ACIW - Earnings call transcript Q1 2024

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Operator

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the ACI Worldwide Inc.

First Quarter 2024 Financial Results Conference Call. [Operator Instructions] Thank you.

to ahead. call like Kraft. to now go Please would turn over the John I

John Kraft

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

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

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

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

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

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

Thomas Warsop

good our morning, you call. appreciate conference earnings and first XXXX I joining everyone. John, quarter Thanks,

this detailed quarter, the Scott As then questions. line for with usual, then to and over remainder open I'll the XXXX, financials discuss the the it I'll start comments some for of to brief on the we'll morning hand and outlook

ramp-ups than than business ahead forecast results later little deals were expected expected. revenue in a pipeline that million, contracts as $XXX sign year-over-year. with expectations. slightly little the able we sign contracts better had up year. specific our we bit that tracked opportunities X% I'd expected existing a earlier QX was project then was expansionary these characterize also customers We and some this some and biller Total and were of in were our to we to

in on show license high-margin contracts our signed will also We've in million income later statement year. $XX up the over that

renewal the of we when U.S. for recognize discussed, them. contract the renewals GAAP first on regardless revenue sign we As of requires day term, we've

our forecast and of upper items for year of it's mentioned guidance to us the our I revenue adjusted full and EBITDA. end allowing raise help derisk range All these that both

the around with in and a for notable our deals signed renewal regional to world. We segments. bank Moving a customers segment, large the some deals expansion on bank and U.S. including new

at we quarter. segment revenue the ACI our bank as the grew in broad. strength the going I a discussed area Day, focus was As indicated, key recent for forward. XX% Segment And for of Analyst banking is

recall, and X inquiry solution the the into products, XX%. quarter. and Base Fraud of may segment Management, have you XXXX, retail main which payment our grew an our fall-through versus from we software revenue XX% grew the payments EBITDA the That sell adjusted to QX solutions. real-time As that that we and sets very XX Issuing reflects includes and business segment. part Bank which grew grew high XX% XX% EBITDA businesses. in for

at depth cloud and our options accelerating of traditional our We're in and our long-term public discussed demand, seeing SaaS in we've available. to making recent continued but invest solutions new modernizing banking Analyst only also we with As customers. Day, not delivery some customers, with

to. it's API for, market known taking in opportunity an This models. resources is more for that is of SaaS continue advantage an smaller so which reliability scalability ones, mega the these of levels historically Tier X slightly These institutions, banks focused than some banks. or smaller are has areas, of historic may And somewhat been and the our be and we they're us, well often allocate seeking highest to delivery interested incremental and exciting

grew segment grew and X% XX%. Merchant revenue EBITDA

pipeline. new and growth from the improve expect confidence year of course, coming scheduled the have our throughout to sales We is progress implementation and, continue and to in we

Biller. Moving on segment and Revenue X% to EBITDA grew X% in grew XXXX. QX

contracts particularly interchange as pleased positive large largest remove successfully to of downside margin those have a onboarding the they in while some coming expectations. Furthermore, volumes above improvement able We're to avoid those bit prior been risk. We of ramp-ups impact customers cases, we've risk in plans. are of contracts the continue our can see interchange the and lower with sales little of our most from

is our biller rates growing. Our new pipeline improving bookings retention are and qualified

on which Analyst work at our we discussed progressing is well. at length payments The hub, Day,

driven AI, continue enhancements We see gain the the detection fraud of prevention to by touched want Day, businesses our starting at We're I also continue traction. one to company. and to more we make methodologies. application tools apply substantial point productivity improvements also these Analyst on AI-powered across to and on which

leader, feedback previously, We've stakeholder all positive all are AI-powered these businesses our believe, a groups. we our solutions pulled and capable and As mentioned from best-in-class. receiving all I've we're on very fraud together

to talk further remain get I ability and I Overall, We're the on year. executing we achieve will the more confident promises delivering investment our our team and the our about into in this community to we're goals. well. as

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

Scott Behrens

QX Tom, X% first our and then million, $XXX double questions. then XXXX. our $XX provide financial to QX QX the for was and of everyone. compared rest the outlook in Thanks, open and nearly line review for morning, was up good million, EBITDA for Revenue results XXXX XXXX. We'll quarter plan I the to adjusted

compared XX% As QX and year. segment million, QX adjusted $XX Tom compared of strength particular nearly bank to in up last mentioned, up we with last revenue saw $XXX XX% EBITDA of to million, the year

issuing Our grew solutions acquiring XX%. and

across our real-time solid grew pretty and solutions in segment payment banking quarter anti-fraud solution Our We grew the XX%. a board. the XX%, saw

