(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Press Release dated August 3, 2023 | |||||
Investor presentation materials dated August 3, 2023 | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
ACI WORLDWIDE, INC. (Registrant) | ||||||||
Date: August 3, 2023 | By: | /s/ SCOTT W. BEHRENS | ||||||
Scott W. Behrens | ||||||||
Executive Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial Officer) |
June 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 132,391 | $ | 124,981 | |||||||
Receivables, net of allowances | 350,094 | 403,781 | |||||||||
Settlement assets | 453,276 | 540,667 | |||||||||
Prepaid expenses | 35,563 | 28,010 | |||||||||
Other current assets | 57,177 | 17,366 | |||||||||
Total current assets | 1,028,501 | 1,114,805 | |||||||||
Noncurrent assets | |||||||||||
Accrued receivables, net | 269,051 | 297,818 | |||||||||
Property and equipment, net | 44,998 | 52,499 | |||||||||
Operating lease right-of-use assets | 34,544 | 40,031 | |||||||||
Software, net | 114,451 | 129,109 | |||||||||
Goodwill | 1,226,026 | 1,226,026 | |||||||||
Intangible assets, net | 212,260 | 228,698 | |||||||||
Deferred income taxes, net | 74,403 | 53,738 | |||||||||
Other noncurrent assets | 64,656 | 67,171 | |||||||||
TOTAL ASSETS | $ | 3,068,890 | $ | 3,209,895 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 48,137 | $ | 47,997 | |||||||
Settlement liabilities | 452,864 | 539,087 | |||||||||
Employee compensation | 40,837 | 45,289 | |||||||||
Current portion of long-term debt | 74,294 | 65,521 | |||||||||
Deferred revenue | 69,352 | 58,303 | |||||||||
Other current liabilities | 96,382 | 102,645 | |||||||||
Total current liabilities | 781,866 | 858,842 | |||||||||
Noncurrent liabilities | |||||||||||
Deferred revenue | 24,503 | 23,233 | |||||||||
Long-term debt | 991,829 | 1,024,351 | |||||||||
Deferred income taxes, net | 37,294 | 40,371 | |||||||||
Operating lease liabilities | 29,394 | 33,910 | |||||||||
Other noncurrent liabilities | 31,478 | 36,001 | |||||||||
Total liabilities | 1,896,364 | 2,016,708 | |||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | 702 | 702 | |||||||||
Additional paid-in capital | 704,096 | 702,458 | |||||||||
Retained earnings | 1,234,440 | 1,273,458 | |||||||||
Treasury stock | (655,660) | (665,771) | |||||||||
Accumulated other comprehensive loss | (111,052) | (117,660) | |||||||||
Total stockholders’ equity | 1,172,526 | 1,193,187 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 3,068,890 | $ | 3,209,895 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Software as a service and platform as a service | $ | 209,676 | $ | 206,978 | $ | 414,606 | $ | 401,540 | |||||||||||||||
License | 44,671 | 64,314 | 63,002 | 124,599 | |||||||||||||||||||
Maintenance | 51,391 | 50,562 | 101,494 | 101,980 | |||||||||||||||||||
Services | 17,587 | 18,571 | 33,899 | 35,386 | |||||||||||||||||||
Total revenues | 323,325 | 340,425 | 613,001 | 663,505 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Cost of revenue (1) | 181,343 | 179,333 | 359,897 | 345,619 | |||||||||||||||||||
Research and development | 35,265 | 40,642 | 72,383 | 78,449 | |||||||||||||||||||
Selling and marketing | 33,289 | 35,391 | 68,724 | 69,999 | |||||||||||||||||||
General and administrative | 31,472 | 28,362 | 62,854 | 54,237 | |||||||||||||||||||
