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, 2022
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) | ||||||||||||||||
(239 ) 403-4660
(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:
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 May 5, 2022, ACI Worldwide, Inc. (“the Company”) issued a press release announcing its financial results for the three months ended March 31, 2022. 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 May 5, 2022 | |||||
| Investor presentation materials dated May 5, 2022 | |||||
| 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: May 5, 2022 | 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 March 31, 2022
Revenue of $323 million, up 13% versus Q1 2021
Adjusted EBITDA of $68 million, up 50% versus Q1 2021
New ARR bookings of $21 million, up 117% versus Q1 2021
Net income of $16 million
Repurchased 1.1 million shares in the quarter
Reiterating guidance for full-year 2022
Miami, FL — May 5, 2022 — ACI Worldwide (NASDAQ: ACIW), the global leader in mission-critical, real-time payments software, announced financial results today for the quarter ended March 31, 2022. ACI delivered a strong first quarter, with revenue growth of 13% and new ARR bookings up 117% versus 2021.
"We continue to execute on the rigorous and disciplined management processes implemented in the last two years, making our business more predictable and our growth momentum clear", said Odilon Almeida, president and CEO of ACI Worldwide.
"I am pleased with our progress and our financial flexibility, which support short- and long-term profitable growth while continuing our share buy-back program,” Almeida continued.
“This quarter’s revenue growth and significant new business wins demonstrate continued execution of our Fit for Growth and Focused on Growth strategic pillars. Our Step-Change Value Creation pillar is progressing as well,” he concluded.
FINANCIAL SUMMARY
In Q1 2022, revenue was $323 million, up 13%, or 14% on a constant currency basis, from Q1 2021. Net income was $16 million, up from a net loss of $2 million Q1 2021. Adjusted EBITDA in Q1 2022 was $68 million, up 50%, or 49% on a constant currency basis, from Q1 2021. Net adjusted EBITDA margin in Q1 2022 was 29% compared to 23% in Q1 2021. Q1 total new ARR bookings of $21 million were up 117% over Q1 2021.
•Bank segment revenue increased 38%, or 40% on constant currency basis, and Bank segment adjusted EBITDA increased 74% on a reported and constant currency basis, versus Q1 2021.
•Merchant segment revenue increased 6%, or 8% on a constant currency basis, and Merchant segment adjusted EBITDA was flat, or down 3% on a constant currency basis, versus Q1 2021.
•Biller segment revenue was flat on a reported and constant currency basis, and the Biller segment adjusted EBITDA was down 23%, or down 22% on a constant currency basis, versus Q1 2021.
ACI ended the quarter with $115 million in cash on hand and a debt balance of $1 billion, which represents a net debt leverage ratio of 2.4x. The company repurchased 1.1 million shares for $38 million during the quarter. As of March 31, 2022, ACI has $178 million remaining on its share repurchase authorization.
2022 FULL-YEAR AND Q2 GUIDANCE
We reaffirm our guidance for the full year of 2022. We expect revenue growth to be in the mid-single digits on a constant currency basis, or in the range of $1.415 billion to $1.435 billion. We expect adjusted EBITDA to be in a range of $400 million to $415 million with net adjusted EBITDA margin expansion.
We expect Q2 2022 revenue to be between $325 million to $345 million and adjusted EBITDA of $55 million to $75 million. This excludes one-time charges to move our European data centers to the public cloud.
CONFERENCE CALL TO DISCUSS FINANCIAL RESULTS
Today, management will host a conference call at 8:30 AM ET to discuss these results. Interested persons may access a real-time webcast of the teleconference at http://investor.aciworldwide.com/ or use the following number for dial-in participation: toll-free: (866) 914-7436. Please provide your name, the conference name of ACI Worldwide, Inc. and conference ID 9771443.
About ACI Worldwide
ACI Worldwide is the global leader in mission-critical, real-time payments software. Our proven, secure and scalable software solutions enable leading corporations, fintechs, financial disruptors and merchants to process and manage digital payments, power omni-commerce payments, present and process bill payments, and manage fraud and risk. We combine our global footprint with a local presence to drive the real-time digital transformation of payments and commerce.
© Copyright ACI Worldwide, Inc. 2022.
