ACI Worldwide, Inc. · NASDAQ:ACIW
ACI Worldwide — Q3 2010 Earnings Presentation
33 slides from ACI Worldwide's earnings presentation, Oct 28, 2010
Slide 1: September 30, 2010 Quarterly Results Presentation
ACI’s software underpins electronic payments throughout retail and wholesale banking, and commerce all the time. September 30, 2010 Quarterly Results Presentation October 28, 2010 1
Slide 2: Safe Harbor For Forward-Looking Statements
Private Securities Litigation Reform Act of 1995 Safe Harbor For Forward-Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The forward- looking statements are made pursuant to safe harbor provision
Slide 3: Quarterly Overview
19 of the world’s top 20 banks, 5 of the top 10 U.S. retailers and 6 of the leading 25 global retailers, rely on ACI payments software. Quarterly Overview Phil Heasley Chief Executive Officer 3
Slide 4: Q3 2010 Update
Q3 2010 Update • Strong sales led by First Data Corporation global account signing • Significant rise in recurring revenue • Strong Operating Free Cash Flow generation • Continued expense management • Good visibility into Q4 revenue attainment • Tracking to full year guidance 4
Slide 5: Business Overview
ACI’s customer base spans 90 countries on six continents. Business Overview Louis Blatt Chief Product Officer Ralph Dangelmaier President, Global Markets 5
Slide 6: First Global Account Deal Signed in Q3
First Global Account Deal Signed in Q3 First Data Corporation signed a global account signalling that ACI is its go-forward software technology platform internationally For FDC the transaction brings them same feature/function opportunity across borders • Eliminates multiplicity of technology platfo
Slide 7: Q3 characterized by sales expansion in both renewals and add-on products
Q3 characterized by sales expansion in both renewals and add-on products Total sales increase of 67% led by sales net of term growth of 35% • Consolidation and Global Account approach result in ACI footprint expansion – New BASE24-eps® license with Spanish bank – Large capacity deal driven by U.K. b
Slide 8: Record Q3 Sales Achievement
Record Q3 Sales Achievement Product Division Qtr. Ended Qtr. Ended % Growth or Product Focus Sept. 10 Sept. 09 Decline Initiate 9,857 7,000 41% Manage 117,617 63,817 84% Secure 6,639 7,339 -10% Operate 27,156 18,204 49% Total Sales 161,269 96,360 67% Sales Type Qtr. Ended Qtr. Ended % Growth or Sale
Slide 9: Market Updates
Market Updates Payments market continues to be strong – Continued need for efficiencies is driving consolidation & investment in payments infrastructure – ACI’s integrated solutions set positions us strongly to deliver efficiencies U.S. Regulatory pressures and changes – Dodd-Frank Wall Street Refor
Slide 10: Financial Review
ACI wholesale payments solutions process more than $12 trillion each day. Financial Review Scott Behrens Chief Financial Officer 10
Slide 11: Key Takeaways from the Quarter
Key Takeaways from the Quarter Strong growth in recurring revenue • Up $12.5 million, or 20%, over prior-year quarter • Overall revenue decreased $7.5 million, largely due to lower capacity revenue and fewer go-live events compared to prior-year quarter Strong sales growth • Up $65 million, or 67%,
Slide 12: Key Takeaways from the Quarter
Key Takeaways from the Quarter Very strong Operating Free Cash Flow of $26.6 million • Up $37 million over prior-year quarter • Led by strong cash receipts from accounts receivable collections and continued disciplined management of cash expenses FX loss of $1.5 million impacted other income/expense
Slide 13: Backlog as a Contributor of Quarterly Revenue
Backlog as a Contributor of Quarterly Revenue Revenue Qtr. Ended Qtr. Ended % Growth or Revenue Sept. 10 Sept. 09 Decline Revenue from Backlog 85,565 89,232 -4% Revenue from Sales 11,452 15,229 -25% Total Revenue 97,017 104,461 -7% Revenue from Backlog 88% 85% Revenue from Sales 12% 15% Backlog cont
Slide 14: Reaffirmation of Guidance
Reaffirmation of Guidance Key Metrics 2009 Actuals 2010 Growth Range 2010 Low 2010 High Revenue $405.8 3-5% $418 $428 Operating Income $41.6 15-20% $48 $50 Operating EBITDA $72.9 14-18% $83 $86 Revenue and operating income within our range • Anticipate revenue will grow closer to 3% over 2009 revenu
Slide 15: Preliminary 2011 Outlook
Preliminary 2011 Outlook Sales to be consistent with this year in the high $400s million Revenue to grow in mid-single digits Backlog to grow in high-single digits Operating income in the 20% growth range Operating EBITDA growth in the mid-teens range over 2010 Cash growth consistent with operating
Slide 16: Appendix
ACI’s risk management software protects more than 2,500 financial institutions worldwide. Appendix 16
Slide 17: Historic Sales By Quarter 2009-2010
Historic Sales By Quarter 2009-2010 Sales Mix by Category Add-on Business inc. Capacity Total Economic Value of Upgrades & Quarter-End Sales New Accounts New Applications Services Term Extentions 3/31/2009 $60,802 $9,719 $8,963 $33,616 $8,504 16% 15% 55% 14% 6/30/2009 $97,328 $12,053 $4,897 $36,453
