ACI Worldwide, Inc. · NASDAQ:ACIW
ACI Worldwide — Q2 2009 Earnings Presentation
33 slides from ACI Worldwide's earnings presentation, Aug 6, 2009
Slide 1: June 30, 2009 Quarterly Results
June 30, 2009 Quarterly Results August 6, 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: Half-year Review
Phil Heasley, Chief Executive Officer Half-year Review
Slide 5: Business Commentary
Business Commentary • We are holding to full year guidance • 2H 2009 has arrived with the key category improvements we’ve been expecting for the past 10 quarters – Big American PUF renewals are behind us and now structured as ILF/annuity contracts – Emphasizing predictable recurring deals – Since qu
Slide 6: Market Commentary
Market Commentary • Market for payments share is growing, not shrinking – Banks are very focused on this piece of their business model • EMEA still represents our greatest absolute growth segment – EMEA banks had a tougher time adjusting to the global economic crisis in Q4 2008/Q1 2009 – Capital spe
Slide 7: Quarterly Business Review
Ron Totaro, Chief Operating Officer Quarterly Business Review
Slide 8: Q2 2009 Business Performance
Q2 2009 Business Performance • Revenues essentially flat ex government mandate deal and FX – $15 million variance in non-recurring deals (Faster Payments, Middle East switch) – Negative foreign currency impact of ~$4 million – Stronger recurring revenue over same period prior year – Much stronger ca
Slide 9: Q2 2009 Sales Results
Q2 2009 Sales Results Sales Type Product Division Qtr. Ended Qtr. Ended % Growth or Qtr. Ended Qtr. Ended % Growth or Sales Type Jun. 09 Jun. 08 Decline Product Division Jun. 09 Jun. 08 Decline New Account 12,053 15,856 -24% Retail Payments 62,946 55,627 13% New Application 4,897 23,487 -79% Applica
Slide 10: Q2 2009 Channel Sales Results
Q2 2009 Channel Sales Results Sales (net of Term Extensions) Q2 2009 v Q2 2008 Channel Performance: • Top 5 customers accounted for 35% of sales dollars in the Sales Net of Term Extensions Qtr. Ended Qtr. Ended % Growth or quarter compared to 27% in Q1-09 and 25% in Q2-08 Channel Jun. 09 Jun. 08 Dec
Slide 11: 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 12: Channel Summary
Channel Summary • Americas – Monthly recurring revenue rise of $2.1 million or 6% compared to prior-year and $1.0 million or 3% compared to March quarter – Experienced 6th consecutive quarter of service bill rates increases since implementing new pricing strategies – Protected revenue base with stra
Slide 13: Product & Development Summary
Product & Development Summary • Delivered 2 major Beta product enhancement releases to customers in Q2-09 – Enterprise Banker (EB) 7.5 – Automated Case Manager (ACM) 2.0 • Implemented first deployment of Proactive Risk Manager (PRM) on IBM System z using DB2 and Websphere MQ for a customer in Asia-
Slide 14: Financial Review
Financial Review Scott Behrens, Chief Financial Officer
Slide 15: Key Takeaways from the Quarter
Key Takeaways from the Quarter → Sales: Down slightly versus prior-year second quarter → Term extensions offset weakness in new application and account sales ↓ Revenue: Achieved $87.2 million in the current quarter versus $109.2 million in Q2-08 quarter, represented a flat performance on Q1-09 Q2-
Slide 16: Takeaways from the Quarter (cont)
Takeaways from the Quarter (cont) ↑ Operating Expenses: Decreased $17.6 million (16%) versus prior-year quarter 110.0 3.5 108.0 - 4.6 105.0 3.8 100.0 3.1 95.0 2.6 90.4 90.0 85.0 80.0 Q2 2008 Operating FX Impact Restructuring Savings Change in Def. Svcs / IBM IT Outsourcing Other / Debt Reserve Q2 20
