DOCSLIB.ORG

Annual Report 2008 W O R L D W I D E Fellow Shareholders

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Annual Report 2008 W O R L D W I D E Fellow Shareholders end-to-end solutions for secure electronic payments annual report 2008 W O R L D W I D E Fellow Shareholders, 2008 was a year of change in the macro economy and in our customer base, particularly in the financial services client segment. One significant outcome of the banking crisis of 2008 was the realization in the marketplace that the payments business is critical to banking sector profitability. Payments are now crucial to the health and success of financial firms and will drive banking competition in the future. ACI is well placed to grow its electronic payments software business as our end users recognize the critical nature of our intellectual property offering. Simply speaking, the turmoil in the markets has underscored the advantage our products provide; ACI implements services and technology that manages the liability and deposit side of financial institutions and large processors. In a world where our customers need to rebalance their business models, ACI solutions are pivotal to their profitability and growth. As I shared with you in last year’s letter, ACI has broadened the company’s focus to emphasize more complete solutions that offer an end-to-end framework for integrated payments. The thesis that our customers could and would invest in multiple products was proven correct by our strong 2008 operating business performance. ACI has been fortunate insofar as we repositioned our business during the 2006 and 2007 fiscal years. Hence, looking back at October 2007 when the US equity markets peaked, our business model was not yet fully operational and our share price was not mirroring the market’s lofty performance. Thus, we do not regard the latter half of 2008 as a time where ACI was losing momentum; in fact, 2008 marked our next step towards gaining business momentum. During 2008 we completed some critical business initiatives. We achieved the globalization of our employee headcount to better serve and mirror our geographic regions of growth and reap the benefits of our 2007 investment in service centers in both Romania and India. We continued to invest in and build upon the IBM Alliance and both parties are now focused upon the execution of our robust 6-quarter pipeline. We signed several important transactions during 2008 which combined ACI’s software technology with IBM’s industry-leading 6ystem z hardware platforms in both Europe and in Asia. Risk Management We expended capital in software research and development in the context of our new IBM $lliance in order to maintain our industry-leading competitive advantage. ACI also witnessed sizable amounts of contracted business graduate from our implementation backlog and move into current period GAAP revenue. And, on the marketing and business side, we succeeded in moving several significant legacy “pay up-front” contracts with large US banking institutions to economic five-year term renewals. ACI remains a critical piece of the solution for banking institutions and the renewal of significant deals in the fourth quarter of 2008 underscored our importance to our end-user financial services clients. Backlog was impacted during 2008 by the extreme volatility of developed country currencies such as the Euro and the British pound. We ended the year at $1.407 billion in 60-month backlog, a very positive milestone given that we sold product throughout the world and backlog was negatively impacted by approximately $80 million due to declining European currencies. Nonetheless, in spite of currency market volatility, our sales still demonstrated strong growth in add-on business and renewed pricing power in our term extensions. New account and new sales business was slightly reduced compared to the previous year as we instituted a more disciplined approach to bidding out the cost of implementation and assessing the ultimate profitability of each customer. The fourth quarter of 2008 witnessed a record achievement by ACI whereby we signed contracts valued at $189 million, led by more prudently structured and far-reaching term renewal transactions in the United States business segment. Mindful of the overall credit market environment, ACI has been prudently managing its cash and we held $113 million in cash and equivalents at December 31, 2008. We have instituted strong accounts receivable practices and our collections are actually more robust than we have ever seen. Due to our focus upon long term economically valuable clients, we have seen a consistent and healthy rise in the monthly recurring fee income throughout our geographies _ up $17 million year-over-year _ as we de- emphasized pay up-front deals. The higher recurring monthly revenue is more appropriately aligned with our monthly expense base and represents a move towards a more sustainable and predictable revenue business. Retail Payments Finally, the measures we have taken in 2008, ranging from migrating both our software engineering talent and development centers closer to the end- customers globally to managing our expenses more prudently and renewing economically valuable contracts, have led to a 12% rise in revenue to $418 million as compared to our 2007 calendar year revenue performance. We achieved this rise in spite of the extreme fluctuations seen in European to US currency exchange rates. While the weakness of the British pound impacted our revenues, it equally benefited us as our sterling expense base shrunk in dollar cost terms. The currency market unrest reinforced the importance of, and utility of, our global headcount whereby revenues and expenses in a given country are more naturally