ACIW - Earnings call 1 2023 | ACI Worldwide, Inc.

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Operator

Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the ACI Worldwide, Inc.

First Quarter 2023 Financial Results Conference Call. Today's conference is being recorded. time, John like Kraft. this conference turn At to over Instructions] I to would the [Operator Please ahead. go

John Kraft

Thank you, results and we for will good rest morning, everyone. the the first On company's quarter the XXXX of and outlook discuss financial year. today's call,

your tab take end. the available the and and will at this aciworldwide.com under The found call. can remain be questions at accompanying the call will We slides webcast Investor Relations after

like is subject harbor all to of statements events. call Today's and our safe forward-looking

text both which deck, and statements full on first the final pages presentation SEC. the website find our and a can You of with the our is on of of copy available

turn is Behrens, to Tom. the On call Tom this Scott our CEO; our Interim morning's that, President With and to call and CFO. over Warsop, like I'd

Thomas Warsop

morning, quarter, all with year. hand this then start QX our John. for We'll call. earnings outlook of our the the for and morning it then and XXXX detailed questions. to Thanks, to you the for on line the joining and conference remainder comments thank discuss quarter first the Scott financials I'll and over open I'll some brief Good

first quarter and our uncertain were million, to X% and Biller mainly the strong consolidated was we consistent results with while revenue reflect X%, an recurring discussed year-over-year, our renewals $XXX call. due as economic down the execution expectations despite revenue last timing Total was in growth that team's environment. and grew delivered by We of driven license-based Bank that segments,

Total foreign down $XX adjusted online are the business Both XX%. divestiture. corporate million, for adjusted and was impact rates growth exchange EBITDA banking

renewals high As you tend be to extremely may margin. license these recall,

ARR compared the at ARR was at a were When from this up looking XX-month X% bookings which XX look March removes $XXX XXXX. basis, to of same how I as the to $XX for months fluctuations. it, of quarter quarterly Trailing million, the bookings is is ARR which on some the New metric like trailing million. new QX

impacting Biller Turning driven I now improvement saw increase to XX% our meaningful client inflation-driven increase with business. address of our and results revenue of substantial year. accounts, built mainly by segment, these subsector. We've through which We're book utility to was for quarter our in expect progress of our throughout This progress taken all interchange interchange EBITDA we've onboarding recontracting we've customer plan coming the results. our continued the an an by growth adjusted P&L, efforts and and across segment steps pleased the of XX%. performance this and our the is in made The

told I effort reaching time, stretch may you before full As last year into is completion. an the next this that

we timing and license-based as Our declined Merchant our driven which, mainly as is of segment Bank said, versus I by expected, revenue the calendar. renewal year last

majority year's new investments XXXX, and in remain occur of guidance. With in our meaningful to our confident particularly latter make capabilities. this We're renewals expected we our year innovative continuing the to in the also segment, and go-to-market significant part Merchant in of full

segment this over long We the to in investments these growth term. expect accelerate

and a behalf. their Let of that and grocer. food expanded We fintech with our several expansions and latest turn SaaS had wins renewals merchant product chain me important We our several included of with fast trends new with e-commerce a U.S.-based and top payments had customer, less to our domestic U.S.-based implementations some some top orchestration traditional a wins. new including European with vendors. business clients, on We

acquirers in we in as with Eastern a in the system payment anti-fraud and Middle including win new Arabian signed new real-time Mexico; finally, the several Saudi and well expansions a national a Asia. payments one payments, issuing as with of infrastructure; had processors acquiring real-time with We contract largest and financial institutions customers,

testing industry the just the year. this in program, payment with ACI unique we piloting of launch been all the has in real-time and and official dubbed instrumental transaction include that built-in In will is launched Cloud. the in This FedNow U.S., of July of cloud-based a a scoring, system the and protection fraud our ACI Payments is in offered deployment. offering Microsoft Real-Time Azure expected

with Just the I the around real-time and last cemented economy position dialogue overall of first benefit inherent bank that payments, many from the met a creates, use developing week, possibilities payments payments real-time and with how only discussed about in that my conversation was for the central their including future speaking real-time payments. the real-time world. a further cases with the markets in Africa, can I It them potential

and Overall, we quarter our market execution made team's progress I'm the challenging the pleased the amid in environment. with

we recognize we more significant done, to opportunities be there's internal before in the to overall While us. we're work right confident capitalize have place the on strategy

energized target and We're Looking achieve XXXX. ahead, the to the full long-term of within technologies. that help we're growth will on cloud-based in XXXX by track achieve our us X% guidance particularly goal, payments pipeline real-time revenue to year opportunities by X% that and our

