2020 HIGHLIGHTS
- Revenue of $1.294 billion, up 3% from 2019
- Net income of $73 million, up 8% from 2019
- Adjusted EBITDA of $359 million, up 17% from 2019
- Net adjusted EBITDA margin improved to 37% from 33% in
2019
- Cash flow from operating activities of $336 million, up 144%
compared to 2019
ACI Worldwide (NASDAQ: ACIW), a leading global provider of
real-time digital payment software and solutions, announced
financial results today for the quarter and full year ended
December 31, 2020.
“The continued execution of our three-pillar strategic plan is
enabling ACI to be fit-for-growth, more agile and
customer-centric,” said Odilon Almeida, president and CEO of ACI
Worldwide. “With our strong fourth quarter performance and our
continued momentum, I am confident that 2021 will be an important
milestone year for ACI. We expect to achieve, for the first time
ever, the rule of 40. As a part of our three-pillar strategic plan,
we will also undertake a thorough strategic review of our business
portfolio to enhance ACI’s growth profile and maximize long-term
value to our shareholders.”
FULL YEAR 2020 FINANCIAL SUMMARY
Full year 2020 total bookings were $1.495 billion, up 21% from
2019, while new bookings were $737 million, up 36% from 2019. New
bookings in our On Demand business more than doubled over last
year, while new bookings in our On Premise license software
business declined due to COVID-related delays in purchasing
decisions by our bank customers.
Full year 2020 revenue was $1.29 billion, up 3% from $1.26
billion in 2019. Total recurring revenue was $981 million, up 10%
from $891 million in 2019.
Net income in 2020 was $73 million, up 8% from $67 million in
2019. Adjusted EBITDA in 2020 was $359 million, up 17% from $308
million in 2019. Net adjusted EBITDA margin improved to 37% from
33% in 2019 due primarily to cost reduction initiatives, as well as
the Speedpay acquisition. Net adjusted EBITDA and On Demand segment
margins are adjusted for pass through interchange revenue of $334
million and $322 million, for 2020 and 2019, respectively.
In 2020, revenue from ACI’s On Demand segment was $769 million,
up 13% from $679 million in 2019 driven by the Speedpay
acquisition. On Demand segment net adjusted EBITDA margin improved
to 34% from 19% in 2019.
ACI’s On Premise segment revenue was $525 million, down 9% from
$579 million in 2019 primarily as a result of lower non-recurring
license revenue. On Premise segment adjusted EBITDA margin was 55%,
flat with 2019.
ACI ended 2020 with a 12-month backlog of $1.3 billion and a
60-month backlog of $6 billion. After adjusting for foreign
currency fluctuations, our 12-month backlog increased $148 million
and our 60-month backlog increased $157 million from year end 2019.
Cash flow from operating activities in 2020 was $336 million, up
144% compared to 2019. ACI ended 2020 with $165 million in cash on
hand and a debt balance of $1.2 billion. During the year, the
company paid down $223 million of debt and repurchased one million
shares for $29 million. The Company has $112 million remaining on
its share repurchase authorization.
2021 GUIDANCE
We expect COVID-19-related headwinds to persist through the
first half of 2021 and for growth to accelerate to the mid-single
digits in the second half of the year. For the full year 2021, we
expect adjusted EBITDA to be in a range of $375 million to $385
million with net adjusted EBITDA margin expansion. This excludes
one-time charges to implement cost reduction initiatives as
communicated at the company’s Analyst Day in November 2020. We
expect revenue to be between $270 million and $280 million and
adjusted EBITDA of $25 million to $35 million in Q1 2021.
CONFERENCE CALL TO DISCUSS FINANCIAL RESULTS
Management will host a conference call at 8:30 am ET today to
discuss these results. Interested persons may access a real-time
audio broadcast of the teleconference at
http://investor.aciworldwide.com/ or use the following numbers for
dial-in participation: US/Canada: (866) 914-7436, international: +1
(817) 385-9117. Please provide your name, the conference name ACI
Worldwide, Inc. and conference code 4694778. There will be a replay
of the call available for two weeks on (855) 859-2056 for US/Canada
callers and +1 (404) 537-3406 for international participants.
About ACI Worldwide
ACI Worldwide is a global software company that provides
mission-critical real-time payment solutions to corporations.
Customers use our proven, scalable and secure solutions to process
and manage digital payments, enable omni-commerce payments, present
and process bill payments, and manage fraud and risk. We combine
our global footprint with local presence to drive the real-time
digital transformation of payments and commerce.
© Copyright ACI Worldwide, Inc. 2021.