aligned and, therefore, naturally hedged. Institutionally, during the past year, we also strengthened the executive team. I brought Ron Totaro to ACI in March 2008 and he serves as our Chief Operating Officer. In turn, Ron hired a Chief Product Officer and numerous strategy, planning and services team leaders across all our operating geographies. Ron’s direct reports focused in great detail upon product pricing strategy, methodologies and go-to market business plans in addition to multi-year product roadmaps. We worked with partners at IBM consulting to design and build a highly disciplined services and implementation organization with a tightly structured corporate management office, deal review committee and implementation services methodology to create more consistent ownership, framework and processes globally. We are near the end of our long-term restructuring process and anticipate that there is a further $8 million of costs we identified in the latter half of 2008 that will be removed from our organization during the first half of 2009. With this process structure in place, we will continue to focus on profitable revenue growth and cost containment. In addition to the upheaval in the banking sector in 2008, we began to see margin pressure at both switch and issuer customers throughout the marketplace. We are optimistic that customers will react to this constraint by investing more intelligently in their systems upgrades needs. We also expect that, while the ongoing banking crisis means that merger activity will decrease the number of active customer licenses in our developed markets, we will also see higher capacity fee deals and higher margins in this line of Wholesale Payments business. There are also ancillary opportunities in the large retailer segment as well that we have just begun to harness through a dedicated retailer sales account team. In the coming year, our business expectations revolve around improving margins and growing profitability. We are satisfied with our business pipeline and the quality of deals that we are seeing and believe that ACI management has a very good understanding of the seasonality and drivers as well as costs of adding new business in different geographies. We have a disciplined approach to scoping new business as well as to managing deal profitability. The value of our software intellectual property only continues to rise and we are encouraged by the trends and developments in our business sector. In looking forward to 2009, we see our customers looking to reduce operational costs and maximize productivity of their assets. Furthermore, we envision exciting opportunities in markets such as China, India and in Latin America. ACI established sales and operating entities in both China and India in 2008 in anticipation of payments hub and risk management solutions growth as well as Indian consumer payment systems expansions. In our Europe, Middle East & Africa (EMEA) segment, we think growth will occur in Single Euro Payments Area mandates instigating investment in software systems. In addition to migration opportunities, we also see a lot of interesting professional services opportunities in the EMEA division as we grow support packages for sunset products. And, finally, in the Americas division we see both large retailers and processors struggling with redundant legacy technologies at a time when they are focused upon improving their business productivity and margins. As always, I am grateful for the continued support of our employees, customers, partners and shareholders as we invest in ACI’s long-term success. I am confident that the steps we have taken over the past three years are building a stronger, more valuable, cohesive and productive company. We believe that the financial performance of ACI is already demonstrating the effectiveness of the steps we have already taken. We look forward to another year of strong operating performance which will only be enhanced by the depth of our organizational team and the exciting opportunities across our global footprint. Philip G. Heasley President and Chief Executive Officer UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2008 Commission File Number 0-25346 ACI WORLDWIDE, INC. (Exact name of registrant as specified in its charter) Delaware 47-0772104 (State or other jurisdiction of (I.R.S.
Load more

Recommended publications
  • TRANSACTION SYSTEMS ARCHITECTS, INC. 01' TSA Annualrpt-Roadtosuccess 1/14/02 2:29 PM Page 2
    01' TSA AnnualRpt-RoadToSuccess 1/14/02 2:29 PM Page 1 THE ROAD TO SUCCESS IS RARELY A STRAIGHT LINE. 2001 | ANNUAL REPORT TRANSACTION SYSTEMS ARCHITECTS, INC. 01' TSA AnnualRpt-RoadToSuccess 1/14/02 2:29 PM Page 2 2001 | TRANSACTION SYSTEMS ARCHITECTS, INC. GLOBAL B2C e-COMMERCE REVENUES | in billions | WORLDWIDE MOBILE COMMERCE GLOBAL APPLICATIONS REVENUES | in billions | FOR # OF SMART CARDS | in millions of units | $707 ’00 ’01 ’02 ’03 ’04 ’05 Asia 0.4 1.3 2.6 5.0 7.4 9.4 459.3 $490 Latin America 0.0 0.0 0.0 0.1 0.2 0.5 395.5 324.0 0.0 0.1 0.2 0.7 1.8 3.5 $298 North America 238.5 175.9 $191 Western Europe 0.0 0.1 0.5 1.7 4.6 7.8 113.8 $118 Rest of world 0.0 0.0 0.1 0.2 0.4 1.0 Financial Cards ’01* ’02 ’03 ’04 ’05** TOTALS $0.4 $1.5 $3.4 $7.7 $14.4 $22.2 ’99 ’00 ’01 ’02 ’03 ’04 Source: Jupiter Research, 2000 Note: *3 million B2C e-Commerce sites Source: Gartner Dataquest, 2001 **13 million B2C e-Commerce sites Source: International Data Corp. (IDC), 2001 TRANSACTION SYSTEMS ARCHITECTS, INC. (Nasdaq: TSAI) is a global provider of software for electronic payments and electronic commerce. The company serves more than 2,300 customers in the finance, retail and transaction processing industries, including more than 100 of the world’s top 500 banks, 23 of the top 100 U.S.
