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ACI Worldwide, Inc. Reports Financial Results for the Quarter Ended September 30, 2020

Nov 5, 2020

FINANCIAL HIGHLIGHTS

  • Q3 revenue of $316 million, adjusted EBITDA of $87 million and net income of $16 million
  • Q3 recurring revenue was 77% of total revenue, up from 69% in Q3 last year
  • Q3 cash flow from operating activities of $67 million, up 107% from Q3 last year
  • Hosting Analyst Day November 10, 2020

NAPLES, Fla.--(BUSINESS WIRE)--Nov. 5, 2020-- ACI Worldwide (NASDAQ: ACIW), a leading global provider of real-time digital payment software and solutions, today announced financial results for the quarter ended September 30, 2020.

“During the pandemic, ACI has focused on keeping our employees and their families safe, assuring continuity of service to our customers, and preparing the Company to emerge from this challenging time stronger than before.” said Odilon Almeida, President and CEO of ACI Worldwide. “We are advancing on all of those fronts and continue to drive toward our goal of creating significant value for our shareholders, which is demonstrated by our performance year-to-date. Our net EBITDA margin improved from 26% to 31% over last year, and adjusted EBITDA is up 25% on revenue growth of 6% compared to the same period last year. While our On Premise business – our most profitable segment – continues to be temporarily impacted by COVID-related delays, our team continues to focus on creating value for our shareholders.”

Mr. Almeida continued, “We recently finalized our Three Pillar Strategy and have started implementing it across our business. We are building an agile and nimble organization, focusing our investments on real-time payments, large sophisticated global merchants, and fast-growing emerging markets. We have the right team, assets, and strategy to build an organization well positioned for continuous profitable growth and significant value creation. We look forward to sharing more details of the new ACI strategy at our upcoming virtual analyst day on November 10, 2020.”

Q3 2020 FINANCIAL RESULTS

Total bookings increased 43% compared to Q3 2019 while new bookings were down 5% compared to Q3 2019. Despite new bookings being up 71% in the Company’s On Demand business, new bookings were down 27% in the Company’s On Premise license software business due to COVID-related delays in purchasing decisions by ACI’s bank customers.

Revenue in the quarter was $316 million, down 11% compared to Q3 2019, primarily from lower non-recurring license fee revenue in ACI’s On Premise business, which was impacted by COVID-related delays. Recurring revenue was 77% of total revenue in Q3 2020, compared to 69% of total revenue in Q3 2019.

Net income in the quarter was $16 million, compared to $32 million in Q3 2019. Adjusted EBITDA in the quarter was $87 million, down 13% year-over-year. Net adjusted EBITDA margin was 38% versus 39% in Q3 2019.

Revenue from ACI’s On Demand segment was $190 million, down 1% year-over-year. On Demand segment net adjusted EBITDA margin improved to 32%, compared to 20% in the prior year period. On Demand segment net adjusted EBITDA margin is adjusted for pass through interchange revenue of $88 million and $99 million, for Q3 2020 and Q3 2019, respectively.

Revenue from ACI’s On Premise segment was $126 million, down 23% from Q3 last year primarily from lower non-recurring license revenue. On Premise segment adjusted EBITDA margin was 55% in Q3 2020 versus 61% in Q3 2019.

ACI ended Q3 2020 with a 12-month backlog of $1.1 billion and a 60-month backlog of $5.9 billion.

Cash flows from operating activities in the quarter were $67 million, up 107% from Q3 last year. ACI ended the quarter with $134 million in cash on hand and approximately $340 million available on the Company’s revolver credit facility. The Company paid down $50 million in debt during the quarter and the Company’s net debt leverage ratio declined to 3.3x.

YEAR-TO-DATE 2020 FINANCIAL RESULTS

Total bookings increased 38% and new bookings increased 15% in the nine-months ended September 30, 2020 compared to the same period last year. While new bookings were up 67% in ACI’s On Demand business, new bookings were down 12% in ACI’s On Premise license software business due to COVID-related delays in purchasing decisions by the Company’s bank customers.

