ACI WORLDWIDE, INC. Q4 FY2024 earnings call

• Tom Warsop highlighted strong 2024 results with total revenue up 10% over 2023, adjusted EBITDA up 18%, and adjusted net EBITDA margin at 41%. - Combined Bank and Merchant segments into Payment Software segment with Erich Litch as general manager. - Next-generation payments hub development on track for 2025 launch, cloud native and targeting broader customer segments. - Hired Phil Bruno as Chief Strategy and Growth Officer to assist with go-to-market strategy for the payments hub. - Biller segment had 6% revenue growth in 2024 with strong ARR bookings in Q4. - Launched smart start program in 2025, with early Q1 signing of a large new logo in Asia Pacific region yielding over $50M in first quarter revenue for Banking segment.

For 2024, the Bank segment saw revenue increase 14% and adjusted EBITDA grow 20% compared to 2023. The Merchant segment had revenue growth of 10% and adjusted EBITDA growth of 57%. The Biller segment had a 6% revenue increase. In terms of revenue contribution, total revenue was $1.6 billion. The Bank segment's revenue growth was 14%, Merchant was 10%, and Biller was 6%.

• Full year 2025 revenue expected in range of $1.685 billion to $1.715 billion, representing 7% to 9% growth over 2024 on an FX adjusted basis. - 2025 adjusted EBITDA expected in range of $480 million to $495 million. - Q1 2025 revenue expected in range of $360 million to $370 million, with adjusted EBITDA in range of $70 million to $80 million.

Q: Could you comment a little bit about the net revenue dynamics within Biller and its impact on EBITDA?

A: Scott Behrens said it was primarily certain contracts where one-time margin benefits in 2023 didn't recur in 2024. Tom Warsop added those benefits fell through straight to net from growth.

Q: In terms of the reorg with merchant and banks and the GM model, what's the impetus and tangible benefits?

A: Tom Warsop said the functional organization was changed to have leadership teams fully accountable for entire business. Benefits include customers being happier with easier accountability and internal efficiency from eliminating duplicative efforts.

Q: On adjusted EBITDA guidance, what factors drive to higher end and lower end?

A: Scott Behrens said it comes down to mix of license fee, services or SaaS. Tom Warsop added overachieving on new license deals like the Q1 win could push to higher end.

Q: Talk about the competitive takeaway in Asia-Pacific for the bank segment. Who was it and drivers?

A: Scott Behrens said it was a large financial institution in Asia-Pacific. Drivers included a competitor not serving the customer well and ACI's payment hub strategy demonstrating proven technology and modernization path.

Q: More on payment hub launch in 2025, specificity and incremental functionality?

A: Tom Warsop said sales force was let loose after reaching a functioning demo. Incremental functionality will include cards and ACH after account to account was first demonstrated.

Q: On new payment software group and merchant segment, is merchant deemphasized?

A: Tom Warsop said merchant is not deemphasized, Erich Litch is leading Payment Software to reenergize both banks and merchants with leverage from similar software between segments.