Q2 HIGHLIGHTS
- Recurring revenue of $250 million, up 7% from Q2 2020
- Revenue of $302 million, up 1% from Q2 2020
- Signed multi-year strategic alliance with Microsoft to deliver
best-in-class cloud-based payment solutions
- Repurchased 1 million shares and paid down $25 million in
debt
- Introducing 2021 revenue guidance and reaffirming 2021 adjusted
EBITDA guidance
ACI Worldwide (NASDAQ: ACIW), a leading global provider of
real-time electronic payment solutions and software, today
announced financial results for the quarter ended June 30,
2021.
“We had another solid quarter, coming in at the high end of our
expectations. Encouragingly, both our global sales organization and
our pipeline continue to strengthen while our business becomes more
predictable,” said Odilon Almeida, president and CEO of ACI
Worldwide. “In the quarter, we signed a significant number of new
logos and secured important strategic wins. We also signed a global
alliance with Microsoft Azure, which will accelerate and expand
ACI’s best-in-class cloud payment offerings. This partnership will
enable stronger go-to-market cooperation between the two companies
to meet the increasing demand for SaaS-based payment solutions from
financial institutions. Also among the quarter’s signings was a
major Real-Time payments win with the Central Bank of Indonesia,
further cementing ACI’s lead in this fast-growing segment.”
Mr. Almeida concluded, “We expect to continue this momentum in
the second half of 2021 and as the economic backdrop improves, plan
to end the year at a significantly higher growth rate. Importantly,
this will allow us to achieve the Rule of 40 in 2021 for the first
year ever. I am increasingly confident that our three-pillar
strategy is taking hold and we remain committed to maximizing
shareholder value.”
Q2 2021 FINANCIAL SUMMARY
Recurring revenue was $250 million, up 7% from Q2 2020. Total
revenue in the quarter was $302 million, up 1% compared to Q2
2020.
Recurring revenue grew in all segments compared to Q2 2020. Bank
segment recurring revenue increased 2% and Bank segment adjusted
EBITDA decreased 20%, versus Q2 2020. Merchant segment recurring
revenue increased 5% and Merchant segment adjusted EBITDA increased
2%, versus Q2 2020. Biller segment recurring revenue grew 9% and
Biller segment adjusted EBITDA increased 1%, versus Q2 2020.
Total adjusted EBITDA in the quarter was $60 million compared to
$78 million in Q2 2020, largely due to the timing of non-recurring,
high-margin license renewals. Net adjusted EBITDA margin was 28% in
the quarter, compared to 35% in Q2 2020. Net income in the quarter
of $7 million declined compared to net income of $14 million in Q2
2020.
Cash flows from operating activities in the quarter were $38
million, down from $68 million in Q2 2020. ACI ended the quarter
with $146 million in cash on hand and $474 million available on our
credit facility after paying down $25 million in debt in the
quarter. The company repurchased 1 million shares during the
quarter.
INTRODUCING 2021 REVENUE GUIDANCE; REAFFIRMING 2021 ADJUSTED
EBITDA GUIDANCE
For the full year 2021, we expect revenue to be in a range of
$1.335 billion to $1.345 billion and we continue to expect adjusted
EBITDA to be in the range of $375 million to $385 million with net
adjusted EBITDA margin expansion. We expect revenue to be between
$310 million and $320 million and adjusted EBITDA of $70 million to
$80 million in Q3 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
webcast of the teleconference at http://investor.aciworldwide.com/
or use the following numbers for dial-in participation: toll-free:
(888) 771-4371, toll: +1 (847) 585-4405. Please provide your name,
the conference name of ACI Worldwide, Inc. and confirmation number
50201377.
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 (loss) plus income tax expense
(benefit), 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 (loss).
- 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 (loss).
- 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, and non-cash stock-based compensation. 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.
