Core Insights - ACI Worldwide is a global payments technology provider that facilitates a wide range of transactions, including card payments and account-to-account transfers, operating in 95 countries for over five decades [2][4]. Group 1: Company Overview - ACI Worldwide supports various industries such as utilities, government, insurance, healthcare, higher education, mortgages, subscriptions, and telecommunications [3]. - The company is headquartered in the US and has a business presence across the Americas, the Middle East, Asia-Pacific, Europe, and Africa [3]. Group 2: Product and Service Offerings - ACI provides software solutions for credit, debit, and prepaid card payments, as well as account-to-account payments for banks, billers, and merchants [2]. - Recent product launches include ACI Instant Pay for real-time payments in January 2023, ACI Wallets for accepting over 200 digital wallets in 70+ countries, and a digital central infrastructure for central banks and financial institutions introduced in September 2023 [6]. Group 3: Partnerships and Collaborations - In February 2025, ACI partnered with UK-based fintech Banfico to offer payment verification services to banks and payment providers in the UK and Europe [6]. Group 4: Performance and Competitive Analysis - The report includes insights into ACI's operational and financial performance, benchmarking against competitors, and a detailed overview of its revenue model [6][8]. - ACI's significant events and milestones, including partnerships and product launches, are highlighted to assess its competitive dynamics in the alternative payments industry [6].

Core Viewpoint - ACI Worldwide (ACIW) has experienced a downtrend with a 7.8% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a momentum oscillator that indicates whether a stock is oversold, with readings below 30 typically signaling this condition [2]. - ACIW's current RSI reading is 28.04, indicating that heavy selling may be exhausting itself, which could lead to a price rebound [5]. Group 2: Fundamental Analysis - Analysts have shown strong agreement in raising earnings estimates for ACIW, with a 0.1% increase in the consensus EPS estimate over the last 30 days, which often correlates with price appreciation [7]. - ACIW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [8].

Key Takeaways Zacks highlights five mid-cap fintech stocks poised for long-term gains amid digital finance growth. BILL, ACIW, FOUR, OPFI and STNE have shown rising earnings estimates and expanding client bases. Sector momentum is driven by AI adoption, mobile banking growth, and real-time payment innovations.Financial technology (fintech) represents a transformative investment space in a hybrid sector merging finance and technology. The companies featured in the space offer a variety of services, such as ...

ACI Worldwide (ACIW) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a changing ...

