Core Viewpoint - ACI Worldwide (ACIW) has shown significant stock performance, gaining 15% over the past three months, outperforming both the Zacks Computer and Technology Sector and the S&P 500 index [1] Group 1: Company Performance - ACIW's revenues have been consistently growing, particularly in the biller segment, which saw a 13% year-over-year increase in the second quarter of 2024 [3] - The bank segment revenues grew by 22% year-over-year during the same period [3] - ACIW has secured major contracts internationally, enhancing its payment solutions and infrastructure [2] Group 2: Market Position and Competition - ACIW is benefiting from international expansion, especially in the Asia-Pacific market, where competitors are withdrawing support, creating opportunities for ACIW [2] - The company faces intense competition in the electronic payments software space from various players, including Fiserv, NCR Voyix, and Jack Henry & Associates [5][6] - Ongoing macroeconomic challenges, such as inflation and high interest rates, may impact ACIW's growth prospects, although the company is currently navigating these issues with its innovative product portfolio [6] Group 3: Financial Outlook - ACIW expects its 2024 revenues to be between $1.557 billion and $1.591 billion, with a Zacks Consensus Estimate of $1.58 billion, indicating an 8.6% year-over-year growth [6] - The recent increase in share price has led to elevated valuation levels, with a Zacks Value score of C, suggesting that the stock may be overvalued at present [7]

Core Viewpoint - ACI Worldwide (ACIW) has shown significant stock performance, gaining 55.8% year to date, outperforming the Zacks Computer-Software industry's growth of 7.1% [1] Group 1: Performance Metrics - ACIW has outperformed both the Zacks Computer and Technology Sector and the S&P 500 index, which returned 13.6% and 14.4% year to date, respectively [1] - In the second quarter of 2024, ACIW's biller segment revenues increased by 13% year over year, while bank segment revenues grew by 22% year over year [3] Group 2: Business Growth and Opportunities - ACIW has been able to grow its top line through higher transaction volumes in the biller segment and is seeing more deals in its banking segment [2] - The company is capitalizing on international opportunities, particularly in the Asia-Pacific market, where competitors are discontinuing product support [2] - ACI Worldwide has secured major contracts with various organizations to modernize payment solutions and improve instant payment infrastructure [2] Group 3: Competitive Landscape - ACIW faces intense competition in the electronic payment software space from companies like Fiserv, NCR Voyix, Jack Henry & Associates, Payoneer Global, Nuvei Corporation, and Paymentus Holdings [4][5] - In the merchant payments space, NCR Voyix competes with ACI Payments Orchestration Platform, while in bill payments, ACIW competes with Jack Henry & Associates, Paymentus, and Fiserv [5] Group 4: Valuation Concerns - ACIW's stock is currently trading at a forward 12-month price-to-earnings multiple of 30.62X, significantly higher than the industry average of 19.22X and its peers [5] - The impressive year-to-date share price performance has driven ACIW's valuation to elevated levels, suggesting a potential market correction or consolidation could provide better investment opportunities [6]

Group 1 - ACI Worldwide (ACIW) has gained approximately 61.7% year-to-date, significantly outperforming the Computer and Technology sector, which has returned an average of 23.4% [2][3] - The Zacks Consensus Estimate for ACIW's full-year earnings has increased by 2.8% over the past quarter, indicating improved analyst sentiment [2] - ACI Worldwide is part of the Computer - Software industry, which has seen a year-to-date gain of about 10.6%, further highlighting ACIW's strong performance relative to its industry peers [3] Group 2 - Celestica (CLS) has also outperformed the sector with a year-to-date return of 81.5% [2] - The Electronics - Manufacturing Services industry, to which Celestica belongs, has returned +8.7% so far this year, ranking 102 in the Zacks Industry Rank [3] - ACI Worldwide currently holds a Zacks Rank of 2 (Buy), while Celestica has a Zacks Rank of 1 (Strong Buy), indicating strong potential for both stocks [2][3]

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Whi ...

