ACIW - Earnings call transcript Q3 2021

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Operator

Good day, and thank you for standing by. Welcome to the ACI Quarter Three Earnings Announcement [Operator Instructions]. Please be advised that today's conference is being recorded [Operator Instructions]. I would now like to hand the conference over to your speaker today, John Kraft. Thank you, and please go ahead.

John Kraft

morning, good and you, everyone. Thank our Like to call subject today's safe all harbor of both and is events, forward-looking statements.

You both Odilon President Scott statements the SEC. pages full Almeida, our website text our first available this as which the our deck, Behrens, final with well of presentation of can and and our morning's on and copy is On CEO; as on CFO. find the a to call is

that I forward Investor over, register hosting want Odilon. in it we hand like everybody November look are via Relations Analyst remind and New I I'd to that, to to on Day our Before With your attendance Please an the to turn over you website. York XX City. seeing call

Odilon Almeida

full revenue and financial date, for We X% well quarter of and you are John. confident and results XXXX. of Thank that year growth joining the past I summarize commitments. above organic is in everyone, to you, earnings organic now This seeing revenue XXXX are X% by in Hello, EBITDA progress the third to X% growth growth our trends. we our will delivering expect saying call. conference we with our pleased thank

ready Fit streamlining sharpening we take evolution. adjusted In cost ACI in about implemented new the environment steps internal In organization. we our launched approach work was improvement. doing grow million how our actions more EBITDA us achieved the of all like savings. the our XXXX been by to implementation results. XX% focused share on strategy next As organizational of XXXX, Fit have about to would an to our also the COVID and from annual we our basis new customers transform deliver company our making processes, adjusted Fit we customers. structure with helped But first more of a XX a and the our this for we guidance. and the streamline the XXX in details pillar, leaner We're COVID margin strategy our XXXX. how That pandemic. moving a for this more most raising a result, optimized Growth. to Starting in we profitability we are design are getting strategy structure, business, Growth. pandemic, where we first than occurred I challenging This We encouraged is delivery our has net in EBITDA and time. so, go-to-market year-end our call Rule it importantly, on discipline And In on contending XXXX. track rethinking to growth increased efficient. X-pillar year with growth $XX and for by Growth These and pressures points year us by the in were from By for to XXXX, of

was which telling have those decisions, streamlined worked center goal do the at to structure. customers is This our enable sped on of We have our new we a to Customers ACI. most group our at increased and of sales new In the us efforts generating function, to we our to already the action commercial success. force, the to what our up of decision street are simplify making. roles customer-facing closest significantly We remain ensure organization establishing feet presence. represents make

bill of originates roughly payment hired For recently example, from X/X segment pipeline our salespeople.

our capital disciplined experience. Along our with aligns also a investments, means is while with to customers, urgency these product It to significantly. and the relationships more more sales implemented investments elevating force now faster energized market deepen With work strategically. that we build time deploy can with our and to continuity customer areas. a sales and and more our market with analytic empowered robust We customers. result a strategy has Our workforce increased high-return directly approach

As about of we are future near the end optimistic our we're XXXX, prospects. growth and these showing efforts results, increasingly

to our Growth. pillar, Focused on second Moving

We as they our transformation modernize continued customers' in their investing digital systems. have payment

such priorities also as real-time customers. Our of priorities and our technologies cloud, mile last are

converged customers also our We of e-commerce allowing leverage merchant the of platforms, combination to point sale. and

specifically management covering and X well Our as online value bring solutions into investments focus what When real high level, omni we you are: markets, you the and mile, across sophisticated these time our and take last are Latin on together an in global innovation Middle payments on integrated capabilities Emerging the begin growth Africa, e-commerce. integrated efforts fraud highest see both differently. gateway, all doing to with low America, growth and At Asia East, solution. Pacific. initiatives as merchants focus South in omni-commerce real-time together,

organizational also We the targeted to have have a and and structure strategy, we culture win. alignment

are We all and on now seeing are firing the results. cylinders

bookings XXXX. of up the from ARR new net third consolidated produced efforts XX% sales Our quarter