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
SVP, Head of Strategy and Finance
john.kraft@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: (i) expectations that the rigorous and disciplined management processes implemented in the last two years is making our business more predictable and our growth momentum clear, (ii) our progress and our financial flexibility, which support short- and long-term profitable growth while continuing our share buy-back program, (iii) expectations that our Step-Change Value Creation pillar is progressing as well, (iv) expectations for full year 2022 revenue, adjusted EBITDA, net adjusted EBITDA margin, and (iv) our expectations for Q2 2022 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, increased competition, business interruptions or failure of our information technology and communication systems, security breaches or viruses, our ability to attract and retain senior management personnel and
skilled technical employees, future acquisitions, strategic partnerships and investments, implementation and success of our 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, our involvement in investigations, lawsuits and other expense and time-consuming legal proceedings, 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, the COVID-19 pandemic, and 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)
| March 31, 2022 | December 31, 2021 | ||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 114,754 | $ | 122,059 | |||||||
| Receivables, net of allowances | 310,778 | 320,405 | |||||||||
| Settlement assets | 531,804 | 452,396 | |||||||||
| Prepaid expenses | 33,465 | 24,698 | |||||||||
| Other current assets | 18,926 | 17,876 | |||||||||
| Total current assets | 1,009,727 | 937,434 | |||||||||
| Noncurrent assets | |||||||||||
| Accrued receivables, net | 276,731 | 276,164 | |||||||||
| Property and equipment, net | 60,770 | 63,050 | |||||||||
| Operating lease right-of-use assets | 47,161 | 47,825 | |||||||||
| Software, net | 146,952 | 157,782 | |||||||||
| Goodwill | 1,280,226 | 1,280,226 | |||||||||
| Intangible assets, net | 273,527 | 283,004 | |||||||||
| Deferred income taxes, net | 51,243 | 50,778 | |||||||||
| Other noncurrent assets | 64,108 | 62,478 | |||||||||
| TOTAL ASSETS | $ | 3,210,445 | $ | 3,158,741 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 38,929 | $ | 41,312 | |||||||
| Settlement liabilities | 531,148 | 451,575 | |||||||||
| Employee compensation | 32,316 | 51,379 | |||||||||
| Current portion of long-term debt | 50,778 | 45,870 | |||||||||
| Deferred revenue | 92,518 | 84,425 | |||||||||
| Other current liabilities | 67,923 | 79,594 | |||||||||
| Total current liabilities | 813,612 | 754,155 | |||||||||
| Noncurrent liabilities | |||||||||||
| Deferred revenue | 27,790 | 25,925 | |||||||||
| Long-term debt | 1,036,380 | 1,019,872 | |||||||||
| Deferred income taxes, net | 32,519 | 36,122 | |||||||||
| Operating lease liabilities | 41,718 | 43,346 | |||||||||
| Other noncurrent liabilities | 33,759 | 34,544 | |||||||||
| Total liabilities | 1,985,778 | 1,913,964 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity | |||||||||||
| Preferred stock | — | — | |||||||||
| Common stock | 702 | 702 | |||||||||
| Additional paid-in capital | 685,354 | 688,313 | |||||||||
| Retained earnings | 1,146,771 | 1,131,281 | |||||||||
| Treasury stock | (506,513) | (475,972) | |||||||||
| Accumulated other comprehensive loss | (101,647) | (99,547) | |||||||||
| Total stockholders’ equity | 1,224,667 | 1,244,777 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 3,210,445 | $ | 3,158,741 | |||||||
ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share amounts)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Revenues | |||||||||||
| Software as a service and platform as a service | $ | 194,562 | $ | 195,746 | |||||||
| License | 60,285 | 21,202 | |||||||||
| Maintenance | 51,418 | 52,363 | |||||||||
| Services | 16,815 | 15,875 | |||||||||
| Total revenues | 323,080 | 285,186 | |||||||||
| Operating expenses | |||||||||||
| Cost of revenue (1) | 166,286 | 159,485 | |||||||||
