ACI Worldwide (ACIW) Q4 2009 earnings summary

Executive summary

• 2009 focused on cost control and profitability: revenue declined 2.8% YoY, while operating income nearly doubled to $41.6M and operating margin rose to 10.2%.

• Strategy shifted toward the integrated ACI Agile Payments Solution and a smaller core product set, aiming to reduce ancillary R&D costs and support investment in profitability and product development.

Financial highlights

• FY09 revenue was $405.8M, down from $417.7M; net income increased to $19.6M from $10.6M, and diluted EPS was $0.57 versus $0.30.

• Operating income was $41.6M versus $21.7M; operating margin was 10.2% versus 5.2%. Total operating expenses fell 8.0% to $364.2M.

• Software license revenue declined 7.5% to $156.5M; maintenance revenue rose 5.2% to $136.7M; services revenue declined 5.0% to $112.5M.

• Adjusted for the $18.0M UK Faster Payments revenue recognized in 2008, EMEA revenue declined 8.3% YoY; prior-period implementations did not recur in 2009.

• Net cash from operations was $44.2M versus $77.8M; the comparison reflects $40.9M of IBM Alliance cash received in 2008, partly offset by higher 2009 net income.

Outlook and guidance

• 2010 priorities include new-customer growth, building global sales pipelines, and executing implementations and installations to support future revenue opportunities.

• Expected growth drivers include cross-selling to installed customers, wholesale product expansion, Essentis and Bell ID retail offerings, and direct-to-market investment in China.

• Management anticipated continued customer focus on lowering operating costs and improving productivity, with opportunities cited in Brazil, China, France, Germany, India and Mexico.

• Backlog ended 2009 at $1.517B, up $107M YoY; 12-month backlog was $355M versus $325M, supporting visibility but relying partly on assumed renewals.