| Exhibit 99.1
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ANALYST DAY 2016
THURSDAY, MARCH 10, 2016 NAPLES, FLORIDA
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WELCOME
JOHN KRAFT VICE PRESIDENT INVESTOR RELATIONS
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ANALYST DAY AGENDA
ACI Financial Update: 8:35 am – 9:05 am
Reinvention of Payments: ACI Opportunity: 9:05 am – 9:20 am
Solutions for a Changing World of Payments: 9:20 am – 10:00 am Break: 10:00 am – 10:20 am ACI Software as a Service Opportunity: 10:20 am – 11:00 am Executive Q&A: 11:00 am – 11:15 am Payments Perspectives Roundtable: 11:15 am – 12:00 pm Lunch: 12:00 pm – 1:00 pm Segment Updates: 1:00 pm – 3:00 pm Analyst Day Conclusion: 3:00 pm
3
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ACI FINANCIAL
UPDATE
SCOTT BEHRENS
SENIOR EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL OFFICER
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FINANCIAL OVERVIEW
Strategic moves for growth
Financial look-back
Recurring revenue growth
Strong financial flexibility
Guidance and five-year targets
5
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STRATEGIC MOVES FOR GROWTH
2016
Official
Payments ReD PAY.ON Online Resources
Distra
S1
Sell Yodlee Divest CFS
Improved growth rates
Divest non-core assets + Strategic M&A =
& margin profile*
Sale of CFS business ReD: 35% growth Net new bookings growth improves nearly 300 bps
Sale of Yodlee stake PAY.ON: upper teens growth Revenue growth improves nearly 100 bps
• Net EBITDA margin improves nearly 200 bps
*Represents 2015 pro forma versus 2015 as reported and growth over 2014 6
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NEW TREND LINE
NON-GAAP REVENUE ADJUSTED EBITDA
1020 275 $
$ 1,005 270
270 1000 265
980 5% CAGR 5% CAGR
260
) 960 $
952 ) 255
millions 940 250 $ millions $ 247 ( $
$917 ( 245 $ 243 920 240 900 235 880 230 860 225
2014 2015 2016E 2014 2015 2016E
Notes:
Represents results adjusted for the divestiture of the CFS business
2016 numbers based on the mid-point of company guidance
7
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RECURRING REVENUE GROWTH DRIVES STABILITY
Overall monthly recurring revenues now exceed 70%
$1,000 $952 $900
$800
$700
Recurring
segments Recurring
millions) $600
( $ segments $500 $418 71% $400
Recurring $300 60% segments $200
29%
$100 40% Non-recurring Non-recurring segments segments $0
2010 2015 8
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RECURRING REVENUE GROWTH DRIVES STABILITY
Strong growth in SaaS—10% to nearly 40%
$1,000 $952 $900
$800 37% SaaS
$700
Recurring
segments Recurring
millions) $600
( $ segments $500 $418 71%
$400 10% SaaS
Recurring $300 60% segments $200
29%
$100 40% Non-recurring Non-recurring segments segments $0
2010 2015 9
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FIXED COSTS PROVIDE LEVERAGE IN MODEL
$350
Non Recurring Revenue: Ongoing Implementations, Services, Capacity Sales and Annual License Fees
Monthly Recurring Revenue: SaaS Subscriptions & Transactions, Maintenance and License Fees (Paid Monthly, Quarterly only)
$300
Adjusted EBITDA
$250
$200
(millions) $150 Revenue $100 Quarterly $50 $0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015
Monthly recurring revenue is predictable and growing: 2015 >70% of total revenue, 2016E ~75%
Non-recurring revenue is strongest in Q4
EBITDA margin spikes follow revenue
10
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STRONG CASH FLOW PROVIDES FINANCIAL FLEXIBILITY
Disciplined use of leverage drives growth – debt repayment follows acquisitions o Current net debt ratio ~2.5x* o Target ratio ~2.5x
Strong OFCF yield ~6%
$138 million remaining on stock repurchase agreement (2/25/16)
OPERATING FREE CASH FLOW STOCK REPURCHASE ACTIVITY
($ millions) $300,000,000
24,000,000
$151
$143 $250,000,000
$134
$200,000,000 19,000,000
$150,000,000
21% CAGR 14,000,000
$67
$100,000,000
9,000,000
$24 $50,000,000
$- 4,000,000 2011 2012 2013 2014 2015 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015
Cumulative Amount Purchased Cumulative Shares
($10.67 avg. price, life to date)
* Includes proceeds from CFS and assumes midpoint of 2016 EBITDA guidance 11