Financial Performance - Total revenues for the three months ended March 31, 2025, increased to $394.6 million, up 25% from $316.0 million in the same period of 2024[15] - Net income for the first quarter of 2025 was $58.9 million, compared to a net loss of $7.8 million in the first quarter of 2024[15] - Operating income rose significantly to $58.5 million, compared to $9.6 million in the prior year, reflecting improved operational efficiency[15] - The company reported a comprehensive income of $66.7 million for the first quarter of 2025, compared to a comprehensive loss of $10.2 million in the prior year[17] - Basic earnings per share for the first quarter of 2025 were $0.56, compared to a loss of $0.07 per share in the same quarter of 2024[15] - Net income for the three months ended March 31, 2025, was $58.87 million, a significant improvement compared to a net loss of $7.75 million in the same period of 2024[23] - Segment Adjusted EBITDA for the Payment Software segment was $106.6 million, while the Biller segment reported $30.9 million for the three months ended March 31, 2025[83] - The company’s diluted earnings per share for the three months ended March 31, 2025, was calculated based on 106,827 thousand weighted average shares outstanding[72] Cash and Liquidity - Cash and cash equivalents increased to $230.1 million as of March 31, 2025, from $216.4 million at the end of 2024[12] - Total cash and cash equivalents, including settlement deposits, increased to $366.77 million as of March 31, 2025, compared to $238.10 million at the end of the same period in 2024, representing a growth of approximately 54%[23] - Net cash flows from operating activities decreased to $78.22 million from $123.24 million year-over-year, reflecting a decline of approximately 36.5%[23] - The company had $598.1 million of unused borrowings under the revolving credit facility as of March 31, 2025[47] Assets and Liabilities - Total assets grew to $3.20 billion as of March 31, 2025, up from $3.03 billion at December 31, 2024[12] - Total liabilities increased to $1.72 billion, compared to $1.60 billion at the end of 2024, primarily due to higher settlement liabilities[12] - The company’s stockholders' equity increased to $1.48 billion as of March 31, 2025, from $1.42 billion at the end of 2024, reflecting strong financial performance[12] - Total receivables, net, decreased to $739.85 million as of March 31, 2025, down from $774.48 million at the end of 2024, indicating a decline of about 4.4%[42] - Deferred revenue as of March 31, 2025, was $90.89 million, down from $94.72 million at the end of 2024, a decrease of approximately 4.4%[44] Research and Development - Research and development expenses for the first quarter of 2025 were $38.9 million, up from $35.0 million in the same quarter of 2024, indicating continued investment in innovation[15] Taxation - The effective tax rate for the three months ended March 31, 2025, was 18%, positively impacted by excess tax deductions on stock-based compensation[88] - The company paid $12.70 million in income taxes during the three months ended March 31, 2025, compared to $2.52 million in the same period of 2024[23] - Unrecognized tax benefits for uncertain tax positions were $21.1 million as of March 31, 2025, with a potential decrease of approximately $0.8 million expected within the next 12 months[91] Stock and Compensation - The Company granted 459,741 performance share awards during the three months ended March 31, 2025, with a grant date fair value of $59.78[65] - As of March 31, 2025, there were 2,180,947 nonvested restricted share units (RSUs) with a weighted average grant date fair value of $39.24[66] - The company reported stock-based compensation expense of $11.63 million for the three months ended March 31, 2025, compared to $8.10 million in 2024[23] - The unrecognized compensation expense related to RSUs was $80.3 million, expected to be recognized over 2.4 years, and $37.9 million related to TSRs over 1.9 years[67] Debt and Interest - As of March 31, 2025, total debt amounted to $845.9 million, a decrease from $924.6 million as of December 31, 2024[57] - The Company had $453.1 million in term loans and $400.0 million in senior notes outstanding, with no amounts drawn under the revolving credit facility[47] - The interest rate for the Credit Facility as of March 31, 2025, was 6.17%[50] Segment Performance - Revenue for the Payment Software segment was $200.7 million, while the Biller segment generated $193.8 million, totaling $394.6 million for the three months ended March 31, 2025[83] - Revenue from the United States was $236.754 million, up from $228.107 million, while revenue from other regions increased significantly to $157.811 million from $87.912 million[87] - The Company’s revenue from Bill Payments was $193.840 million for the three months ended March 31, 2025, up from $174.862 million in 2024[86] - The Company’s revenue from Merchant Payments increased to $37.659 million in Q1 2025 from $35.728 million in Q1 2024[86] - The Company’s revenue from Fraud Management decreased to $9.574 million in Q1 2025 from $11.507 million in Q1 2024[86]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $395 million, representing a 25% increase from Q1 2024, while adjusted EBITDA was $94 million, up 95% from the previous year [18][19] - The company ended the quarter with $230 million in cash and a net debt leverage ratio of 1.2x, below the target of 2x [19][20] Business Line Data and Key Metrics Changes - Payment Software segment revenue grew 42% year-over-year, with adjusted EBITDA more than doubling compared to Q1 2024 [10][18] - Biller segment revenue increased by 11%, with adjusted EBITDA rising by 1% from Q1 2024 [18][19] Market Data and Key Metrics Changes - The company reported strong cash flow growth with operating cash flow of $78 million for the quarter [19] - The company has not seen material impacts from geopolitical uncertainties, including trade discussions, and remains focused on broader strategies [16][20] Company Strategy and Development Direction - The company has combined its Bank and Merchant segments into a new business unit called Payments Software, which has generated new pipeline opportunities and improved operational efficiency [9][10] - The launch of the next-generation payments hub solution, named Kinetic, aims to expand the addressable market to include midsize banks and non-bank financial institutions [11][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving full-year targets, citing a strong start to the year and healthy customer demand despite macroeconomic uncertainties [16][17] - The company raised its full-year revenue guidance to a range of $1.69 billion to $1.72 billion, with adjusted EBITDA expected between $480 million and $495 million [22] Other Important Information - The company repurchased approximately 1 million shares year-to-date for $52 million, with $320 million remaining on its share repurchase authorization [19] - Scott Behrens, the CFO, announced plans for retirement, which will be managed through a succession plan [24][26] Q&A Session Summary Question: Current environment and customer behavior - Management noted no negative impacts from macroeconomic uncertainties, with customers showing a willingness to invest in modernization [31][35] Question: Exposure to stablecoins and cross-border payments - The company facilitates cross-border payments and is exploring stablecoin opportunities, although current volumes are small [39][42] Question: Payment Software segment growth expectations - Management expects continued growth in the Payment Software segment, with a focus on recurring revenue and license deals [50][55] Question: Partnership with Ingo Payments and Speedpay - The partnership aims to enhance digital disbursements, expanding the company's capabilities beyond bill payments [56][62] Question: Impact of recent mergers in the industry - Management expressed optimism about potential opportunities arising from the mergers of Global Payments and FIS, emphasizing strong existing relationships [64][65] Question: Revenue contribution from real-time payments - Real-time payments account for about 10% of overall business and are expected to grow at double digits, though with some quarter-to-quarter volatility [86][87] Question: Traction in different product areas - The company saw significant traction in issuing and acquiring solutions, particularly in the Asia Pacific region [92][95]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $395 million, representing a 25% increase from Q1 2024, while adjusted EBITDA was $94 million, up 95% from the previous year [15][16] - Cash flow from operating activities was $78 million, with a net debt leverage ratio of 1.2x, below the target of 2x [16][19] Business Line Data and Key Metrics Changes - Payment Software segment revenue grew 42% with adjusted EBITDA more than doubling compared to Q1 2024 [15][16] - Biller segment revenue increased by 11%, while adjusted EBITDA rose by 1% from Q1 2024 [15][16] Market Data and Key Metrics Changes - The company reported strong cash flow growth and ended the quarter with $230 million in cash on hand and approximately $853 million in total debt outstanding [16][19] - The company has not seen material impacts from geopolitical uncertainties, including exposure to China, which is considered non-material [14][19] Company Strategy and Development Direction - The company has combined its Bank and Merchant segments into a new business unit called Payments Software, which has generated new pipeline opportunities and improved operational efficiency [7][8] - The launch of the next-generation payments hub solution, named Kinetic, aims to expand the addressable market to include midsize and smaller institutions, as well as non-bank financial institutions [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding long-term profitable growth and the ability to deliver significant shareholder value, despite macroeconomic uncertainties [15][19] - The company raised its full-year revenue guidance to a range of $1.69 billion to $1.72 billion, expecting adjusted EBITDA to be between $480 million and $495 million [20][21] Other Important Information - The company sold its non-controlling interest in India-based Mindgate to PayU India, with the gain included in other income [17] - The CFO announced plans for retirement, emphasizing a smooth transition in financial leadership [22][23] Q&A Session Summary Question: Current environment and customer behavior - Management noted no negative impacts on customer decision-making timelines, with some customers pushing to finalize deals sooner due to uncertainty [29][33] Question: Exposure to stablecoins and cross-border payments - The company facilitates cross-border payments and is exploring the potential of stablecoins, although current volumes are small [36][42] Question: Payment Software segment growth expectations - Management expects the Payment Software segment to continue tracking a 7-9% constant currency revenue growth for the year, with variability based on timing of license fees [52][54] Question: Partnership with Ingo Payments and Speedpay - The partnership aims to enhance digital disbursements, expanding the company's capabilities beyond bill payments [55][58] Question: Impact of recent mergers in the industry - Management expressed optimism about potential opportunities arising from the mergers of Global Payments and FIS, emphasizing strong existing relationships [64][66] Question: Kinetic platform milestones - The company has achieved key milestones with the Kinetic platform, including successful demos and plans for beta customers by late this year or early next year [75][76]

