Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by. My name is Belinda, and I will be your conference operator today. At this time, I'd like to welcome everyone to the ACI Worldwide Conference Call. [Operator Instructions] Thank you.

I'll now turn the call over to you, John Kraft.

conference. your begin may You

John Kraft

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

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

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

deck both can website press and find presentation the in You are and our SEC. earnings of both on statements which text the of release, our full available with

morning's Tom CEO; this our CFO. and President On and call is our Scott Behrens, Warsop,

on it attending the Wells on Fargo August ACI over, hand Business August to wanted Annual will FinTech I Information the share Forum and Genuity be Canaccord Transformation XX, and on August that Digital Conference XX. Conference X, Before upcoming Services Needham the I Growth and FinTech Annual

turn call that, With Tom. the I'll over to

Tom Warsop

thank joining all and Good for quarter our XXXX conference morning, you earnings call. second

brief of open to questions outlook this and it usual. hand I will the I'll then We'll year. the with over for quarter the comments to and remainder QX financials morning and on for detailed the discuss the line the then Scott start as some

this our and most and years, some a And our and to First, the very our And for as customer ACI may familiar I our XXXX. know ACI I've month role, mission, even to business the largest want with of that joining many traveled weeks of in am the with to over Many countries time, appointed very platforms. say a you customers of how become I've a as permanent been before few have visited honored I in ago. innovative CEO partners. a Board since long been assuming I've an software fan team,

growth. we our I'm and feedback has discussed I have been alongside received optimizing inspiring The and working our opportunities portfolio, through been to in continue its to for lead look place team maximizing the value and energizing, to the chapter have forward confident ACI we've I of And shareholders. growth, this accelerating foundation have incredible. next

the we ahead to delivered quarter you results moving back provided second to guidance the in of we quarter, May. Now

Our did job new a and wins some expected. great than expansionary team originally securing of sooner

the from wins And business we've second been traction early our the great our to with new signing about contracts reducing de-risked new real discussing needs that you. the of Biller see to team results QX's has continuing number is news is secure. The these by half initiatives

this of in achieving All gives us increasing our confidence guidance.

numbers, revenue recurring In $XXX when deeper for will into renewals terms was down was million firm line of revenue QX was In divestiture quarterly and year. discussed, to way Banking impact of more the year that previously just accounted. exchange phased foreign these, the up X% specific we've with Corporate last and Online and adjusted this $XXX total weighted dive year-over-year. million, the and as quarters Scott business. X% prior of how QX It's the be relative my renewals our timing towards and will previous the comments of The

every years note were June annually. new is XXXX. for months non-recurring does licenses, bookings ending bookings important metric months the that million, as such in not trailing bookings and $XX ARR XX were ARR term trailing recur five ARR million the $XX for include our not the as they which New X% new quarter XX It's from bookings to new up

with driven signed FinTechs two Asia and New quarter. East, the South or were new more Middle second up quarter last the was region. by MEASA in contracts license than in bookings Africa, in from year's XXX% part This

growth continued strong business. and region forward closing support times to MEASA visited in region over team showing the the strong results to few personally Our the past is and months there. pipeline, I looking three I'm

bookings. It's I signed large on we immediately. immediately point more notable another mean One that after ARR the closing very Biller quarter, and client

I on bookings that July, around X:XX AM Xst will our in QX. show the in up and was number of think it ARR one

On the I revenue, we are nearly XX% also expect on-boarding increase same We're topic grew improvement and continued last an interchange particularly our Biller, contract have which customer improvement by QX was segment, pleased to period of adjustments negotiations new our interchange to pricing lasting see efforts. driven our and X% and This on adjusted the net has in impacts to X% it revenue tracking who year. the XXXX. Those EBITDA our in had a through in was versus of Biller this profitability. increase compared

mentioned. that the second half of revenue show SaaS renewal I the XX% were newer grew segment bank just calendar encouraged should following in year-over-year, We Consolidated recurring Bank EBITDA revenue ramp. contracts that growth as and year again this

currency was increased take segment. as a of constant on initiatives to this EBITDA XX% revenue-sharing begun basis, and have revenue flat segment in that and a Merchant efficiency hold result

in particularly make innovative We in are go-to-market and segment, continuing investments our capabilities. meaningful Merchant and our to new

on items, to I industry give me you significant and little discuss I some Before of over with ACI Scott, trends There two opportunity. believe provide each. my are let obvious a want it that perspective turn we top-of-mind to

with Reserve real-time the instant their First, went live network. payments. FedNow anticipated payments much Federal Recently,

on pleased receive, real-time in Morning's more the process was RTP network. This one the request adds to alongside organizations services pay first functionality U.S., and send, in certify The House be payments capacity Early to the Now. ACI for new Clearing of network to

service real-time and to domestic many credit intermediaries with implementations, as working currently unions. banks smaller well as on banks We're

small cases the next increase access, many over four-fold four include Buy we real-time a Pay and Later, believe for additional see and starting in a others. U.S. payments request the will base, such from line will credit So, it as years Now pay, use

global the has this and the Phase markets. more is dramatic. And Brazil, in of course, functionality we're happening like real-time ecosystem cross-border exploring globally. the Having X is growth growth the been just payment in certain options markets India accelerate will as revolution some and In U.S.