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NEW STARTING POINT: REVENUE WALK
Non-GAAP revenue
990 – 1,020
($ millions)
4-7% 1,047 Growth
12
954
(95)
(10)
2016E
2015 Deduct Annualize FX 2015 Actual CFS PAY.ON Impact Pro Forma
12
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2016 GUIDANCE
12-month backlog of $838 million = 85% of guidance
2016 2016 Implied 2015 Deduct Annualize FX 2015 Non-GAAP Non-GAAP Growth Actual CFS PAY.ON Impact Pro Forma (Low) (High) Rate
Non-GAAP Revenue $1047 (95) 12 (10) 954 990 1020 4-7%
Adjusted EBITDA $260 (13) — 247 265 275 7-11%
Adjusted EBITDA % 28.4% 13.7% ——30.0% 31.0% 31.2% 100-120 bps
$ millions, FX rates as of 12/31/15
EBITDA % computed net of interchange of $140 and $130 for 2016 and 2015, respectively
GUIDANCE
2015 pro forma adjusted to exclude CFS and reflect a full-year impact of PAY.ON acquisition and FX rate changes
Total sales growth expected to be in the high single digits
Revenue and margin phasing by quarter consistent with seasonal history
Q1 non-GAAP revenue expected to represent $205 to $215 million, excluding CFS
CFS closed on 3/3/2016 and is expected to contribute an incremental $15 million to full-year revenue
13
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FINANCIAL SUMMARY: FIVE-YEAR TARGETS
ORGANIC REVENUE GROWTH: Mid-to-upper single digits
ADJUSTED EBITDA MARGIN: 100 bps expansion per year
OPERATING FREE CASH FLOW: Track adjusted EBITDA growth
SALES NET OF TERM EXTENSION GROWTH: High single digits
14
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HIGH QUALITY SOFTWARE MODEL
The Advantage
Leading market position
High retention and renewal rates
Significant recurring revenue
Scalable, fixed-cost model with improving margin
Pricing power and large barriers to entry
15
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Q&A
16
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Analyst Day 2016
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REINVENTION OF PAYMENTS: ACI OPPORTUNITY
PHIL HEASLEY
PRESIDENT & CEO
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ANALYST DAY 2016
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SOLUTIONS FOR A CHANGING WORLD OF PAYMENTS
CRAIG SAKS
GROUP PRESIDENT, STRATEGIC PRODUCTS
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UP
UNIVERSAL PAYMENTS
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THE REINVENTION OF PAYMENTS
The payments industry is in the midst of a decade of disruption…
22
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THE REINVENTION OF PAYMENTS
The payments world as we know it is changing forever
The center of power is shifting back to the merchant and the consumer
The historical pricing models that have funded the system are being challenged
The distribution problem has been solved, undermining the traditional purpose of intermediaries and third-party brands
Technology advances have overcome the limitations of the past and are leading to a new breed of competitors
Desire for speed, reach and integration are driving innovation
23
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THE REINVENTION OF PAYMENTS
ACI has the solutions, reach and business model to emerge as a leader by delivering on our vision of real-time, any-to-any payments.
24
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GLOBAL SOLUTIONS PROVIDER
Payments Payments Users Operators
25
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GLOBAL SOLUTIONS PROVIDER
Payments Payments Users Operators
26
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GLOBAL SOLUTIONS PROVIDER
Payments Payments Users Operators
27
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GLOBAL SOLUTIONS PROVIDER
Comprehensive PAY.ON Solutions ReD
SaaS
Retail
Immediate Payments Payments Solution
28
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OVERCOMING THE FEAR OF CHANGE
Navigating the five Cs: a path to the future
Current Continuity Coexistence Consolidation Change
Future Legacy Legacy Legacy Future Future ++
29
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SOLUTION SUCCESSES AROUND THE GLOBE
Faster payments initiatives: propelling a very large investment cycle
Western Europe U.S.