it our to Scott? I'll to guidance. Scott turn Now over discuss and financials

Scott Behrens

XXXX. that was contribute good is in everyone. our year is as important review line for first in in our some compared growth combination provide pricing growth customer We'll Revenue then as the both $XXX a million annual I million, last a our of Biller Thanks, initiatives last plan to late then morning, segment. our $XX QX X% line and was our Bank that we in recurring this in our outlook here our EBITDA CPI the uplifts to and go-lives adjusted QX full well that that expectations. for for rest benefit as questions. happened well segment with as saw open year, of and to note coming and year financial Tom, results quarter of from revenue year the It will

revenue recurring strength our number So of in are that to growth. overall, leading a contributing factors the

our be very more fulfillment this comes license costs so fees will they have renewals EBITDA. those weighted flow-through last reminder half to And that high a when second from nonrecurring that as primarily fee year. have And very incremental earnings in, from little call revenue come our license

to segment and segment The fees. million. and most this Bank $XX segment predominantly by the segment million. revenue year's $X Bank software, timing $XX Merchant EBITDA million, will Turning is be this was was our the so license impacted revenue $XX was million, licensed results. renewal of EBITDA was adjusted adjusted

fees the of to be final transition nonrecurring seen We this stages SaaS this in are which recurring from can quarter. in segment, results the in revenues our license the clearly

$XXX last in this year. adjusted to segment and both XX% profitability QX The which million, increased Biller compared our QX growth revenue XX% revenue growth represents year, over and was And EBITDA customer year, last this late notable that in we segment to year will our year is go-lives with driven progress interchange full made program. have a and last improvement by contribute growth

nearly year. billion with from We quarter and ended XX% have cash operations million up of ratio and we balance debt on over the flows leverage a remaining debt $XXX was QX on in over repurchase authorization. $XXX share a just net $X X.Xx, hand, last Cash of our million

the revenue seeing what growth. our year, Turning to particular, in with the outlook of recurring strength start we're the next to

in the margin to expansion. $XXX to $XXX adjusted we reiterating are with the And range adjusted EBITDA with of continue to range to expect million net guidance $X.XXX year million EBITDA in We billion. our revenue $X.XXX billion be full of

come For the adjusted of range million in compared million $XXX million saw revenue impacted QX will to QX, EBITDA revenue million. lower be in Similar to to when the be in of expect we be range as of in fee to to license half $XXX we the by here fee the to to the license expect second $XX we last year QX, QX $XX year. and see what

we we're XXXX. combined And with I on that to in strength seeing long-term growth of expected. up as the the So base well sets delivering year additional think the us the targets with in expect of here business, tracking XXXX, in for particular in X% X% our recurring revenue we're go-lives summary,

I'll Tom? Tom So to it closing for back with remarks. some pass that,

Thomas Warsop

we're first this we and our and we to I mission worldwide. continue we believe results the value leading financial that billers institutions, is difficult a Thanks, see ACI Scott. to that the In to against backdrop, summary, We in merchants the strong particularly for know critical customers. delivered provide In quarter, year. quarter, solid start off a to

We strategy beyond. and our have and revenue our a our clear and team our XXXX path reaffirms to my ahead confidence in ability on goals in deliver that growth

up meeting for Before for I to look After and process joining stages weeks. on the the forward open expects of of I'd promising number briefly in is like today, search selection to us a our it with CEO thank With open in up to touch and candidates, upcoming Board ongoing and now the it we'll that, the reviewing final you the We this for announcement search. soon. Q&A. complete Q&A,

Operator

Davidson. at take [Operator Instructions] our D.A. Heckmann We'll from first question Peter

Peter Heckmann

was revenue, high within So Biller good for growth it do the full the year, on to wins up talked interchange, year-over-year. that think you single-digit customer about that X% achieve net you've you new Biller some that, Based of interchange? see about, can that of net goal of

Scott Behrens

from it number this think, at No, from gross benefit Yes, see to of really happy Scott. with I revenue we're we're One too, the starting and in a combined initiatives Pete, is net in reasons. that Yes. both is with go-lives interchange business. that the Biller we program We're saw seeing the benefits last late year. and profitability the that revenue of put the we've place,

So year we're a go-lives of going this those year. to full benefit get

happy of see believe put billers to in as both really we're terms place. corner the rate interchange with initiatives we -- turned we're So that growth kind we as starting well in the really of

the see should comparable we gross as as there. on well as a revenue benefit the to percentage interchange So of sequential start benefit

both sides, initiatives hold. as So from benefit interchange as improvement taken definitely go-lives well both the

Thomas Warsop

Yes.