Biller EBITDA was was and QX year to million, up $XX and year up compared to segment last was adjusted $XX compared segment QX X% was last revenue year. million, merchant Our XX% last QX revenue compared And last to $XXX X% to X% million, up compared QX million, adjusted up EBITDA $XX year. our

roughly the last quarter quarter. up flow the Cash was which from $XXX on an hand, ended QX to in is $XX increase $XXX million of operations million, year. We with million Xx cash in compared

we is our and ratio debt started leverage in in year Xx lowest Our quarter debt than more the our down leverage and represents when is billion net the of balance of years. XX X.Xx from $X million $XX down

$XXX capital ended and the $XX finally, shares quarter million on And QX in approximately share we with million repurchased our in X authorization. repurchase remaining million for

And April, repurchased QX. so to here in have million X shares we in date an far additional

Turning strong our guidance next revenue a for to With to in now the we up our high $X.XXX start to range to range our a to $X.XXX billion, XXXX. $X.XXX the of adjusted are We of EBITDA. rest be $X.XXX of billion. from range year, billion for billion outlook expect revenue raising the end of and

million of from $XXX EBITDA expect look range And adjusted the range to million in be now $XXX $XXX a million million $XXX million. to we $XXX $XX into to QX to of revenue adjusted EBITDA range We and XXXX, of of million. to to here as be a million $XX million, expect up in $XXX we

strength overall, to and in we So that see continuing strong QX. here year the start a

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

Thomas Warsop

or Thanks, Scott. In summary, we in are pleased above to expectations. results continue line delivering

pipeline and growth our regarding comment. and shareholder our both ability last optimistic strong, forward, to focused and our we're Looking is significant value. deliver One

expectations time our some global You and payments may trend the for recently announcement and future. the insight that great for released report, real-time real-time seen into have gives ecosystem prime the of

about interesting what's up future. I to I'm can for I questions. take forward the There's at about stuff excited really some about look here going recommend the in expectations ACI. Operator, following you now giving quarter, read. very with near the there. on a our future we very

Operator

first from [Operator line Your Davidson. Pete D.A. of question Instructions] with comes the Heckmann

Peter Heckmann

idea will bit later do when On better you calendar have you about you Tom, have bit of or when start you availability? to like and still able year? this feel think -- can the maybe a you marketing payment product talk be general a little solid you'll be could a Do that it

Thomas Warsop

be conservative understand about touch very to the Tom. I they so really to that prospective we to very customers important this are. very be end actively and me year. something to show have I we customers feel can the is marketing Yes, want question and by this -- because -- I we guess, Pete, expect of we want are benefits it's the the do and what our something to that answer

So They overall the with we right letting we publish are understanding we're we that with the conversations -- customers them relationship. clear right plan. as have today up the having a and participate showing we're have them right customers the

early those So we're would But super about conversations I be having what you're expectation. this asking now. probably will buyers. would think I really And to be year those that of be my expect late marketing. customers some active

Peter Heckmann

it's mix thinking just was if EBITDA about license? I And I mix. assume an software is a revenue just terms merchant. such that significant That's But bidding then there or can't remember just to there. year-over-year of just growth comparison of easy helpful. in

Thomas Warsop

then cost scale the scale. It's from that from the higher also EBITDA initiatives, growth growth fixed it's driving profitability. is of but that's Just and revenue the some relatively the primarily through a bit down cost dropping coming just the business base

Operator

Next from Cantwell Seaport of line question comes with the Partners. Research Jeff

Jeffrey Cantwell

drill was markets real-time us most Which right the the seeing was are tell now bit hoping at It a in you're banking seeing real-time sustainability growth the could about say, Can above ahead? growth how want you then you to look I segment. talk I sustainable of you growth think demand? XX%. down XX%. payments. you a strong feel you more guys, that? that payment be about for for in do get And I'd you just as could Maybe

Unknown Executive

the you can maybe to real-time And require have I in really real-time growing the regulatory add our has years. growth that for systems. mean, take payments from where fastest is outside been And it. I'll again, Tom, of implementation mandates we of bank that one that's that. [indiscernible] the segment coming of And U.S. most

be where really, the predominantly outside we're a We live when but this growth U.S. U.S., the do projecting by real on the and see Fed now side. we're helps would that's going of to but again, end at level critical I not the have expect situation sustained us, point, So to U.S. mass in regulation the that driven at actually