- Recurring revenue: revenue from software as a service and
platform as a service fees and maintenance fees. Recurring revenue
should be considered in addition to, rather than as a substitute
for, total 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, expectations regarding: (i) both our global
sales organization and our pipeline strengthening considerably,
while our business becomes more predictable, (ii) a global alliance
with Microsoft Azure, which will accelerate and expand ACI’s
best-in-class cloud payment offerings, (iii) continuing this
momentum in the second half of 2021 and as the economic backdrop
improves, plan to end the year at a significantly higher growth
rate, (iv) the achievement the rule of 40 in 2021 for the first
year ever, and (v) full year 2021 and Q3, 2021 financial guidance
for 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, the COVID-19 pandemic, increased competition,
business interruptions or failure of our information technology and
communication systems, may be subjected to security breaches or
viruses, our ability to attract and retain senior management
personnel and skilled technical employees, new members of senior
management coupled with our headquarters relocation, future
acquisitions, strategic partnerships and investments, integration
of and achieving benefits from the Speedpay acquisition,
implementation and success of our new Three Pillar strategy, impact
if we convert some or all on-premise licenses from fixed-term to
subscription model, anti-takeover provisions, exposure to credit or
operating risks arising from certain payment funding methods,
customer reluctance to switch to a new vendor, our ability to
adequately defend our intellectual property, litigation, our
offshore software development activities, risks from operating
internationally, including fluctuations in currency exchange rates,
adverse changes in the global economy, compliance of our products
with applicable legislation, governmental regulations and industry
standards, the complexity of our products and services and the risk
that they may contain hidden defects, complex regulations
applicable to our payments business, our compliance with privacy
regulations, exposure to unknown tax liabilities, consolidations
and failures in the financial services industry, volatility in our
stock price, demand for our products, 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, impairment of our goodwill or intangible
assets, the accuracy of management’s backlog estimates, 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, restrictions and other
financial covenants in our debt agreements, our existing levels of
debt, potential adverse effects from the impending replacement of
LIBOR, events outside of our control including natural disasters,
wars, and outbreaks of disease. 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
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited and in
thousands)
June 30,
2021
December 31,
2020
ASSETS
Current assets
Cash and cash equivalents
$
146,213
$
165,374
Receivables, net of allowances
289,351
342,879
Settlement assets
486,983
605,008
Prepaid expenses
31,258
24,288
Other current assets
31,425
17,365
Total current assets
985,230
1,154,914
Noncurrent assets
Accrued receivables, net
190,399
215,772
Property and equipment, net
61,527
64,734
Operating lease right-of-use assets
51,511
41,243
Software, net
180,873
196,456
Goodwill
1,280,226
1,280,226
Intangible assets, net
303,151
321,983
Deferred income taxes, net
64,857
57,476
Other noncurrent assets
57,406
54,099
TOTAL ASSETS
$
3,175,180
$
3,386,903
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
37,899
$
41,223
Settlement liabilities
489,302
604,096
Employee compensation
39,894
48,560
Current portion of long-term debt
36,067
34,265
Deferred revenue
97,503
95,849
Other current liabilities
65,794
81,612
Total current liabilities