Group 1: Fintech Industry Overview - The demand for digitalized conveniences is increasing, with cash becoming obsolete as consumers seek more efficient payment solutions [1] - The fintech sector is experiencing significant interest as traditional business models struggle to adapt to modern consumer expectations [1] Group 2: PayPal (PYPL) - PayPal reached a peak valuation in 2021 but has since seen a decline in stock price due to unfavorable monetary policy [2] - Currently, PYPL shares trade at 2.17X trailing-year revenue, down from 2.49X earlier this year, indicating potential for reversion to mean valuation [2][3] - Analysts project fiscal 2024 sales to hit $31.93 billion, representing a growth rate of 14.8% from the previous year [3] Group 3: Paysafe (PSFE) - Paysafe provides end-to-end payment solutions across various international markets, including credit and debit card processing and digital wallets [5] - PSFE stock trades at 0.71X trailing-year revenue, significantly lower than the average multiple of 4.14X in the infrastructure software space [5][6] - Analysts forecast fiscal 2024 revenue at $1.71 billion, a 6.6% increase from $1.6 billion in the prior year [6] Group 4: ACI Worldwide (ACIW) - ACI Worldwide develops software solutions for digital payments, including fraud prevention and transaction processing [7] - ACIW shares currently trade at 3.21X sales, which is a premium compared to competitors but still below the sector average [7][8] - Analysts expect revenue of $1.58 billion for fiscal 2024, translating to a growth rate of 10.7% from the previous year [8]

For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Is ACI Worldwide (ACIW) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Computer and Technology peers, we might be able to answer that question.ACI Worldwide is a member of our Computer and Technology group, which includes 617 different companies and currently sits at #8 in the Zacks Sector Rank. T ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $373 million, representing a 16% increase year-over-year, while adjusted EBITDA was $93 million, up 62% from Q2 2023 [13][14] - Cash flow from operations was $55 million, an increase of 215% compared to Q2 last year, with a net debt leverage ratio of 1.9x, down from 2.3x at year-end [14][15] Business Line Data and Key Metrics Changes - In the Biller segment, revenue was $192 million, up 13% year-over-year, and adjusted EBITDA increased by 20% [14][7] - The Bank segment saw revenue growth of 22%, reaching $144 million, with adjusted EBITDA up 53% [14][9] - The Merchant segment's revenue grew 4% to $38 million, while adjusted EBITDA surged 55% [14][12] Market Data and Key Metrics Changes - The company experienced strong tax-related volumes in the government vertical during Q2, contributing to the Biller segment's performance [7] - The Bank segment's growth was driven by significant renewal contracts and strategic expansions, including a partnership with a top bank in Malaysia [9] Company Strategy and Development Direction - The company is focused on its next-generation payments hub program, with investments continuing and development on track for customer evaluation by year-end [10] - There is a strong emphasis on expanding the customer base, particularly in the Asia Pacific and European markets, driven by the demand for real-time payment solutions [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the strong performance and raised guidance for both revenue and adjusted EBITDA for the remainder of 2024 [16][17] - The company highlighted the importance of early contract renewals to derisk the forecast and allow focus on new deals in the second half of the year [9][25] Other Important Information - ACI Worldwide was recognized as one of the world's top FinTech companies for 2024, underscoring its position as an industry leader [18] - The Board of Directors increased the share repurchase authorization to $400 million, with $380 million remaining available [15] Q&A Session Summary Question: How does the company characterize its international opportunity relative to the U.S. market? - Management noted significant interest globally, particularly in Asia Pacific and Europe, driven by competitors removing products from support and regulatory mandates for faster payments [21][22] Question: Can you speak to the pipeline across the three segments for the second half and 2025? - The pipeline is growing, with a strong focus on renewals and new business, particularly in the Bank segment [24][26] Question: What is the outlook for real-time payments over the next two years? - The European Central Bank mandates real-time payments, creating opportunities for upgrades in payment infrastructure across the EU [29][30] Question: What contributed to the strong results in the Bank segment? - The outperformance was primarily driven by the Biller segment, with no significant one-time issues affecting the Bank segment's results [56][57] Question: Can you elaborate on the full-year guidance raise? - The guidance raise is primarily attributed to better-than-expected performance in the Biller segment, with expectations for continued growth in all segments [58][59]

ACI Worldwide (ACIW) reported $373.48 million in revenue for the quarter ended June 2024, representing a year-over-year increase of 15.5%. EPS of $0.47 for the same period compares to $0.15 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $349.95 million, representing a surprise of +6.72%. The company delivered an EPS surprise of +113.64%, with the consensus EPS estimate being $0.22. While investors scrutinize revenue and earnings changes year-over-year and how they compare with ...