-- time to We that one -- days it risk. and it's phased last had biller talked days signed, in. we largest ever, new actually thing. to X live deal about ago Just went the our X We manage tried the we ago add customer that

friends that be what we few but even months, going in, well, next call, it's more help. and ramp over up see it's the that phase and right the family now, will So and we should

Peter Heckmann

Good. Is in blacked capital more repurchases about out just Good. of potentially needs curious, was repurchase to in then hear. That's no or working quarter? quarter. And something the that good the thinking

Scott Behrens

have still correct. ideas the authorization there We and the capital $XXX Generally, have no in change million We yes, you're quarter. in allocation. real the Yes. on on remaining any didn't

Operator

move Vafi Genuity. Canaccord at next And Joseph we'll to

William Johnston

about is primary and This wanted I recent for the ACI how just the or updates Johnston highlight? ask payment system there other about thinking opportunity Joe. real-time any and is can Fed's developments on of you to Will kind

Thomas Warsop

Sure.

and been this by We're shape we're in July, they've some opportunities our as as Fed we live the with plotting good our in in So and with testing, FedNow well FedNow. time. stages goes the pipeline for been final of customers, go-live and for position involved good we've -- the very new driven are pretty got of for we've launch a

So I the launch. very it we we're we've are. at should should obviously that's hasn't good this immediately start leader where them to after shape, been no because process -- see we launched, but point We throughout. in and this volumes in a And think

William Johnston

how should Great. yesterday, ACI environment the hike we And Nice is of the hear. behavior to the through macro about shifts of like, in that And any, thinking rest then there trends kind thinking or about? the year? rate following be consumer is

Scott Behrens

all nondiscretionary place even our if to consumer would and probably in impacts only X across payment -- remember Yes. we have directly again, we in Merchant generally look But the kind you at nondiscretionary the segments, products segments. really biller -- be our But see types. are biller Biller the of behavior that verticals that are generally,

say, at heavily change. side, the would this And very e-commerce not driven. any I And seeing we're on we're point, Merchant

And in is the e-commerce secular -- in so the store. growth just versus stronger

seeing not any So we're trends now.

fact, matter to bit was revenue expecting this which our you a were up actually recurring little than point. lot QX if at stronger transactions, is As in-quarter tied X% closer look of that's at we that a a growth, year-over-year,

bit a the not year. we're recurring the thought point is in growth overall, anything we So than this revenue we'd where stronger be at and seeing year-over-year

Operator

take George We'll from our question Sutton at next Craig-Hallum.

Unknown Analyst

talk in is you've connect Can Like and right George. a your This FedNow you What customers U.S. And and banks hits adoption in real-time of go-lives world? given U.S. payments? conversations expecting the bank James in quickly about can for are about talk what from of how the you the sort overseen lot you're critical the are these on competitive mass sort to of with when landscape having to U.S.? across win? the expectations gives then about you the

Scott Behrens

Sure.

point, we FedNow the expect adoption So to on begin immediately.

I consumers big will it. of is question think up how ramp use quickly the really their

start this will largely, We've cash take those time. world, some transactions. of parts cannibalize the seen it will think in other I to

value-add I how So customers that ready exactly will type ramp but don't our obviously, transaction don't it. exactly think ready certain I and know high see But we we're up. for for fast. a quickly, know be it's adoption for will I consumers, and how it,

In implementation They'll it sort process. to terms have ability built available. of as that's soon use into as connecting, the of it's the

And about our talking your current then us was right to win were I you what other -- think gives environment. in question the

products we have products, We really proven. understand. are continually just we -- I solid, we and our think it's rock invest -- the in

this talked more historically specifically, one more on very be important becoming a lot are our part to center. talk cost time, and I about We about remember things don't is probably that business. focused, that of obviously, a tended a of is the payments but customers' I payments, I've last And and

cost facilitating facilitate be quite an And people thought now the the now it must-have. way ability movement different. want payments money. the So they absolute about customers the of see to Well, and of to commercial it's consumers

So want is ACI choice. they and reliability speed want perfectly positioned that. flexibility. and They for They want

go So doubt good there's is whether when we can and question a to that. a when choice it, no ACI them, there's I do go never for and whether about customers potential ACI about customers, -- talk

usual speak. are the suspects, We to so

business, do -- we customers can what and conversations. expand some talk their to do them the can -- we are is their great and what which The what those help objectives, to we do meet we sit to strategic about

and a with central mentioned they I the fantastic. to is to I a conversation think country sat in type a consumers that bank looking for I that And few the ago even minutes economy. value down ways their bank, central is add increase and their of that

we was I can we're and helping partner. customers It as was no very helping And And can said, a we understand about how good at whether customers we good how value. -- discussion there would be them. help prospective those add

