ACI Worldwide, Inc. · NASDAQ:ACIW
ACI Worldwide — Q3 2009 Earnings Presentation
37 slides from ACI Worldwide's earnings presentation, Nov 5, 2009
Slide 1: September 30, 2009 Quarterly Results
September 30, 2009 Quarterly Results November 5, 2009
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: Presenters and Q&A
• Phil Heasley, Chief Executive Officer • Ron Totaro, Chief Operating Officer • Scott Behrens, Chief Financial Officer • Q&A: Phil Heasley, Ron Totaro and Scott Behrens 3
Slide 4: Phil Heasley, Chief Executive Officer
Phil Heasley, Chief Executive Officer
Slide 5: Market Commentary
Market Commentary • Mega-bank Trends – Banks used to regard each unit and country as disparate entities – Now we are seeing banks moving towards global deals in software infrastructure to improve efficiencies – The good news is that deals under discussion are larger and more comprehensive projects –
Slide 6: Quarterly Business Review
Ron Totaro, Chief Operating Officer Quarterly Business Review
Slide 7: Q3 2009 Business Performance
Q3 2009 Business Performance • Revenues mostly flat when adjusting for impact of tail end of deals related to Faster Payments in Q3 2008 – EMEA ILF business was significantly lower than last year’s quarter – Consistent monthly recurring revenue • Expenses strongly improved, YTD-09 ~$33 million less
Slide 8: Q3 2009 Sales Results
Q3 2009 Sales Results Sales Type Product Division Qtr. Ended Qtr. Ended % Growth or Qtr. Ended Qtr. Ended % Growth or Sales Type Sep. 09 Sep. 08 Decline Product Division Sep. 09 Sep. 08 Decline New Account 5,435 14,345 -62% Retail Payments 73,057 70,003 4% New Application 5,729 7,180 -20% Applicatio
Slide 9: Q3 2009 Channel Sales Results
Q3 2009 Channel Sales Results Sales (net of Term Extensions) Q3 2009 v Q3 2008 Channel Performance: Sales Net of Term Extensions Total top 5 customers accounted for 45% of sales dollars in Qtr. Ended Qtr. Ended % Growth or Channel Sep. 09 Sep. 08 Decline the quarter compared to 35% in Q2-09 and 12%
Slide 10: Historic Sales By Quarter 2008-2009
Historic Sales By Quarter 2008-2009 Sales Mix by Category Add-on Business inc. Capacity Total Economic Value of Upgrades & Quarter-End Sales New Accounts New Applications Services Term Extentions 3/31/2008 $63,813 $1,311 $9,621 $38,101 $14,781 2% 15% 60% 23% 6/30/2008 $99,938 $15,856 $23,487 $45,434
Slide 11: Channel Summary
Channel Summary • Americas – Monthly recurring revenue reduction of $1.4 million or 4% compared to prior-year due to higher deferred MLF revenue releases in prior-year quarter, monthly recurring revenue rise of $1.0 million or 3% compared to June quarter – 14 “Go Live” deals moved out of backlog int
Slide 12: Q3 Product Development Summary
Q3 Product Development Summary • Wholesale – 6 ACI On Demand customers already live on ACI Enterprise BankerTM 7.5 (released in June) – Reduced conversion time to bring new customer onto ACI Enterprise Banker from 9-12 months to 5 months • Introduced Agile Payment Solution Strategy – Excitement surr
Slide 13: Agile Payments Solution Strategy
Agile Payments Solution Strategy Be the leading provider of a unified solution that initiates, manages, secures and operates payments to maximize the total economic impact for our customers. • Identified 11 key products to comprise Agile Payment Solution functionality required for a holistic solutio
Slide 14: Product & Development Investments
Product & Development Investments • Improved Delivery – BASE24-epsTM to extend global leadership in fast-growing markets – Cut customer install time for ACI Enterprise Banker by 50% – Organized a new function in the company completely focused on innovation to drive common architecture and new produc
Slide 15: Financial Review
Financial Review Scott Behrens, Chief Financial Officer
Slide 16: Key Takeaways from the Quarter
Key Takeaways from the Quarter Sales: Down 10% or $10.2 million versus prior-year third quarter or down 1% or $1.0 million compared to June quarter Revenue: Achieved $104.5 million in the current quarter versus $108.6 million in Q3-08 quarter, Q3-09 represented a $17.3 million improvement over Q
Slide 17: Takeaways from the Quarter (cont)
Takeaways from the Quarter (cont) Operating Expenses: Decreased $13.1 million (12%) versus prior-year quarter 110.0 105.6 4.4 - 105.0 3.3 100.0 2.5 1.8 95.0 1.1 92.5 90.0 85.0 Q3 2008 Operating IBM IT Outsourcing Restructuring Savings Subcontractor Travel & Change in Def. Svcs / Q3 2009 Operating
Slide 18: Backlog is Still a Significant Contributor to Current Period Revenue
Backlog is Still a Significant Contributor to Current Period Revenue Revenue Qtr. Ended Qtr. Ended % Growth or Revenue Sep. 09 Sep. 08 Decline Revenue from Backlog 89,232 88,398 1% Revenue from Sales 15,229 20,162 -24% Total Revenue 104,461 108,560 -4% Revenue from Backlog 85% 81% Revenue from Sales
Slide 19: Guidance reiterates stronger operating margins
Guidance reiterates stronger operating margins August 09 Key Metrics 2008 Actuals Guidance Risks/Opportunities Sales $460 $450 (5-8)% GAAP Revenues 418 415 (-2)% GAAP Operating Income 22 35 5-10% • At this point in time, anticipate full risk/opportunity adjustment is necessary – Sales should come wi
Slide 20: Appendix
Appendix
Slide 21: Operating Free Cash Flow ($ millions)
Operating Free Cash Flow* ($ millions) Quarter Ended September 30, 2009 2008 Net cash provided (used) by operating $(8.0) $ 3.2 activities Net after-tax payments associated with employee-related actions 0.3 0.4 Net after-tax payments associated with IBM IT Outsourcing Transition and Severance 0.3 0.