Singapore
Australia
30
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SOLUTION SUCCESSES AROUND THE GLOBE
Payments transformation initiatives: a response to the changing environment
U.S.
Australia
31
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SOLUTION SUCCESSES AROUND THE GLOBE
Enterprise risk management: protecting more complex payment environments
Canada
razil
Australia
32
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SOLUTION SUCCESSES AROUND THE GLOBE
Low operating cost environments: reinforcing the RPS value proposition
Netherlands
33
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SOLUTION SUCCESSES AROUND THE GLOBE
Cross-border eCommerce: adding 350+ connections to ACI’s solutions
34
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SOLUTION SUCCESSES AROUND THE GLOBE
Card-not-present risk management: a large, global opportunity
Middle Europe East
Japan U.S.
China Brazil Nigeria India
Australia
35
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SOLUTION SUCCESSES AROUND THE GLOBE
Merchant omni-channel: covering all customer touch points, during and after the sale
Europe U.S.
36
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DISTRIBUTION ORGANIZED FOR SUCCESS
Large markets, specified by customer segment, focused on cross sell and new logos
North America
& Europe
Banks
Financial North Intermediaries America Merchants
Billers
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DISTRIBUTION ORGANIZED FOR SUCCESS
Growth markets: strong drivers of future value
Latin America
38
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DISTRIBUTION ORGANIZED FOR SUCCESS
Growth markets: strong drivers of future value
Middle East, Africa
& South Asia
39
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DISTRIBUTION ORGANIZED FOR SUCCESS
Growth markets: strong drivers of future value
ASEAN & North Asia
40
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DISTRIBUTION ORGANIZED FOR SUCCESS
Growth markets: strong drivers of future value
Pacific
41
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GLOBAL REACH
Covering the world in-country, in-language but as 1ACI
North America
& Europe
ASEAN & North Asia
Latin
Middle America East, Africa
& South Asia
Pacific
42
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GLOBAL REACH
Multinationals are ideally served by ACI’s reach
43
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POSITIONED TO WIN IN THE DECADE OF DISRUPTION
ACI is unique in the industry
ACI has enriched its future with the addition of a strong, global merchant franchise
ACI solutions enable more use cases in more markets
ACI’s technology is more advanced, scalable and integrated
ACI has the approach to evolve from the old to the new elegantly
Business model allows ACI to uniquely benefit in a disrupted market
44
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POSITIONED TO WIN IN THE DECADE OF DISRUPTION
ACI is delivering the future through real-time, any-to-any payments
45
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ANALYST DAY 2016
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BREAK
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ANALYST DAY 2016
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
CAROLYN HOMBERGER
GROUP PRESIDENT, ACI ON DEMAND
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
Key drivers of payments to the cloud
Security and Speed
Focus Compliance to Market
50
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
Diversity of solutions and clients
Electronic Bill Payment Merchant Retail Large Financial Institutions and and Presentment • Retail and grocery Financial Intermediaries
Financial institutions Fuel and transportation Retail and transaction banking
IRS and government Quick service restaurants Processors
Higher education Omni-channel solutions – card Complete suite of ACI omni-channel
Insurance present and card not present payment solutions
Multi-tenant Fraud management Global
Mulit-tenant, global
INTEGRATED SUPPORT FOR MULTIPLE ACI APPLICATIONS
7 of the top 50 banks globally 4,600+ 3 of the top 10 brands globally FINANCIAL INSTITUTIONS, 5 of the top 10 banks in the U.S.