766,459
905,605
Noncurrent liabilities
Deferred revenue
32,524
33,564
Long-term debt
1,071,822
1,120,742
Deferred income taxes, net
35,208
40,504
Operating lease liabilities
48,008
39,958
Other noncurrent liabilities
42,599
39,933
Total liabilities
1,996,620
2,180,306
Commitments and contingencies
Stockholders’ equity
Preferred stock
—
—
Common stock
702
702
Additional paid-in capital
676,399
682,431
Retained earnings
1,008,046
1,003,490
Treasury stock
(412,492
)
(387,581
)
Accumulated other comprehensive loss
(94,095
)
(92,445
)
Total stockholders’ equity
1,178,560
1,206,597
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
3,175,180
$
3,386,903
ACI WORLDWIDE, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited and in thousands,
except per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues
Software as a service and platform as a
service
$
196,328
$
180,573
$
392,074
$
373,523
License
34,727
50,136
55,929
78,265
Maintenance
53,155
52,749
105,518
106,029
Services
17,459
16,452
33,334
33,578
Total revenues
301,669
299,910
586,855
591,395
Operating expenses
Cost of revenue (1)
158,614
147,346
318,099
313,183
Research and development
35,029
35,578
69,543
74,602
Selling and marketing
28,660
24,455
56,798
54,538
General and administrative
31,937
29,758
59,712
65,684
Depreciation and amortization
32,005
33,635
63,589
65,533
Total operating expenses
286,245
270,772
567,741
573,540
Operating income
15,424
29,138
19,114
17,855
Other income (expense)
Interest expense
(11,260
)
(14,142
)
(22,735
)
(31,313
)
Interest income
2,865
2,954
5,719
5,854
Other, net
1,434
2,041
52
(7,717
)
Total other income (expense)
(6,961
)
(9,147
)
(16,964
)
(33,176
)
Income (loss) before income
taxes
8,463
19,991
2,150
(15,321
)
Income tax expense (benefit)
1,962
5,916
(2,406
)
(4,969
)
Net income (loss)
$
6,501
$
14,075
$
4,556
$
(10,352
)
Income (loss) per common share
Basic
$
0.06
$
0.12
$
0.04
$
(0.09
)
Diluted
$
0.05
$
0.12
$
0.04
$
(0.09
)
Weighted average common shares
outstanding
Basic
117,718
116,033
117,605
116,019
Diluted
119,010
117,264
118,958
116,019
(1) The cost of revenue excludes charges for depreciation but
includes amortization of purchased and developed software for
resale.
ACI WORLDWIDE, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited and in
thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Cash flows from operating activities:
Net income (loss)
$
6,501
$
14,075
$
4,556
$
(10,352
)
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Depreciation
5,292
5,927
10,708
11,752
Amortization
28,111
29,765
56,278
57,762
Amortization of operating lease
right-of-use assets
2,655
5,245
5,000
8,801
Amortization of deferred debt issuance
costs
1,175
1,204
2,357
2,416
Deferred income taxes
(3,480
)
5,671
(9,558
)
(4,742
)
Stock-based compensation expense
7,720
7,932
14,423
14,882
Other
542
1,122
436
1,772
Changes in operating assets and
liabilities:
Receivables
619
(19,646
)
76,754
29,053
Accounts payable
268
12,374
(2,540
)
6,287
Accrued employee compensation
4,324
1,192
(8,401
)
8,177
Deferred revenue
(7,855
)
(259
)
297
22,236
Other current and noncurrent assets and
liabilities
(7,779
)
3,427
(42,094
)
(22,515
)
Net cash flows from operating
activities
38,093
68,029
108,216
125,529
Cash flows from investing activities:
Purchases of property and equipment
(3,729
)
(7,018
)
(8,075
)
(10,615
)
Purchases of software and distribution
rights
(7,599
)
(8,516
)
(15,652
)
(15,057
)
Net cash flows from investing
activities
(11,328
)
(15,534
)
(23,727
)
(25,672
)
Cash flows from financing activities:
Proceeds from issuance of common stock
596
947
1,648
1,894
Proceeds from exercises of stock
options
4,245
722
7,044
1,122
Repurchase of stock-based compensation
awards for tax withholdings
(590
)
(151
)
(14,796
)
(11,124
)
Repurchases of common stock
(39,411
)
—
(39,411
)
(28,881
)
Proceeds from revolving credit
facility
—
—