| Research and development | 37,807 | 34,514 | |||||||||
| Selling and marketing | 34,608 | 28,138 | |||||||||
| General and administrative | 25,875 | 27,775 | |||||||||
| Depreciation and amortization | 30,838 | 31,584 | |||||||||
| Total operating expenses | 295,414 | 281,496 | |||||||||
| Operating income | 27,666 | 3,690 | |||||||||
| Other income (expense) | |||||||||||
| Interest expense | (10,894) | (11,475) | |||||||||
| Interest income | 3,159 | 2,854 | |||||||||
| Other, net | 2,250 | (1,382) | |||||||||
| Total other income (expense) | (5,485) | (10,003) | |||||||||
| Income (loss) before income taxes | 22,181 | (6,313) | |||||||||
| Income tax expense (benefit) | 6,691 | (4,368) | |||||||||
| Net income (loss) | $ | 15,490 | $ | (1,945) | |||||||
| Income (loss) per common share | |||||||||||
| Basic | $ | 0.13 | $ | (0.02) | |||||||
| Diluted | $ | 0.13 | $ | (0.02) | |||||||
| Weighted average common shares outstanding | |||||||||||
| Basic | 115,287 | 117,491 | |||||||||
| Diluted | 116,098 | 117,491 | |||||||||
(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 March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 15,490 | $ | (1,945) | |||||||
| Adjustments to reconcile net income (loss) to net cash flows from operating activities: | |||||||||||
| Depreciation | 4,981 | 5,416 | |||||||||
| Amortization | 26,508 | 28,167 | |||||||||
| Amortization of operating lease right-of-use assets | 2,716 | 2,345 | |||||||||
| Amortization of deferred debt issuance costs | 1,153 | 1,182 | |||||||||
| Deferred income taxes | (3,367) | (6,078) | |||||||||
| Stock-based compensation expense | 7,958 | 6,703 | |||||||||
| Other | 601 | (106) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Receivables | 9,660 | 76,135 | |||||||||
| Accounts payable | (2,748) | (2,808) | |||||||||
| Accrued employee compensation | (19,138) | (12,725) | |||||||||
| Deferred revenue | 9,949 | 8,152 | |||||||||
| Other current and noncurrent assets and liabilities | (24,889) | (34,681) | |||||||||
| Net cash flows from operating activities | 28,874 | 69,757 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | (2,280) | (4,346) | |||||||||
| Purchases of software and distribution rights | (6,207) | (8,053) | |||||||||
| Net cash flows from investing activities | (8,487) | (12,399) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of common stock | 906 | 1,052 | |||||||||
| Proceeds from exercises of stock options | 1,022 | 2,799 | |||||||||
| Repurchase of stock-based compensation awards for tax withholdings | (5,537) | (14,206) | |||||||||
| Repurchases of common stock | (37,860) | — | |||||||||
| Proceeds from revolving credit facility | 40,000 | — | |||||||||
| Repayment of revolving credit facility | (10,000) | (15,000) | |||||||||
| Repayment of term portion of credit agreement | (9,738) | (9,738) | |||||||||
| Payments on or proceeds from other debt, net | (4,186) | (3,600) | |||||||||
| Net decrease in settlement assets and liabilities | (605) | (71,264) | |||||||||
| Net cash flows from financing activities | (25,998) | (109,957) | |||||||||
| Effect of exchange rate fluctuations on cash | (2,464) | (41) | |||||||||
| Net decrease in cash and cash equivalents | (8,075) | (52,640) | |||||||||
| Cash and cash equivalents, including settlement deposits, beginning of period | 184,142 | 265,382 | |||||||||
| Cash and cash equivalents, including settlement deposits, end of period | $ | 176,067 | $ | 212,742 | |||||||
| Reconciliation of cash and cash equivalents to the Consolidated Balance Sheets | |||||||||||
| Cash and cash equivalents | $ | 114,754 | $ | 184,364 | |||||||
| Settlement deposits | 61,313 | 28,378 | |||||||||
| Total cash and cash equivalents | $ | 176,067 | $ | 212,742 | |||||||
| Three Months Ended March 31, | |||||||||||
| Adjusted EBITDA (millions) | 2022 | 2021 | |||||||||
| Net income (loss) | $ | 15.5 | $ | (1.9) | |||||||
| Plus: | |||||||||||
| Income tax expense (benefit) | 6.7 | (4.4) | |||||||||
| Net interest expense | 7.7 | 8.6 | |||||||||
| Net other income (expense) | (2.3) | 1.4 | |||||||||
| Depreciation expense | 5.0 | 5.4 | |||||||||