[Q2 2024 Financial Results](index=1&type=section&id=Q2%202024%20Financial%20Results) [Q2 2024 Performance Highlights](index=1&type=section&id=Q2%202024%20Performance%20Highlights) ACI Worldwide reported strong Q2 2024 financial results, with significant year-over-year growth in revenue, Adjusted EBITDA, and cash flow from operations, alongside a new share repurchase program and raised full-year guidance Q2 2024 Key Performance Indicators (vs. Q2 2023) | Metric | Q2 2024 Value | Change vs. Q2 2023 | | :--- | :--- | :--- | | Revenue | $373 million | +16% | | Net Income | $31 million | +$38 million | | Adjusted EBITDA | $93 million | +62% | | Cash Flow from Operating Activities | $55 million | +215% | - The company announced a new **$400 million share repurchase authorization** and bought back **1.7 million shares for $57 million** during the quarter[1](index=1&type=chunk)[4](index=4&type=chunk) - Full-year 2024 financial guidance for both revenue and adjusted EBITDA has been raised[1](index=1&type=chunk)[2](index=2&type=chunk) [Financial Summary](index=1&type=section&id=Financial%20Summary) Q2 2024 total revenue increased 16% to $373 million, driven by all segments, with recurring revenue at $284 million (76% of total), and a net debt leverage ratio of 1.9x Q2 2024 Segment Performance (vs. Q2 2023) | Segment | Revenue Growth | Adjusted EBITDA Growth | | :--- | :--- | :--- | | Bank | +22% | +53% | | Merchant | +4% | +55% | | Biller | +13% | +20% | - Recurring revenue was **$284 million**, a **9% increase** from Q2 2023, and represented **76% of total revenue**[3](index=3&type=chunk) - The company ended the quarter with **$157 million in cash** and a net debt leverage ratio of **1.9x**[4](index=4&type=chunk) [Updated 2024 Financial Guidance](index=2&type=section&id=RAISING%202024%20GUIDANCE%20RANGE) ACI Worldwide raised its full-year 2024 revenue and Adjusted EBITDA guidance, also providing a positive outlook for the third quarter of 2024 Updated Full-Year 2024 and Q3 2024 Guidance | Period | Metric | New Guidance Range | | :--- | :--- | :--- | | **Full-Year 2024** | Revenue | $1.557 billion - $1.591 billion | | **Full-Year 2024** | Adjusted EBITDA | $423 million - $438 million | | **Q3 2024** | Revenue | $400 million - $410 million | | **Q3 2024** | Adjusted EBITDA | $110 million - $120 million | [Financial Statements](index=6&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2024, ACI's total assets slightly decreased to $3.36 billion, with stable liabilities at $2.13 billion and reduced stockholders' equity of $1.24 billion due to share repurchases Balance Sheet Summary (in thousands) | Account | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $156,983 | $164,239 | | Total Assets | $3,364,672 | $3,444,739 | | Long-term debt (current & noncurrent) | $1,008,013 | $1,038,004 | | Total Liabilities | $2,127,916 | $2,120,442 | | Total Stockholders' Equity | $1,236,756 | $1,324,297 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q2 2024 saw a significant profitability turnaround with net income of $30.9 million, up from a $6.7 million loss in Q2 2023, driven by a 15.5% revenue increase to $373.5 million amidst stable operating expenses Q2 Statement of Operations (in thousands, except per share) | Metric | Q2 2024 (in thousands) | Q2 2023 (in thousands) | | :--- | :--- | :--- | | Total Revenues | $373,479 | $323,325 | | Operating Income | $53,701 | $10,520 | | Net Income (Loss) | $30,887 | $(6,710) | | Diluted EPS | $0.29 | $(0.06) | Six Months Ended June 30 Statement of Operations (in thousands) | Metric | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Total Revenues | $689,498 | $613,001 | | Operating Income (Loss) | $63,261 | $(13,832) | | Net Income (Loss) | $23,136 | $(39,018) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities significantly increased to $178.3 million for the six months ended June 30, 2024, while financing activities resulted in a $170.3 million outflow primarily due to stock repurchases and debt repayments Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Net cash from operating activities | $178,258 | $57,508 | | Net cash from