ACI Worldwide(ACIW) - 2024 Q2 - Quarterly Results

Q2 2024 Financial Results Q2 2024 Performance Highlights 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][4] - Full-year 2024 financial guidance for both revenue and adjusted EBITDA has been raised[1][2] Financial Summary 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] - The company ended the quarter with $157 million in cash and a net debt leverage ratio of 1.9x[4] Updated 2024 Financial Guidance 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 Condensed Consolidated Balance Sheets 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 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 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] Non-GAAP Financial Measures & Reconciliations Reconciliation of Net Income to Adjusted EBITDA 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 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 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 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 |