Slide 22: 60-Month Backlog ($ millions)
60-Month Backlog ($ millions) Quarter Ended September 30, September 30, 2009 June 30, 2009 2008 Americas 827 $817 $744 EMEA 504 504 511 Asia/Pacific 156 155 159 Backlog 60-Month $1,487 $1,476 $1,414 ACI Deferred Revenue 132 $140 $131 ACI Other 1,355 $1,336 $1,283 Backlog 60-Month $1,487 $1,476 $1,41
Slide 23: Revenues by Channel ($ millions)
Revenues by Channel ($ millions) Quarter Ended September 30, 2009 2008 Revenues: United States $46.2 $39.8 Americas International 12.5 13.3 Americas $58.7 $53.1 EMEA 35.2 45.4 Asia/Pacific 10.6 10.1 Revenues $104.5 $108.6 23
Slide 24: Monthly Recurring Revenue ($ millions)
Monthly Recurring Revenue ($ millions) Quarter Ended September 30, 2009 2008 Monthly license fees $19.5 $21.3 Maintenance fees 35.0 34.0 Processing Services 8.4 8.1 Monthly Recurring Revenue $62.9 $63.4 24
Slide 25: Deferred Revenue & Expense ($ millions)
Deferred Revenue & Expense ($ millions) Quarter Ended June 30, June 30, September 30, September 30, 2009 2009 2008 2008 Short Term Deferred Revenue $103.4 $107.7 $107.3 $123.0 Long Term Deferred Revenue 28.7 32.4 23.3 23.2 Total Deferred Revenue $132.1 $140.1 $130.6 $146.2 Total Deferred Expense $13
Slide 26: Non-Cash Compensation and Acquisition Intangibles
Non-Cash Compensation and Acquisition Intangibles Quarter ended September 30, Quarter ended September 30, 2009 2008 EPS Impact* $ in Millions EPS Impact* $ in Millions Employee-Related $0.05 $1.6 $0.07 $2.3 IBM IT Outsourcing Severance Cost 0.00 0.0 0.01 0.3 IBM IT Outsourcing Transition Costs 0.00
Slide 27: Other Income / Expense ($ millions)
Other Income / Expense ($ millions) Quarter Ended September 30, September 30, 2009 June 30, 2009 2008 June 30, 2008 Interest Income $0.1 $0.4 $0.6 $0.7 Interest Expense ($0.5) (0.5) ($1.1) (1.0) FX Gain / Loss $1.1 (4.3) $1.6 (0.7) Interest Rate Swap Loss ($0.7) (0.3) ($0.8) 2.9 Other ($0.4) 1.0 $0.
Slide 28: Sales by Channel and Product Division ($ millions)
Sales by Channel and Product Division ($ millions) Quarter Ended September September 30, March 31, December 31, 30, 2009 June 30, 2009 2009 2008 2008 Sales by Channel: Americas $65.5 $43.8 $38.9 $119.6 $46.8 EMEA 23.3 44.7 17.4 47.1 53.0 Asia Pacific 7.5 8.8 4.6 22.6 6.8 Total Sales $96.4 $97.3 $60.
Slide 29: Reclassification Recast
Reclassification Recast Year Ended December 31, ($ Thousands) 2007 2008 Cost of software license fees 9,763 12,846 Cost of maintenance and services 95,607 117,087 Research and development 83,258 75,850 Selling and marketing 72,466 73,236 General and administrative 97,259 100,272 Depreciation and amo
Slide 30: 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, excluding after-tax cash payments for employee related actions and IBM IT Outsourcing transition and severance less capital expenditures and plus or minus net
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results pre
Slide 32: 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 33: 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 34: Forward Looking Statements
Forward Looking Statements Any or all of the forward-looking statements may turn out to be wrong. They can be affected by the judgments and estimates underlying such assumptions or by known or unknown risks and uncertainties. Many of these factors will be important in determining our actual future r
Slide 35: Forward Looking Statements
Forward Looking Statements • The recent restatements of our financial statements; • The consolidation in the financial services industry that may adversely impact the number of customers and revenues in the future; • The economic changes in the banking and financial services industries that apply to
Slide 36: Forward Looking Statements
Forward Looking Statements • The possibility that if we are unable to successfully perform under the terms of our alliance with IBM or our customers are not receptive to the alliance, then our business, financial condition and/or results of operations may be adversely affected; • Our outsourcing agr
Slide 37: Every Second. Every Day.
INGE EVERY SECOND. EVERY DAY.