RETAILERS AND BILLERS
51
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
Merchants
Growth Drivers ACI Investments
Today Today
Merchants
EMV, point-to-point Additional technical encryption resources to keep pace
Legacy systems with growth
Globalization through 2016+ European data center eCommerce, card-not- 2016+ present fraud
Big data and changes in Scale affords vertical consumer shopping specialization in sales and behaviors technology
52
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
Billers
Growth Drivers ACI Investments
Today Today
Billers
Biller direct leads Data center migration
Legacy systems Tran$act platform consolidation
2016+
Consumer payment 2016+ experience expectations Globalization
Affordable Care Act Cross sell to merchants compliance and large financial institutions
53
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
Financial institutions and intermediaries
Growth Drivers ACI Investments
Today Today
Financial Institutions
Mandates and compliance and Intermediaries Value proposition tools to
Legacy systems demonstrate business value of ACI solutions 2016+ Globalization through
Immediate Payments European data center
UP Retail Payments 2016+ Solution
Modernization of payments infrastructure for clients
54
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
Technology
On-Premise SaaS
Agile / DevOps
Process Maturing software development model for SaaS Process
Multi-tenancy / Active-Active / Customer Onboarding
Architecture Multi-tenancy, high availability, disaster recovery; efficient, self- Architecture service customer onboarding
Security / Scalability / Availability
Non-Functional Non-Functional
Requirements • Security for multi-tenant and cloud data Requirements (NFRs) • Scalability for dynamic and cost-efficient scaling (NFRs)
Availability for zero transaction loss
55
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
Data center footprint—today
ACI data centers
Colos – acquisitions and planned consolidation
Migrated out of within the last two years
56
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
Data center footprint—2017
ACI data centers
Colos – acquisitions and planned consolidation
57
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
AOD customer experience and operations
Service Delivery Payment Services Management Capabilities
Implementation Audits and and Onboarding Operational
Compliance 58
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ACI SOFTWARE AS A SERVICE OPPORTUNITY
Conclusion
Accelerating Value-added
double-digit security,
sales and revenue compliance and growth NFRs
2.5X+
deal size
59
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ANALYST DAY 2016
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EXECUTIVE Q&A
PHIL HEASLEY
PRESIDENT & CEO
SCOTT BEHRENS
SENIOR EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER
CRAIG SAKS
GROUP PRESIDENT, STRATEGIC PRODUCTS
CAROLYN HOMBERGER
GROUP PRESIDENT, ACI ON DEMAND
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ANALYST DAY 2016
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PAYMENTS PERSPECTIVES ROUNDTABLE
ROB HOPPER
DIRECTOR, INDIVIDUAL BUSINESS OPERATIONS BLUE CROSS BLUE SHIELD OF MICHIGAN
PAUL THOMALLA
MODERATOR ROBERT FLYNN
SVP, CORPORATE RELATIONS MANAGING DIRECTOR
AND DEVELOPMENT ACCENTURE PAYMENT SERVICES, NORTH AMERICA
ACI WORLDWIDE
BYRON SNIDER
CIO
SCHEELS
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LUNCH
64
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ANALYST DAY 2016
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SEGMENT UPDATE: MERCHANT, BILLER AND PAYMENTS RISK
MIKE BRAATZ
SENIOR VICE PRESIDENT, CHIEF PRODUCT OFFICER
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ACI SOLUTION FOOTPRINT
Merchant, biller and payments risk
Payments users Payments are expensive
Consumer experience is key Fear of breaches
Payments are not core Fraud liability shift
67
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MERCHANTS EMBRACE PAYMENTS INNOVATION
Consumer engagement Margin growth
Elegant consumer experience Higher conversion rates
Consistency Increased loyalty
Rewards and offers More revenue
Single or no-click payments
Mobility
Robust security
68
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THE IMPORTANCE OF ALTERNATIVE PAYMENTS
It’s not all about credit cards…
Emerging payment types
Local payment methods
Higher conversion rates
Cross-border opportunity
Stronger security
69
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GLOBAL COVERAGE
70
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HOW MERCHANTS WANT TO BUY
Large Global Merchants Medium and Small Merchants
Omni-channel vision Multiple channels
Bespoke consumer experience Feature-rich
Flexibility and choice Modern, consistent consumer
