ACI Worldwide, Inc. · NASDAQ:ACIW
ACI Worldwide — Q1 2010 Earnings Presentation
39 slides from ACI Worldwide's earnings presentation, Apr 29, 2010
Slide 1: March 31, 2010 Quarterly Results
March 31, 2010 Quarterly Results April 29, 2010
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: Trademarks
Trademarks ACI, the ACI logo, BASE24 and BASE24-eps are registered trademarks of ACI Worldwide, Inc., or one of its subsidiaries, in the United States and/or other countries. Agile Payments Solution, ACI Money Transfer System, ACI Issuer, ACI Acquirer and ACI Interchange have pending registrations o
Slide 4: Presenters and Q&A participants
• Phil Heasley, Chief Executive Officer • Louis Blatt, Chief Product Officer • Scott Behrens, Chief Financial Officer • Q&A: Phil Heasley, Scott Behrens, Louis Blatt, Ralph Dangelmaier and Tony Scotto 4
Slide 5: Overview
Overview Phil Heasley, Chief Executive Officer
Slide 6: Q1 2010 Update
Q1 2010 Update • Stronger business performance compared to prior year • Sales of $81.1 million, up $20 million versus Q1-09 sales • Strong expense management • Stronger OFCF • Stronger recurring revenue led by maintenance • Strong contract size growth in our term renewals across Americas and EMEA re
Slide 7: Business Review
Business Review Louis Blatt, Chief Product Officer
Slide 8: Overall Market View
Overall Market View • We are seeing larger deal sizes • Pipeline of significant deals strengthening • Emphasis on cross-selling and solution-selling • Seeing movement on migrations from BASE24® to BASE24-eps® (e.g. South African bank, Networks First program, etc.) 8
Slide 9: Strategy Update
Strategy Update We are continuing to foster a single strategy and set of objectives that unifies ACI to focus on a single vision: to be the leading provider of a unified solution that initiates, manages, secures and operates payments to maximize the total economic impact for our customers Immedi
Slide 10: Geographic Sales & Revenue Highlights
Geographic Sales & Revenue Highlights • Americas Q1-10 sales of $47.3 million, up 22% versus Q1-09 • Americas Q1-10 revenue of $46.3 million, down 7% versus Q1-09 • EMEA channel sales of $27.0 million, up 55% versus Q1-09 • EMEA Q1-10 revenue of $31.9 million, up 10% versus Q1-09 • Concluded build-o
Slide 11: Market Drivers
Market Drivers • Strong retail sales being driven by the market forces described earlier – Our ACI IssuerTM, ACI AcquirerTM and ACI InterchangeTM products (former Essentis technologies) and BASE24-eps deliver an unprecedented level of integration to the market. • Financial crimes continue to be a cr
Slide 12: Agile Payments Solution Product Sales
Agile Payments SolutionTM Product Sales Product Division Qtr. Ended Qtr. Ended % Growth or Product Focus Mar. 10 Mar. 09 Decline INITIATE 890 6,262 -86% MANAGE 55,198 38,334 44% SECURE 12,945 4,904 164% OPERATE 12,109 11,303 7% Total Sales 81,142 60,802 33% Sales Type Qtr. Ended Qtr. Ended % Growth
Slide 13: Alliances & Partnerships
Alliances & Partnerships • Reviewing high growth markets and distribution strategy • Go-direct instituted in India after 17 years operating through a distributor • Achieved first win with our chip card technology partner, Bell ID • Exploring new partnerships across product lines to deliver new capab
Slide 14: 60-Month Backlog Is Driven By Maintenance
60- Month Backlog Is Driven By Maintenance 60-Month Backlog Imp & Prof Services On-Demand 6% • Implementation and 13% professional services more Applications (License) 35% significant in 12-month backlog • Recurring revenues (maintenance, license, and Maintenance & hosting fees) comprise Enhanced Su
Slide 15: Ongoing Margin Improvement Initiatives
Ongoing Margin Improvement Initiatives ACI’s profitability is driven by four main sources of revenue: Maintenance, Application, Services and On Demand. •Maintenance • Reliable and predictable revenue and cash flow stream • Higher maintenance pricing on mature and sunset products or move to newer ver
Slide 16: Financial Review
Financial Review Scott Behrens, Chief Financial Officer
Slide 17: Key Takeaways From The Quarter
Key Takeaways From The Quarter • Revenue essentially flat; achieved $87.7 million in the current quarter versus $88.2 million in March 2009 quarter • Higher maintenance, MLF and on-demand hosting revenues offset by lower initial software license fees and services revenues • Continuing trend of recur
Slide 18: Takeaways From The Quarter (continued)
