Core Insights - ACI Worldwide will participate in three major investor conferences to discuss payment modernization trends, fraud management evolution, and digital transformation in the global payments ecosystem [1][2][3] Group 1: Investor Conferences - ACI Worldwide executives will present at Citi's 14th Annual FinTech Conference on November 18 and at Stephens Annual Investment Conference on November 20, including a fireside chat [2] - The UBS Global Technology and AI Conference will take place on December 2-3, where ACI executives will also engage in one-on-one meetings with registered investors [3] Group 2: Company Overview - ACI Worldwide is a leader in real-time payments software, providing solutions to thousands of financial institutions and merchants globally, with a focus on modernizing payment infrastructures [1][4] - The company has 50 years of experience in payments technology, emphasizing intelligent payments orchestration to enhance payment experiences [4]

Core Insights - The payments industry is undergoing transformation driven by five key forces: agentic payments becoming competitive tools, emergence of payments-specific foundational models, necessity of robust fraud management, transaction banking leveraging AI, and fragmentation of stablecoins as they scale [1] Group 1: Agentic Payments - Agentic payments are transitioning from experimental phases to becoming essential competitive assets, with a focus on protocol standardization and multi-rail enablement to reduce friction in transactions [2] - Companies must enhance risk models to recognize agents as active participants, incorporating new signals such as agent reputation and intent authorization [2] Group 2: Payments-Specific Models - A shift is anticipated from general-purpose large language models (LLMs) to industry-specific models tailored for payments, prompting firms to decide between building or partnering for access to these specialized models [3] Group 3: Fraud Management - Fraud management has become a baseline requirement for banks and merchants, necessitating a unified risk stack that includes device, identity, transaction, and agentic signals to cover the entire customer journey [4] - Companies are advised to integrate deepfake detection and real-time scoring to combat emerging fraud tactics [4] Group 4: Transaction Banking and AI - Transaction banking is emerging as a key area for AI application, with firms encouraged to develop an AI adoption heatmap to identify and expand use cases [5][8] Group 5: Stablecoins - The stablecoin ecosystem is expanding with various use cases, but it is also becoming increasingly fragmented, necessitating exploration of alternative solutions like tokenized deposits and central bank digital currencies (CBDCs) [8][12] - Multiple regulated stablecoin issuers are competing, with Ripple's RLUSD surpassing $1 billion in circulation and Circle working on reducing fragmentation in USDC [12] Group 6: Alternative Payment Rails - Alternative payment methods are gaining traction alongside traditional card payments, with both infrastructures coexisting and advancing digital payment solutions [9] Group 7: Future of Payments - The future of payments is expected to be characterized by agent-led, model-driven, and multi-rail systems, with standards like ACP and domain-specific foundational models shaping the landscape [10] Group 8: Innovations and Developments - Companies like Ant International and Stripe are launching innovative solutions such as the Agentic Commerce Protocol and AI-driven payment models to enhance transaction efficiency and security [6][13] - Visa is scaling its generative Large Transaction Model, which has significantly improved fraud detection rates [7]

Financial Data and Key Metrics Changes - In Q4 2024, the company reported non-GAAP revenue of $183 million, a 13% increase year-over-year and a 5% increase sequentially [6][18] - Adjusted EBITDA for Q4 was $37.6 million, representing 20.6% of non-GAAP revenue, an improvement of approximately 630 basis points year-over-year [6][26] - Total non-GAAP revenue for the full year was $696.5 million, up 11% from the prior year [18] - Subscription revenue for the full year grew by 16%, accounting for 79% of total revenue [18][20] - Total annualized recurring revenue (ARR) grew to $824 million, up 12% year-over-year [20] - The ending backlog increased to over $2.2 billion, representing a 21% growth year-over-year [21][22] Business Line Data and Key Metrics Changes - The company achieved a record year for renewals, with renewal bookings increasing by 80% year-over-year [22][23] - In Q4, the company renewed 10% of its entire digital banking customer base [22] - Subscription net revenue retention rate ended the year at approximately 114%, up from 112% in 2023 [23] Market Data and Key Metrics Changes - The company signed 25 Tier one and enterprise deals in 2024, the most in a single year [8] - The company signed nearly twice the number of digital banking deals in Tier two and three segments compared to the previous year [9] - The fraud solutions segment was highlighted as one of the fastest-growing areas, driven by increased demand for fraud mitigation [12] Company Strategy and Development Direction - The company is optimistic about the demand environment in 2025, with a focus on expanding its subscription revenue and operational efficiencies [11][29] - The company aims to achieve a subscription revenue rule of 40 as a long-term objective [28] - The addition of Andre Mintz to the Board of Directors is expected to enhance the company's expertise in global privacy and cybersecurity [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on a favorable demand environment and strong sales momentum [31] - The company anticipates continued healthy demand for its fraud solutions and expects expansion opportunities with existing customers [12][29] - Management noted that the deregulation in the banking sector could provide tailwinds for the company's growth [60] Other Important Information - The company ended the year with cash and investments totaling $447 million, up from $408 million in the previous quarter [26] - Free cash flow for the year was $107 million, representing an 85% conversion rate as a percentage of adjusted EBITDA [26] Q&A Session Summary Question: Can you discuss the relationship pricing with Wells Fargo and its significance? - Management highlighted the success of the relationship pricing model and its deployment with major banks, indicating strong potential for future growth [34][36] Question: How does the company view the reliance on large Tier one enterprise deals versus Tier two and three? - Management indicated a balanced pipeline for 2025, expecting continued success in both Tier one and Tier two/three deals [40][42] Question: What are the biggest drivers behind the increased Total Addressable Market (TAM)? - Management pointed to growth in fraud products and the Helix business as key drivers for the TAM increase [48][51] Question: How does deregulation impact the company's strategy? - Management noted that deregulation could enhance operational efficiency for clients, providing a positive environment for the company's offerings [60][61] Question: What are the expectations for professional services revenue? - Management indicated that they do not expect a rebound in professional services revenue in the near term, citing ongoing pressures in discretionary spending [100][102]