Slide 1: Quarterly Results Presentation
July 26, 2011 June 30, 2011 Quarterly Results Presentation ACI's software underpins electronic payments throughout retail and wholesale banking, and commerce all the time.
Slide 2: 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 provisions of the Private Securities Litigation Reform Act of 1995. A discussion of these forward- lo
Slide 3: Quarterly Overview
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. Phil Heasley Chief Executive Officer
Slide 4: Q2 2011 in Review
Q2 2011 in Review Much stronger sales quarter than last year driven by large renewals in North America and in Northern Europe 12 and 60-month backlog metrics continue to improve visibility into future revenue stream Strong revenue growth driven by increased recurring revenue Strong growth in operati
Slide 5: Business Overview
4 Business Overview ———
Slide 6: Q2 2011 Sales
36% increase in year-over-year sales, including 6% increase in new sales Major new international payment processing account New hosting sale to major U.S. processor Strong term renewals, supplemented by new modules, capacity, and services Consistent sales strength in all three geographies; pipeline
Slide 7: Key Industry Dynamics
Q2 2011 in Review Growth in electronic payment transaction volumes Consolidation creating large scale needs & inefficient platform redundancies Continued desire for cost reduction and increased productivity Need to expand fraud detection to unprotected channels Regulatory demands continue (e.g. Durb
Slide 8: Geographic Segment Results
Geographic Segment Results EMEA Americas Asia/Pacific ($ in millions) ($ in millions) ($ in millions) Sales increased 34% Y-o-Y Revenue increased 16% Y-o-Y, driven by sales mix and project completions Significant extension with Top 5 U.S bank Several key hosting deals, for both retail and wholesale
Slide 9: Execution is Driving Results
Execution is Driving Results Refined organizational structure paying dividends Best Practices resulting in better discipline and quality of business Focus on cross-sell evident in results, including services and sales Pipeline remains strong 9
Slide 10: Financial Review
Financial Review i
Slide 11: Key Takeaways from the Quarter
Key Takeaways from the Quarter Strong sales growth Sales growth across all regions led to 36% increase in sales over prior-year quarter 60-month backlog growth of $27 million over March quarter, $74 million over YE 2010 Strong revenue quarter Led by strong growth in recurring revenue, up $16.1 milli
Slide 12: Key Takeaways from the Quarter (cont)
Key Takeaways from the Quarter (cont) Strong growth in operating income Up $6.0 million over prior-year quarter Strong growth in adjusted EBITDA Up $7.1 million over prior-year quarter Lower effective tax rate Favorable impact of $2.2 million release of tax reserves 12
Slide 13: Backlog as a Contributor of Quarterly Revenue
Backlog as a Contributor of Quarterly Revenue Backlog from monthly recurring revenues and project go-lives continues to drive current quarter GAAP revenue, leading to predictable quarterly performance Consistent revenue from current quarter sales 13
Slide 14: Raising 2011 Guidance
Raising 2011 Guidance First half year strength driving higher full year expectations Top-line revenue and expenses both trending higher due largely to FX impact Sales should fall in the mid- $500 million range 14 * Adjusted EBITDA = operating income + Depreciation and Amortization + non-cash compens
Slide 15: Appendix
4 Appendix
Slide 16: Historic Sales By Quarter 2010-2011
Historic Sales By Quarter 2010-2011 16
Slide 17: Total Sales By Channel, Type & Product
Total Sales By Channel, Type & Product 17
Slide 18: Operating Free Cash Flow
Operating Free Cash Flow ($ millions) Quarter Ended June 30, Quarter Ended June 30, 2011 2010 Net cash provided by operating activities $7.5 $3.5 Adjustments: Net after-tax payments associated with IBM IT Outsourcing Transition 0.2 - Less capital expenditures (6.1) (2.4) Less Alliance technical enab
Slide 19: 60-Month Backlog
60-Month Backlog ($ millions) Quarter Ended Quarter Ended Quarter Ended June 30, 2011 March 31, June 30, 2010 2011 Americas $907 $895 $860 EMEA 539 526 475 Asia-Pacific 194 192 176 Backlog 60-Month $1,640 $1,613 $1,511 Deferred Revenue $162 $175 $150 Other 1,478 1,438 1,361 Backlog 60-Month $1,640 $
Slide 20: Revenues by Channel
Revenues by Channel ($ millions) Quarter Ended June 30, Quarter Ended June 30, 2011 2010 Revenues: United States $44.9 $38.0 Americas International 13.1 12.2 Americas $58.0 $50.2 EMEA 41.9 30.4 Asia-Pacific 13.5 11.8 Revenues $113.4 $92.4 20
Slide 21: Monthly Recurring Revenue
Monthly Recurring Revenue ($ millions) Quarter Ended June 30, Quarter Ended June 30, 2011 2010 Monthly Software License Fees $31.4 $20.3 Maintenance Fees 35.6 34.2 Processing Services 14.1 10.5 Monthly Recurring Revenue $81.1 $65.0 21
Slide 22: Deferred Revenue and Expense
Deferred Revenue and Expense ($ millions) Quarter Ended Quarter Ended Quarter Ended Quarter Ended June 30, 2011 March 31, 2011 June 30, 2010 March 31, 2011 Short Term Deferred Revenue $131.7 $141.4 $113.3 $106.9 Long Term Deferred Revenue 30.0 33.2 37.1 37.3 Total Deferred Revenue $161.7 $174.6 $150
Slide 23: Non-Cash Compensation, Acquisition Intangibles and Software
Non-Cash Compensation, Acquisition Intangibles and Software Quarter ended June 30, 2011 Quarter ended June 30, 2011 Quarter ended June 30, 2010 Quarter ended June 30, 2010 EPS Impact* $ in Millions EPS Impact* $ in Millions Amortization of acquisition-related intangibles $0.03 $1.1 $0.03 $1.0 Amorti
Slide 24: Other Income / Expense
Other Income / Expense ($ millions) 24 Quarter Ended Quarter Ended Quarter Ended Quarter Ended June 30, 2011 March 31, 2011 June 30, 2010 March 31, 2010 Interest Income $0.2 $0.2 $0.1 $0.1 Interest Expense ($0.4) ($0.6) ($0.5) ($0.5) FX Gain / Loss $0.3 ($0.2) ($1.7) $0.1 Interest Rate Swap Loss $0.
Slide 25: Adjusted EBITDA
Adjusted EBITDA Quarter Ended June 30, 2011 Quarter Ended June 30, 2010 Net Income (Loss) $9.8 ($0.1) Income tax expense 0.7 2.4 Net Interest Expense 0.2 0.4 Net Other Expense (0.3) 1.7 Depreciation Expense 1.8 1.7 Amortization Expense 5.5 4.9 Non-Cash Compensation Expense 2.2 1.8 Adjusted EBITDA $1
Slide 26: 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 capital exp
Slide 27: 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 28: 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 29: 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 30: 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 31: 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 and the continuing de
Slide 32: 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