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8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant To Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 5, 2015 (May 5, 2015)

 

 

ACI WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   0-25346   47-0772104

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

3520 Kraft Rd, Suite 300

Naples, FL 34105

(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (239) 403-4600

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 7.01. Regulation FD Disclosure

On May 5, 2015, ACI Worldwide, Inc. posted investor relations materials on its website (www.aciworldwide.com) to be used in connection with investor conferences. A copy of the presentation materials is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 7.01. The foregoing information (including the exhibits hereto) is being furnished under “Item 7.01- Regulation FD Disclosure.” Such information (including the exhibits hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

The filing of this report and the furnishing of this information pursuant to Item 7.01 do not mean that such information is material or that disclosure of such information is required.

 

Item 9.01. Financial Statements and Exhibits.

99.1 Investor Presentation Materials dated May 5, 2015

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 5, 2015

ACI WORLDWIDE, INC.

/s/ Scott W. Behrens

Scott W. Behrens, Executive Vice President, Chief Financial

Officer, and Chief Accounting Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ACI WORLDWIDE, INC.

/s/ Scott W. Behrens

Scott W. Behrens, Senior Executive Vice President, Chief Financial Officer, and Chief Accounting Officer

Date: May 5, 2015

EXHIBIT INDEX

 

Exhibit
No.

   

Description

99.1    Investor Presentation Materials dated March 2015
EX-99.1
ACI Worldwide (ACIW)
May/June 2015
Exhibit 99.1

MEETS THE CHALLENGE OF CHANGE
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 provisions of the Private Securities
Litigation Reform Act of 1995.  A discussion of these forward-looking statements
and
risk
factors
that
may
affect
them
is
set
forth
at
the
end
of
this
presentation. 
The Company assumes no obligation to update any forward-looking statement in
this presentation, except as required by law.
2

MEETS THE CHALLENGE OF CHANGE
About ACI Worldwide
•
High
quality
products
and
services
drive
strong
renewal
rates
on
a
large
installed user base of over 5,600 customers
•
Long-term, blue-chip, geographically diverse customer base with low
customer concentration
•
Subscription-based model drives recurring revenue and provides stability
and predictability to our operations
•
Large contractual backlog provides earnings visibility and allows our
management to optimally manage the size and infrastructure of the
business
•
Leading payments transformation with Universal Payments (UP)
•
Management team has an established track record of operational
excellence and significant industry experience
2014
Pro Forma Revenue
$1046 Million
2014
Pro Forma Adjusted EBITDA
$267 Million
3/31/2015
60-Month Backlog
$4.1 Billion
Founded in 1975,
ACI is a leading provider of
electronic payments and
transaction banking
software solutions for
financial institutions,
retailers, processors and
billers worldwide
Note: Pro Forma Revenue is presented on a Non-GAAP basis that adds back the Deferred Revenue Fair
Value
Adjustment.
Pro
Forma
Adjusted
EBITDA
excludes
transaction
and
litigation
expenses.
Both
metrics are presented on a pro forma basis for the ReD acquisition.
3

MEETS THE CHALLENGE OF CHANGE
Global Distribution and Customer Base:
The Leader in the Mega and Large FIs Market
Headquarters          Regional Offices          Distributors
AMERICAS
1,950+ customers
EMEA
500+ customers
ASIA/PACIFIC
150+ customers
5,600+ customers in over 80
countries rely on ACI solutions
Customers: ~ 180
processors globally
Customers: 300+
retailers globally
Customers: 3600+
US billers
18 of the top 20 and 67 of the top 100 global banks are customers
~ 4,500
employees in 36 countries
4

