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ACI Worldwide, Inc. (ACIW)
:ACIW
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ACI Worldwide
(NASDAQ:ACIW)
78Outperform
Positive Factors
Earnings
ACIW reported 24% year-over-year revenue growth and 61% year-over-year growth in adjusted EBITDA, exceeding forecasts.
Market Performance
Impressed with ACIW's execution and now projecting double-digit organic revenue growth in FY24, well above historical levels.
Negative Factors
Revenue Growth Concerns
There is an expectation of much more modest growth in total revenue and the possibility of lower or negative year-over-year growth in adjusted EBITDA over the next several quarters.
Volatility Risk
There is some risk of new investors reacting negatively should ACI revert to the more historical pattern of quarter-to-quarter volatility in Software license fees.
ACI Worldwide (ACIW) vs. S&P 500 (SPY)
Market Cap
$5.80B
Dividend YieldN/A
Average Volume (3M)662.42K
Price to Earnings (P/E)28.8
Beta (1Y)1.30
Revenue Growth9.76%
EPS Growth73.38%
CountryUS
Employees3,103
SectorTechnology
Sector Strength54
IndustrySoftware
Share Statistics
EPS (TTM)1.91
Shares Outstanding105,336,030
10 Day Avg. Volume598,552
30 Day Avg. Volume662,423
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)N/A
Price to Sales (P/S)3.51
Price to Cash Flow (P/CF)11.10
P/FCF Ratio11.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$60.00Price Target Upside8.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
ACI Worldwide Business Overview & Revenue Model
Company DescriptionACI Worldwide, Inc., a software company, develops, markets, installs, and supports a range of software products and solutions for facilitating digital payments to banks, merchants, and billers worldwide. The company offers ACI Acquiring, a merchant management system to deliver digital innovation, improve fraud prevention, and reduce interchange fees; ACI Issuing, a digital payments issuing solution; and ACI Enterprise Payments Platform that provides payment processing and orchestration capabilities for digital payments. It also provides ACI Low Value Real-Time Payments, a platform for processing real-time payments; and ACI High Value Real-Time Payments, a payments engine that offers multi-bank, multi-currency, 24x7 payment processing, and SWIFT messaging. In addition, the company offers ACI Omni Commerce, a scalable, omni-channel payment processing platform; ACI Secure eCommerce solution; ACI Fraud Management, a real-time approach to fraud management; ACI Digital Business Banking, a cloud-based digital banking platform; and ACI Speedpay, an integrated suite of digital billing, payment, disbursement, and communication services. The company offers electronic bill presentment and payment services to consumer finance, insurance, healthcare, higher education, utility, government, and mortgage sectors; implementation services, including product installations and configurations, and custom software modifications; and business and technical consultancy, on-site support, product education, and testing services, as well as distributes or acts as a sales agent for software developed by third parties. It markets its products under the ACI Worldwide brand. The company was formerly known as Transaction Systems Architects, Inc. and changed its name to ACI Worldwide, Inc. in July 2007. The company was founded in 1975 and is based in Coral Gables, Florida.
How the Company Makes MoneyACI Worldwide generates revenue primarily through the sale of its software solutions and services that support electronic payments and banking operations. The company's revenue model includes software licensing fees, maintenance fees, and professional services. Key revenue streams are derived from its on-premise software installations, cloud-based solutions, and Software-as-a-Service (SaaS) offerings. ACI Worldwide also earns from transaction-based fees linked to the payment processing volume handled through its platforms. Significant partnerships with banks, financial institutions, and technology providers enhance its market reach and contribute to its earnings by integrating ACI's solutions into broader financial systems and networks.
ACI Worldwide Financial Statement Overview
Summary
ACI Worldwide exhibits strong financial performance, marked by significant revenue growth, healthy profit margins, and robust cash flow generation. The company maintains a stable balance sheet with manageable leverage, indicating financial stability. Potential challenges include asset growth, but overall, the financial outlook is positive, reflecting strong operational execution.Income Statement
The income statement reveals strong revenue growth with a 9.8% increase from 2023 to 2024, indicating robust demand. Gross profit margin is healthy at 50.3%, and net profit margin has improved to 12.7%, showcasing enhanced profitability. EBIT margin is solid at 19.3%, reflecting efficient operations, while EBITDA margin is 18.1%, slightly lower but still favorable.88
Very Positive
Balance Sheet
The balance sheet shows a stable equity position with an equity ratio of 47.1%, indicating a balanced capital structure. The debt-to-equity ratio stands at 0.67, suggesting manageable leverage. ROE is strong at 14.3%, reflecting good utilization of equity, but the decrease in total assets indicates potential challenges in asset growth.75
Positive
Cash Flow
The cash flow statement demonstrates a remarkable free cash flow growth of 162.6%, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 1.77 suggests efficient cash conversion. The free cash flow to net income ratio is 1.69, indicating robust cash profitability.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.45B | 1.59B | 1.45B | 1.42B | 1.37B | 1.29B | Gross Profit |
| 780.86M | 802.50M | 733.37M | 725.83M | 731.73M | 671.86M | EBIT |
| 242.91M | 308.13M | 223.01M | 203.84M | 209.90M | 144.74M | EBITDA |
| 398.97M | 443.55M | 360.11M | 398.19M | 364.03M | 319.02M | Net Income Common Stockholders |
| 152.07M | 203.12M | 121.51M | 142.18M | 127.79M | 72.66M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 216.39M | 216.39M | 164.24M | 124.98M | 122.06M | 165.37M | Total Assets |
| 3.03B | 3.03B | 3.44B | 3.21B | 3.16B | 3.39B | Total Debt |
| 947.17M | 947.17M | 1.08B | 1.12B | 1.11B | 1.19B | Net Debt |
| 730.77M | 730.77M | 912.19M | 998.80M | 987.03M | 1.03B | Total Liabilities |
| 1.60B | 1.60B | 2.12B | 2.02B | 1.91B | 2.18B | Stockholders Equity |
| 1.42B | 1.42B | 1.32B | 1.19B | 1.24B | 1.21B |
| Cash Flow | Free Cash Flow | ||||
| 147.40M | 343.35M | 130.74M | 103.49M | 175.10M | 289.67M | Operating Cash Flow |
| 183.44M | 358.75M | 168.52M | 143.38M | 220.47M | 336.30M | Investing Cash Flow |
| -36.04M | -45.05M | -37.78M | 60.25M | -45.37M | -30.70M | Financing Cash Flow |
| -158.46M | -288.20M | -111.55M | -171.06M | -256.88M | -261.57M |
ACI Worldwide Technical Analysis
Positive
55.08
Price Trends
53.10
Positive
53.59
Positive
49.48
Positive
Market Momentum
0.42
Negative
58.68
Neutral
88.81
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACIW, the sentiment is Positive. The current price of 55.08 is above the 20-day moving average (MA) of 53.52, above the 50-day MA of 53.10, and above the 200-day MA of 49.48, indicating a bullish trend. The MACD of 0.42 indicates Negative momentum. The RSI at 58.68 is Neutral, neither overbought nor oversold. The STOCH value of 88.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ACIW.