So and again, international continue of double-digit the most from markets. it will growth

Thomas Warsop

I out prime press add. We had real-time just a this morning. go time the for mentioned report. I'll Jeff, Yes. release

to you So can easily. that access get

couple of from this lead Just -- highly of believe that sustainable. numbers a there us a is to couple

were around forecast from that And if That fact, billion. you in at transactions headline. happened XXXX, there the there'll billion payments sustainable. is XXXX, by in real-time headlines And the is payment the In is the XXX press is the be our real-time globe. that release what XXX look growth

in growth about estimates that's And quickly that's happens that's XX.X%. to pretty we're of what conservative how going with just happen. a So pretty annual compound unclear of the it's U.S. because rate --

there a is world. payments up in the real-time So pick of around lot growth

Jeffrey Cantwell

segment? banking year your the to reason revenue fair maybe for for Great. to how it guidance, then bring are Is offers? the raise? coming the should from full you guidance, on the the we that say year through How the full expectations about us be or can guidance And revenue? that walk increased just you would line thinking

Scott Behrens

banks, the we're are pretty in business. say in would our but coming higher I Yes. part strong expectations also growth from Biller seeing

in we And and our own so it the gives revenue some part to comfort time service in saw carried can SaaS and expectations was we that at at that sales in year our QX business. license a of new that SaaS and of QX. the growth banks. are little in of look which transaction part QX, license timing part transaction-based us what where where be of recurring that here and the predominantly into And came continue we But higher outperformance of really is in a be expect base in can that the outperformed base from a the that of QX quarter is services, really is

end line line, an bottom than this in our are our the high both so and why at point. top kind expected, of acknowledgment guidance quarter, that starting I is we year we the that's coming And of comfortable really, raising we're the at think for raise guidance better and

Operator

line comes question next the Your George Sutton of Capital. from with Craig-Hallum

George Sutton

was to driven more the is we're and And clear, issuing wanted I came that's understood driven very the I that make that this more some acquiring mature this particularly impressive. more from licenses, certainly, for and quarter. you quarter just [indiscernible] and growth just a to thought number see segment to high be -- of that, that growth by growth of not I is kind sure

understand just I to So the of sustainability that. wanted

Scott Behrens

services even of on of where and the be side overachieve Yes. upon timing were really where we quarter been business. year-over-year. Part we transaction-based on where I'm the license we license that, saying, -- have the bit that's on thought George, in coming of of renewals versus the and up a at above be to going is that bank of thought both again, that, that of timing. sales But on would But side. ended from in And terms can a and point dependent new side, the what over overachieved we those overachievement be we the the is lot the of this we side SaaS year we'd did

that's both say and I both billers. so -- that's And would banks

George Sutton

the So business. SaaS on banks. That's hub. the smaller the your strength Tom, of pointed And in you mid-market that's the obviously out the also target customer for payment sized side effectively to

understand hub. curious Just the the of movement. SaaS showing of this, walk that also of if payment them kind delivering intrigued potential of while of can through you're you side the sort kind how to I'm

Thomas Warsop

sure. Yes,

exactly that's what's So happening.

about banking across saw really actually in our side the overperformance we for that conversations well. because seeing customers And -- doing -- pretty on and environment are SaaS the advantage good as providing, So services board we a just taking mentioned, a for obviously, the the expectations as that's they're payment and them. of creating hub from the we're nice SaaS we're Scott these are job

expecting probably big for real, the take they're we I a even sure that willingness that long and the in future about of was very what's creating banks because as can coming they stronger talk an growing, make that scalability the to a that's so they're And to reliability provided there time. advantage looking than

future seeing and growth of and need is more about right real kind receptivity we're think even where creating the that's feeding payments that other the a to scalability, they're about away. So to headed talk the with underlining each we're This up.

Operator

Your question Trevor the from Williams comes next of line with Jefferies.