Revenue in the nine-months ended September 30, 2020 was $907 million, up 6% compared to the same period last year driven primarily by the acquisition of Speedpay in May 2019. Recurring revenue was 80% of total revenue in the nine-months ended September 30, 2020 compared to 74% of total revenue in the same period last year.

Net income in the nine-months ended September 30, 2020 of $6 million compared to $12 million in the same period last year. Adjusted EBITDA in the nine-months ended September 30, 2020 was $203 million, up 25% compared to the same period last year. Net adjusted EBITDA margin was 31% versus 26% in the same period last year, due primarily to cost reduction initiatives, as well as the Speedpay acquisition.

Revenue from ACI’s On Demand segment was $564 million in the nine-months ended September 30, 2020, up 19% from the same period last year. On Demand segment net adjusted EBITDA margin improved to 29% compared to 14% last year. On Demand segment net adjusted EBITDA margin is adjusted for pass through interchange revenue of $252 million and $222 million, for the nine-months ended September 30, 2020 and 2019, respectively.

Revenue from ACI’s On Premise segment was $343 million in the nine-months ended September 30, 2020, down 10% from the same period last year primarily as a result of lower non-recurring license revenue. On Premise segment adjusted EBITDA margin was 46% in the nine-months ended September 30, 2020 versus 48% in the same period last year.

GUIDANCE

While a significant portion of ACI’s revenues are recurring and the Company is optimistic about its pipeline of deals, the duration and severity of the COVID-19 pandemic has caused uncertainty regarding the timing of signing and realizing of revenue from new business. As previously announced, ACI has suspended guidance regarding its financial outlook for the full year 2020.

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 4956507. 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 powers digital payments for more than 6,000 organizations around the world. More than 1,000 of the largest financial institutions and intermediaries, as well as thousands of global merchants, rely on ACI to execute $14 trillion each day in payments and securities. In addition, myriad organizations utilize our electronic bill presentment and payment services. Through our comprehensive suite of software solutions delivered on customers’ premises, through the public cloud or through ACI’s private cloud, we provide real-time, immediate payments capabilities and enable the industry’s most complete omni-channel payments experience.

© Copyright ACI Worldwide, Inc. 2020.

ACI, ACI Worldwide, ACI Payment Systems, the ACI logo and all ACI product 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).

ACI is also presenting adjusted operating free cash flow, which is defined as net cash provided by operating activities and net after-tax payments associated with significant transaction-related expenses, less capital expenditures. Adjusted operating free cash flow is considered a non-GAAP financial measure as defined by SEC Regulation G. We utilize this non-GAAP financial measure, and believe it is useful to investors, as an indicator of cash flow available for debt repayment and other investing activities, such as capital investments and acquisitions. We utilize adjusted operating free cash flow as a further indicator of operating performance and for planning investment activities. Adjusted operating free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities. A limitation of adjusted operating free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. This measure also does not exclude mandatory debt service obligations and, therefore, does not represent the residual cash flow available for discretionary expenditures. We believe that adjusted operating free cash flow is useful to investors to provide disclosures of our operating results on the same basis as that used by our management.

ACI backlog includes estimates for SaaS and PaaS, license, maintenance, and services revenue specified in executed contracts but excluded from contracted revenue 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 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, expectations regarding: (i) our focus on and advancement of keeping our employees and their families safe, assuring continuity of service to our customers and preparing the Company to emerge from this challenging time stronger than before, (ii) the temporary impact of the COVID-19 related delays, (iii) building an agile and nimble organization, focusing our investments on real-time payments, large sophisticated global merchants, and fast-growing emerging markets, and (iv) our belief that we have the right team, assets, and strategy to build an organization well positioned for continuous profitable growth and significant value creation.