Depreciation and amortization | 31,436 | 32,240 | 62,975 | 63,078 | |||||||||||||||||||
Total operating expenses | 312,805 | 315,968 | 626,833 | 611,382 | |||||||||||||||||||
Operating income (loss) | 10,520 | 24,457 | (13,832) | 52,123 | |||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
Interest expense | (19,909) | (11,784) | (38,801) | (22,678) | |||||||||||||||||||
Interest income | 3,458 | 3,051 | 6,963 | 6,210 | |||||||||||||||||||
Other, net | (4,092) | 2,006 | (7,487) | 4,256 | |||||||||||||||||||
Total other income (expense) | (20,543) | (6,727) | (39,325) | (12,212) | |||||||||||||||||||
Income (loss) before income taxes | (10,023) | 17,730 | (53,157) | 39,911 | |||||||||||||||||||
Income tax expense (benefit) | (3,313) | 4,388 | (14,139) | 11,079 | |||||||||||||||||||
Net income (loss) | $ | (6,710) | $ | 13,342 | $ | (39,018) | $ | 28,832 | |||||||||||||||
Income (loss) per common share | |||||||||||||||||||||||
Basic | $ | (0.06) | $ | 0.12 | $ | (0.36) | $ | 0.25 | |||||||||||||||
Diluted | $ | (0.06) | $ | 0.12 | $ | (0.36) | $ | 0.25 | |||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Basic | 108,455 | 114,669 | 108,306 | 114,976 | |||||||||||||||||||
Diluted | 108,455 | 115,205 | 108,306 | 115,649 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||
Net income (loss) | $ | (6,710) | $ | 13,342 | $ | (39,018) | $ | 28,832 | |||||||||||||||
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | |||||||||||||||||||||||
Depreciation | 6,960 | 6,027 | 13,091 | 11,008 | |||||||||||||||||||
Amortization | 24,476 | 26,213 | 49,884 | 52,721 | |||||||||||||||||||
Amortization of operating lease right-of-use assets | 3,724 | 2,773 | 6,491 | 5,489 | |||||||||||||||||||
Amortization of deferred debt issuance costs | 1,377 | 1,146 | 2,492 | 2,299 | |||||||||||||||||||
Deferred income taxes | (12,259) | (3,018) | (22,641) | (6,385) | |||||||||||||||||||
Stock-based compensation expense | 5,414 | 6,800 | 10,715 | 14,758 | |||||||||||||||||||
Other | 601 | 523 | 311 | 1,124 | |||||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||||
Receivables | (7,104) | (23,700) | 81,856 | (14,040) | |||||||||||||||||||
Accounts payable | (646) | 1,429 | (1,954) | (1,319) | |||||||||||||||||||
Accrued employee compensation | 10,965 | 8,937 | (4,628) | (10,201) | |||||||||||||||||||
Deferred revenue | 2,498 | (4,417) | 12,700 | 5,532 | |||||||||||||||||||
Other current and noncurrent assets and liabilities | (11,856) | 2,834 | (51,791) | (22,055) | |||||||||||||||||||
Net cash flows from operating activities | 17,440 | 38,889 | 57,508 | 67,763 | |||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Purchases of property and equipment | (2,318) | (1,377) | (4,576) | (3,657) | |||||||||||||||||||
Purchases of software and distribution rights | (8,540) | (4,531) | (15,021) | (10,738) | |||||||||||||||||||
Net cash flows from investing activities | (10,858) | (5,908) | (19,597) | (14,395) | |||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Proceeds from issuance of common stock | 719 | 1,056 | 1,426 | 1,962 | |||||||||||||||||||
Proceeds from exercises of stock options | 2,791 | 375 | 2,869 | 1,397 | |||||||||||||||||||
Repurchase of stock-based compensation awards for tax withholdings | (319) | (265) | (3,320) | (5,802) | |||||||||||||||||||
