ACI Worldwide(ACIW) - 2023 Q3 - Quarterly Report

Financial Performance - Total revenue for the three months ended September 30, 2023, increased by $56.4 million, or 18$15.8 million, or 8%, during the three months ended September 30, 2023, compared to the same period in 2022[128]. - License revenue increased by $36.0 million, or 82$2.8 million, or 6%, during the three months ended September 30, 2023, compared to the same period in 2022[132]. - Services revenue increased by $1.8 million, or 10$5.9 million, or 1%, compared to the same period in 2022[151]. - SaaS and PaaS revenue increased by $28.9 million, or 5$25.6 million, or 15%, during the nine months ended September 30, 2023, compared to the same period in 2022[154]. - Maintenance revenue increased by $2.3 million, or 2$976.0 million, compared to $970.1 million for the same period in 2022[168]. Operating Expenses - Total operating expenses decreased by$2.0 million, or 1%, during the three months ended September 30, 2023, compared to the same period in 2022[136]. - Cost of revenue increased by $5.9 million, or 3$2.2 million, or 6%, during the three months ended September 30, 2023, compared to the same period in 2022[140]. - Selling and marketing expense decreased by $3.4 million, or 10$0.7 million, or 2%, for the three months ended September 30, 2023, compared to the same period in 2022[144]. - Total operating expenses increased by $13.4 million, or 1$20.2 million, or 4%, during the nine months ended September 30, 2023, compared to the same period in 2022[159]. - R&D expenses decreased by $8.2 million, or 7$4.6 million, or 5%, for the nine months ended September 30, 2023, compared to the same period in 2022[161]. - General and administrative expenses increased by $7.9 million, or 9$61.9 million, representing an 18% margin[1]. - Net income for the three months ended September 30, 2023, was $37.9 million, a 12$1.1 million, compared to a net income of $51.9 million for the same period in 2022[150]. Cash Flow and Debt - Cash and cash equivalents as of September 30, 2023, were$139.5 million, with $40.1 million held by foreign subsidiaries[173]. - Operating cash flows were$82.8 million for the nine months ended September 30, 2023, a decrease of $19.2 million compared to the same period in 2022[177]. - The company did not repurchase any shares under the stock repurchase program during the nine months ended September 30, 2023, with a remaining authorization of approximately$200.0 million[175]. - During the first nine months of 2023, the company repaid $53.6 million on Term Loans and$12.5 million of other debt payments[181]. - The company received net proceeds of $24.0 million on the Revolving Credit Facility and$5.3 million from stock options exercise[181]. - As of September 30, 2023, the company had approximately $1.1 billion of debt outstanding, with$668.2 million under the Credit Facility and $400.0 million in 2026 Notes[187]. - The Credit Facility had a floating rate of 7.42$0.1 million annually[187]. - Interest expense increased by $5.5 million, or 38$21.6 million, or 58%, for the nine months ended September 30, 2023, primarily due to higher interest rates[164]. Strategic Initiatives - ACI Worldwide processes $14 trillion in payments daily for over 6,000 organizations globally[105]. - The company's 60-month backlog as of September 30, 2023, is$6.435 billion, with committed backlog at $2.147 billion and renewal backlog at$4.288 billion[122]. - Digital payment transaction volumes are increasing, driven by eCommerce growth and the adoption of real-time payments[108]. - ACI's strategic partnerships with Mastercard, Microsoft, and Mindgate Solutions enhance its position in the real-time payments market[109]. - The company recognizes the shift to cloud technology, optimizing its products on Microsoft Azure to support customer cloud strategies[110]. - ACI aims to grow through acquisitions, seeking candidates that improve solution breadth and access to new markets[115]. - The company sold its corporate online banking solutions for $100 million in September 2022, recognizing a gain of$38.5 million[116]. - The adoption of Request for Payment (RfP) technology is expanding globally, enhancing secure payment requests between consumers and billers[113]. - ACI's focus on omni-commerce aims to provide seamless payment experiences across various channels, increasing customer loyalty and satisfaction[112]. Market Risks - Inflationary pressures have impacted financial performance, particularly in interchange costs associated with the Biller segment[104]. - The company has not entered into any foreign currency hedging transactions, exposing it to market risks related to fluctuations in foreign currency exchange rates[186]. - There were no significant changes to the company's critical accounting policies and estimates during the nine months ended September 30, 2023[185]. - The company used $4.2 million for stock-based compensation awards repurchase for tax withholdings during the first nine months of 2023[181]. - The company had$90.9 million used for common stock repurchase during the first nine months of 2022[181]. - There have been no material changes to the contractual obligations and commercial commitments for the nine months ended September 30, 2023[182].