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, the success of our Universal Payments strategy, demand for our products, consolidations and failures in the financial services industry, customer reluctance to switch to a new vendor, 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, 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 compliance with privacy regulations, our ability to protect customer information from security breaches or attacks, our ability to adequately defend our intellectual property, exposure to credit or operating risks arising from certain payment funding methods, 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, adverse changes in the global economy, worldwide events outside of our control, failure to attract and retain key personnel, litigation, future acquisitions, strategic partnerships and investments, integration of and achieving benefits from the Speedpay acquisition, impairment of our goodwill or intangible assets, restrictions and other financial covenants in our debt agreements, our existing levels of debt, replacement of LIBOR benchmark interest rate, the accuracy of management’s backlog estimates, exposure to unknown tax liabilities, 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, volatility in our stock price, and the COVID-19 pandemic. 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, except share and per share amounts)

 

 

September 30,
2020

 

December 31,
2019

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

133,845

 

 

$

121,398

 

Receivables, net of allowances

309,496

 

 

359,197

 

Settlement assets

376,382

 

 

391,039

 

Prepaid expenses

25,913

 

 

24,542

 

Other current assets

24,695

 

 

24,200

 

Total current assets

870,331

 

 

920,376

 

Noncurrent assets

 

 

 

Accrued receivables, net

205,885

 

 

213,041

 

Property and equipment, net

67,028

 

 

70,380

 

Operating lease right-of-use assets

47,017

 

 

57,382

 

Software, net

204,239

 

 

234,517

 

Goodwill

1,280,226

 

 

1,280,525

 

Intangible assets, net

328,257

 

 

356,969

 

Deferred income taxes, net

60,397

 

 

51,611

 

Other noncurrent assets

69,054

 

 

72,733

 

TOTAL ASSETS

$

3,132,434

 

 

$

3,257,534

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

38,932

 

 

$

37,010

 

Settlement liabilities

349,510

 

 

368,719

 

Employee compensation

42,638

 

 

29,318

 

Current portion of long-term debt

34,236

 

 

34,148

 

Deferred revenue

59,414

 

 

65,784

 

Other current liabilities

65,452

 

 

76,971

 

Total current liabilities

590,182

 

 

611,950

 

Noncurrent liabilities

 

 

 

Deferred revenue

71,870

 

 

53,155

 

Long-term debt

1,234,319

 

 

1,339,007

 

Deferred income taxes, net

27,270

 

 

32,053

 

Operating lease liabilities

39,952

 

 

46,766

 

Other noncurrent liabilities

45,997

 

 

44,635

 

Total liabilities

2,009,590

 

 

2,127,566

 

Commitments and contingencies

 

 

 

Stockholders’ equity

 

 

 

Preferred stock

 

 

 

Common stock

702

 

 

702

 

Additional paid-in capital

675,941

 

 

667,658

 

Retained earnings

936,344

 

 

930,830

 

Treasury stock

(393,651

)

 

(377,639

)

Accumulated other comprehensive loss

(96,492

)

 

(91,583

)

Total stockholders’ equity

1,122,844

 

 

1,129,968

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

3,132,434

 

 

$

3,257,534

 

ACI WORLDWIDE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per share amounts)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Revenues

 

 

 

 

 

 

 

Software as a service and platform as a service

$

190,369

 

 

$

192,952

 

 

$

563,892

 

 

$

474,008

 

License

56,773

 

 

92,058

 

 

135,038

 

 

165,677

 

Maintenance

53,049

 

 

52,638

 

 

159,078

 

 

159,671

 

Services

15,692

 

 

17,253

 

 

49,270

 

 

59,018

 

Total revenues

315,883

 

 

354,901

 

 

907,278

 

 

858,374

 

Operating expenses

 

 

 

 

 

 

 

Cost of revenue (1)

158,579

 

 

174,168

 

 

471,762

 

 

444,349

 

Research and development

33,573

 

 

36,543

 

 

108,175

 

 

