  | 41,937 |  |  | — |  |  | 41,937 |
Changes in: |  |  |  |  |  |
Accounts receivable, net |  | 4,329 |  |  | (256 | ) |  | 4,073 |
Deferred costs and other assets |  | (2,995 | ) |  | 2,939 |  |  | (56 | )
Accounts payable and other liabilities |  | (21,704 | ) |  | — |  |  | (21,704 | )
Deferred revenue |  | (33 | ) |  | (40 | ) |  | (73 | )
Net cash from operating activities |  | 17,184 |  |  | — |  |  | 17,184 |
Net cash from investing activities |  | (10,684 | ) |  | — |  |  | (10,684 | )
Net cash from financing activities |  | (52,586 | ) |  | — |  |  | (52,586 | )
Effect of exchange rate changes on cash |  | (1,094 | ) |  | — |  |  | (1,094 | )
Net change in cash and cash equivalents |  | (47,180 | ) |  | — |  |  | (47,180 | )
Cash and cash equivalents at beginning of period |  | 142,279 |  |  | — |  |  | 142,279 |
Cash and cash equivalents at end of period |  | $ | 95,099 |  |  | $ | — |  |  | $ | 95,099 |
Disaggregation of Revenue In the following table, revenue is disaggregated by primary geographical market and major service offerings. The table also includes a reconciliation of the disaggregated revenue within the reportable segments.
Reportable Segments
June 30, 2018
(dollars in thousands)
Primary Geographical Markets |  | Acxiom Marketing Solutions |  | LiveRamp |  | Total
United States |  | $ | 150,307 |  |  | $ | 56,222 |  |  | $ | 206,529 |
Europe |  | 11,115 |  |  | 4,908 |  |  | 16,023 |
APAC |  | 3,080 |  |  | 1,328 |  |  | 4,408 |
|  | $ | 164,502 |  |  | $ | 62,458 |  |  | $ | 226,960 |
Major Offerings/Services |  |  |  |  |  |
Audience Creation |  | $ | 45,452 |  |  | $ | — |  |  | $ | 45,452 |
Data Analytics |  | 9,025 |  |  | — |  |  | 9,025 |
Data Management |  | 110,025 |  |  | — |  |  | 110,025 |
Subscription |  | — |  |  | 51,329 |  |  | 51,329 |
Marketplace and Other |  | — |  |  | 11,129 |  |  | 11,129 |
|  | $ | 164,502 |  |  | $ | 62,458 |  |  | $ | 226,960 |
Reportable Segments
June 30, 2017
(dollars in thousands)
Primary Geographical Markets |  | Acxiom Marketing Solutions |  | LiveRamp |  | Total
United States |  | $ | 152,129 |  |  | $ | 42,118 |  |  | $ | 194,247 |
Europe |  | 10,735 |  |  | 3,802 |  |  | 14,537 |
APAC |  | 2,893 |  |  | 837 |  |  | 3,730 |
|  | $ | 165,757 |  |  | $ | 46,757 |  |  | $ | 212,514 |
Major Offerings/Services |  |  |  |  |  |
Audience Creation |  | $ | 51,303 |  |  | $ | — |  |  | $ | 51,303 |
Data Analytics |  | 8,858 |  |  | — |  |  | 8,858 |
Data Management |  | 105,596 |  |  | — |  |  | 105,596 |
Subscription |  | — |  |  | 37,052 |  |  | 37,052 |
Marketplace and Other |  | — |  |  | 9,705 |  |  | 9,705 |
|  | $ | 165,757 |  |  | $ | 46,757 |  |  | $ | 212,514 |
Transaction Price Allocated to the Remaining Performance Obligations We have performance obligations, primarily related to AMS offerings, associated with fixed commitments in customer contracts for future services that have not yet been recognized in our condensed consolidated financial statements. The amount of fixed revenue not yet recognized was $1.1 billion as of June 30, 2018. The Company expects to recognize revenue on approximately 75% of these remaining performance obligations by March 31, 2021 with the balance recognized thereafter.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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