Global acceptance experience
Hosted/SaaS Turnkey payment solution
Direct relationship with solution SaaS provider Payment service providers (PSPs) and acquirers
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BILLER AND MERCHANT SYNERGIES
Online bill payment looks increasingly like eCommerce
Billers embrace consumer engagement in the bill payment process
Merchants are billers ?? billers are merchants
ACI core competencies in common technologies and processes
72
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OPPORTUNITIES IN BIG DATA AND ANALYTICS
Business
Data Mining Predictive Analytics Intelligence
Vast amounts of data flowing through payment systems
Large investments in big data management, analytics and data science
Fraud management is our starting point
Additional opportunities in payments cost optimization and merchant/biller offers and rewards
73
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SEGMENT UPDATE: GLOBAL OMNI-CHANNEL PAYMENTS
MARKUS RINDERER
SENIOR VICE PRESIDENT, PRODUCT LINE MANAGER MERCHANT PAYMENT SOLUTIONS
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GLOBAL OMNI-CHANNEL PAYMENTS
Shoppers expect localized solutions, payment methods and currencies
75
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CROSS-BORDER PAYMENTS
Cross-border commerce is growing at an accelerated pace
2020 $1000 950
billion million
2014 $230 309
billion million
Cross-border Cross-border transaction volume shoppers
76
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GLOBAL OMNI-CHANNEL PAYMENTS
Enabling merchants to accept payments from all channels globally
Channels Software as a Service Global Network
PAY.ON Postilion ReD
77
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GLOBAL NETWORK EXPANSION
Connecting existing platforms to 350+ new endpoints
Acquirers
& Banks
PAY.ON
Existing ACI Solutions
78
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Q&A
MIKE BRAATZ
SENIOR VICE PRESIDENT, CHIEF PRODUCT OFFICER
MERCHANT, BILLER AND PAYMENTS RISK MANAGEMENT SOLUTIONS
MARKUS RINDERER
SENIOR VICE PRESIDENT, PRODUCT LINE MANAGER
MERCHANT PAYMENT SOLUTIONS
ANDREW SAJESKI
DIRECTOR, SOLUTION CONSULTING BILLER SOLUTIONS
ANDREAS SUMA
VICE PRESIDENT, PRODUCT LINE MANAGER
PAYMENTS RISK MANAGEMENT AND BIG DATA SOLUTIONS
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ANALYST DAY 2016
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SEGMENT UPDATE: BANKS AND FINANCIAL INTERMEDIARIES
BILL HERNANDEZ
SENIOR VICE PRESIDENT, CHIEF PRODUCT OFFICER
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ACI SOLUTION FOOTPRINT
Retail banking, transaction banking and immediate payments
Consumer Transaction
Consumer Merchant Payment Solutions Bill Payment Solutions
Payment Solutions Banking Solutions ments Solutions
Payments Risk Management
Immediate Payments
Payments Integration
Payments operators Must change and innovate to be competitive
Retail banks, commercial banks and Move slowly, but continue to be dominant spenders on financial intermediaries payments
Struggle to operate existing legacy systems
82
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OVERCOMING THE FEAR OF CHANGE
Navigating the five Cs: a path to the future
Current Continuity Coexistence Consolidation Change
UP
BASE24 BASE24 BASE24 UP BASE24-eps UP BASE24-eps
BASE24-eps
High availability, Risk reduction with Next-generation technology Significantly reduce Enterprise-class reliability and extended support driving innovation total cost of ownership services scalability (Linux/x86)
Competitive advantage Single platform
Access to real-time,
Global payments Move to SaaS any-to-any payments Future-proof Lower total cost of industry standard environment across all channels ownership
Achieve economies of
Drive innovation scale
83
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UP RETAIL PAYMENTS SOLUTION BENEFITS
Improve top-line Increase transaction volume and revenue through cross revenue selling and upselling
Grow market share through Rapidly add new payment types, devices and channels innovation with less effort and cost to stay ahead of the competition
Deliver any-to-any, real-time payments (P2P, cardless) Strengthen customer loyalty across all channels, in a secure, omni-channel environment
Move to less expensive platforms (Linux/x86) to reduce operating
Lower TCO costs
84
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TRANSACTION BANKING CORPORATE CUSTOMERS: BANKING NEEDS
Purchasing supplies from suppliers
Banking functions need to be simple and efficient to gain control and provide Advertising
Banking
flexibility
Managing
Expand global reach Employees
Information needs to be up to date with Selling goods immediate accessibility
Access must be channel agnostic (mobile, tablet, PC, etc.)