ACI Worldwide Risk Analysis
ACI Worldwide disclosed 43 risk factors in its most recent earnings report. ACI Worldwide reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ACI Worldwide Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.75B | 25.06 | 34.88% | 0.67% | 11.19% | 51.03% | |
78 Outperform | $5.80B | 28.79 | 14.78% | ― | 9.76% | 73.38% | |
76 Outperform | $12.74B | 31.16 | 21.90% | 1.27% | 5.36% | 8.62% | |
73 Outperform | $24.57B | 16.05 | 6.94% | 1.01% | 4.68% | 63.39% | |
58 Neutral | $21.97B | 10.63 | -18.43% | 2.40% | 4.67% | -24.47% | |
51 Neutral | $39.50B | 52.31 | 4.65% | 1.94% | -17.38% | ― |
* Technology Sector Average
Performance Comparison
ACIW
ACI Worldwide
55.08
21.87
65.85%
FIS
Fidelity National Info
74.58
1.79
2.46%
GPN
Global Payments
99.47
-32.88
-24.84%
JKHY
Jack Henry & Associates
179.32
7.81
4.55%
PAYC
Paycom
225.82
28.36
14.36%
ACI Worldwide Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 8.90% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call demonstrated strong financial performance in 2024, with record revenue growth, improved EBITDA margins, and significant cash flow generation. The company's strategy to sign new contracts earlier in the year has shown success, especially with a major win in the Asia Pacific region. Although the Biller segment faced some EBITDA decline due to non-recurring benefits from the prior year, the overall outlook for 2025 appears positive with expected continued growth and a strong start to the year.Highlights
Record Revenue Growth
Total revenue increased by 10% over 2023, reaching $1.6 billion, surpassing the guidance and expectations set by the company.
Strong EBITDA Performance
Adjusted EBITDA grew by 18% to $466 million, with a margin expansion of over 300 basis points, indicating strong operational leverage.
Cash Flow and Liquidity Improvement
Cash flow from operating activities more than doubled to $359 million, and the company reduced its total debt by over $100 million, resulting in a net debt leverage ratio of 1.5x.
Successful Contract Renewals and New Wins
The company successfully signed major new contracts early in the year, including the largest new logo win in the Asia Pacific region, contributing to a positive start for 2025.
Positive Segment Growth
Bank segment revenue increased by 14%, and Merchant segment revenue grew by 10%, both contributing to the overall revenue growth.
Lowlights
Biller Segment EBITDA Decline
Biller segment EBITDA dollars were down due to the absence of one-time non-recurring margin benefits that occurred in the previous year.
Company Guidance
In the recent earnings call for ACI Worldwide, the company reported strong financial performance for 2024, surpassing their expectations and previous guidance. Total revenue increased by 10% compared to 2023, with an adjusted EBITDA growth of 18%, resulting in a margin expansion of over 300 basis points to 41%. Cash flow from operating activities more than doubled to $359 million. The Bank segment saw a revenue growth of 14% and a 20% increase in EBITDA, while the Merchant segment experienced a 10% revenue increase and a 57% rise in adjusted EBITDA. The Biller segment grew 6% in revenue with significant contract momentum. For 2025, ACI projects a revenue range of $1.685 billion to $1.715 billion, representing 7% to 9% growth, and an adjusted EBITDA of $480 million to $495 million. They expect a strong start to the year, with Q1 revenue anticipated to grow by 17% to 21% compared to the previous year.ACI Worldwide Corporate Events
Business Operations and StrategyFinancial Disclosures
ACI Worldwide Reports Strong 2024 Financial Performance
Positive
Feb 27, 2025
ACI Worldwide reported a strong financial performance for the year ending December 31, 2024, with a 10% increase in total revenue to $1.594 billion and a 67% rise in net income to $203 million. The company also saw a significant growth in cash flow from operating activities, which more than doubled to $359 million. The bank and merchant segments showed notable revenue and adjusted EBITDA growth, while the biller segment experienced a decrease in adjusted EBITDA due to non-recurring margin benefits. ACI Worldwide is poised for continued growth in 2025, with expected revenue growth between 7% and 9% and a focus on becoming a leader in Intelligent Payments Orchestration.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.