Yahoo Finance ACI Worldwide Inc (ACIW) Q1 2024 Earnings Call Transcript Highlights: Robust Growth and ...
Total Revenue: $316 million, up 9% year-over-year.
Bank Segment Revenue: $105 million, up 20% from Q1 2023.
Merchant Segment Revenue: $36 million, increased by 3%.
Biller Segment Revenue: $175 million, a 5% increase.
Adjusted EBITDA: $48 million, nearly doubled from Q1 2023.
Bank Segment Adjusted EBITDA: $42 million, up nearly 70%.
Merchant Segment Adjusted EBITDA: $11 million, up 63%.
Biller Segment Adjusted EBITDA: $31 million, increased by 4%.
Cash Flow from Operations: $123 million, approximately three times the amount from Q1 2023.
Cash on Hand: $183 million, up $19 million.
Debt Balance: $1 billion, down $34 million.
Net Debt Leverage Ratio: Two times, down from 2.3 times at the start of the year.
Share Repurchases: 2 million shares for $63 million in Q1; additional 1 million shares in Q2 to date.
Revenue Guidance for 2024: Raised to $1.547 billion to $1.581 billion.
Adjusted EBITDA Guidance for 2024: Increased to $418 million to $433 million.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you provide an update on the marketing timeline for the Payments Hub and its readiness for general availability? A: Thomas Warsop, CEO of ACI Worldwide, explained that active marketing of the Payments Hub is expected by the end of the year. The company is currently engaging with customers to refine the product, aiming to present something tangible that demonstrates clear benefits. Initial customer engagement is already happening, with expectations for early adopters to emerge by late this year.
Q: What drove the significant EBITDA growth in the merchant segment? A: CEO Thomas Warsop attributed the EBITDA growth primarily to scaling the business, which leverages a relatively fixed cost base, along with some cost initiatives. This scale is driving higher revenue growth and subsequently higher profitability.
Q: Could you elaborate on the growth in real-time payments, particularly which markets are driving this growth and its sustainability? A: CFO Scott Behrens noted that growth in real-time payments has been robust, especially outside the US, driven by regulatory mandates. He expects this double-digit growth to continue, primarily fueled by international markets. CEO Warsop added that global real-time payment transactions are projected to grow significantly, supporting the sustainability of this growth trend.
Q: Regarding the raised full-year guidance, can you specify the segments contributing to this increased outlook? A: CEO Warsop indicated that the raised guidance is partly due to better-than-expected performance in the banking segment and strong growth in the biller business. The overperformance in Q1, particularly from new license sales and SaaS-based revenues, has provided confidence in raising the revenue and EBITDA forecasts for the year.
Q: Can you discuss the progress and expectations around the consolidation of legacy platforms within the biller segment? A: CEO Warsop confirmed that consolidation is on track, with expectations that all new customers will transition to the consolidated platform later in the year. This consolidation is anticipated to speed up implementations and reduce costs over time.
Q: How is the transition towards SaaS models, particularly in the mid-market banking segment, expected to impact the revenue mix? A: CEO Warsop and CFO Behrens discussed the shift towards more SaaS-based revenues, especially from mid-market banks. This shift is expected to gradually change the revenue mix, increasing the proportion of SaaS revenues in the company's overall revenue structure.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