COVID American dissipated quarter, in last market the mentioned from nearly we and the North last pressures in ARR quarter year. third As doubled earlier Americas

in areas are are international markets, soft. although seeing these improvements still We

once progress or considerably revenue the our guided QX previous revenue in is revenue fourth the to XX% you. again year. of date, signed Our above date for the we XXXX, and we XX% expected provide To This of for years. quarter full EBITDA within range have were both the

are organic national expectation time focus. corporations to and our global of established repeat, wins the in of first highlight our organization want Rule third I in for some global, XX the our recurring to regional accelerated a spectrum from quarter, to and And revenue growth this to the organizations central governments. are XXXX. strength testament these in expect the the for our critical across We and achieve confident from to strategic wins Many we of of year. sales

Middle U.S. North Buy increasing see Later XX top Pay and will segments utilize payments bank A more critical for of platform. domestic same path the Asia, East, longtime for bank, growth firms. and to also our recorded banks the and utilizing and They customer. a U.S., all cryptocurrency enterprise America, wires North and companies, non-U.S. one fintech Latin ACI to with major and international the create We payments the on real-time from mandate. both a America. win pave the a and struck top renewed Africa made a new platform payment Europe, across back path. ACI in including America, U.S. ACI the address business we We with types converge wins ACI deal to modernization demand X In need significant high-value We for selected services Now, in payments a [Indiscernible]

one modernization. information firm to support based Canada in strategy. Asia, and a implement modernization major with customers, a of footprint largest on We both signed Label a country's our leading the leading wins, wins India issuing new banks are use a payments. Malaysian bank acquiring. services payment payments and of provide solutions utilize provide as as high-value this will In White to high-value next-generation ACI payment the to Bank issuing and on with large scheme, real-time global technology on digital wins These ongoing spanning a its built ACI ATM global customers are had and a Berhad, competitive has partnering area ACI our major with other X real-time established to in win This region and important with and payments focus bank their CIMB critical selected on ACI takeaway. recognized partner. acquiring. the JCB, to ability We service provider, was focus CIMB

vertical, will and to payment renewed on renewal geographies. America, new leading In innovative issuing the of issuing provider the provide will platform ACI banks acquiring. platforms ACI ACI we of and part Turning platforms, agreement Zimbabwe grocery key to X service our We Europe, payments Saudi the provider utilize service in acquiring. with to omni-commerce payment In one that had to selected one extensibility our in a cementing its as manage program. while institutions multi-acquiring payment agile new Arabia. supporting customers of saw focus enterprise In largest cloud, the technology They and Middle Albertsons, service renewed has platform top Vision growth the its East, the major path modernize leverage ACI and leading processes, ACI financial Africa, U.S. one based Saudi replace of deals. also our deal e-commerce several Merchant XXXX with the for chargebacks. Latin and we're simplify and Arabia's issuing in-house processors offer. segment, our progress and help acquirers a they and acquiring for with richest supermarkets, continued enables a in In XX to several their our use

to and the deal the cloud want orchestration to needs ACI. out digital grocery transformation European fraud meet mention fraud These the and U.K.'s of management. their provide of also access ability technology extended continued renewed services secure and to and around focus new a will our new I our these services on largest relationship payments the world facilitate that new in-store with merchant solutions the ACI with acquirers e-commerce One grew of wins of with and payments, e-commerce segment and the customers. grocers

firms modernize ACI Services, recreation Metrics BCU, Speedpay with will replace Leading system has vendors, universities wins higher a This credit to new in finance education regional as research the and report. a deal customers. Some their of XXX-plus global U.S. also include the current leading payment for union, systems landscape management systems in preferred Biller innovation, and like ERP cash This the to and leadership. deal segment their utilizing our technology win partner. mobile best-in-class institutions processing its A chosen company Roadrunner student focus offer will areas of Payments a IT XXXX recognized on deal Account of solutions ACI's with higher achieved portal. Speedpay. industry payment segment vehicles, a top grew U.S. leading which education upgrade ranking Pro. ACI new currently leading out for PayPal ACI We continued the to our including