| Amortization expense | 26.5 | 28.2 | |||||||||
| Non-cash stock-based compensation expense | 8.0 | 6.7 | |||||||||
| Adjusted EBITDA before significant transaction-related expenses | $ | 67.1 | $ | 44.0 | |||||||
| Significant transaction-related expenses: | |||||||||||
| Employee related actions | $ | — | $ | 0.8 | |||||||
| Other | 0.5 | 0.4 | |||||||||
| Adjusted EBITDA | $ | 67.6 | $ | 45.2 | |||||||
| Revenue, net of interchange: | |||||||||||
| Revenue | $ | 323.1 | $ | 285.2 | |||||||
| Interchange | 93.2 | 87.3 | |||||||||
| Revenue, net of interchange | $ | 229.9 | $ | 197.9 | |||||||
| Net Adjusted EBITDA Margin | 29 | % | 23 | % | |||||||
| Three Months Ended March 31, | |||||||||||
| Segment Information (millions) | 2022 | 2021 | |||||||||
| Revenue | |||||||||||
| Banks | $ | 132.2 | $ | 95.9 | |||||||
| Merchants | 41.0 | 38.7 | |||||||||
| Billers | 149.9 | 150.6 | |||||||||
| Total | $ | 323.1 | $ | 285.2 | |||||||
| Recurring Revenue | |||||||||||
| Banks | $ | 61.3 | $ | 62.3 | |||||||
| Merchants | 34.8 | 35.3 | |||||||||
| Billers | 149.9 | 150.5 | |||||||||
| Total | $ | 246.0 | $ | 248.1 | |||||||
| Segment Adjusted EBITDA | |||||||||||
| Banks | $ | 64.7 | $ | 37.2 | |||||||
| Merchants | 14.7 | 14.7 | |||||||||
| Billers | 26.4 | 34.0 | |||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| EPS Impact of Non-cash and Significant Transaction-related Items (millions) | EPS Impact | $ in Millions (Net of Tax) | EPS Impact | $ in Millions (Net of Tax) | |||||||||||||||||||
| GAAP net income (loss) | $ | 0.13 | $ | 15.5 | $ | (0.02) | $ | (1.9) | |||||||||||||||
| Adjusted for: | |||||||||||||||||||||||
| Significant transaction-related expenses | — | 0.4 | 0.01 | 0.9 | |||||||||||||||||||
| Amortization of acquisition-related intangibles | 0.06 | 7.0 | 0.06 | 7.0 | |||||||||||||||||||
| Amortization of acquisition-related software | 0.04 | 5.0 | 0.06 | 6.7 | |||||||||||||||||||
| Non-cash stock-based compensation | 0.05 | 6.0 | 0.04 | 5.1 | |||||||||||||||||||
| Total adjustments | $ | 0.15 | $ | 18.4 | $ | 0.17 | $ | 19.7 | |||||||||||||||
| Diluted EPS adjusted for non-cash and significant transaction-related items | $ | 0.28 | $ | 33.9 | $ | 0.15 | $ | 17.8 | |||||||||||||||
| Three Months Ended March 31, | |||||||||||
| Recurring Revenue (millions) | 2022 | 2021 | |||||||||
| SaaS and PaaS fees | $ | 194.6 | $ | 195.7 | |||||||
| Maintenance fees | 51.4 | 52.4 | |||||||||
| Recurring Revenue | $ | 246.0 | $ | 248.1 | |||||||
| Annual Recurring Revenue (ARR) Bookings (millions) | Three Months Ended March 31, | ||||||||||
| 2022 | 2021 | ||||||||||
| ARR bookings | $ | 21.1 | $ | 9.7 | |||||||
Q1 2022 Earnings Presentation May 5, 2022 Exhibit 99.2
Private Securities Litigation Reform Act of 1995 Safe Harbor for Forward-Looking Statements 2 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. Confidential
ACI Delivers Mission-Critical Payment Solutions We combine our global footprint with a local presence to drive the real-time digital transformation of payments and commerce. Our proven, secure and scalable software solutions enable leading corporations, fintechs, financial disruptors and merchants to: Process and manage digital payments Enable omni-commerce payments Present and process bill payments Manage fraud and risk 3 ACI Worldwide is the global leader in mission-critical, real-time payments software. Confidential
Three-Pillar Strategy 4 We are organized and operating with a strong focus on growth by: • Adopting a simpler, flatter and more agile organizational structure • Building a powerful, best-in- class sales engine • Maintaining fewer layers between business leaders and customers We are focusing investments on the biggest growth opportunities and continuing to accelerate the digital transformation of payments by: • Increasing investment in real- time payments, global sophisticated merchants, international markets and the next-generation real-time payments platform We continue to build on our successful history of mergers and acquisitions by: • Driving inorganic value creation through acquisitions and divestitures aligned with our areas of focus and overall strategy Fit for Growth Focused on Growth Step-Change Value Creation Confidential