ACI, ACI Worldwide, ACI Payments, Inc., ACI Pay, Speedpay and
all ACI product/solution names are trademarks or registered
trademarks of ACI Worldwide, Inc., or one of its subsidiaries, in
the United States, other countries or both. Other parties’
trademarks referenced are the property of their respective
owners.
To supplement our financial results presented on a GAAP basis,
we use the non-GAAP measures indicated in the tables, which exclude
significant transaction-related expenses, as well as other
significant non-cash expenses such as depreciation, amortization
and stock-based compensation, that we believe are helpful in
understanding our past financial performance and our future
results. The presentation of these non-GAAP financial measures
should be considered in addition to our GAAP results and are not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
GAAP. 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 presented in accordance with GAAP.
We believe that these non-GAAP financial measures reflect an
additional way to view aspects of our operations that, when viewed
with our GAAP results, provide a more complete understanding of
factors and trends affecting our business. Certain non-GAAP
measures include:
- Adjusted EBITDA: net income plus income tax expense, net
interest income (expense), net other income (expense),
depreciation, amortization and stock-based compensation, as well as
significant transaction-related expenses. Adjusted EBITDA should be
considered in addition to, rather than as a substitute for, net
income.
- Net Adjusted EBITDA Margin: Adjusted EBITDA divided by revenue
net of pass through interchange revenue. Net Adjusted EBITDA Margin
should be considered in addition to, rather than as a substitute
for, net income.
- Diluted EPS adjusted for non-cash and significant transaction
related items: diluted EPS plus tax effected significant
transaction related items, amortization of acquired intangibles and
software, non-cash stock-based compensation, and discreet income
tax times. Diluted EPS adjusted for non-cash and significant
transaction related items should be considered in addition to,
rather than as a substitute for, diluted EPS.
ACI also includes backlog estimates, which includes all SaaS and
PaaS, license, maintenance, and services revenue specified in
executed contracts that will be recognized in future periods, as
well as revenue from assumed contract renewals to the extent that
we believe recognition of the related revenue will occur within the
corresponding backlog period. We have historically included assumed
renewals in backlog estimates based upon automatic renewal
provisions in the executed contract and our historic experience
with customer renewal rates.
Backlog is considered a non-GAAP financial measure as defined by
SEC Regulation G. Our 60-month backlog estimates are derived using
the following key assumptions:
- License arrangements are assumed to renew at the end of their
committed term or under the renewal option stated in the contract
at a rate consistent with historical experience. If the license
arrangement includes extended payment terms, the renewal estimate
is adjusted for the effects of a significant financing
component.
- Maintenance fees are assumed to exist for the duration of the
license term for those contracts in which the committed maintenance
term is less than the committed license term.
- SaaS and PaaS arrangements are assumed to renew at the end of
their committed term at a rate consistent with our historical
experiences.
- Foreign currency exchange rates are assumed to remain constant
over the 60-month backlog period for those contracts stated in
currencies other than the U.S. dollar.
- Our pricing policies and practices are assumed to remain
constant over the 60-month backlog period.
Estimates of future financial results require substantial
judgment and are based on several assumptions as described above.
These assumptions may turn out to be inaccurate or wrong for
reasons outside of management’s control. For example, our customers
may attempt to renegotiate or terminate their contracts for many
reasons, including mergers, changes in their financial condition,
or general changes in economic conditions (e.g. economic declines
resulting from COVID-19) in the customer’s industry or geographic
location. We may also experience delays in the development or
delivery of products or services specified in customer contracts,
which may cause the actual renewal rates and amounts to differ from
historical experiences. Changes in foreign currency exchange rates
may also impact the amount of revenue recognized in future periods.
Accordingly, there can be no assurance that amounts included in
backlog estimates will generate the specified revenues or that the
actual revenues will be generated within the corresponding 60-month
period. Additionally, because certain components of Committed
Backlog and all of Renewal Backlog estimates are operating metrics,
the estimates are not required to be subject to the same level of
internal review or controls as a contracted but not recognized
Committed Backlog.
Backlog estimates should be considered in addition to, rather
than as a substitute for, reported revenue and contracted but not
recognized revenue (including deferred revenue).
FORWARD-LOOKING STATEMENTS
This press release 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 “believes,” “will,” “expects,” “anticipates,”
“intends,” and words and phrases of similar impact. The
forward-looking statements are made pursuant to safe harbor
provisions of the Private Securities Litigation Reform Act of
1995.