several Celent, Payments We ACI of are base corporate for won by digital Juniper, our and in customer from a banking platforms the support. We including which e-commerce. leader Year named highlighted Innovation secure awards solid

and incremental approval machine technology Additionally, we approach learning. for received learning patent industry-first full to innovative an our

for the I bring. handing business Scott? financials. am proud Scott, to call to so what say far. incredibly our what will of over and I achieved that, and team over that it want have With Before discuss customers Scott about to our I'm the will we future turn enthusiastic ACI to the I

Scott Behrens

go results for and delivered for once third then guidance of had and provide some quarter outlook I the first for the results Odilon, financial our again everyone. regarding the range. increased our good line commentary We'll solid our then additional and a open plan Thanks, morning, year. to QX through questions. We rest within

XX% representing in of above a our up for delivered reached million string compared and now or financial total guidance. QX revenue have Recurring QX quarterly quarter We in our X% last results of the line revenue to $XXX with year.

of As signed Odilon and in we pipeline now year more progress XX% year full our also contracts XXXX representing outlook. significant advancing revenue than made our mentioned, full bookings have

for we've year and allows $XX $XXX was the Our quarter raise last than from slightly million, QX year, pipeline contracts. the year last notably by full reinforces Adjusted the momentum from this up delivering license of Total quarter year. timing our higher-margin typically due and QX million, to November, is our on was revenue us mix increased the down primarily to higher EBITDA for in guidance. in which forecast recorded confidence

increased financial projects X% three to recurring year. Merchant and revisit institutions see last total revenue And Biller as revenue to delayed continue double-digit XX% segment, transaction Banking our increased increased growth versus segments. as our declined solution. recurring In business segment, our in X% In X% QX we to started and by in our COVID. our e-commerce segment, previously revenue revenue recurring total revenue Turning finally,

filings year, If and you the related $XXX We in federal ended last last the pushed $XXX tax as had million year. cash available segment tax tax into deadline significant on QX million nearly with ratio a was be or representing million in $X.X to as our recall, on exit volumes targeted hand quarter below debt for the at payment Biller ended state credit debt X.Xx with $XX the X.Xx leverage We facility quarter expect ratio and of billion paying we of after our quarter. net net leverage down debt, XXXX. in our and

expect from the revenue revenue ahead, at are $X.XXX range increasing adjusted we $X.XXX of in $X.XX XXXX expect to high come $X.XXX and the up billion. be Looking billion, of billion to end year now full our now to our expectations billion to previous EBITDA range. of We guidance in

year's growth repeating This EBITDA that So waiting the signed top we're And in higher range high calendar traction is of line $XXX half With and of notably closing on to setting be recognize in now is Odilon guidance to us expecting XXXX, of contract, which the we worth increased the XX% to the $XXX that, the gives exit targets. our to years, In for here seeing revenue it confidence revenue. than under strength the we're with the we combined are have second I million. us bookings as million growth it ARR our back of the in XXXX. past higher well simply accelerating and revenue already for pass up some enter year, are will Odilon? in as comments. we

Odilon Almeida

for for our we customers the hard Thanks, software needs. say are are Scott. us we to performance I their thank ACI critical and want to team execution work and with of seeing. again trusting our want most I pleased results and with how their strategy the the

provider prime position As modernize world's in the are world's we the a software, ecosystem. premier of to payments payment

pipeline And growth value second through Growth. first are Growth. pillar, our Fit build and long-term for to want strategic for important platforms our new In we to and on year, their remain pillar, choice robust government XXXX, on our continue. step-change launched entities This first including the continuing a efforts our on that central We strategy and commercial and pillar, we I digital will enforce delivering are to laser-focused holistically. M&A Focused support on large delivered a fintechs, modernize third we our objectives. on build creation globally, payment that

our review opportunities long-term short- shareholders. M&A our and creation ensure and business to to for portfolio maximize continue we We value

of have on year, strategy that financial the is raising our are delivered XX financial are you. our organic growth We our Thank Rule evidence execution and and accomplishing promises guidance for achieving the and working.