111,972

 

Selling and marketing

22,154

 

 

30,417

 

 

76,692

 

 

92,809

 

General and administrative

37,000

 

 

27,286

 

 

102,684

 

 

108,122

 

Depreciation and amortization

33,395

 

 

31,169

 

 

98,928

 

 

79,779

 

Total operating expenses

284,701

 

 

299,583

 

 

858,241

 

 

837,031

 

Operating income

31,182

 

 

55,318

 

 

49,037

 

 

21,343

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense

(12,925

)

 

(18,987

)

 

(44,238

)

 

(45,924

)

Interest income

2,927

 

 

2,988

 

 

8,781

 

 

9,018

 

Other, net

1,356

 

 

(2,369

)

 

(6,361

)

 

(2,879

)

Total other income (expense)

(8,642

)

 

(18,368

)

 

(41,818

)

 

(39,785

)

Income (loss) before income taxes

22,540

 

 

36,950

 

 

7,219

 

 

(18,442

)

Income tax expense (benefit)

6,674

 

 

5,136

 

 

1,705

 

 

(30,018

)

Net income

$

15,866

 

 

$

31,814

 

 

$

5,514

 

 

$

11,576

 

Income per common share

 

 

 

 

 

 

 

Basic

$

0.14

 

 

$

0.27

 

 

$

0.05

 

 

$

0.10

 

Diluted

$

0.13

 

 

$

0.27

 

 

$

0.05

 

 

$

0.10

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

116,558

 

 

116,169

 

 

116,217

 

 

116,337

 

Diluted

117,804

 

 

118,307

 

 

117,644

 

 

118,460

 

(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
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$

15,866

 

 

$

31,814

 

 

$

5,514

 

 

$

11,576

 

Adjustments to reconcile net income to net cash flows from operating activities:

 

 

 

 

 

 

 

Depreciation

6,260

 

 

6,085

 

 

18,012

 

 

17,916

 

Amortization

29,230

 

 

27,828

 

 

86,992

 

 

70,627

 

Amortization of operating lease right-of-use assets

5,344

 

 

3,848

 

 

14,145

 

 

10,877

 

Amortization of deferred debt issuance costs

1,197

 

 

1,226

 

 

3,613

 

 

2,909

 

Deferred income taxes

(5,798

)

 

2,008

 

 

(10,540

)

 

(39,323

)

Stock-based compensation expense

8,061

 

 

9,371

 

 

22,943

 

 

30,328

 

Other

2,567

 

 

898

 

 

4,339

 

 

2,431

 

Changes in operating assets and liabilities, net of impact of acquisitions:

 

 

 

 

 

 

 

Receivables

12,208

 

 

(53,906

)

 

41,261

 

 

34,690

 

Accounts payable

(4,607

)

 

(9,708

)

 

1,680

 

 

(8,414

)

Accrued employee compensation

5,408

 

 

2,903

 

 

13,585

 

 

1,740

 

Current income taxes

6,772

 

 

(2,902

)

 

(2,595

)

 

(8,536

)

Deferred revenue

(7,875

)

 

246

 

 

14,361

 

 

(17,735

)

Other current and noncurrent assets and liabilities

(8,104

)

 

12,362

 

 

(21,252

)

 

(20,148

)

Net cash flows from operating activities

66,529

 

 

32,073

 

 

192,058

 

 

88,938

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property and equipment

(3,476

)

 

(8,824

)

 

(14,091

)

 

(18,739

)

Purchases of software and distribution rights

(6,499

)

 

(7,265

)

 

(21,556

)

 

(18,565

)

Acquisition of businesses, net of cash acquired

 

 

1,278

 

 

 

 

(757,268

)

Other

 

 

(18,474

)

 

 

 

(18,474

)

Net cash flows from investing activities

(9,975

)

 

(33,285

)

 

(35,647

)

 

(813,046

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from issuance of common stock

959

 

 

909

 

 

