Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — Q4 2010 Earnings Presentation
37 slides from Aci Worldwide's earnings presentation, Feb 15, 2011
Slide 1: Quarterly Results Presentation, December 31, 2010
February 15, 2011 December 31, 2010 Quarterly Results Presentation 1 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: 2010 Year in Review
4 2010 Year in Review Record sales year with global account contracts and strong retail signings Strong Operating Free Cash Flow generation Continued expense management Growth in operating income margin Met or exceeded all full year guidance metrics Good visibility into forward revenue and profitabi
Slide 5: Business Overview
Business Overview Ralph Dangelmaier President, Global Markets
Slide 6: 2010 Year in Review - Markets
2010 Year in Review- Markets Americas New regulatory regime impacting our clients through banks and card interchange fees in US resulting in more interest in our efficiency solutions Latin America seeing higher demand for card usage which is leading to more regulatory scrutiny and, therefore, need f
Slide 7: 2010 Year in Review - Sales
2010 Year in Review- Sales Global Enterprise license agreement with First Data and Worldpay, the former RBS processor Americas Migrations gaining steam- several Networks First migrations as well as a top ten US bank committed to a migration from BASE24(r) to BASE24-eps (r) as did a key switch in Sou
Slide 8: Q4 2010 Characterized by Sales Expansion in Renewals and Add-on Products
Q4 2010 Characterized by Sales Expansion in Renewals and Add-on Products Total quarterly sales remained constant over prior year driven by large UK and Japan sales Quarter characterized by new application sales as well as renewals with add-on sales - Major add-on PRM sale at a Southern European proc
Slide 9: Product Mix of Q4 and FY Sales
9 Product Mix of Q4 and FY Sales Comprised More Heavily by Retail as well as Back Office systems Retail sales growth driven by key BASE24-eps migration sales as well as a large UK merchant acquirer Strong year with retailers/big box stores on both ACI Retail Commerce ServerTM and BASE24 ACI Enterpri
Slide 10: 2011 Market Opportunities
2011 Market Opportunities Cross selling new applications to current customers based on integrated payments solutions portfolio Investing in resources to accelerate our growth in emerging markets (Brazil, China, etc) Multi-region wholesale market payment hubs Driving BASE24-eps(r) migrations Tools so
Slide 11: Financial Review
Financial Review Scott Behrens Chief Financial Officer
Slide 12: Key Takeaways from the Quarter
Key Takeaways from the Quarter Record revenue quarter Led by strong growth in recurring revenue, up $16.7 million, or 26%, over prior-year quarter Balanced Sales Growth Strong sales growth in the EMEA and Asia regions as compared to Q4-09 Led by sales of new applications Another Strong Cash Quarter
Slide 13: Key Takeaways from the Quarter (cont)
13 Key Takeaways from the Quarter (cont) Strong Growth in Operating Income Up $7.8 million, or 22%, over prior-year quarter Strong Growth in Operating EBITDA Up $9.4 million, or 22%, over prior-year quarter FX loss moderated to $0.1 million compared to an FX loss of $1.2 million in prior-year quarte
Slide 14: Key Takeaways from the Year
Key Takeaways from the Year Strong growth of $40.3 million in recurring revenue Comprised 68% of total revenue in 2010 compared to 60% of revenue in 2009 Sales rise of $100 million led by major account signings during 2010 First Data Corporation global deal as well as several significant UK renewals
Slide 15: 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 We expect backlog to contribute a similar percentage of 2011 revenue led by recurring revenue and p
Slide 16: 2010 Performance Exceeded Guidance
2010 Performance Exceeded Guidance Revenue came within guidance expectations despite FX headwinds for calendar 2010 Operating Income and Operating EBITDA outperformed due to good expense discipline