open call for now will the questions. We

Operator

the We Canaccord have question Instructions] Pallav comes Saini from first of Genuity. [Operator from our line

Pallav Saini

be do from all recent into hires. have you do And Or are more results in Odilon, Is pieces the your sales you're good clearly your done feel about now? getting perspective? there your how XXXX. going your follow-up. to feel infrastructure a some about How you pipeline go-to-market from I place here? And

Odilon Almeida

lot still a let But we have a to done lot already. there. me done, start There's be

So we have the changed leadership.

the company. that We have Mandy, the brought U.S. Also, very Canada. is now markets, international new the of for and have example, we leadership talented to a also head called high the executive managing

globe. some the And America, We whole have Latin changed team in that continues. leaders across the

tell think refinement satisfied you is with continues. I'm that I so that the very can I What far. results

of never for have like in We had this And amount XX% new is is bill coming example, of pipeline. that seeing that, shows already a working. pipeline, the hires which our record, payments, from

still happy So to lot But there to a see I'm I is now. be done. what very

Pallav Saini

see partnership, partnership Affirm. timing your deal? should additional with on this on the And implementation? of maybe Can congratulations give this expect you when we to And some contribution color from some

Odilon Almeida

right? vertical, educational the to referring you're So

Pallav Saini

Deposits with believe? Affirm, I

Odilon Almeida

Buy Now, Pay Later.

Pallav Saini

Pay Buy The, Now, yes. Later,

Odilon Almeida

this No, about I very happy we are think partnership.

get the middle of enabling in and that's put it And shows software us later. be the And now the That we payment coming again that for those banks we globe. fintech globe, question. for new the around are and yes, solution, also the shows very is new the and important big payment the going revolution, basically, pay that we're and system. -- you -- think this thank to the solution that and I their for right, system but of around are

to are So innovation very we overall. linked the

are mentioning deal, this think that's I we why right?

Operator

Company. from Mayank Our next from the question Needham of comes Tandon line &

Sam Salvas

Mayank This on is Salvas actually today. Sam for

before Or provide to more could of that to question Is first XX% revenue you 'XX my year-end? I curious be any there on color a weeks delivered -- signed signed? guys first the if bit deals guided are and the potentially just little of committed slip everything few So could is was having January?

Scott Behrens

to you particularly Sam, the I large of of started But sales rest America. in and saw say we in the in quarter of fee. terms in American to to a reason the up see strength us confidence, going really banks. very well doubling In be but because under billers, saw I'd over North that up of us a yet that we continued revenue. haven't put be think the our for answer for in sales broader quarter QX, is a last much broader contract. in what North back pick we because I the fourth has I our North in banks, up seen is we really set QX most North also sales. if third the world, the It's merchants traditionally quarter look say, picked strong, out is is at it and to MEASA that saw, America And sales in region. sales renewals. doubled year, much America, QX, but license

for I in us that say sales say in XX% revenue. whether really on a business, has So to terms number of get pretty early and/or it's paths year. fourth number to in success a here that QX, What's up that at renewals quarter paths set QX would there's we're of left, the deliver XX% the in that. comfortable I new would to of

So demonstrate of That's about delivering... out slippage. really we the deal high why our percentage confidence particularly not to -- in put concerned

Odilon Almeida

color change sales this next Scott in really And right? QX time ACI a and just the that The to year heard is comment the is, said, a to the of to that gives career is first it. the came start we saying. different and to shows to company add during from year. at leader lot leader Sam, I my sales work in how what this me that of a

Mayank Tandon

on this if wins payments? we any wondering And could notable there that within quick And segment quarter? then just an was just update real-time were in a the I growth follow-up. get