Repurchases of common stock | — | (24,847) | — | (62,707) | |||||||||||||||||||
Proceeds from revolving credit facility | 5,000 | 20,000 | 55,000 | 60,000 | |||||||||||||||||||
Repayment of revolving credit facility | — | (10,000) | (45,000) | (20,000) | |||||||||||||||||||
Repayment of term portion of credit agreement | (19,475) | (11,481) | (34,081) | (21,219) | |||||||||||||||||||
Payments on or proceeds from other debt, net | (6,160) | (5,183) | (11,830) | (9,369) | |||||||||||||||||||
Payments for debt issuance costs | (2,160) | — | (2,160) | — | |||||||||||||||||||
Net decrease in settlement assets and liabilities | (21,253) | (3,970) | (24,087) | (4,575) | |||||||||||||||||||
Net cash flows from financing activities | (40,857) | (34,315) | (61,183) | (60,313) | |||||||||||||||||||
Effect of exchange rate fluctuations on cash | 2,870 | 1,402 | 5,427 | (1,062) | |||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (31,405) | 68 | (17,845) | (8,007) | |||||||||||||||||||
Cash and cash equivalents, including settlement deposits, beginning of period | 228,232 | 176,067 | 214,672 | 184,142 | |||||||||||||||||||
Cash and cash equivalents, including settlement deposits, end of period | $ | 196,827 | $ | 176,135 | $ | 196,827 | $ | 176,135 | |||||||||||||||
Reconciliation of cash and cash equivalents to the Consolidated Balance Sheets | |||||||||||||||||||||||
Cash and cash equivalents | $ | 132,391 | $ | 118,953 | $ | 132,391 | $ | 118,953 | |||||||||||||||
Settlement deposits | 64,436 | 57,182 | 64,436 | 57,182 | |||||||||||||||||||
Total cash and cash equivalents | $ | 196,827 | $ | 176,135 | $ | 196,827 | $ | 176,135 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Adjusted EBITDA (millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net income (loss) | $ | (6.7) | $ | 13.3 | $ | (39.0) | $ | 28.8 | |||||||||||||||
Plus: | |||||||||||||||||||||||
Income tax expense (benefit) | (3.3) | 4.4 | (14.1) | 11.1 | |||||||||||||||||||
Net interest expense | 16.4 | 8.8 | 31.8 | 16.5 | |||||||||||||||||||
Net other income (expense) | 4.1 | (2.0) | 7.5 | (4.3) | |||||||||||||||||||
Depreciation expense | 7.0 | 6.0 | 13.1 | 11.0 | |||||||||||||||||||
Amortization expense | 24.5 | 26.2 | 49.9 | 52.7 | |||||||||||||||||||
Non-cash stock-based compensation expense | 5.4 | 6.8 | 10.7 | 14.8 | |||||||||||||||||||
Adjusted EBITDA before significant transaction-related expenses | $ | 47.4 | $ | 63.5 | $ | 59.9 | $ | 130.6 | |||||||||||||||
Significant transaction-related expenses: | |||||||||||||||||||||||
Cost reduction strategies | 7.6 | — | 15.9 | — | |||||||||||||||||||
European datacenter migration | 1.2 | 1.3 | 2.2 | 1.8 | |||||||||||||||||||
Other | 1.2 | 1.4 | 4.3 | 1.4 | |||||||||||||||||||
Adjusted EBITDA | $ | 57.4 | $ | 66.2 | $ | 82.3 | $ | 133.8 | |||||||||||||||
Revenue, net of interchange: | |||||||||||||||||||||||
Revenue | $ | 323.3 | $ | 340.4 | $ | 613.0 | $ | 663.5 | |||||||||||||||
Interchange | 106.1 | 103.8 | 212.3 | 197.0 | |||||||||||||||||||
Revenue, net of interchange | $ | 217.2 | $ | 236.6 | $ | 400.7 | $ | 466.5 | |||||||||||||||
Net Adjusted EBITDA Margin | 26 | % | 28 | % | 21 | % | 29 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Segment Information (millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Revenue | |||||||||||||||||||||||