—
30,000
Repayment of revolving credit facility
(15,000
)
(30,000
)
(30,000
)
(69,000
)
Repayment of term portion of credit
agreement
(9,737
)
(9,738
)
(19,475
)
(19,475
)
Payments on or proceeds from other debt,
net
(4,672
)
(1,093
)
(8,272
)
(4,686
)
Net cash flows from financing
activities
(64,569
)
(39,313
)
(103,262
)
(100,150
)
Effect of exchange rate fluctuations on
cash
(347
)
(3,083
)
(388
)
8,118
Net increase (decrease) in cash and cash
equivalents
(38,151
)
10,099
(19,161
)
7,825
Cash and cash equivalents, beginning of
period
184,364
119,124
165,374
121,398
Cash and cash equivalents, end of
period
$
146,213
$
129,223
$
146,213
$
129,223
Adjusted EBITDA (millions)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Net income (loss)
$
6.5
$
14.1
$
4.6
$
(10.4
)
Plus:
Income tax expense (benefit)
2.0
5.9
(2.4
)
(5.0
)
Net interest expense
8.4
11.2
17.0
25.5
Net other (income) expense
(1.4
)
(2.0
)
(0.1
)
7.7
Depreciation expense
5.3
5.9
10.7
11.8
Amortization expense
28.1
29.8
56.3
57.8
Non-cash stock-based compensation
expense
7.7
7.9
14.4
14.9
Adjusted EBITDA before significant
transaction-related expenses
56.6
72.8
100.5
102.3
Significant transaction-related
expenses:
Employee related actions
2.9
—
3.7
8.2
Facility closures
—
1.8
—
1.8
Other
0.5
3.2
0.9
3.5
Adjusted EBITDA
$
60.0
$
77.8
$
105.1
$
115.8
Revenue, net of interchange:
Revenue
$
301.7
$
299.9
$
586.9
$
591.4
Interchange
87.5
74.8
174.8
163.6
Revenue, net of interchange
$
214.2
$
225.1
$
412.1
$
427.8
Net Adjusted EBITDA Margin
28
%
35
%
26
%
27
%
Segment Information (millions)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenue
Banks
$
114.1
$
125.4
$
210.0
$
231.2
Merchants
37.4
37.3
76.1
69.1
Billers
150.2
137.2
300.8
291.1
Total
$
301.7
$
299.9
$
586.9
$
591.4
Recurring Revenue
Banks
$
63.6
$
62.2
$
126.0
$
124.8
Merchants
35.7
33.9
70.9
63.8
Billers
150.2
137.2
300.7
291.0
Total
$
249.5
$
233.3
$
497.6
$
479.6
Segment Adjusted EBITDA
Banks
$
54.5
$
68.4
$
91.7
$
110.8
Merchants
13.0
12.8
27.8
19.3
Billers
34.6
34.3
68.6
64.5
EPS Impact of Non-cash and Significant
Transaction-related Items (millions)
Three Months Ended June
30,
2021
2020
EPS Impact
$ in Millions
(Net of Tax)
EPS Impact
$ in Millions
(Net of Tax)
GAAP net income
$
0.05
$
6.5
$
0.12
$
14.1
Adjusted for:
Significant transaction-related
expenses
0.02
2.6
0.03
3.5
Amortization of acquisition-related
intangibles
0.06
7.1
0.06
7.0
Amortization of acquisition-related
software
0.05
6.3
0.07
8.1
Non-cash stock-based compensation
0.05
5.9
0.05
6.0
Total adjustments
0.18
21.9
0.21
24.6
Diluted EPS adjusted for non-cash and
significant transaction-related items
$
0.23
$
28.4
$
0.33
$
38.7
EPS Impact of Non-cash and Significant
Transaction-related Items (millions)
Six Months Ended June
30,
2021
2020
EPS Impact
$ in Millions
(Net of Tax)
EPS Impact
$ in Millions
(Net of Tax)
GAAP net income (loss)
$
0.04
$
4.6
$
(0.09
)
$
(10.4
)
Adjusted for:
Significant transaction-related
expenses
0.03
3.5
0.09
10.3
Amortization of acquisition-related
intangibles
0.12
14.1
0.12
14.1
Amortization of acquisition-related
software
0.11
13.0
0.14
16.1
Non-cash stock-based compensation
0.09
11.0
0.10
11.3
Total adjustments
0.35
41.6
0.45
51.8
Diluted EPS adjusted for non-cash and
significant transaction-related items
$
0.39
$
46.2
$
0.36
$
41.4
Recurring Revenue (millions)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
SaaS and PaaS fees
$
196.3
$
180.6
$
392.1
$
373.5
Maintenance fees
53.2
52.7
105.5
106.0
Recurring Revenue
$
249.5
$
233.3
$
497.6
$
479.5
Annual Recurring Revenue (ARR) Bookings
(millions)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
ARR bookings
$
17.6
$
21.4
$
27.3
$
34.9
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805005175/en/
Investors John Kraft john.kraft@aciworldwide.com
Media Dan Ring dan.ring@aciworldwide.com
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