Scott Behrens

a back customer some back. existing We competitor here call that an was that brought had one a did. It's a them but modernization quarter, this and upgrades we actually on win to a back had of their win Yes, and mentioned. Odilon moved

saw strength -- in we is comes revenue fee. pretty good that license from a quarter. in of And So real-time lot the a

disclose see year. in the revenues we'll over that that real-time our strong So you'll later here XX-Q last up pretty today you'll see

Operator

Craig-Hallum. the George of Sutton Our comes from next question from line

George Sutton

Odilon, about comments. that I on talk the could you of wins of list the was so prepared a that. quarter, congratulations very wondered said you if couple in a in things Larry-Ellison-like

up the when You mentioned speeding were said to questions sales one of course, big from force. of expand you you That, seeing going was a of that you're customers. decision-making meaningfully the

could process, just I you a to changed just differently? sped also you Are just then process relative to product deploying this capital, product R&D just disciplined more wondered And developing if get and wanted has So upgrading on it a product it bit? road identify me. that's Is there? sort can little you of that for I about what the talk focused process? approach the up map, to And your clarity that.

Odilon Almeida

I of to proud it. think spent we of I'm talking Yes, about love a I'd do very deals, time amount that. good and

your you like the give bank U.S. think I that about an And example. in and explaining change, decision-making, before myself was CEO CEO I the can between So of talking speed account representative. levels to up a to the this X in question had first I X I to top I was

have the I change only X that's levels. happens. Now And how

you about think clients decision new is amount today. together the because when anymore. an value fewer happening layers that in is years. that the XX happening that, this know be revenue of get conversations with is And quarter. never most because important It's like have empowered. happening layers, all for coming I it layers much conversation like good the which telling we like that involved, also And happened us reason have and the expedites more the And not a I long-term been of the reason next to want And we of because don't with is clients, position my are we what have So I'm layers, important and much front before.

So I second one? do want question. think for the that's you Scott, the get first to

Scott Behrens

is on R&D, year, George. we R&D last on parts I was that, of our think our on spend. through, growth R&D On focus One our zero-based the really deployment. other X capital that we the on kind initiatives and went

we didn't the we return we we're less so redeploying to per where X next to spending aren't And optimized se, on -- but can years. get that over most X more that the or R&D

that but all, focus some on of our past. consistent in really at was segments. approach. is of say the the The couple I the Day in as by we're couple deployment And I'd different Analyst on weeks modernization. really with here model one modernization our know second changed. we'll if to Day. of hasn't at strategies a are But thing we've on So be capital capital deployment, don't those R&D then same to what And provide going of further about Analyst a that's our in each talking the here the again, question, updates that weeks R&D what that's It's done have our a

Operator

Palmer from Our next the of Mark question Instructions] from [Operator line BTIG. comes

Mark Palmer

buying I portfolio the involve more kind on creation in portfolio, little regard are the parts the that your you And had color and lines? your a a parts via would give fact selling the table? to of the reviewing of along can value of bit you're both question portfolio, those that M&A step-change -- on

Odilon Almeida

through to of not not our Yes, value right? to side. strategy, part pillar. an extrinsic our That start our M&A creation the It's that say the is something intrinsic like is part of strategy, third I'd is that by happens

investor]. we I've spending So looking and been possibilities of [divestiture time my at the all amount are that doing significant time. of a

and We that about anything the builds are term. long shareholder maximize value short talking in and

portfolio, shareholder the analyzing together, part of be be right? can buy, the can the all portfolio, that math we open maximize value; of sell, be we that you and part are put can be when to So can are time, the anything by

Operator

further more And no time. are continue. there at questions this please John,

John Kraft

Have the Analyst We Day. to today. XXth good for to you at everybody, forward a thanks, again us on look joining day. Well, our talking

Operator

conference call. participating. you today's Thank for all concludes This

Have great a You day. disconnect. may now

ACI Worldwide (ACIW) 6 Nov 212021 Q3 Earnings call transcript