Trevor Williams

recurring just decel There was wanted piece. a quarter in QX. step-up I you after to the a banking and on big ask revenue had this

Clearly, good where curious any is there. with the you call-outs full up the feel about what outlook to. Just moving still if guys year --

on Just line? wondering of kind what the recurring pieces the were moving

Scott Behrens

big pretty Yes. had that. XXXX CPI was of a in uplift a year, speaking, lot generally

And the that the expectations segments quarter delivered and the highest the terms so contribute quarter Obviously, our likely in in highest bank I growth year. will and into X year. of wouldn't this full anything read to the of for the bank the around the

So I anything wouldn't quarter. recurring for read revenue for the the banks into

Trevor Williams

of banks licensing of in type guys it big if the mean, how terms SaaS versus the banking And you market think could the segment, guys significantly of alter delivery. evolution Obviously, Great. just curious on out time, recurring then on playing the that being the down playing kind more of potentially over Over move further a that potential model model. just revenue mix I revenue mix nonrecurring within changing you you out see time? a see mostly the I'm revenue. do if of

Scott Behrens

I quickly is think the traction in how yes. And the likelihood it depends there, but mid-market, obviously, that into on SaaS. we come get

of mid-market percent we so in SaaS XX predominantly total is higher the But of expect would terms was will that sale. we total If to in you of and revenue mid-XXs be our we success were at our the revenue there that more shift QX, SaaS. look obviously -- have overall percentage revenue

Unknown Executive

Yes.

Just I transition revenue going Trevor, it's continue know SaaS, the to we don't It's that The to see while not a take being will will such the to of bank a banking be but is an revenue a to on we continue percentage. of quick see going increasing percentage look more large in exactly, bulk to to but the at our a we licensed. SaaS. is particular, shift thing

Operator

Charles Stephens. question next comes the from with of Nabhan Your line

Charles Nabhan

to bit. Biller little wanted segment a into the drill I

the Analyst of Day some platforms. was legacy of consolidation of the one topics your the First, at

then on had little expectations to that apologize I a you I an Biller if quarter. mentioned missed earlier, I And get So wanted update that. this ahead secondly, the first in but tracking of was

maybe that a wanted provide. little any to I strength could So or that color you from around what a drove of terms get in segment color standpoint more

Unknown Executive

Sure.

to in Scott, free feel too. So jump

do not year but continuing do and onto consolidation We be expect progress expect very in the a now, we later the few we're to months platforms. consolidated that on make platform. go all will new that of consolidation So strong did the not -- we point, the customers complete the very, for on to expect

Analyst expected it we we the and It's still what that. expect that's So when at we're Day. about on what talked we track still think for we

platforms. speed having we So platform. of -- implementation get benefit will to and is several several that's maintain a time, there not that a to for really reasons. by having But one that then And there be obviously, cost over to predominantly, benefit good

So us. that's it's why so to important

ourselves see Day. Analyst at to continue as We discussed we track on

then the the customers was was -- large think year faster -- was in couple it overperformance of we biggest I but that X, I we you think about QX. was I signed your driver And their go little second of saw And ramp-up over last think broad-based, the expectations question or than relatively a expected. our it a we our

that's So revenue couple morning. of -- That acceleration, and that because on different said has giving. this news that be gift keeps ways the great a that's recurring going and Scott to

Scott Behrens

that look only it add the just across Biller if within seeing thing the we at verticals. QX, [indiscernible] Chuck, business, is to we're Yes. even broad-based, I'd where is

largest here in volume and expecting. here And our QX seeing that saw we consumer state providers one were then we the We're of taxes. IRS So higher being than we government QX, anticipating. vertical obviously higher the transaction April utilities far finance in the so in vertical in both transactions, revenue and are of higher

verticals. across it or within even I think seeing So across even -- Biller we're

Charles Nabhan

if earlier. a just as missed I this quick again, And follow-up, apologize I and

later that standpoint? is is, up that to $XX mentioned timing question the year. in My contracts show a the income license in are going from in had -- a statement million expected magnitude line was that in You and high-margin

Scott Behrens

expected. I'd a little than we say it's bit better

signed contracts that doesn't quarter, we've so signed terms. a the I bit earlier, renew we actually can so. end that think it of it's that We the at now some So of, signed or here already and month until not this right, right sitting unusual of signed third one and we a deal the good

to a not for little us ahead, early. deals unusual it's probably bit So but sign

Operator

over turn now will Please go for to closing call the back John I remarks. Kraft ahead.

John Kraft

this catching you call much. Thank day. morning. joining to days weeks. for and everybody, coming very a thanks, the We in great Have forward look the Well, up

Operator

Ladies call. all and and disconnect. gentlemen, concludes today's that may now joining, you Thank for you

ACI Worldwide (ACIW) 30 Apr 242024 Q1 Earnings call transcript