Deliver multinational capabilities Manufacturing
Meeting and selling to customers
85
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WHAT BANKS MUST DO NOW
Deliver differentiated and value-added products and services that are accessible across all channels
Mobile Simple Online
Migrate from siloed and legacy systems to banking banking banking create a more flexible solution that is more responsive to customers’ expectations
Expand solutions to include immediate Transaction Domestic/ Credit card
reporting international services payments payments mgmt
Leverage economies of scale and cost reduction by moving to SaaS environment Import and export
trade solutions
86
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HOW ACI DELIVERS
Providing highest straight-through processing and proven reliability
Compliance/Risk
Large U.S. bank depends on Universal
Online Banker for global payments Payment High-value,
Simple real-time
origination balances Transaction payments
Banking
Global bank processes SEPA, Target2 and Channel
Transaction
FedWire transactions for U.K. and U.S. reporting ACH bulk
payments
branches using Money Transfer System
U.S. software company sells products and Domestic/
international Financial
services to mortgage processors to payment mgmt messages facilitate movement of funds associated
with mortgages Import and export Global clearing trade solutions and settling networks
87
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IMMEDIATE PAYMENTS
Situation and opportunity
SITUATION
Legacy payment systems provide a solid foundation for payment services; however, most of these systems rely on paper-based and/or batch processes, which are not universally fast or efficient, while others are fast and efficient but inconvenient and costly.
OPPORTUNITY
Near-term opportunity for the industry is to provide a payment system that combines the valued attributes of legacy payment systems with the advancement of new technology, enabling faster processing, easy access to funds, convenience and enhanced risk capabilities.
Longer-term opportunity is to build upon our current solution and deliver real-time, flexible, cross-border settlement and reconciliation.
88
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BUSINESS CASE FOR IMMEDIATE PAYMENTS
Situation and opportunity
WHY CHANGE, WHY NOW? BUSINESS CASE
Real-time, any-to-any experience has become Retail the expected norm • Just–in-time stock control
• Informal services
Many relevant use cases across retail and • P2P – dinner, consumer use commercial to support business case • Expedited bill payments
P2P, P2B, B2B, B2P, etc. Cardless transactions instead of physical cards
Market factors driving adoption Commercial
Speed Improved inventory terms
Accessibility Discounts for expedited payment
Efficiency Enhanced cash management
Flexibility Improved reconciliation
Convenience e-Invoicing/EBPP
Need for ubiquity Payroll – hourly wages
Insurance payments
89
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GLOBAL PICTURE OF IMMEDIATE PAYMENTS
UP Framework for Immediate Payments: a global solution
Exploratory Live
Canada U.K. European Union Brazil Finland Poland Kazakhstan Singapore Indonesia South Africa Thailand Mexico Chile
Design China
India Netherlands Korea Norway Japan Turkey Switzerland Colombia Denmark Spain Sweden Portugal Czech Republic
Live
Bahrain Taiwan
In development
In discussion/design U.S. Nigeria
Over 30 countries are undertaking or have undertaken efforts to enhance the speed, efficiency Build and effectiveness of clearing and/or settlement systems.