ACI is a Leading Provider of Electronic Payments and
Transaction Banking Solutions
•
Internet-based electronic bill payment and
presentment (EBPP)
•
Transaction-based, hosted services for
banks and billers
•
Automated collection application
Bill Pay / Collections
•
Consumer and Business Internet Banking,
Mobile, Trade Finance and Branch
Automation sold to large banks globally as
license or hosted subscription services
•
Consumer and small biz Internet and
mobile banking sold to US community FIs
and credit unions as hosted, subscription
Online Banking
•
Software sold directly to banks and
payment processors
•
Solutions help authenticate, authorize,
acquire, clear and settle electronic
consumer payments
•
Payments acquiring and authorization
solution for retailers
Retail Payments
1
Ovum, 2014 market study
Note: Revenue figures represent FY 2014 GAAP Revenue on a pro forma basis for the ReD acquisition.
ACI Product Family Revenue %
Highlights
In a fragmented $20+
billion market, we control
~5% of the market spend¹
Software facilitates over
120 billion consumer
transactions per year;
scales to thousands per
second
~1/3 of all domestic SWIFT
transactions
Enables over $13 trillion in
payments each day
Software designed for
“Five nines availability”
2/3 of all Fed wires
5
Retail Payments
and Merchant
43%
Online Banking
and Branch 22%
Bill Payment
22%
Fraud 8%
Wholesale 3%
Other 1%
MEETS THE CHALLENGE OF CHANGE
•
Software sold to global banks that enables
the providing of treasury services to large
corporates
•
High value wire transfers, Low Value Bulk
Payments and SWIFT messaging
Wholesale Payments
Fraud
•
Tools to prevent payment transaction
fraud and enterprise financial crimes
•
Case management

Diverse Customer Base of Top Global Banks, Processors, Billers and
Retailers Provide Significant Cross Sell Opportunities
FY 2014 Revenue by Customer
No single customer represents more than 3% of
consolidated revenue
On average, customers use 3 ACI products or less
representing a large cross sell opportunity
6
Customer  #
1
2.3%
Customer  #
2
2.3%
Customer  #
4
1.6%
Customer  #
5
0.8%
Customer  #
0.8%
Customer  #
7
0.8%
Customer  #
0.8%
Customer  #
9
0.8%
Customer  #
10
0.7%
Customer  #
11
0.7%
Customer  #
12
0.7%
Customer  #
13
0.7%
Top 10 customers
12.8%
6
8
MEETS THE CHALLENGE OF CHANGE

MEETS THE CHALLENGE OF CHANGE
Delivering an Omni-channel
Customer Experience
for one of the world’s
largest banks
CHALLENGE
•
•
BENEFITS
•
Significant operating cost improvements
•
•
Payment analytics improves cross sell and retention
•
Consistent
payment
experience
Aspirations to be the primary bank of
its customers held back by
inconsistent experience caused by
legacy technology
Improve cross sell and retention rates
New
channels
deployed
in
4
months
instead
of
18,
reducing deployment costs by 80%

MEETS THE CHALLENGE OF CHANGE
Complex Payments Environment Leads to
Inconsistent Customer Experience
CORE BANKING
Core interface
Before
Online banking
AML
Call center
Branch system
Payment
engine
Mobile
POS
ATM
Payment
engine
Payment
engine
Fraud
detection
Fraud
detection
Fraud
detection
Payment
engine
Tablet
Payment
engine
8

MEETS THE CHALLENGE OF CHANGE
Fraud
detection and
AML
Branch
system
Online banking
Mobile
POS
Tablet
After
Streamlined, Consistent
Omni-channel Experience
Future payment
types and
channels
Payment engine
Core banking
Call Center
FRAMEWORK
Payment engine
ATM
9

MEETS THE CHALLENGE OF CHANGE
Attractive trends will drive growth opportunities for ACI
1
Source: Ovum, 2014 market study and McKinsey Global Payments 2014 report
Industry
Dynamics
Customer Trends
Market
Sizing
1
•
Shift from paper to electronic
•
Compounding regulatory requirements
•
Revenue and profitability pressures
•
Complexity from globalization
FIs looking to transform their businesses by:
•
Driving down unit costs
•
Launching new products quicker
•
Reducing risks
•
Improving customer satisfaction and loyalty
•
Vendor Consolidation
•
Total addressable market is ~$20bn in 2014 and growing mid to upper single digits
•
~50% of addressable market is in-sourced (homegrown) applications
•
eCommerce transaction growth expected to be 6x in-store transaction growth
•
Increasing fraud costs
•
Convergence of payments; real-time
•
Legacy systems increasingly difficult to
update
Favorable Industry and Customer Trends
10