Forward-looking statements in this press release include, but
are not limited to, statements regarding: (i) expectations that our
three-pillar strategic plan is enabling ACI to be fit-for-growth,
and more agile and customer-centric, (ii) our confidence that 2021
will be an important milestone year, (iii) expectations to achieve,
for the first time ever, the rule of 40, (iv) plans to also
undertake a thorough strategic review of our business portfolio to
enhance ACI’s growth profile and maximize long-term value to our
shareholders, and (v) 2021 financial expectations, including
expectations for COVID-19-related headwinds to persist through the
first half of 2021 and for growth to accelerate to the mid-single
digits in the second half of the year, 2021 adjusted EBITDA, net
adjusted EBITDA margin expansion, and first quarter 2021 revenue
and adjusted EBITDA.
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, increased competition, demand for our products,
restrictions and other financial covenants in our debt agreements,
consolidations and failures in the financial services industry,
customer reluctance to switch to a new vendor, the accuracy of
management’s backlog estimates, failure to obtain renewals of
customer contracts or to obtain such renewals on favorable terms,
delay or cancellation of customer projects or inaccurate project
completion estimates, volatility and disruption of the capital and
credit markets and adverse changes in the global economy, events
outside of our control including natural disasters, wars, and
outbreaks of disease, our ability to attract and retain senior
management personnel and skilled technical employees, our existing
levels of debt, potential adverse effects from the impending
replacement of LIBOR, impairment of our goodwill or intangible
assets, litigation, future acquisitions, strategic partnerships and
investments, integration of and achieving benefits from the
Speedpay acquisition, the complexity of our products and services
and the risk that they may contain hidden defects or be subjected
to security breaches or viruses, compliance of our products with
applicable legislation, governmental regulations and industry
standards, our ability to protect customer information from
security breaches or attacks, our compliance with privacy
regulations, our ability to adequately defend our intellectual
property, exposure to credit or operating risks arising from
certain payment funding methods, the cyclical nature of our revenue
and earnings and the accuracy of forecasts due to the concentration
of revenue-generating activity during the final weeks of each
quarter, business interruptions or failure of our information
technology and communication systems, our offshore software
development activities, risks from operating internationally,
including fluctuations in currency exchange rates, exposure to
unknown tax liabilities, and volatility in our stock price. For a
detailed discussion of these risk factors, parties that are relying
on the forward-looking statements should review our filings with
the Securities and Exchange Commission, including our most recently
filed Annual Report on Form 10-K and our Quarterly Reports on Form
10-Q.
ACI WORLDWIDE, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(unaudited and in thousands,
except share and per share amounts)
December 31,
2020
2019
ASSETS
Current assets
Cash and cash equivalents
$
165,374
$
121,398
Receivables, net of allowances
342,879
359,197
Settlement assets
605,008
391,039
Prepaid expenses
24,288
24,542
Other current assets
17,365
24,200
Total current assets
1,154,914
920,376
Noncurrent assets
Accrued receivables, net
215,772
213,041
Property and equipment, net
64,734
70,380
Operating lease right-of-use assets
41,243
57,382
Software, net
196,456
234,517
Goodwill
1,280,226
1,280,525
Intangible assets, net
321,983
356,969
Deferred income taxes, net
57,476
51,611
Other noncurrent assets
54,099
72,733
TOTAL ASSETS
$
3,386,903
$
3,257,534
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
41,223
$
37,010
Settlement liabilities
604,096
368,719
Employee compensation
48,560
29,318
Current portion of long-term debt
