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 21, 2019 (May 21, 2019)
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)) |
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, $0.005 par value | ACIW | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 7.01. | Regulation FD Disclosure |
On May 21, 2019, ACI Worldwide, Inc. posted investor relations materials on its website (www.aciworldwide.com) to be used in connection with investor events. 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 21, 2019 |
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 21, 2019
ANALYST BRIEFING Driving the real-time digital payments experience MAY 21, 2019 Exhibit 99.1
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. Private Securities Litigation Reform Act of 1995 Safe Harbor for Forward-Looking Statements
WELCOME John Kraft Vice President, Investor Relations and Strategic Analysis
ANALYST BRIEFING Mike Braatz Chief Product & Marketing Officer
Any Payment, Every Possibility Note (1): 2019 Revenue and Adj. EBITDA are Guidance metrics. Adjusted EBITDA is a non-GAAP measures. Adjusted EBITDA excludes significant transaction-related expenses. Speedpay results included for the period May 9 through December 31, 2019. $1.315 – 1.345 Billion FY 2019 Revenue(1) ~260 Billion Transactions Processed Annually $360 - $380 Million FY 2019 Adjusted EBITDA(1) 5,300+ Customers Globally Universal Payments Software 4,000+ Employees in 39 Countries 1 1ACI 4 CUSTOMER SEGMENTS 6 SOLUTION AREAS 2 DEPLOYMENT MODELS
2023 Addressable Transaction Opportunity 2.1 TRILLION Transactions 2023 3.6 TRILLION Transactions 2023 1.5 TRILLION Transactions 2023 Addressable with Current Solution and Segment Focus White Space Opportunity
ACI’s Addressable Transaction Opportunity by Segment 1.3 TRILLION Transactions 2018 2.1 TRILLION Transactions 2023 Corporates 8 B Merchants 137 B Intermediaries 598 B Banks 560 B Corporates 10 B Merchants 210 B Intermediaries 1050 B Banks 865 B ACI % share: High teens to low 20s ACI % share: Low-to-mid 20s
Growth Trends Transforming Transaction Opportunity Cloud/Open Source Digital Transformation Democratization of Payments Real-Time Non-Card Payments Internet of Things Payments Intelligence
Monetizing the Transaction Opportunity Value-Based Pricing Approach Opportunity to grow price per transaction by providing additional value-added services The cloud and open source infrastructure software are key to efficiency gains Corporates Merchants Intermediaries Banks Type C2B end-to-end hosted payment processing C2B payment at merchant POS or via eCommerce Wide range of payment services Payment access to funds Current Price per transaction $0.2-$1.0 $0.01-$0.07 Full range, depending on value derived <$0.01 (Volume discount price curve applied)
2 Deployment Models *Sum of percentage revenue growth and net adjusted EBITDA margin of at least 40% ACI ON DEMAND ACI ON PREMISE Licensed software model Migrate customers to modernized IP UP Retail Payments Solution (RPS) New UP Real-Time Payments Solution (RTPS) Cross-selling to existing customers Secular transaction growth Maintain low attrition ACI’s platform for payments Consumption-based business model Double digit growth opportunity Ramp incremental volume from existing customers Disciplined transaction-based pricing Winding down of heavy investment cycle Targeting Rule of 40*
The Combined Opportunity Market leadership in biller direct, and 3,700+ customers Speedpay brings immediate scale to ACI On Demand Updating 2019 guidance Unifies two leading platforms and brings together top talent Accelerates technical innovation through increased R&D and shared enhancements Accelerates convergence of Merchant and Bill Pay +
Unified Bill Payment Solution Real-time bill payment platform Any Payment Control of end-to-end experience Distinctive digital user experience Speedpay Front End Notifications eBills Portals IVR In-Person Settlement Collections Disbursement Payment Mobile Wallet Presentment ACI Back End Vertical integrations Strong scalability, security and availability
Enables consumers to view bills and initiate payments on iOS and Android smartphones with Apple Wallet or Google Pay Customers can link consumers to more products and services directly from bills
Consumer Finance Education Insurance Utilities Government Vertical-specific features are built onto the platform Partnerships with leading ERP providers in target verticals Focus on Specific Verticals for Traditional Billing
ACI Merchant Payments Platform In-Store Payments Mobile POS eCommerce mCommerce Global Coverage Intelligent Routing Tokenization EMV Integrated Fraud Protection Real-time, omni-channel merchant payments platform Any Payment Modern digital payment experience Integrated payments intelligence Scalability, security, availability
Delivering Global Payments Coverage ALTERNATIVE PAYMENTS OTHERS PREPAYMENT WALLET ONLINE TRANSFER MOBILE INVOICE CARDS CREDIT DEBIT PRE-PAID DIRECT DEBIT INSTALLMENTS
Merchant and Biller Needs Are Converging Merchant Payments Digital Subscription Billing Bill Payments
Subscription Billing Segments Digital Subscription Services Verticals Examples Physical Goods Music Video/other media Video games Education Finance News Dating Healthcare/wellness Health/fitness Restaurant delivery Grocery delivery Fashion Personal care Automotive Spotify, Pandora Netflix, ESPN PS4, Xbox Coursera, edX Mint, Lemonade WSJ, The Economist Match.com, Bumble Iora Peloton, Equinox Doordash, Uber Eats Blue Apron, Hello Fresh Stitch Fix, Trunk Club Dollar Shave Club, Lola BMW, Zipcar
Strong Digital Subscription Growth Number of bills in billions Growth driven by: Digital native billers Traditional players adopting subscription models Traditional Billing Digital Subscription – Services Digital Subscription – Physical Goods 37 55 3% 18% 21% CAGR Digital Subscriptions Traditional Billing +8% Number of bills in billions Source: 2018 McKinsey Global Payment Map
Digital Subscription Pain Points High payment acceptance costs High churn Lack of end-to-end solutions Missing vertical specific capabilities Limited customer engagement experience
ACI Solution Strategy Speedpay Front End Notifications eBills Portals IVR In-Person Settlement Collections Disbursement Payment Mobile Wallet Presentment ACI Back End In-Store Payments Mobile POS eCommerce mCommerce Global Coverage Intelligent Routing Tokenization EMV Integrated Fraud Protection Unified Bill Payment Solution Omni-Channel Merchant Payments Platform
ACI Real-Time Digital Payments Platform Combines the best of commerce + billing capabilities Any Payment Modern digital payment experience Global coverage Scalability, security, availability
ACI Value Proposition for Merchants and Billers Higher acceptance rates Reduced payments costs Stronger customer engagement Payments intelligence to reduce fraud and drive new revenue streams Global Any Payment
ANY PAYMENT, EVERY POSSIBILITY. ®
Q&A Philip Heasley President and CEO Scott Behrens Chief Financial Officer Mike Braatz Chief Product & Marketing Officer
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: Expectations that Speedpay brings immediate scale, significantly boosting recurring revenue and materially improving net adjusted EBITDA margin; Expectations regarding our leadership position, talent and technical innovation ; Expectations regarding the convergence of Merchant and Bill Pay; and 2019 financial guidance related to revenue and adjusted EBITDA. 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 success of our Universal Payments strategy, 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, 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, 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, volatility in our stock price, and potential claims associated with our sale and transition of our CFS assets and liabilities. 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. Forward-Looking Statements