Slide 18: Q3 Channel Sales Results
Q3 Channel Sales Results Sales Net of Term Extensions Qtr. Ended Qtr. Ended % Growth or Channel Sept. 10 Sept. 09 Decline Americas 43,881 48,749 -10% EMEA 47,531 21,550 121% Asia-Pacific 9,242 4,034 129% Total Sales (Net of Term Ext.) 100,654 74,333 35% Term Extension Sales Qtr. Ended Qtr. Ended % G
Slide 19: Operating Free Cash Flow ($ millions)
Operating Free Cash Flow ($ millions) Quarter Ended September 30, 2010 2009 Net cash provided by operating activities $32.0 $(8.0) Adjustments: Net after-tax payments associated with employee-related actions - 0.3 Net after-tax payments associated with IBM IT Outsourcing Transition and Severance 0.2
Slide 20: 60-Month Backlog ($ millions)
60-Month Backlog ($ millions) Quarter Ended September 30, June 30, December 31, 2010 2010 2009 Americas $893 $864 $850 EMEA 525 475 510 Asia/Pacific 179 176 157 Backlog 60-Month $1,597 $1,515 $1,517 Deferred Revenue $167 $150 $138 Other 1,430 1,365 1,379 Backlog 60-Month $1,597 $1,515 $1,517 20
Slide 21: Revenues by Channel ($ millions)
Revenues by Channel ($ millions) Quarter Ended September 30, 2010 2009 Revenues: United States $37.0 $ 46.2 Americas International 12.9 12.5 Americas $49.9 $58.7 EMEA 35.1 35.2 Asia/Pacific 12.0 10.6 Revenues $97.0 $104.5 21
Slide 22: Monthly Recurring Revenue ($ millions)
Monthly Recurring Revenue ($ millions) Quarter Ended September 30, 2010 2009 Monthly Software License Fees $29.2 $19.2 Maintenance Fees 32.5 33.3 Processing Services 13.7 10.4 Monthly Recurring Revenue $75.4 $62.9 22
Slide 23: Deferred Revenue and Expense ($ millions)
Deferred Revenue and Expense ($ millions) Quarter Ended September September 30, June 30, 30, June 30, 2010 2010 2009 2009 Short Term Deferred Revenue $131.5 $113.3 $103.4 $107.7 Long Term Deferred Revenue 35.7 37.1 28.7 32.4 Total Deferred Revenue $167.2 $150.4 $132.1 $140.1 Total Deferred Expense $
Slide 24: Non-Cash Compensation, Acquisition Intangibles and Software
Non-Cash Compensation, Acquisition Intangibles and Software Quarter ended Quarter ended September 30, 2010 September 30, 2009 EPS Impact* $ in Millions EPS Impact* $ in Millions Amortization of acquisition- related intangibles $0.03 $1.0 $0.03 $1.0 Amortization of acquisition- related software $0.03
Slide 25: Other Income / Expense ($ millions)
Other Income / Expense ($ millions) Quarter Ended September June 30, September June 30, 30, 2010 2010 30, 2009 2009 Interest Income $0.2 $0.1 $0.1 $0.4 Interest Expense ($0.4) ($0.5) ($0.5) ($0.5) FX Gain / Loss ($1.5) ($1.7) $1.1 ($4.3) Interest Rate Swap Loss $0.0 $0.0 ($0.7) ($0.3) Other ($0.1) $
Slide 26: Operating EBITDA
Operating EBITDA Quarter Ended Quarter Ended September 30, September 30, 2010 2009 Operating Income $7.4 $11.9 Depreciation Expense 1.8 1.6 Amortization Expense 4.9 4.4 Non-Cash Compensation Expense 1.9 2.0 Operating EBITDA $16.0 $19.9 Operating EBITDA is defined as operating income/(loss) plus depr
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures ACI is presenting operating free cash flow, which is defined as net cash provided (used) by operating activities, less net after-tax payments associated with employee related activities, net after-tax payments associated with IBM IT outsourcing transition and severance, a
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures ACI also includes backlog estimates which are all software license fees, maintenance fees and services specified in executed contracts, as well as revenues from assumed contract renewals to the extent that we believe recognition of the related revenue will occur within th
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures Estimates of future financial results are inherently unreliable. Our backlog estimates require substantial judgment and are based on a number of assumptions as described above. These assumptions may turn out to be inaccurate or wrong, including for reasons outside of mana
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures The presentation of these non-GAAP financial measures should be considered in addition to our GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management general
Slide 31: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as “belie
Slide 32: Forward-Looking Statements
Forward-Looking Statements All of the foregoing forward-looking statements are expressly qualified by the risk factors discussed in our filings with the Securities and Exchange Commission. Such factors include, but are not limited to, risks related to the global financial crisis, restrictions and ot
Slide 33: ACI's software underpins electronic payments
ACI’s software underpins electronic payments throughout retail and wholesale banking, and commerce all the time, without fail. www.aciworldwide.com