large cost partners. beginning money between Imagine get of at movement really trading the power excited. enabling I'm low real-time to

respect Specifically we're via cloud cloud the for FedNow, our via license on-premise real-time deployment offering. services with or customers to payments able deliver SaaS-based to with our

statistics year, in some transactions by yet, a ACI service AI-powered bundling customers differentiated been the risk-scoring beds we be expect U.S. early are it's We ecosystem more the but part in an processed, expect impact of our over are FedNow players provide safe the you fraud and is FedNow the don't connect. I that meaningful revenue well, but cloud of volumes sure important think time, will beyond. protection to to offering solutions quite how published layers say, system the wondering seeking. to I'm additional has no have this small in as many and of be payments a

to artificial other intelligence driver is want AI. The industry discuss or I

we in the on stock been market, years, payments were our be incremental say we fraud is We call prevention processes anti-fraud patented the we ways several patent cloud into software. at most that and granted the solutions and to and both Looking set now. of newspapers this tools real-time learning, and ACI notably driver a using industry model key incorporate has offering. recently might a in a able for AI every right in our

Let our updated are how Other others. me approach learning periodically differs to models offline. from give you a about pretty and simplistic think way

AI's about GPT-X of may offline have process. to For heard example, which you that's GPT-X, like Open this an transitioning update models is example

us drop quickly have bursts. model's Users in eliminates continually models to model off accuracy a performance incremental and a allows new That small approach as upgrades. means for to can big emerge. model move proprietary scenarios the the to once need ACI's our while. bang in approach train This learning new

into up the likely of current to fraudulent minute, our encouraging Our seen Biller segment they've expanding interchange management in and and seeing efforts the activity. almost use models results. We're have detect making more to data incremental we're the of also very prevent benefit the them learning

decks, debugging, tell I've tools testing We more don't help programs our use used Board. have messaging make Board and tools internal even please AI pilot development, and create code my efficient. me AI-enhanced team to to to

seemingly products, efficiency, to the especially everywhere generative rapid language advancements we're our models, and costs. and the and is our reduce our AI potential in finding large has AI and improve enhance all-encompassing, AI that

Now risks these of far the of read may have you, of but you, to all have, course many responsible large are too and ways of you, I using potential are some some prudent I'm of there about be scenarios ignore. AI, the of of the tools in real sure benefits same risks. very doomsday some

is more of ACI continue intends to work I we challenges on we great I strategy a am us our improve place made the execution. business technologies. our payments opportunities our AI We've to and of continued in and navigating to responsible customers. the be And near-term in progress capitalize proud also leader before done, the to there while and consistent and quarter. cloud-based results, value know real-time in delivering have team's the significant positioning I the this provide use believe in right ACI be to

I in investment reiterate it to my growth our X% reiterate of I our say, of our in to to growth more want I our I potential. community. revenue turn can achieve want But know also Before Scott, eyes the I commitment over want to team, in do strategy, to we to X% our confidence And and XXXX. target the

are we on story, provide. not transparency, ways the we're working While details, we as metrics to as provide including better to well our ready quite ways improve our tell to

the am confident know, holds, you Our ACI address choice. share price was simply does absolutely I not to ACI made a determined investment I and stock, I'm and believe significant a great value that. And sure am I've personal I that in reflect

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

Scott Behrens

good Tom, morning, Thanks, and everyone.

was and outlook EBITDA I our then rest in Revenue million. $XX million financial for and was our provide QX review of the the for $XXX results quarter first plan XXXX. to adjusted

of to growth recurring is in up year continue coming this year-to-date will which late that happened revenue, to compared last see go-lives year our that last combination from We solid contribute That year. year. a growth is benefit full customer a X%

Biller in our Our segment. uplifts as initiatives well Bank CPI our annual as on our pricing segment,

our that our So of reminder, non-recurring fee those leading when this very contributing have have factors high that to and And overall, little be call, as through license primarily revenue weighted incremental revenue, strength renewals, costs, a are earnings EBITDA. license fees more a half coming second so to last number recurring fulfillment that's growth. from they And will flow in, come year. in from

segment by most license renewal Turning this X% license represents will was segment year's revenue Biller which The the our increased Bank be year. those EBITDA software, and segment million is million so and EBITDA to results. $XXX growth million. segment segment to QX $XX and adjusted the impacted Bank year. of adjusted our last Merchant over revenue EBITDA was adjusted compared revenue predominantly million fees. timing XX% was $XX QX $XXX was And last $XX was million, on-premise

in on The both segment share quarter repurchase growth authorization. hand, $X We in driven $XXX and with revenue we ratio go-lives ended have over profitability progress improvement cash net in balance notable debt and this interchange of remaining by with million a the we our billion, and and X.X made times, have a broadly. is our $XXX leverage million debt of just on customer

outlook. the EBITDA and the of we what adjusted full are particular, with we in year, year to Turning strength margin a revenue in range guidance of billion, adjusted here growth, $XXX to continue With our our $X.XXX first with EBITDA the we're net $X.XXX million of be million, range expect revenue of the next expansion. to $XXX to seeing to half reiterating billion the recurring in in

the million in of QX For year. QX, solid double-digit we expect $XXX to of million, EBITDA to be compared in $XX both to range ranges to and million growth be $XX range million, $XXX adjusted revenue to representing last a