Takeaways From The Quarter (continued) • OFCF of $8.2 million was positively impacted by strong cash receipts • Operating expenses decreased $1.7 million versus prior- year quarter primarily due to approximately $2.2 million in lower professional fees • FX contributed a small positive margin while i
Slide 19: 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 Mar. 10 Mar. 09 Decline Revenue from Backlog 82,594 83,648 -1% Revenue from Sales 5,149 4,566 13% Total Revenue 87,743 88,213 -1% Revenue from Backlog 94% 95% Revenue from Sales 6%
Slide 20: Enhanced Revenue Presentation
Enhanced Revenue Presentation • Software hosting revenues broken out on a separate line. Includes all revenues from hosting and on-demand arrangements • Refined classification of revenues in order to provide more expanded disclosure and to better reflect the results of our on-demand business • Prior
Slide 21: Re-affirmation of 2010 Guidance
Re-affirmation of 2010 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 – Expect revenue growth even as we anticipate fewer term renewals in 2010 where revenue re
Slide 22: Appendix
Appendix
Slide 23: Q1 2010 Channel Sales Results
Q1 2010 Channel Sales Results Sales (net of Term Extensions) Sales Net of Term Extensions Qtr. Ended Qtr. Ended % Growth or Channel Mar. 10 Mar. 09 Decline Americas 21,150 31,525 -33% EMEA 14,766 16,898 -13% Asia-Pacific 4,907 3,876 27% Total Sales (Net of Term Ext.) 40,824 52,298 -22% Term Extensio
Slide 24: 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 $36,453
Slide 25: Operating Free Cash Flow ($ millions)
Operating Free Cash Flow ($ millions) Quarter Ended March 31, 2010 2009 Net cash provided by operating activities* $13.6 $2.8 Adjustments: Net after-tax cash payments associated with employee-related actions 0.2 1.6 Less capital expenditures (3.9) (5.3) Less alliance Technical enablement expenditure
Slide 26: 60-Month Backlog ($ millions)
60-Month Backlog ($ millions) Quarter Ended December 31, March 31, March 31, 2010 2009 2009 Americas $851 $850 $793 EMEA 480 510 466 Asia/Pacific 176 157 153 Backlog 60-Month $1,507 $1,517 $1,412 ACI Deferred Revenue $144 $138 $137 ACI Other 1,363 1,379 1,275 Backlog 60-Month $1,507 $1,517 $1,412 26
Slide 27: Revenues by Channel ($ millions)
Revenues by Channel ($ millions) Quarter Ended March 31, 2010 2009 Revenues: United States $33.3 $36.3 Americas International 13.0 13.6 Americas $46.3 $49.9 EMEA 31.9 29.0 Asia/Pacific 9.5 9.3 Revenues $87.7 $88.2 27
Slide 28: Monthly Recurring Revenue ($ millions)
Monthly Recurring Revenue ($ millions) Quarter Ended March 31, 2010 2009 Monthly Software License Fees $19.6 $17.4 Maintenance fees 33.4 29.9 Processing Services 10.3 10.1 Monthly Recurring Revenue $63.3 $57.4 28
Slide 29: Deferred Revenue & Expense ($ millions)
Deferred Revenue & Expense ($ millions) Quarter Ended March 31, December 31, March 31, December 31, 2010 2009 2009 2008 Short Term Deferred Revenue $106.9 $106.3 $111.5 $99.9 Long Term Deferred Revenue 37.3 31.5 $25.7 $24.3 Total Deferred Revenue $144.2 $137.8 $137.2 $124.2 Total Deferred Expense $1
Slide 30: Non-Cash Compensation, Acquisition Intangibles and Non-Recurring Items
Non-Cash Compensation, Acquisition Intangibles and Non-Recurring Items Quarter ended March 31, 2010 Quarter ended March 31, 2009 Non-recurring items EPS Impact* $ in Millions EPS Impact* $ in Millions Employee Related Non-recurring items $0.00 $0.0 $0.01 $0.2 Non-recurring items 0.00 0.0 0.01 0.2 Am
Slide 31: Other Income / Expense ($ millions)
Other Income / Expense ($ millions) Quarter Ended December 31, December 31, March 31, 2010 2009 March 31, 2009 2008 Interest Income $0.1 $0.2 $0.3 $0.7 Interest Expense ($0.5) ($1.1) (0.8) (1.5) FX Gain / Loss $0.1 ($1.2) (0.7) 9.3 Interest Rate Swap Loss ($0.2) ($0.2) (0.4) (4.3) Other ($0.1) ($0.5
Slide 32: Operating EBITDA
Operating EBITDA Quarter Ended March Quarter Ended March 31, 31, 2010 2009 Operating Income/(Loss) ($0.9) ($2.1) Depreciation Expense 1.6 1.6 Amortization Expense 4.9 4.2 Non-Cash Compensation Expense 1.8 2.6 Operating EBITDA $7.4 $6.3 • Operating EBITDA is defined as operating income/(loss) plus de
Slide 33: 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 associated with one-time employee related actions, less capital expenditures and plus or minus net proceeds from IBM. Operat
Slide 34: 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 35: 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 36: 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 gen
Slide 37: 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 38: 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 39: Every Second. Every Day.
INGE EVERY SECOND. EVERY DAY.