investing activities | $(23,978) | $(19,597) | | Net cash from financing activities | $(170,273) | $(61,183) | - Key financing activities in the first six months of 2024 included **$119.7 million** in common stock repurchases and a net repayment of term loans and other debt[16](index=16&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Reconciliation of Net Income to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2024 increased 62% to $92.8 million, with the margin expanding to 37%, and six-month Adjusted EBITDA growing 71% to $140.9 million Adjusted EBITDA Reconciliation (in millions) | Metric | Q2 2024 (in millions) | Q2 2023 (in millions) | Six Months 2024 (in millions) | Six Months 2023 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $30.9 | $(6.7) | $23.1 | $(39.0) | | **Adjusted EBITDA** | **$92.8** | **$57.4** | **$140.9** | **$82.3** | | Net Adjusted EBITDA Margin | 37% | 26% | 31% | 21% | [Segment Information](index=9&type=section&id=Segment%20Information) All segments contributed to Q2 2024 growth, with the Bank segment leading in revenue and Adjusted EBITDA increases, the Biller segment remaining the largest by revenue, and the Merchant segment showing strong profitability Q2 2024 Segment Revenue and Adjusted EBITDA (in millions) | Segment | Revenue (in millions) | Revenue YoY Change | Adj. EBITDA (in millions) | Adj. EBITDA YoY Change | | :--- | :--- | :--- | :--- | :--- | | Banks | $143.7 | +22.3% | $79.2 | +53.5% | | Merchants | $38.0 | +4.1% | $15.4 | +55.6% | | Billers | $191.8 | +13.3% | $37.4 | +20.0% | [Reconciliation of GAAP EPS to Adjusted EPS](index=10&type=section&id=EPS%20Impact%20of%20Non-cash%20and%20Significant%20Transaction-related%20Items) Adjusted diluted EPS significantly increased to $0.47 for Q2 2024 and $0.56 for the first six months of 2024, reflecting adjustments for non-cash and significant transaction-related items EPS Reconciliation | Metric | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | GAAP Diluted EPS | $0.29 | $(0.06) | $0.22 | $(0.36) | | **Adjusted Diluted EPS** | **$0.47** | **$0.15** | **$0.56** | **$0.07** | [Recurring Revenue and New Bookings](index=10&type=section&id=Recurring%20Revenue%20and%20New%20Bookings) Q2 2024 recurring revenue grew 8.8% to $284.1 million, driven by SaaS and PaaS fees, while new bookings, including license and services, also showed strong growth to $80.7 million Recurring Revenue (in millions) | Component | Q2 2024 (in millions) | Q2 2023 (in millions) | | :--- | :--- | :--- | | SaaS and PaaS fees | $235.4 | $209.7 | | Maintenance fees | $48.7 | $51.4 | | **Total Recurring Revenue** | **$284.1** | **$261.1** | New Bookings (in millions) | Type | Q2 2024 (in millions) | Q2 2023 (in millions) | | :--- | :--- | :--- | | Annual recurring revenue (ARR) | $13.1 | $12.7 | | License and services | $80.7 | $55.5 |

Financial Performance - Total revenue for the three months ended June 30, 2024, increased by $50.2 million, or 16%, compared to the same period in 2023[120]. - Total revenue for the six months ended June 30, 2024, increased by $76.5 million, or 12%, compared to the same period in 2023[145]. - Total revenue for the three months ended June 30, 2024, was $373.5 million, a 15.6% increase from $323.3 million in the same period of 2023[163]. - Adjusted for foreign currency impact, total revenue for the six months ended June 30, 2024, increased by $77.0 million, or 13%, compared to the same period in 2023[145]. - Net income for the six months ended June 30, 2024, was $23.1 million, compared to a net loss of $39.0 million in the same period in 2023[144]. Revenue Breakdown - SaaS and PaaS revenue increased by $25.7 million, or 12%, during the three months ended June 30, 2024, driven by new customer go-lives and higher transaction volumes[123]. - License revenue increased by $20.9 million, or 47%, during the three months ended June 30, 2024, primarily due to license renewal timing and new license events[126]. - Maintenance revenue decreased by $2.7 million, or 5%, during the three months ended June 30, 2024, attributed to customers reducing premium support on non-strategic products[127]. - Services