2,853

 

 

2,662

 

Proceeds from exercises of stock options

5,396

 

 

861

 

 

6,518

 

 

6,677

 

Repurchase of stock-based compensation awards for tax withholdings

(26

)

 

(13

)

 

(11,150

)

 

(2,822

)

Repurchases of common stock

 

 

(34,986

)

 

(28,881

)

 

(35,617

)

Proceeds from revolving credit facility

 

 

30,000

 

 

30,000

 

 

280,000

 

Repayment of revolving credit facility

(40,000

)

 

 

 

(109,000

)

 

(15,000

)

Proceeds from term portion of credit agreement

 

 

 

 

 

 

500,000

 

Repayment of term portion of credit agreement

(9,737

)

 

(9,738

)

 

(29,212

)

 

(19,162

)

Payments for debt issuance costs

 

 

 

 

 

 

(12,830

)

Payments on or proceeds from other debt, net

(5,358

)

 

(5,989

)

 

(10,044

)

 

(8,209

)

Net cash flows from financing activities

(48,766

)

 

(18,956

)

 

(148,916

)

 

695,699

 

Effect of exchange rate fluctuations on cash

(3,166

)

 

2,353

 

 

4,952

 

 

1,488

 

Net increase (decrease) in cash and cash equivalents

4,622

 

 

(17,815

)

 

12,447

 

 

(26,921

)

Cash and cash equivalents, beginning of period

129,223

 

 

139,396

 

 

121,398

 

 

148,502

 

Cash and cash equivalents, end of period

$

133,845

 

 

$

121,581

 

 

$

133,845

 

 

$

121,581

 

Adjusted EBITDA (millions)

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Net income

$

15.9

 

 

$

31.8

 

 

$

5.5

 

 

$

11.6

 

Plus:

 

 

 

 

 

 

 

Income tax expense (benefit)

6.7

 

 

5.1

 

 

1.7

 

 

(30.0

)

Net interest expense

10.0

 

 

16.0

 

 

35.5

 

 

36.9

 

Net other income (expense)

(1.4

)

 

2.4

 

 

6.4

 

 

2.9

 

Depreciation expense

6.3

 

 

6.1

 

 

18.0

 

 

17.9

 

Amortization expense

29.2

 

 

27.8

 

 

87.0

 

 

70.6

 

Non-cash stock-based compensation expense

8.1

 

 

9.3

 

 

22.9

 

 

30.3

 

Adjusted EBITDA before significant transaction-related expenses

$

74.8

 

 

$

98.5

 

 

$

177.0

 

 

$

140.2

 

Significant transaction-related expenses

12.3

 

 

0.9

 

 

25.8

 

 

22.2

 

Adjusted EBITDA

$

87.1

 

 

$

99.4

 

 

$

202.8

 

 

$

162.4

 

Segment Information (millions)

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Revenue

 

 

 

 

 

 

 

ACI On Demand

$

190.4

 

 

$

193.0

 

 

$

563.9

 

 

$

475.3

 

ACI On Premise

125.5

 

 

161.9

 

 

343.4

 

 

383.1

 

Total

$

315.9

 

 

$

354.9

 

 

$

907.3

 

 

$

858.4

 

Interchange

 

 

 

 

 

 

 

ACI On Demand

$

88.2

 

 

$

98.8

 

 

$

251.8

 

 

$

222.1

 

Net Revenue

 

 

 

 

 

 

 

ACI On Demand

$

102.2

 

 

$

94.2

 

 

$

312.1

 

 

$

253.2

 

ACI On Premise

125.5

 

 

161.9

 

 

343.4

 

 

383.1

 

Total

$

227.7

 

 

$

256.1

 

 

$

655.5

 

 

$

636.3

 

Segment Adjusted EBITDA

 

 

 

 

 

 

 

ACI On Demand

$

33.2

 

 

$

18.6

 

 

$

89.4

 

 

$

35.6

 