Banks | $ | 117.5 | $ | 141.9 | $ | 205.5 | $ | 274.1 | |||||||||||||||
Merchants | 36.5 | 36.5 | 71.3 | 77.5 | |||||||||||||||||||
Billers | 169.3 | 162.0 | 336.2 | 311.8 | |||||||||||||||||||
Total | $ | 323.3 | $ | 340.4 | $ | 613.0 | $ | 663.4 | |||||||||||||||
Recurring Revenue | |||||||||||||||||||||||
Banks | $ | 57.4 | $ | 60.7 | $ | 113.0 | $ | 122.0 | |||||||||||||||
Merchants | 34.4 | 34.9 | 66.9 | 69.7 | |||||||||||||||||||
Billers | 169.3 | 161.9 | 336.2 | 311.8 | |||||||||||||||||||
Total | $ | 261.1 | $ | 257.5 | $ | 516.1 | $ | 503.5 | |||||||||||||||
Segment Adjusted EBITDA | |||||||||||||||||||||||
Banks | $ | 51.6 | $ | 70.2 | $ | 76.3 | $ | 134.9 | |||||||||||||||
Merchants | 9.9 | 7.8 | 16.5 | 22.5 | |||||||||||||||||||
Billers | 31.2 | 28.3 | 60.9 | 54.7 | |||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
EPS Impact of Non-cash and Significant Transaction-related Items (millions) | EPS Impact | $ in Millions (Net of Tax) | EPS Impact | $ in Millions (Net of Tax) | |||||||||||||||||||
GAAP net income (loss) | $ | (0.06) | $ | (6.7) | $ | 0.12 | $ | 13.3 | |||||||||||||||
Adjusted for: | |||||||||||||||||||||||
Significant transaction-related expenses | 0.07 | 7.7 | 0.02 | 2.1 | |||||||||||||||||||
Amortization of acquisition-related intangibles | 0.06 | 6.4 | 0.06 | 6.9 | |||||||||||||||||||
Amortization of acquisition-related software | 0.04 | 3.8 | 0.04 | 4.5 | |||||||||||||||||||
Non-cash stock-based compensation | 0.04 | 4.1 | 0.05 | 5.2 | |||||||||||||||||||
Total adjustments | $ | 0.21 | $ | 22.0 | $ | 0.17 | $ | 18.7 | |||||||||||||||
Diluted EPS adjusted for non-cash and significant transaction-related items | $ | 0.15 | $ | 15.3 | $ | 0.29 | $ | 32.0 | |||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
EPS Impact of Non-cash and Significant Transaction-related Items (millions) | EPS Impact | $ in Millions (Net of Tax) | EPS Impact | $ in Millions (Net of Tax) | |||||||||||||||||||
GAAP net income (loss) | $ | (0.36) | $ | (39.0) | $ | 0.25 | $ | 28.8 | |||||||||||||||
Adjusted for: | |||||||||||||||||||||||
Significant transaction-related expenses | 0.16 | 17.1 | 0.02 | 2.4 | |||||||||||||||||||
Amortization of acquisition-related intangibles | 0.12 | 12.8 | 0.12 | 13.9 | |||||||||||||||||||
Amortization of acquisition-related software | 0.08 | 8.2 | 0.08 | 9.6 | |||||||||||||||||||
Non-cash stock-based compensation | 0.07 | 8.1 | 0.10 | 11.2 | |||||||||||||||||||
Total adjustments | $ | 0.43 | $ | 46.2 | $ | 0.32 | $ | 37.1 | |||||||||||||||
Diluted EPS adjusted for non-cash and significant transaction-related items | $ | 0.07 | $ | 7.2 | $ | 0.57 | $ | 65.9 | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Recurring Revenue (millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
SaaS and PaaS fees | $ | 209.7 | $ | 206.9 | $ | 414.6 | $ | 401.5 | |||||||||||||||
Maintenance fees | 51.4 | 50.6 | 101.5 | 102.0 | |||||||||||||||||||
Recurring Revenue | $ | 261.1 | $ | 257.5 | $ | 516.1 | $ | 503.5 |
Annual Recurring Revenue (ARR) Bookings (millions) | Three Months Ended June 30, | TTM Ended June 30, | |||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
ARR bookings | $ | 12.7 | $ | 18.1 | $ | 90.7 | $ | 88.9 |
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