Slide 17: 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 Jun. 09 Jun. 08 Decline Revenue from Backlog 79,167 97,638 -19% Revenue from Sales 8,003 11,581 -31% Total Revenue 87,170 109,219 -20% Revenue from Backlog 91% 89% Revenue from Sale
Slide 18: Re-affirmation of Guidance
Re-affirmation of Guidance Key Metrics 2008 Actuals 2009 Guidance Sales $460 $450-460 Revenue 418 415-425 GAAP Operating Income 22 35-40 • Currently expect sales, revenue and GAAP Operating Income on the lower end of the guidance range • Fourth quarter sales and revenue generation anticipated to be
Slide 19: Appendix
Appendix
Slide 20: Operating Free Cash Flow ($ millions)
Operating Free Cash Flow ($ millions) Quarter Ended June 30, 2009 2008 Net cash provided by operating activities* $16.6 $ (3.4) Adjustments: Less capital expenditures (1.1) (6.0) Less alliance Technical enablement expenditures (1.9) (1.5) Operating Free Cash Flow $13.6 $(10.9) *OFCF is defined as ne
Slide 21: 60-Month Backlog ($ millions)
60-Month Backlog ($ millions) Quarter Ended June 30, 2009 March 31, 2009 June 30, 2008 Americas $817 $791 $744 EMEA 504 466 534 Asia/Pacific 155 153 159 Backlog 60-Month $1,476 $1,410 $1,437 ACI Deferred Revenue $140 $137 $144 ACI Other 1,336 1,273 1,293 Backlog 60-Month $1,476 $1,410 $1,437 21
Slide 22: Revenues by Channel ($ millions)
Revenues by Channel ($ millions) Quarter Ended June 30, 2009 2008 Revenues: United States $34.6 $40.2 Americas International 11.6 12.3 Americas 46.2 52.5 EMEA 29.7 46.9 Asia/Pacific 11.2 9.8 Revenues $87.2 $109.2 22
Slide 23: Monthly Recurring Revenue ($ millions)
Monthly Recurring Revenue ($ millions) Quarter Ended June 30, 2009 2008 Monthly license fees $17.5 $17.8 Maintenance fees 33.3 32.9 Processing Services 9.0 7.6 Monthly Recurring Revenue $59.8 $58.3 23
Slide 24: Deferred Revenue & Expense ($ millions)
Deferred Revenue & Expense ($ millions) Quarter Ended March 31, March 31, June 30, 2009 2009 June 30, 2008 2008 Short Term Deferred Revenue $107.7 $111.5 123.0 $137.3 Long Term Deferred Revenue 32.4 25.7 23.1 20.3 Total Deferred Revenue $140.1 $137.2 $146.1 $157.6 Total Deferred Expense $13.9 $12.4
Slide 25: Non-Cash Compensation and Acquisition Intangibles
Non-Cash Compensation and Acquisition Intangibles Quarter ended June 30, 2009 Quarter ended June 30, 2008 EPS Impact* $ in Millions EPS Impact* $ in Millions Amortization of acquisition-related intangibles and software 0.05 1.9 0.06 2.0 Non-cash equity-based compensation 0.04 1.3 0.05 1.7 Total: $0.
Slide 26: Other Income / Expense ($ millions)
Other Income / Expense ($ millions) Quarter Ended June 30, 2009 March 31, 2009 June 30, 2008 March 31, 2008 Interest Income $0.4 $0.3 $0.7 $0.6 Interest Expense (0.5) (0.8) (1.0) (1.4) FX Gain / Loss (4.3) (0.7) (0.7) 3.7 Interest Rate Swap Loss (0.3) (0.4) 2.9 (3.7) Other 1.1 0.0 0.2 (0.2) Total Ot
Slide 27: Sales by Channel and Product Division ($ millions)
Sales by Channel and Product Division ($ millions) Quarter Ended December 31, September 30, June 30, June 30, 2009 March 31, 2009 2008 2008 2008 Sales by Channel: Americas $43.8 $38.9 $119.6 $46.8 $49.9 EMEA 44.7 17.4 47.1 53.0 42.4 Asia Pacific 8.8 4.6 22.6 6.8 7.6 Total Sales $97.3 $60.8 $189.3 $1
Slide 28: Reclassification Recast
Reclassification Recast Year Ended December 31, ($ 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 29: 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 capital expenditures and plus or minus net proceeds from IBM. Operating free cash flow is considered a non-GAAP financial measure as defined by SEC Regula
Slide 30: 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 31: 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 32: 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 “bel
Slide 33: INGE
INGE EVERY SECOND. EVERY DAY.