Unknown Analyst

can business. And impact about payments you sort can that and then of Perfect. the how talk real-time Biller

So in understand any gain use payment it, side? Like the Bill Bill experience sort of cases, could does Pay of first the and advantage because Pay one in translate connectivity I advantage into managing Bill infrastructure you of some is but adoption the real-time as real-time sort your Pay? on competitive of

Scott Behrens

be about needs It yes. I is that whatever think who's use -- electricity real-time keep expensive. that makes clearly cumbersome little make expensive. today, their that payment -- it payments. a might on can their it reason or gas be, good is for clearly so, be an bit case I quicker, can or someone a quite payments to to immediate mean for think easier, and whatever less Real-time restore

payment build connect types it of rails. case use able good all and a our be we to products ability to definitely have So in because to we the to

advantage, it talk we that does about customers. and think I do give with our us an

of just not it's us, course. Now

our ready kind with payments to We're those be of help working which customers doing. well, as we to have are them. facilitate We

think to But absolutely, us. I term, long think over that's advantage an medium the I for

very think presence because around world with well I positioned our we're real-time the payments. of

Unknown Analyst

double-digit Great. onetime growth quarter? like the you low could what recurring to weakness Last segment, but of this was I as you in one And gives address the well. still Recurring get Can get for in you me. confidence that the that down segment sort Merchant conversion,

any be So detail there helpful. would just

Scott Behrens

has towards it there. recurring No, or of -- segment from the that fee. A shifted license that a of In of coming business is ours, customer hit lot decline segment, SaaS it more a type I Yes. lot of payment. you the of the think

flip year-over-year is that that should starting of the coming further from most you positive shift to So from decline half QX the and in here positive that license second year. then see But of recurring. in

XXXX. at a we enter exit as So rate growth of double-digit

Operator

Mayank Tandon from our Needham next Company. take & We'll question at

Sam Salvas

is for today. actually This on Sam Mayank

to ARR for think, hit the quarter quarter this on bookings. bookings, a were Just first following XQ, which record wanted I soft

about little and expectations then the you remainder parse more activity a you guys for of customer the of year? of seeing what are in maybe guys and bit your terms conversations can level just new So talk out

Scott Behrens

QX bookings typically And quarter QX at -- I overall pretty look from perspective. for wouldn't is as soft Yes. an a us

If X are bookings look quarter you at comparable over ARR and the have this ARR, introduced X trailing bookings X% of up we of volatility. But quarter, to quarter kind trailing sequential some period. that ARR address

ARR kind year, We would looking deliver that of X% with in at to should to revenue in level expect growth that that kind term think X% I ARR growth. next order grow bookings bookings -- consistent we're of long kicking of

I So just being as a think the quarter pattern. wouldn't QX look slow year. it's of I at a

Sam Salvas

it. Got

just helpful. seeing? Okay. was quickly the a guys was that... mentioned wondering it that on timing the revenue stuff then in Or a was that is lighter guide, guide And the banking of you than or That's anything Is XQ I mostly little license renewal of else some a Biller are you anything? change factor guys or if in this merchant expected.

Scott Behrens

is and a of years really change a ago, mostly renewed, Yes, group mostly X of cohort that timing it's renewals. the in that that's call It's -- weighted. it, banks, the the it's function just second for not half XXXX

but So as in tracking Bank volatility the it's we're expected. really of license a segment's fee, kind

second we happen of when those license come expecting year. the here renewals that in half in So were the fee to

Thomas Warsop

recognize second way signed. don't the because the in but renew -- we this until of a actually handful say that work, know rules that half that already the we half. second when of a the accounting have renewal the second we is to I And And have half, Yes. just deals in it, have obvious, the but

We it. are The renewal just it's expected, expected. -- over don't as -- is purely any coming with and but issues it, book -- we and issue, don't that's all we're works. how performing it's things it we in just timing So as see a

Operator

further at any management for I'll conference closing turn time, to And have we this the questions. back over no remarks.

Thomas Warsop

Okay. appreciate you. Well, thank really We time today. your

said, we're with first results I in the quarter. pleased the As

in of on what but enjoy to Lot great have you, And We we dialogues doing. And year. we're look forward we and the the on to continuing you. things the great of are rest about feel going for thank track with your day. world,

Scott Behrens

Thanks, everyone.

Operator

that you for And conference. Thank conclude your today's participation. does

disconnect. now may You

ACI Worldwide (ACIW) 4 May 232023 Q1 Earnings call transcript