Slide 1: Quarterly Results Presentation
October 28, 2010 September 30, 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: Q3 2010 Update
4 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
Slide 5: Business Overview
Business Overview ACI's customer base spans 90 countries on six continents. Louis Blatt Chief Product Officer Ralph Dangelmaier President, Global Markets
Slide 6: First Global Account Deal Signed in Q3
6 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 renewals and add-ons
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(r) license with Spanish bank Large capacity deal driven by U.K. bank
Slide 8: Record Q3 Sales Achievement
8 Record Q3 Sales Achievement
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 Reform and
Slide 10: Financial Review
Financial Review ACI wholesale payments solutions process more than $12 trillion each day. Scott Behrens Chief Financial Officer
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%, over p
Slide 12: Key Takeaways from the Quarter
12 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 Backlog contributes approximately 90% of quarterly revenue We expect backlog to contribute a similar percentage of Q4 revenue led by recurring revenue, annual license fees and go-live events 13
Slide 14: Reaffirmation of Guidance
Reaffirmation of Guidance Revenue and operating income within our range Anticipate revenue will grow closer to 3% over 2009 revenue of $405.8 million. Top-line revenue impacted by FX of approximately $5 million Operating income & Operating EBITDA expected at the high end of range Expect sales for th
Slide 15: Preliminary 2011 Outlook
Preliminary 2011 Outlook Sales to be consistent with this year in the high $400s million Revenue to grow in mid-single digits Backlog to grow in high-single digits Operating income in the 20% growth range Operating EBITDA growth in the mid-teens range over 2010 Cash growth consistent with operating
Slide 16: Appendix
Appendix ACI's risk management software protects more than 2,500 financial institutions worldwide.
Slide 17: Historic Sales By Quarter 2009-2010
17 Historic Sales By Quarter 2009-2010
Slide 18: Q3 Channel Sales Results
27 October 2010 18 Q3 Channel Sales Results Q3 Channel Sales Results Q3 Channel Sales Results Q3 Channel Sales Results
Slide 19: Operating Free Cash Flow
Operating Free Cash Flow ($ millions) 19 Quarter Ended September 30, Quarter Ended September 30, 2010 2009 Net cash provided by operating activities $32.0 $(8.0) Adjustments: Net after-tax payments associated with employee-related actions - 0.3 Net after-tax payments associated with IBM IT Outsourci
Slide 20: 60-Month Backlog
60-Month Backlog ($ millions) 20 Quarter Ended Quarter Ended 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 $138 Other 1,430 1,365 1,379 Backlog 60-Mon
Slide 21: Revenues by Channel
Revenues by Channel ($ millions) 21 Quarter Ended September 30, 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 $104.5
Slide 22: Monthly Recurring Revenue
Monthly Recurring Revenue ($ millions) 22 Quarter Ended September 30, 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 $62.9
Slide 23: Deferred Revenue and Expense
Deferred Revenue and Expense ($ millions) 23 Quarter Ended Quarter Ended Quarter Ended Quarter Ended September 30, June 30, September 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
Slide 24: Non-Cash Compensation, Acquisition Intangibles and Software
Non-Cash Compensation, Acquisition Intangibles and Software 24 Quarter ended September 30, 2010 Quarter ended September 30, 2010 Quarter ended September 30, 2009 Quarter ended September 30, 2009 EPS Impact* $ in Millions EPS Impact* $ in Millions Amortization of acquisition-related intangibles $0.03
Slide 25: Other Income / Expense
Other Income / Expense ($ millions) 25 Quarter Ended Quarter Ended Quarter Ended Quarter Ended September 30, 2010 June 30, 2010 September 30, 2009 June 30, 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 Swa
Slide 26: Operating EBITDA
Operating EBITDA Quarter Ended September 30, 2010 Quarter Ended September 30, 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 26 Operating EBITDA is defined as operating income/(loss) plus d
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 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