34,265
34,148
Deferred revenue
95,849
65,784
Other current liabilities
81,612
76,971
Total current liabilities
905,605
611,950
Noncurrent liabilities
Deferred revenue
33,564
53,155
Long-term debt
1,120,742
1,339,007
Deferred income taxes, net
40,504
32,053
Operating lease liabilities
39,958
46,766
Other noncurrent liabilities
39,933
44,635
Total liabilities
2,180,306
2,127,566
Commitments and contingencies
Stockholders’ equity
Preferred stock
—
—
Common stock
702
702
Additional paid-in capital
682,431
667,658
Retained earnings
1,003,490
930,830
Treasury stock
(387,581
)
(377,639
)
Accumulated other comprehensive loss
(92,445
)
(91,583
)
Total stockholders’ equity
1,206,597
1,129,968
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
3,386,903
$
3,257,534
ACI WORLDWIDE, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited and in thousands,
except per share amounts)
Three Months Ended December
31,
Years Ended December
31,
2020
2019
2020
2019
Revenues
Software as a service and platform as a
service
$
205,288
$
203,661
$
769,180
$
677,669
License
111,858
122,584
246,896
288,261
Maintenance
52,619
53,738
211,697
213,409
Services
17,279
19,937
66,549
78,955
Total revenues
387,044
399,920
1,294,322
1,258,294
Operating expenses
Cost of revenue (1)
150,697
173,104
622,459
617,453
Research and development
31,118
34,601
139,293
146,573
Selling and marketing
26,875
30,875
103,567
123,684
General and administrative
49,784
27,174
152,468
135,296
Depreciation and amortization
32,863
31,753
131,791
111,532
Total operating expenses
291,337
297,507
1,149,578
1,134,538
Operating income
95,707
102,413
144,744
123,756
Other income (expense)
Interest expense
(12,392
)
(18,109
)
(56,630
)
(64,033
)
Interest income
2,847
2,949
11,628
11,967
Other, net
5,245
3,399
(1,116
)
520
Total other income (expense)
(4,300
)
(11,761
)
(46,118
)
(51,546
)
Income before income taxes
91,407
90,652
98,626
72,210
Income tax expense
24,261
35,166
25,966
5,148
Net income
$
67,146
$
55,486
$
72,660
$
67,062
Income per common share
Basic
$
0.57
$
0.48
$
0.62
$
0.58
Diluted
$
0.56
$
0.47
$
0.62
$
0.57
Weighted average common shares
outstanding
Basic
116,934
115,695
116,397
116,175
Diluted
119,375
118,898
118,079
118,571
(1) The cost of revenue excludes charges for depreciation but
includes amortization of purchased and developed software for
resale.
ACI WORLDWIDE, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited and in
thousands)
Three Months Ended December
31,
Years Ended December
31,
2020
2019
2020
2019
Cash flows from operating activities:
Net income
$
67,146
$
55,486
$
72,660
$
67,062
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation
6,716
6,176
24,728
24,092
Amortization
28,596
27,850
115,588
98,477
Amortization of operating lease
right-of-use assets
9,303
5,057
23,448
15,934
Amortization of deferred debt issuance
costs
1,189
1,219
4,802
4,128
Deferred income taxes
13,889
17,183
3,349
(22,140
)
Stock-based compensation expense
6,659
6,435
29,602
36,763
Other
1,678
2,744
6,017
5,175
Changes in operating assets and
liabilities, net of impact of acquisitions:
Receivables
(32,468
)
(53,744
)
8,793
(19,054
)
Accounts payable
804
711
2,484
(7,703
)
Accrued employee compensation
4,906
(12,569
)
18,491
(10,829
)
Deferred revenue
(4,940
)
(19,826
)
9,421
(37,561
)
Other current and noncurrent assets and
liabilities
40,766
11,989
16,919
(16,695
)
Net cash flows from operating
activities
144,244
48,711
336,302
137,649
Cash flows from investing activities:
Purchases of property and equipment
(3,713
)
(4,360
)
(17,804
)
(23,099
)
Purchases of software and distribution
rights
(7,273
)
(6,350
)
(28,829
)
(24,915
)
Acquisition of businesses, net of cash
acquired
—
—
—
(757,268
)
Other
15,934
(6,725
)
15,934
(25,199
)
Net cash flows from investing
activities
4,948
(17,435
)
(30,699
)
(830,481
)
Cash flows from financing activities:
Proceeds from issuance of common stock
906
929
3,759
3,591
Proceeds from exercises of stock
options
5,406
6,308
11,924
12,985
Repurchase of stock-based compensation
awards for tax withholdings
(418
)
(1,164
)
(11,568
)
(3,986
)
Repurchases of common stock
—
—
(28,881
)
(35,617
)