ACI On Premise

$

69.6

 

 

$

99.6

 

 

$

159.6

 

 

$

184.9

 

Segment Net Adjusted EBITDA Margin

 

 

 

 

 

 

 

ACI On Demand

32

%

 

20

%

 

29

%

 

14

%

ACI On Premise

55

%

 

61

%

 

46

%

 

48

%

Reconciliation of Adjusted Operating Free Cash Flow (millions)

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Net cash flows from operating activities

$

66.5

 

 

$

32.1

 

 

$

192.1

 

 

$

88.9

 

Net after-tax payments associated with significant transaction-related expenses

6.5

 

 

2.8

 

 

15.5

 

 

18.0

 

Less: capital expenditures

(10.0

)

 

(16.1

)

 

(35.6

)

 

(37.3

)

Adjusted Operating Free Cash Flow

$

63.0

 

 

$

18.8

 

 

$

172.0

 

 

$

69.6

 

EPS Impact of Non-cash and Significant Transaction-related Items (millions)

Three Months Ended September 30,

 

2020

 

2019

 

EPS Impact

 

$ in Millions
(Net of Tax)

 

EPS Impact

 

$ in Millions
(Net of Tax)

GAAP net income

$

0.13

 

 

$

15.9

 

 

$

0.27

 

 

$

31.8

 

Adjusted for:

 

 

 

 

 

 

 

Significant transaction-related expenses

0.08

 

 

9.3

 

 

0.01

 

 

0.7

 

Amortization of acquisition-related intangibles

0.06

 

 

7.1

 

 

0.06

 

 

7.2

 

Amortization of acquisition-related software

0.07

 

 

8.2

 

 

0.07

 

 

8.4

 

Non-cash stock-based compensation

0.05

 

 

6.1

 

 

0.06

 

 

7.1

 

Total adjustments

$

0.26

 

 

$

30.7

 

 

$

0.20

 

 

$

23.4

 

Diluted EPS adjusted for non-cash and significant transaction-related items

$

0.39

 

 

$

46.6

 

 

$

0.47

 

 

$

55.2

 

EPS Impact of Non-cash and Significant Transaction-related Items (millions)

Nine Months Ended September 30,

 

2020

 

2019

 

EPS Impact

 

$ in Millions
(Net of Tax)

 

EPS Impact

 

$ in Millions
(Net of Tax)

GAAP net income

$

0.05

 

 

$

5.5

 

 

$

0.10

 

 

$

11.6

 

Adjusted for:

 

 

 

 

 

 

 

Tax benefit from release of valuation allowance

 

 

 

 

(0.16

)

 

(18.5

)

Significant transaction-related expenses

0.17

 

 

19.7

 

 

0.14

 

 

16.9

 

Amortization of acquisition-related intangibles

0.18

 

 

21.1

 

 

0.14

 

 

17.1

 

Amortization of acquisition-related software

0.21

 

 

24.3

 

 

0.18

 

 

20.9

 

Non-cash stock-based compensation

0.15

 

 

17.4

 

 

0.19

 

 

23.0

 

Total adjustments

$

0.71

 

 

$

82.5

 

 

$

0.49

 

 

$

59.4

 

Diluted EPS adjusted for non-cash and significant transaction-related items

$

0.76

 

 

$

88.0

 

 

$

0.59

 

 

$

71.0

 

Recurring Revenue (millions)

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

SaaS and PaaS fees

$

190.4

 

 

$

193.0

 

 

$

563.9

 

 

$

474.0

 

Maintenance fees

53.0

 

 

52.6

 

 

159.1

 

 

159.7

 

Recurring Revenue

$

243.4

 

 

$

245.6

 

 

$

723.0

 

 

$

633.7

 

 

John Kraft, Vice President, Investor Relations & Strategic Analysis
ACI Worldwide
239-403-4627
john.kraft@aciworldwide.com

Source: ACI Worldwide, Inc.