11
FINANCIAL OVERVIEW

$4,160
$1,566
$1,617
$2,416
$3,861
2010
2011
2012
2013
2014
2010
2011
2012
2013
2014
SNET 22%+ CAGR
$315
$330
$501
$600
$702
Renewal rates across ACI products in the mid-high 90%s
>95% of our contracts are transaction-based
NET NEW SALES BOOKINGS
HISTORICAL 60-MONTH BACKLOG
28%+ CAGR
(millions)
(millions)
Bookings Growth Leads to Large Backlog
Provides Revenue and Earnings Visibility
12
MEETS THE CHALLENGE OF CHANGE

$1,018
$465
$689
$871
$285
$113
$191
$239
$261
2011
2012
2013
2014
2015E
NON-GAAP REVENUE
2011
2012
2013
2014
2015E
ADJUSTED EBITDA
30%
24%
28%
29%
29%
Adjusted EBITDA
% Net Margin
23% CAGR
26% CAGR
(millions)
(millions)
2014 revenue geographic mix: 69% Americas, 23% EMEA and 8% Asia/Pacific
ACI’s Financial Summary,  2011 –
2015
Notes: 
1-Net
Margin
based
on
net
revenues,
or
gross
revenues
adjusted
for
pass
through
interchange
fees
of
$38,
$116
and
$115
million
in
2013,
2014
and
2015
2-2015 numbers based on the midpoint of company guidance
13
$1,055
MEETS THE CHALLENGE OF CHANGE

MEETS THE CHALLENGE OF CHANGE
•
Monthly Recurring Revenue predictable & growing, now >70% of total revenue
•
Non-recurring revenue is strongest in Q4
•
EBITDA margin spikes follow revenue
Fixed Costs Provide Leverage in Model
14
$0
$50
$100
$150
$200
$250
$300
$350
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Non Recurring Revenue: Ongoing Implementations, Services, Capacity Sales and Annual License Fees
Monthly Recurring Revenue: SaaS Subscriptions & Transactions, Maint and License Fees (Paid Monthly,
Quarterly only)
Adjusted EBITDA

MEETS THE CHALLENGE OF CHANGE
SaaS Subscriptions and Transactions Contribution Growth
2009 segment contribution
2014 segment contribution
•
SaaS Subscriptions & Transactions have grown from ~10% to over 40%
•
Overall monthly recurring revenues have grown from ~60% to over 70%
Monthly recurring segments
Non recurring segments
15
SaaS
subscriptions &
transactions,
10%
Maintenance,
32%
Services,
20%
Initial licenses
fees, 20%
Monthly
license fees,
18%
SaaS
subscriptions &
transactions
41%
Maintenance
25%
Services
11%
Initial licenses
fees
14%
Monthly
license fees
9%

MEETS THE CHALLENGE OF CHANGE
OPERATING FREE CASH FLOW
CAPITAL EXPENDITURES
% of Non-GAAP Revenue
Low capital expenditures needed to maintain
existing client base
ACI generates strong free cash flow
•
(millions)
(millions)
Low Cap Ex and Strong Cash Flow
16
$13
$19
$16.7
$32.5
$34.9
2010
2011
2012
2013
2014
$63
$67
$24
$151
$134
2010
2011
2012
2013
2014
3%
4%
2%
4%
3%
NOLs starting to contribute and cash taxes
much lower than GAAP

MEETS THE CHALLENGE OF CHANGE
•
Existing customer base and low customer attrition provide baseline for future revenue
•
Competitive positioning and high R&D spending provides pricing power
•
Electronic payment growth of mid-high single digits
•
Cross sales typically account for 2/3 of net new business
Cross sales and new customer wins
Backlog is Foundation, Cross Sales Add Growth
17
Start
Year 1
Year 2
Year 3
Year 4
Year 5
Transaction growth (both in SaaS revenue &
incremental transaction-based licenses)
Price increases
Annual inflation increases
60-mo backlog (recurring only)