Source: McKinsey research Australia
90
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ACI EXPERIENCE ACROSS THE GLOBE
VocaLink FPS-UK FAST-Singapore NPP-Australia
ACI software serves 60% of U.K. Payment services, risk liability, High-volume batch files members acceptance services, currency
Payment services
Payment gateway for both central conversion, etc. Payment, payment with document, infrastructure and bank connectivity Reconciliation and settlement request and pay solutions
Provisioning for accounts, mandates,
First-, second- and third-order payment
Multi-tenant central access gateway etc. and product services support service
Real-time and file/batch processing
Credit and debit
Direct Corporate Access (DCA)
Legacy integration with offline
Legacy integration
Batch Service UP Framework used in processing Live soon central infrastructure
Live since 2014
Live since 2008
91
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DELIVERING THE PATH TO THE FUTURE
Framework
Integrating the power of UP Framework across all of ACI payment solutions
Single enterprise platform for on-premise and SaaS customers
Plug-in solutions to meet global customers’ unique and innovative needs
Single integrated payments platform with all data, in one place, in real time
Path for customers to mitigate risk, deliver product innovation and drive business and revenue forward
92
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Q&A
BILL HERNANDEZ
SENIOR VICE PRESIDENT, CHIEF PRODUCT OFFICER
FINANCIAL INSTITUTIONS AND FINANCIAL INTERMEDIARIES
NICK BARNES
SENIOR VICE PRESIDENT, PRODUCT LINE MANAGER
RETAIL BANKING AND FINANCIAL INTERMEDIARY SOLUTIONS
JEN HOLTON
VICE PRESIDENT, PRODUCT LINE MANAGER TRANSACTION BANKING SOLUTIONS
W.A. PROCTOR
VICE PRESIDENT, PRODUCT LINE MANAGER IMMEDIATE PAYMENTS SOLUTIONS
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ANALYST DAY 2016
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APPENDIX
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Non-GAAP Financial Measures
To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude certain business combination accounting entries related to the acquisition of Online Resources Corporation and significant transaction related expenses, as well as other significant non-cash expenses such as depreciation, amortization, and non-cash compensation, that we believe are helpful in understanding our past financial performance and our future results. The presentation of these non-GAAP financial measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. Certain non-GAAP measures include:
Non-GAAP revenue: revenue plus deferred revenue that would have been recognized in the normal course of business by Online Resources if not for GAAP purchase accounting requirements and less estimated revenue from the CFS product line. Non-GAAP revenue should be considered in addition to, rather than as a substitute for, revenue.
Adjusted EBITDA: net income plus income tax expense, net interest income (expense), net other income (expense), depreciation, amortization, and non-cash compensation, as well as deferred revenue that would have been recognized in the normal course of business by Online Resources if not for GAAP purchase accounting requirements and significant transaction related expenses and the estimated impact of the CFS divestiture. Adjusted EBITDA should be considered in addition to, rather than as a substitute for, operating income.
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Non-GAAP Financial Measures
Non-GAAP Revenue (millions) 2010 2011 2012 2013 2014 2015
Revenue $ 418 $ 465 $ 667 $ 865 $ 1,016 $ 1,046 Deferred revenue fair value adjustment — — 22 6 2 1 Non-GAAP revenue $ 418 $ 465 $ 689 $ 871 $ 1,018 $ 1,047
418 465 689 871 1018 1047
Adjusted EBITDA (millions) 2010 2011 2012 2013 2014 2015
Net income (loss) $ 27 $ 46 $ 49 $ 64 $ 68 $ 85 Plus: Income tax expense (benefit) 22 18 16 29 31 28 Net interest expense 1 1 10 27 39 41 Net other expense 4 1 — 3 — (26) Depreciation expense 6 8 13 19 21 22 Amortization expense 20 21 38 51 66 76 Non-cash compensation expense 8 11 15 14 11 18 Adjusted EBIDTA 88 106 141 207 236 244 Deferred revenue fair value adjustment — — 22 6 2 1 Employee related actions — — 11 11 10 6 Facility closure costs — — 5 2 — — IT exit costs — — 3 — — -
Other significant transaction related expenses — 7 9 13 13 9
Adjusted EBIDTA excluding significant transaction related expenses $ 88 $ 113 $ 191 $ 239 $ 261 $ 260
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Non-GAAP Financial Measures
ACI is also presenting operating free cash flow, which is defined as net cash provided by operating activities, plus payments associated with the cash settlement of acquisition related options and significant acquired opening balance sheet liabilities, plus net after-tax payments associated with employee-related actions and facility closures, net after-tax payments associated with significant transaction related expenses, net after-tax payments associated with IBM IT outsourcing transition and termination, and less capital expenditures. Operating free cash flow is considered a non-GAAP financial measure as defined by SEC Regulation G. We utilize this non-GAAP financial measure, and believe it is useful to investors, as an indicator of cash flow available for debt repayment and other investing activities, such as capital investments and acquisitions. We utilize operating free cash flow as a further indicator of operating performance and for planning investing activities. Operating free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities. A limitation of operating free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. This measure also does not exclude mandatory debt service obligations and, therefore, does not represent the residual cash flow available for discretionary expenditures. We believe that operating free cash flow is useful to investors to provide disclosures of our operating results on the same basis as that used by our management.