Slide 17: 2011 Guidance
2011 Guidance 17 Revenue Revenue growth range higher than last year Revenue and margin phasing consistent with prior-year Operating Income Operating income improves from on-going growth in recurring revenue and continued expense management 15%-20% growth range Operating EBITDA Depreciation and amort
Slide 18: Other Factors Impacting Guidance
Other Factors Impacting Guidance Sales to be in the high $400s million OFCF growth consistent with Operating EBITDA growth Cash taxes expected to be lower than in 2010 Capex flat over prior-year 18
Slide 19: Appendix
4 Appendix
Slide 20: Historic Sales By Quarter 2009-2010
20 Historic Sales By Quarter 2009-2010
Slide 21: Strong Q4 led by BASE24 Renewals & New Application Sales
21 Strong Q4 led by BASE24 Renewals & New Application Sales; Annual Sales driven by robust term/adds in Base24 & Tools
Slide 22: Sales By Region by Quarter and Year
Sales By Region by Quarter and Year
Slide 23: Operating Free Cash Flow
Operating Free Cash Flow ($ millions) 23 Quarter Ended December 31, Quarter Ended December 31, 2010 2009 Net cash provided by operating activities $32.2 $ 32.8 Adjustments: Net after-tax payments associated with employee-related actions - 1.3 Net after-tax payments associated with IBM IT Outsourcing
Slide 24: 60-Month Backlog
60-Month Backlog ($ millions) 24 Quarter Ended Quarter Ended Quarter Ended December 31, September 30, December 31, 2010 2010 2009 Americas $871 $887 $845 EMEA 506 525 510 Asia/Pacific 189 180 157 Backlog 60-Month $1,566 $1,592 $1,512 Deferred Revenue $151 $167 $138 Other 1,415 1,425 1,374 Backlog 60
Slide 25: Revenues by Channel
Revenues by Channel ($ millions) 25 Quarter Ended December 31, Quarter Ended December 31, 2010 2009 Revenues: United States $54.8 $ 55.7 Americas International 20.3 12.3 Americas $75.1 $68.0 EMEA 53.1 43.2 Asia/Pacific 13.0 14.7 Revenues $141.2 $125.9
Slide 26: Monthly Recurring Revenue
Monthly Recurring Revenue ($ millions) 26 Quarter Ended December 31, Quarter Ended December 31, 2010 2009 Monthly Software License Fees $32.5 $17.9 Maintenance Fees 34.4 35.8 Processing Services 13.7 10.2 Monthly Recurring Revenue $80.6 $63.9
Slide 27: Deferred Revenue and Expense
Deferred Revenue and Expense ($ millions) 27 Quarter Ended Quarter Ended Quarter Ended Quarter Ended December 31, September 30, December 31, September 30, 2010 2010 2009 2009 Short Term Deferred Revenue $121.9 $131.5 $106.3 $103.4 Long Term Deferred Revenue 31.0 35.7 31.5 28.7 Total Deferred Revenue
Slide 28: Non-Cash Compensation, Acquisition Intangibles and Software
Non-Cash Compensation, Acquisition Intangibles and Software 28 Quarter ended December 31, 2010 Quarter ended December 31, 2010 Quarter ended December 31, 2009 Quarter ended December 31, 2009 EPS Impact* $ in Millions EPS Impact* $ in Millions Amortization of acquisition-related intangibles $0.03 $1.
Slide 29: Other Income / Expense
Other Income / Expense ($ millions) 29 Quarter Ended Quarter Ended Quarter Ended Quarter Ended December 31, 2010 September 30, 2010 December 31, 2009 September 30, 2009 Interest Income $0.2 $0.2 $0.2 $0.1 Interest Expense ($0.5) ($0.4) ($1.1) ($0.5) FX Gain / Loss ($0.1) ($1.5) ($1.2) $1.1 Interest
Slide 30: Operating EBITDA
Operating EBITDA Quarter Ended December 31, 2010 Quarter Ended December 31, 2009 Operating Income $42.8 $35.0 Depreciation Expense 1.6 1.6 Amortization Expense 5.0 4.7 Non-Cash Compensation Expense 2.3 1.0 Operating EBITDA $51.7 $42.3 30 Operating EBITDA is defined as operating income plus depreciat
Slide 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: ACI's software underpins electronic payments throughout retail and wholesale banking, and commerce all the
ACI's software underpins electronic payments throughout retail and wholesale banking, and commerce all the time, without fail. www.aciworldwide.com