MEETS THE CHALLENGE OF CHANGE
2015 Guidance
18
Guidance
-
-
-
-
-
2015 Non-GAAP
Incremental
2015 Non-GAAP
Key Metrics
Guidance
FX Impact
Guidance
12/31/14 fx rates
3/31/15 fx rates
Non-GAAP Revenue
1,050 - 1,080
(10)
 
1,040 - 1,070
Adjusted EBITDA
280 - 290
-
280 - 290
$s in millions
Reaffirming full year guidance adjusted for FX.  Represents 3%-6% organic growth over
pro forma 2014
Sales, net of term extensions, growth in the high single digits
Q2 non-GAAP revenue expected to be in the range of $240 to $250 million
Q2 2014 revenue was $240 million on a constant currency basis
Adjusted EBITDA excludes approximately $10 million in significant transaction-related
expenses for datacenter and facilities consolidation and bill payment platform
rationalization

Financial Summary –
Five-year Targets
•
Organic revenue growth
Mid-to-upper single digits
•
Adjusted EBITDA margin
100 bps expansion per year
•
Operating free cash flow
Track adjusted EBITDA growth
•
Sales net of term extension growth
High single digits
19
MEETS THE CHALLENGE OF CHANGE

MEETS THE CHALLENGE OF CHANGE
The
•
Leading market position
•
High retention and renewal rates
•
Significant recurring revenue
•
Scalable, fixed-cost model
with improving margin
•
Low cash investment required
Questions?
20
Advantage

MEETS THE CHALLENGE OF CHANGE
Non-GAAP Financial Measures
21
To supplement our financial results presented on a GAAP basis, we use the non-GAAP measure indicated in the tables, which exclude certain
business combination accounting entries related to the acquisitions of Online Resources and significant transaction related expenses, as well as
other significant non-cash expenses such as depreciation, amortization and share-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 of viewing 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:   
Non-GAAP revenue: revenue plus deferred revenue that would have been recognized in the normal course of business by Online Resources if not
for GAAP purchase accounting requirements.  Non-GAAP revenue should be considered in addition to, rather than as a substitute for, revenue.
Non-GAAP operating income: operating income plus deferred revenue that would have been recognized in the normal course of business by
Online Resources if not for GAAP purchase accounting requirements and significant transaction related expenses.  Non-GAAP operating income
should be considered in addition to, rather than as a substitute for, operating income.
Adjusted EBITDA: net income plus income tax expense, net interest income (expense), net other income (expense), depreciation, amortization
and non-cash compensation, as well as deferred revenue that would have been recognized in the normal course of business by Online Resources
if not for GAAP purchase accounting requirements and significant transaction related expenses.  Adjusted EBITDA should be considered in
addition to, rather than as a substitute for, operating income.

MEETS THE CHALLENGE OF CHANGE
Adjusted EBITDA (millions)
2010
2011
2012
2013
2014
Net income (loss)
27
$    
46
$    
49
$    
64
$   
68
$    
Plus:
Income tax expense (benefit)
22
18
16
29
31
Net interest expense
1
1
10
27
39
Net other expense
4
1
-
3
-
Depreciation expense
6
8
13
19
21
Amortization expense
20
21
38
51
66
Non-cash compensation expense
8
11
15
14
11
Adjusted EBIDTA
88
106
141
207
236
Deferred revenue fair value adjustment
-
-
22
6
2
Employee related actions
-
-
11
11
10
Facility closure costs
-
-
5
2
-
IT exit costs
-
-
3
-
-
Other significant transaction related
expenses
-
7
9
13
13
Adjusted EBIDTA excluding significant
transaction related expenses
88
$    
113
$  
191
$  
239
$ 
261
$  
Non-GAAP Revenue (millions)
2010
2011
2012
2013
2014
Revenue
418
$  
465
$  
667
$  
865
$ 
1,016
$
Deferred revenue fair value adjustment
-
-
22
6
2
Non-GAAP revenue
418
$  
465
$  
689
$  
871
$ 
1,018
$
Non-GAAP Financial Measures
22