revenue increased by $6.2 million, or 35%, during the three months ended June 30, 2024, driven by project-related work[129]. - SaaS and PaaS revenue increased by $36.5 million, or 9%, during the six months ended June 30, 2024, compared to the same period in 2023[147]. - License revenue increased by $32.6 million, or 52%, during the six months ended June 30, 2024, compared to the same period in 2023[148]. - Maintenance revenue decreased by $5.0 million, or 5%, during the six months ended June 30, 2024, compared to the same period in 2023[149]. - Services revenue increased by $12.4 million, or 37%, during the six months ended June 30, 2024, compared to the same period in 2023[150]. Operating Expenses - Total operating expenses increased by $7.0 million, or 2%, during the three months ended June 30, 2024, with significant transaction-related expenses impacting the total[130]. - Total operating expenses for the six months ended June 30, 2024, decreased by $0.6 million compared to the same period in 2023[151]. - General and administrative expense decreased by $11.9 million, or 19%, during the six months ended June 30, 2024, compared to the same period in 2023[157]. - Interest expense for the six months ended June 30, 2024, decreased by $1.3 million, or 3%, compared to the same period in 2023[159]. Cash Flow and Liquidity - Cash flows from operating activities for the six months ended June 30, 2024, were $178.3 million, significantly higher than $57.5 million in the same period of 2023[172]. - Cash and cash equivalents as of June 30, 2024, totaled $157.0 million, with $61.0 million held by foreign subsidiaries[167]. - Total liquidity increased to $619.1 million as of June 30, 2024, primarily due to a $100.0 million increase in the revolving credit facility[168]. - The company used $24.0 million for capital expenditures during the first six months of 2024, compared to $19.6 million in the same period of 2023[175]. - The company repaid a net $38.4 million on the Term Loan during the first six months of 2024[177]. Debt and Interest Rates - As of June 30, 2024, the company had approximately $1.0 billion of debt outstanding[182]. - The Credit Facility had $617.3 million outstanding with a floating interest rate of 7.44% as of June 30, 2024[182]. - The 2026 Notes are fixed-rate long-term debt obligations with a 5.750% interest rate[182]. - A hypothetical 10% increase or decrease in effective interest rates would change interest income by $0.2 million annually[182]. - A hypothetical 10% increase or decrease in effective interest rates would affect interest expense related to the Credit Facility by approximately $4.6 million[182]. Strategic Initiatives - ACI Worldwide processes $14 trillion in payments daily for over 6,000 organizations globally[100]. - The company's 60-month backlog as of June 30, 2024, totals $6.368 billion, with committed backlog at $2.362 billion and renewal backlog at $4.006 billion[116]. - Digital payment transaction volumes are increasing, driven by the digitization of cash and the growth of eCommerce, with COVID-19 accelerating this trend[103]. - ACI is positioned as a leader in real-time payments, leveraging partnerships with Mastercard, Microsoft, and Mindgate Solutions to enhance connectivity and security[104]. - The adoption of cloud technology is a key focus, with ACI optimizing its products on Microsoft Azure to support customer cloud strategies[105]. - The company is actively pursuing acquisitions to enhance its solution offerings and access new markets[111]. - ACI's omni-commerce strategy aims to provide seamless payment experiences across various channels, responding to changing consumer behaviors[107]. - The Request for Payment (RfP) service is being introduced globally, enhancing secure payment requests between consumers and billers[108]. - ACI's financial results are subject to risks including currency fluctuations and customer contract renewals, which may affect revenue recognition[110]. Market Conditions - Inflationary pressures have impacted financial performance, particularly in interchange costs associated with the Biller segment[99].