Financial Performance - Q1 2025 revenue was $395 million, up 25% from Q1 2024[4] - Net income for Q1 2025 was $59 million compared to a net loss of $8 million in Q1 2024[4] - Adjusted EBITDA in Q1 2025 was $94 million, reflecting a 95% increase from Q1 2024[4] - Total revenues for Q1 2025 reached $394.6 million, a 25.0% increase from $316.0 million in Q1 2024[20] - Net income for Q1 2025 was $58.9 million, compared to a net loss of $7.8 million in Q1 2024, marking a significant turnaround[20] - Adjusted EBITDA for Q1 2025 was $94.1 million, up from $48.1 million in Q1 2024, reflecting a strong operational performance[23] - The company achieved a net adjusted EBITDA margin of 36% in Q1 2025, up from 24% in Q1 2024[23] - The company reported a basic earnings per share (EPS) of $0.56 in Q1 2025, compared to a loss per share of $0.07 in Q1 2024[20] Revenue Breakdown - Recurring revenue reached $286 million, growing 8% and representing 72% of total revenue[4] - Recurring revenue for Q1 2025 totaled $285.7 million, a 8.9% increase from $263.5 million in Q1 2024[24] - The newly formed Payment Software segment grew revenue by 42% in Q1 2025[7] - Annual recurring revenue (ARR) bookings for Q1 2025 were $8.9 million, an increase from $6.4 million in Q1 2024[24] - License and services bookings for Q1 2025 were $50.0 million, significantly higher than $27.2 million in Q1 2024[24] Cash Flow and Guidance - Cash flow from operating activities in Q1 2025 was $78 million, down from $123 million in Q1 2024[4] - The company reported a net cash flow from operating activities of $78.2 million in Q1 2025, down from $123.2 million in Q1 2024[22] - The company ended Q1 2025 with $230 million in cash and a net debt leverage ratio of 1.2x adjusted EBITDA[5] - Cash and cash equivalents at the end of Q1 2025 were $366.8 million, compared to $238.1 million at the end of Q1 2024[22] - ACI raised its full-year 2025 revenue guidance to a range of $1.690 billion to $1.720 billion[8] - For Q2 2025, revenue is expected to be between $375 million and $385 million[8] Share Repurchase - ACI repurchased 1 million shares for approximately $52 million year-to-date[6]

Company Performance - ACI Worldwide reported quarterly earnings of $0.51 per share, exceeding the Zacks Consensus Estimate of $0.33 per share, and showing a significant increase from $0.10 per share a year ago, representing an earnings surprise of 54.55% [1] - The company achieved revenues of $394.57 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 8.14%, and up from $316.02 million year-over-year [2] - ACI Worldwide has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Stock Performance - ACI Worldwide shares have increased approximately 5.7% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.50, with projected revenues of $398.35 million, and for the current fiscal year, the consensus EPS estimate is $2.80 on revenues of $1.7 billion [7] - The Computer - Software industry, to which ACI Worldwide belongs, is currently ranked in the top 29% of over 250 Zacks industries, suggesting a favorable outlook for the sector [8]

Earnings Presentation Q1 2025 May 8, 2025 Private Securities Litigation Reform Act of 1995 Safe Harbor for Forward-Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. A discussion of these forward-looking statements and risk factors that may affect them is set forth at the end o ...