Proceeds from revolving credit
facility
—
—
30,000
280,000
Repayment of revolving credit facility
(105,000
)
(26,000
)
(214,000
)
(41,000
)
Proceeds from term portion of credit
agreement
—
—
—
500,000
Repayment of term portion of credit
agreement
(9,738
)
(9,738
)
(38,950
)
(28,900
)
Payments for debt issuance costs
—
—
—
(12,830
)
Payments on or proceeds from other debt,
net
(3,810
)
1,189
(13,854
)
(7,020
)
Net cash flows from financing
activities
(112,654
)
(28,476
)
(261,570
)
667,223
Effect of exchange rate fluctuations on
cash
(5,009
)
(2,983
)
(57
)
(1,495
)
Net increase (decrease) in cash and cash
equivalents
31,529
(183
)
43,976
(27,104
)
Cash and cash equivalents, beginning of
period
133,845
121,581
121,398
148,502
Cash and cash equivalents, end of
period
$
165,374
$
121,398
$
165,374
$
121,398
Adjusted EBITDA (millions)
Three Months Ended December
31,
Years Ended December
31,
2020
2019
2020
2019
Net income
$
67.1
$
55.5
$
72.7
$
67.1
Plus:
Income tax expense
24.3
35.2
26.0
5.1
Net interest expense
9.5
15.2
45.0
52.1
Net other (income) expense
(5.2
)
(3.4
)
1.1
(0.5
)
Depreciation expense
6.7
6.2
24.7
24.1
Amortization expense
28.6
27.9
115.6
98.5
Non-cash stock-based compensation
expense
6.7
6.4
29.6
36.8
Adjusted EBITDA before significant
transaction-related expenses
$
137.7
$
143.0
$
314.7
$
283.2
Significant transaction-related
expenses:
Employee related actions
11.0
0.8
24.3
0.8
Facility closures
6.5
1.3
10.2
1.3
Other
1.4
0.6
10.1
22.8
Adjusted EBITDA
$
156.6
$
145.7
$
359.3
$
308.1
Net Revenue
Revenue
$
387.0
$
399.9
$
1,294.3
$
1,258.3
Interchange
82.5
99.4
334.3
321.5
Total
$
304.5
$
300.5
$
960.0
$
936.8
Net Adjusted EBITDA Margin
51
%
48
%
37
%
33
%
Segment Information (millions)
Three Months Ended December
31,
Years Ended December
31,
2020
2019
2020
2019
Revenue
ACI On Demand
205.3
203.7
769.2
679.0
ACI On Premise
$
181.7
$
196.2
$
525.1
$
579.3
Total
$
387.0
$
399.9
$
1,294.3
$
1,258.3
Interchange
ACI On Demand
$
82.5
$
99.4
$
334.3
$
321.5
Net Revenue
ACI On Demand
$
122.8
$
104.3
$
434.9
$
357.5
ACI On Premise
181.7
196.2
525.1
579.3
Total
$
304.5
$
300.5
$
960.0
$
936.8
Segment Adjusted EBITDA
ACI On Demand
$
60.2
$
30.9
$
149.6
$
66.5
ACI On Premise
$
130.7
$
136.4
$
290.3
$
321.3
Segment Net Adjusted EBITDA
Margin
ACI On Demand
49
%
30
%
34
%
19
%
ACI On Premise
72
%
70
%
55
%
55
%
EPS Impact of Non-cash and Significant
Transaction-related Items (millions)
Three Months Ended December
31,
2020
2019
EPS Impact
$ in Millions (Net of
Tax)
EPS Impact
$ in Millions (Net of
Tax)
GAAP net income
$
0.56
$
67.1
$
0.47
$
55.5
Adjusted for:
Significant transaction-related
expenses
0.12
14.5
0.02
2.0
Amortization of acquisition-related
intangibles
0.06
7.0
0.06
7.1
Amortization of acquisition-related
software
0.06
7.5
0.07
8.2
Non-cash stock-based compensation
0.04
5.1
0.04
4.9
Total adjustments
$
0.28
$
34.1
$
0.19
$
22.2
Diluted EPS adjusted for non-cash and
significant transaction-related items
$
0.84
$
101.2
$
0.66
$
77.7
EPS Impact of Non-cash and Significant
Transaction-related Items (millions)
Years Ended December
31,
2020
2019
EPS Impact
$ in Millions (Net of
Tax)
EPS Impact
$ in Millions (Net of
Tax)
GAAP net income
$
0.62
$
72.7
$
0.57
$
67.1
Adjusted for:
Tax benefit from release of valuation
allowance
—
—
(0.13
)
(15.5
)
Significant transaction-related
expenses
0.29
34.2
0.16
18.9
Amortization of acquisition-related
intangibles
0.24
28.2
0.20
24.2
Amortization of acquisition-related
software
0.27
31.8
0.24
29.0
Non-cash stock-based compensation
0.19
22.5
0.24
27.9
Total adjustments
$
0.99
$
116.7
$
0.71
$
84.5
Diluted EPS adjusted for non-cash and
significant transaction-related items
$
1.61
$
189.4
$
1.28
$
151.6
Recurring Revenue (millions)
Three Months Ended December
31,
Years Ended December
31,
2020
2019
2020
2019
SaaS and PaaS fees
$
205.3
$
203.7
$
769.2
$
677.7
Maintenance fees
52.6
53.7
211.7
213.4
Recurring Revenue
$
257.9
$
257.4
$
980.9
$
891.1
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210225005194/en/
John Kraft SVP, Head of Strategy and Finance ACI Worldwide
239-403-4627 john.kraft@aciworldwide.com
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