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

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

Tom Warsop

Scott. Thanks,

summary, of delivered results in In our we ahead second quarter. expectations the

progress will marketplace. an certainly AI in significant focused implementation reiterate to am forward it's outlook and payments, the value. shareholder at has relentlessly this real-time confidence year to and be on Our ACI. time ACI bookings our for always next. I and With exciting opportunity us and delivering provides be

time and coming going finally, us to John again with forward we're our to And you. attend I for mentioned, forward investor engagement investor look to as planning level Thank several of joining up. forward conferences spending look increasing today. We you

open Q&A. We'll for now it up

Operator

question open. Heckmann of Heckmann, first the line from is The Alli comes your D.A. from line Alli Instructions] Davidson. [Operator

Alli Heckmann

in go years. Good solutions geographies revenue question on we for where a of talking Thankyou. if over success segment, you touched growth over expect morning. And Merchant We do four next being this and you had you two have This Peter the flattish, the segment kind you already could new is Alli expecting the to about, next quarters? Heckmann. wondered but accelerating are over with

Scott Behrens

Yes, second I Alli. when in terms pretty that international positive first going our to This growth so we The was of and growth. actually growth. that about Scott that expect had markets would we'd of that of flat, signaled quarter, We accelerating heavily-weighted predominantly Behrens. first were over call, negative exit business answer is, mid-to-upper quarter - The short that slightly come of international be came single-digits about we to years. next is dollars, we out quarter Merchant the couple and year of is would that from markets, is in kind the kind

Alli Heckmann

Thank you. Sweet.

Operator

question your Vafi, is Joseph line line comes Vafi from next of Your from Canaccord. Joseph the open.

Joseph Vafi

nice results. for here the see. guys. vision to updated also, ACI moving great It's Nice And Hi, forward. Tom, see to

CEO interim were you know I a So, for while.

permanent changes the sounds CEO. a plenty just you've or shifts kind you're wondering you're any but, lot. updates or if wood model. of like to Now got chop contemplating business of other It Thanks major to

Tom Warsop

I a to - all that solid. definitely think reiterate times I Yes, strategy is those It's think said I That's I've thanks, ACI's want the - as and Joseph. solid, and few I team appreciate comments. is so,

business the think I model is solid.

So, shouldn't anytime see need to soon just them. expect you shifts major because we don't

as sure are on concentrating areas and are am fast to I what that possible. results that as deliver going focused making But efforts investments is we our in

laser-focused, what some our So, have we've of we've space we - segment, course big for new leaders that we being Biller in performing been really one in but it's about been example we that talking challenges and brought had and opportunities well.

one that is example. So,

to are to going question, ensuring areas about deliver back are will getting major more that It I - shifts. focus concentrating you're your results not in and But actual that anticipate do be we fast.

Joseph Vafi

Thanks very much.

Tom Warsop

you. Thank welcome. You're

Operator

comes question from George Craig-Hallum. your open. next The is Sutton George, line from

George Sutton

you. Thank additional appreciate on segments. information I the Tom, the

has So, been I a wanted to Obviously, Biller. platform focus change. specifically there on

of wins some You size. had recent good

you large mentioned that another You had post-quarter. win

could of seeing in rates you sort you're opportunity to if relative sets just wondered win I several that So, go ago. maybe Biller through and months

Scott Behrens

Okay. go-lives - we I But Well, what publish point at success. we rates haven't we year. this the haven't are. right, win publicly the we in we last we mean of of had yet here the sold this don't year at you're of second is impact seen our on half What is have Scott. I this bigger least mean that some some deals see

signed last of it Tom So, like year, more sold half. that we again, July that terms and to of impact second in of stuff one The again in probably the likely publishing Xst to is those don't upside kind year, the Biller in have win I in second think we half here us the we performance terms the of as get rates, the that of mentioned, statistics come more into will next provide. yet that was but

Tom Warsop

than But in completely it half, larger second is it we more yet. that got haven't you'll impact deals impact or this win over, We really winning - we cut see though is mentioned, are quarter. The of we saw big seen about, been gaining do the Well, we're those from think quite share and share. taking as bulk Scott we we've talking not really one deals to live. needed the so we

Operator

Again - I'm sorry.

John Kraft

any anybody have questions? we Is Do there? more

Operator

I'm Yes, here.

John Kraft

a there follow-up? Is

Operator

questions As there are over no time, further call the to at back you, this I turn Kraft. John

John Kraft

everybody Thanks to forward Have great for in Alright. coming We Thanks, us. the weeks. catching look Linda. a joining day. up

Tom Warsop

Thanks.

Operator

today's concludes conference. This

You may now disconnect.

ACI Worldwide (ACIW) 3 Aug 232023 Q2 Earnings call transcript