MEETS THE CHALLENGE OF CHANGE
Non-GAAP Financial Measures
23
Reconciliation of Operating Free Cash
Flow (millions)
2010
2011
2012
2013
2014
Net cash provided (used) by operating
activities
81
$     
83
$     
(9)
$     
138
$  
149
$   
Net after-tax payments associated with
employee-related actions
-
     
-
     
6
        
10
      
6
        
Net after-tax payments associated with facility
closures
-
     
-
     
3
        
1
        
1
        
Net after-tax payments associated with
significant transaction related expenses
-
     
4
        
9
        
18
      
8
        
Net after-tax payments associated with cash
settlement of acquisition related options
-
     
-
     
10
       
10
      
-
     
Payments associated with acquired opening
balance sheet liabilties
-
     
-
     
-
     
5
        
5
        
Net after-tax payments associated with IBM IT
Outsourcing Transition
1
        
1
        
1
        
2
        
-
     
Plus IBM Alliance liability repayment
-
     
-
     
21
       
-
     
-
     
Less capital expenditures
(13)
     
(19)
     
(17)
     
(33)
     
(35)
     
Less IBM Alliance technical enablement
expenditures
(6)
       
(2)
       
-
     
-
     
-
     
Operating Free Cash Flow
63
$     
67
$     
24
$     
151
$  
134
$   
ACI is also presenting operating free cash flow, which is defined as net cash provided by operating activities, plus payments associated with the
cash settlement of acquisition related options and significant acquired opening balance sheet liabilities, plus net after-tax payments associated
with employee-related actions and facility closures, net after-tax payments associated with significant transaction related expenses, net after-tax
payments associated with IBM IT outsourcing transition and termination, and less capital expenditures.  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
operating free cash flow as a further indicator of operating performance and for planning investing activities.  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 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 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 also includes backlog estimates, which include 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 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 estimate represents expected
revenues from existing customers using the following key assumptions:
Estimates of future financial results 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 management’s control. For example, our customers may
attempt
to
renegotiate
or
terminate
their
contracts
for
a
number
of
reasons,
including
mergers,
changes
in
their
financial
condition,
or
general
changes in economic conditions in the customer’s industry or geographic location, or we may 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 actually recognized in future periods. 
Accordingly, there can be no assurance that contracts included in backlog estimates will actually generate the specified revenues or that the
actual revenues will be generated within the corresponding 60-month period.
Backlog should be considered in addition to, rather than as a substitute for, reported revenue and deferred revenue.
Non-GAAP Financial Measures
24
MEETS THE CHALLENGE OF CHANGE
•
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.
•
License, facilities management, and software hosting arrangements are assumed to renew at the end of their committed term at a rate
consistent with our historical experiences.
•
Non-recurring
license
arrangements
are
assumed
to
renew
as
recurring
revenue
streams.
•
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.

MEETS THE CHALLENGE OF CHANGE
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 “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 presentation include, but are not limited to, statements regarding:
(i) expectations regarding 2015 financial guidance, including non-GAAP revenue, adjusted EBITDA, and net new sales bookings;
(ii) expectations regarding Q2 2015 non-GAAP revenue; and
(iii) expectations regarding  five year targets, including future increases in organic revenue, adjusted EBITDA margin, operating free cash flow,
and sales net of term extension.
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, increased competition, the performance of our strategic product, BASE24-
eps, demand for our products, restrictions and other financial covenants in our credit facility, consolidations and failures in the financial services
industry, customer reluctance to switch to a new vendor, the accuracy of management’s backlog estimates, the maturity of certain products, our
strategy to migrate customers to our next generation products, ratable or deferred recognition of certain revenue associated with customer
migrations and the maturity of certain of 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, volatility and disruption of the capital and credit
markets
and
adverse
changes
in
the
global
economy,
our
existing
levels
of
debt,
impairment
of
our
goodwill
or
intangible
assets,
litigation,
future acquisitions, strategic partnerships and investments, risks related to the expected benefits to be achieved in the transaction with Online
Resources, OPAY and ReD, 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, the protection of our intellectual property in intellectual property litigation, 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.
25

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