Q1 2022 Highlights 5 Consolidated Results Segment Results Balance Sheet * Statistics as of 3/31/2022 • Total revenue of $323, up 13%, or 14% on a constant currency basis, from Q1 2021 • Net adjusted EBITDA margin of 29%, up from 23% in Q1 2021 • Banking revenue up 38%, or 40% on a constant currency basis • Merchant revenue up 6%, or 8% on a constant currency basis • Biller revenue flat on a reported and constant currency basis • $115M cash balance* • $1B debt Net debt ratio of 2.4* • Adjusted EBITDA of $68M, up 50%, or 49% on a constant currency basis, from Q1 2021 • Repurchased 1.1 million shares in Q1 2022 - $178M remaining on authorization Confidential Business more predictable and growth momentum clear
Reiterating 2022 Guidance 6 • Revenue growth expected to be in the mid-single digits on a constant currency basis, or in the range of $1.415B - $1.435B • Adjusted EBITDA expected to be $400M - $415M • Expect net adjusted EBITDA margin slightly higher than 2021 • Revenue expected to be $325M - $345M • Adjusted EBITDA expected to be $55M - $75M • Expect quarterly phasing less second half weighted 2022 Revenue Guidance 2022 Adjusted EBITDA Guidance Q2 2022 Confidential
2022 Quarter 1: Recognitions Leading industry research firms and awards recognize ACI’s solutions leadership 7 Retail Fraud Awards - Australia Most Innovative Online Risk Management Solution: Winner ACI Fraud Management Vendor of the Year: Highly Commended ACI Worldwide Celent Model Bank Awards Payments Infrastructure CCE Peru with ACI Worldwide and Mastercard Confidential
8 Three Months Ended March 31, Recurring Revenue (millions) 2022 2021 SaaS and PaaS fees $ 194.6 $ 195.7 Maintenance fees 51.4 52.4 Recurring Revenue $ 246.0 $ 248.1 Three Months Ended March 31, Annual Recurring Revenue (ARR) Bookings (millions) 2022 2021 ARR Bookings $ 21.1 $ 9.7 Supplemental Financial Data
9 Supplemental Financial Data Three Months Ended March 31, Adjusted EBITDA (millions) 2022 2021 Net income (loss) $ 15.5 $ (1.9) Plus: Income tax expense (benefit) 6.7 (4.4) Net interest expense 7.7 8.6 Net other income (expense) (2.3) 1.4 Depreciation expense 5.0 5.4 Amortization expense 26.5 28.2 Non-cash stock-based compensation expense 8.0 6.7 Adjusted EBITDA before significant transaction-related expenses $ 67.1 $ 44.0 Significant transaction-related expenses: Employee related actions $ — $ 0.8 Other 0.5 0.4 Adjusted EBITDA $ 67.6 $ 45.2 Revenue, net of interchange Revenue $ 323.1 $ 285.2 Interchange 93.2 87.3 Revenue, net of interchange $ 229.9 $ 197.9 Net Adjusted EBITDA Margin 29 % 23 %
10 Three Months Ended March 31, Segment Information (millions) 2022 2021 Revenue Banks $ 132.2 $ 95.9 Merchants 41.0 38.7 Billers 149.9 150.6 Total Revenue $ 323.1 $ 285.2 Recurring Revenue Banks $ 61.3 $ 62.3 Merchants 34.8 35.3 Billers 149.9 150.5 Total $ 246.0 $ 248.1 Segment Adjusted EBITDA Banks $ 64.7 $ 37.2 Merchants 14.7 14.7 Billers 26.4 34.0 Supplemental Financial Data
11 Three Months Ended March 31, 2022 2021 EPS Impact of Non-cash and Significant Transaction-related Items (millions) EPS Impact $ in Millions (Net of Tax) EPS Impact $ in Millions (Net of Tax) GAAP net income (loss) $ 0.13 $ 15.5 $ (0.02) $ (1.9) Adjusted for: Significant transaction-related expenses — 0.4 0.01 0.9 Amortization of acquisition-related intangibles 0.06 7.0 0.06 7.0 Amortization of acquisition-related software 0.04 5.0 0.06 6.7 Non-cash stock-based compensation 0.05 6.0 0.04 5.1 Total adjustments $ 0.15 $ 18.4 $ 0.17 $ 19.7 Diluted EPS adjusted for non-cash and significant transaction- related items $ 0.28 $ 33.9 $ 0.15 $ 17.8 Supplemental Financial Data
12 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
13 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 our Three Pillar strategy; our full year 2022 expectations for revenue, quarterly phasing, adjusted EBITDA, net adjusted EBITDA margin; and our expectations for Q2 2022 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, 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. Forward Looking Statements