Reconciliation of Operating Free Cash
Flow (millions) 2010 2011 2012 2013 2014 2015
Net cash provided (used) by operating activities $ 81 $ 83 $ (9) $ 138 $ 149 $ 183 Net after-tax payments associated with employee-related actions — — 6 10 6 5 Net after-tax payments associated with facility closures — — 3 1 1 1 Net after-tax payments associated with significant transaction related expenses — 4 9 18 8 3 Net after-tax payments associated with cash settlement of acquisition related options — — 10 10 — -Payments associated with acquired opening balance sheet liabilties — — — 5 5 -Net after-tax payments associated with IBM IT
Outsourcing Transition 1 1 1 2 — -Plus IBM Alliance liability repayment — — 21 — — -Less capital expenditures (13) (19) (17) (33) (35) (49) Less IBM Alliance technical enablement expenditures (6) (2) — — — -Operating Free Cash Flow $ 63 $ 67 $ 24 $ 151 $ 134 $ 143
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Forward-Looking Statements
This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as “believes,” “will,” “expects,” “anticipates,” “intends,” and words and phrases of similar impact. The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements in this presentation include, but are not limited to, statements regarding:
Expectations regarding 2016 financial guidance related to revenue and adjusted EBITDA;
Expectations regarding net new sales bookings;
Expectations regarding Q1 2016 revenue;
Expectations regarding CFS contribution and pro forma impact of excluding CFS;
Expectations regarding five year targets, including future increases in organic revenue, adjusted EBITDA margin, operating free cash flow, and sales net of term extension.
All of the foregoing forward-looking statements are expressly qualified by the risk factors discussed in our filings with the Securities and Exchange Commission. Such factors include but are not limited to, increased competition, the performance of our strategic product, UP, BASE24-eps, demand for our products, restrictions and other financial covenants in our credit facility, consolidations and failures in the financial services industry, customer reluctance to switch to a new vendor, the accuracy of management’s backlog estimates, the maturity of certain products, our strategy to migrate customers to our next generation products, ratable or deferred recognition of certain revenue associated with customer migrations and the maturity of certain of our products, failure to obtain renewals of customer contracts or to obtain such renewals on favorable terms, delay or cancellation of customer projects or inaccurate project completion estimates, volatility and disruption of the capital and credit markets and adverse changes in the global economy, our existing levels of debt, impairment of our goodwill or intangible assets, litigation, future acquisitions, strategic partnerships and investments, risks related to the expected benefits to be achieved in the transaction with PAY.ON, the complexity of our products and services and the risk that they may contain hidden defects or be subjected to security breaches or viruses, compliance of our products with applicable legislation, governmental regulations and industry standards, our compliance with privacy regulations, the protection of our intellectual property in intellectual property litigation, the cyclical nature of our revenue and earnings and the accuracy of forecasts due to the concentration of revenue generating activity during the final weeks of each quarter, business interruptions or failure of our information technology and communication systems, our offshore software development activities, risks from operating internationally, including fluctuations in currency exchange rates, exposure to unknown tax liabilities, and volatility in our stock price. For a detailed discussion of these risk factors, parties that are relying on the forward-looking statements should review our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.
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UNIVERSAL PAYMENTS SM