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): August 5, 2021
Commission File Number 0-25346
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||||||||
(305 ) 894-2200
(Registrant's telephone number, including area code)
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 (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 2.02. Results of Operation and Financial Condition.
On August 5, 2021, ACI Worldwide, Inc. (“the Company”) issued a press release announcing its financial results for the three months ended June 30, 2021. A copy of this press release is attached hereto as Exhibit 99.1.
The foregoing information (including the exhibits hereto) is being furnished under “Item 2.02 – Results of Operations and Financial Condition” and “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 Items 2.02 and 7.01 do not mean that such information is material or that disclosure of such information is required.
Item 7.01. Regulation FD Disclosure.
See “Item 2.02 – Results of Operation and Financial Condition” above.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Press Release dated August 5, 2021 | |||||
| Investor presentation materials dated August 5, 2021 | |||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURE
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 thereunto duly authorized.
ACI WORLDWIDE, INC. (Registrant) | ||||||||
| Date: August 5, 2021 | By: | /s/ SCOTT W. BEHRENS | ||||||
| Scott W. Behrens | ||||||||
| Executive Vice President, Chief Financial Officer, and Chief Accounting Officer (Principal Financial Officer) | ||||||||
Exhibit 99.1
ACI Worldwide, Inc. Reports Financial Results for the
Quarter Ended June 30, 2021
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
MIAMI, FLA — August 5, 2021 — 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.
For more information contact:
Investors
John Kraft
john.kraft@aciworldwide.com
Media
Dan Ring
dan.ring@aciworldwide.com
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 | |||||||||||||||
Q2 2021 EARNINGS PRESENTATION ACI WORLDWIDE August 5, 2021 Exhibit 99.2
2 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.
Quarter in Review Odilon Almeida President and Chief Executive Officer 3
Three-Pillar Strategy for the New ACI 4 • Revenues and EBITDA at high end of expectations • Significantly grew sales pipeline in the quarter • Signed strategic global alliance with Microsoft • Well-positioned to accelerate revenue growth in the second half of 2021 • Expect to attain “Rule of 40” for full year 2021 Drive organic growth through operational discipline and a strong sales culture FIT FOR GROWTH Focus R&D on growth-rich solutions supported by innovation FOCUSED ON GROWTH Accretive M&A to drive additional growth and value creation STEP CHANGE VALUE CREATION
Microsoft Global Alliance 5 Creates Industry Leading Payments Platform in the Cloud Capitalize on Growing Global Demand Accelerates and Expands ACI’s Cloud Offerings • Multi-year global alliance offering best-in-class payments in the cloud, via Microsoft Azure • Joint go-to-market and innovation collaboration • Benefits for financial institutions include: − Accelerated path to digital transformation − Increased speed-to-market through new services
Financial Review Scott Behrens Chief Financial Officer 6
• Recurring revenue grew to 83% of total revenue in Q2 2021 versus 78% in Q2 2020 • Recurring revenue grew in all segments compared to Q2 2020 • Adjusted EBITDA decrease due to the timing of non-recurring, high-margin license renewals 7 Q2 2021 Takeaways $60M Adjusted EBITDA -23% Q2 2020 Q2 2021 +1% $302M Revenue Q2 2020 Q2 2021 +7% $250M Recurring Revenue Q2 2020 Q2 2021
Segment Results • Bank segment recurring revenue grew 2%, versus Q2 2020 • Merchant segment recurring revenue grew 5%, versus Q2 2020 • Biller segment recurring revenue grew 9%, versus Q2 2020 Debt and Liquidity • Ended quarter with $146 million in cash; approximately $474 million of available credit facility • Repurchased 1 million shares during the quarter • Paid down $25 million in debt during the quarter • Net debt leverage of 2.8x Introducing 2021 Revenue Guidance; Reiterating Adjusted EBITDA Guidance • 2021 revenue expected to be in a range of $1.335 billion to $1.345 billion • 2021 adjusted EBITDA expected to be in a range of $375 million to $385 million, with net adjusted EBITDA margin expansion • Q3 2021 revenue expected to be in a range of $310 million to $320 million and adjusted EBITDA in a range of $70 million to $80 million 8 Q2 2021 Takeaways
10 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 Revenue $ 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 Recurring Revenue $ 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 Supplemental Financial Data
11 Supplemental Financial Data 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 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 %
12 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 Supplemental Financial Data 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
13 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 non-cash 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 non-cash 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 service fees and maintenance fees. Recurring revenue should be considered in addition to, rather than as a substitute for, total revenue. Non-GAAP Financial Measures
14 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) significant growth in sales pipeline, (ii) a strategic global alliance with Microsoft, (iii) accelerating revenue growth in the second half of 2021, (iv) attainment of the “Rule of 40” for full year 2021, 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. Forward Looking Statements