    [Show full text]
  • 2019 ACI Worldwide Annual Report
    ANY PAYMENT, EVERY POSSIBILITY.® ANNUAL REPORT 2019 LEADING THE TRANSFORMATION TO REAL-TIME PAYMENTS As the world’s most recognized and preferred real-time payments solution provider, ACI continues to lead the transformation of payments to real-time. We’re driving growth for banks, intermediaries, merchants and billers by allowing their customers to pay on their terms, with any currency, through any channel and on any network — today, tomorrow and beyond. FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS REVENUE 25% Revenue increased 25% vs. 2018. RECURRING REVENUE ACI ON DEMANDTM MARGIN 6 points 14 points Recurring revenue was 71% of ACI On Demand net adjusted EBITDA total revenue vs. 65% in 2018. margin rose from 5% in 2018 to 19% in 2019. THE TRANSACTION OPPORTUNITY ACI is well positioned to seize an increasing share of payment transactions globally. 2019 2024 3.4T 5.8T* transactions transactions * Includes 2.9T transactions addressable with current ACI solution/segment focus and 2.9T white space opportunity FELLOW SHAREHOLDERS ACI Worldwide continued to advance our business to accelerate revenue growth in our bill pay in 2019, building on our unique value proposition business through the fast-growing areas of real- serving the real-time, any-to-any payment needs time payments and subscription billing. of banks, intermediaries, merchants and billers in the fast-growing digital payments industry. We MICROSOFT COLLABORATION made key investments, strengthened our portfolio and secured global strategic wins across all of A key priority in 2019 was advancing our global our solutions, all of which validate our leadership strategic partnerships. One of our most notable position.
    [Show full text]
  • 2020 ACI Worldwide Annual Report
    2020 Annual Report 2020 Financial Highlights ACI Worldwide is a global software company that provides mission-critical real-time payment solutions to corporations. Customers use our proven, scalable and secure solutions to process and manage digital payments, enable omni-commerce payments, present and process bill payments, and manage fraud and risk. We combine our global footprint with local presence to drive the real-time digital transformation of payments and commerce. Our Mission To accelerate global commerce through real-time payments Our Vision To be a global leader in real-time payments Our Purpose To create global prosperity through real-time payments Valued Shareholders I am exceptionally proud of what our team achieved in improve local execution. We launched our Fit for Growth 2020 — a year like no other in our company’s 45+ years operating model in January 2021 and have already seen of driving digital payments. improved productivity and efficiency. We have also generated significant cost savings to reinvest into the Weeks after I joined ACI in March 2020, we pivoted business, including to fund expanded sales capacity. in response to the emerging pandemic. This included transitioning our nearly 4,000 employees and contractors Focused on Growth to work from home, focusing in on operational discipline The second pillar of our strategy is Focused on Growth. to strengthen profitability in an uncertain macro- To drive increased organic growth, we committed to a environment and evolving our solutions as global greater focus on high-growth market opportunities. For acceptance of digital payment systems accelerated. ACI, these opportunities include real-time payments, Against this backdrop, we also began taking initial steps global merchants and emerging markets — areas that will toward a significant business transformation using all yield double-digit growth in the years ahead.
    [Show full text]
  • ACI Worldwide, Inc. 2016 Annual Report
    2016 ANNUAL REPORT ENABLING REAL-TIME ELECTRONIC PAYMENTS FOR ANYONE, ANYWHERE, AT ANY TIME The payments landscape is moving to real time, and ACI is leading the way. Our unique Universal Payments® (UP®) software powers global eCommerce by equipping financial institutions, intermediaries and merchants with the ability to deliver real-time, any-to-any payments that are reliable, efficient and highly secure. Available through ACI’s private cloud or managed on customers’ premises, UP solutions offer access to more payment endpoints and services than any other provider — enabling our customers to create the innovative products and services needed to stand out in today’s competitive market. 2016 marked an important year in the continued buildout of UP solutions for customers both in the cloud and on premise, with ACI answering the call for innovation across eCommerce, immediate payments, retail payments, transaction banking, bill payments and more.” Philip G. Heasley President and Chief Executive Officer FELLOW STAKEHOLDERS Decisions (ReD) and the 2015 acquisition of PAY.ON. This solution helps merchants overcome the challenges Electronic payment systems are the backbone of global of accepting locally-preferred payment methods as well commerce. These systems must function very quickly, as cross-border payments processing with integrated seamlessly, securely and reliably without regard to where fraud management. Since the launch, the solution has a transaction is initiated or completed. won numerous industry awards and seen rapid adoption throughout the world. Universal connectivity ACI’s Universal Payments (UP) solutions deliver the Milestone year for UP Retail Payments™ universal connectivity needed to make real-time electronic solution adoption payments possible by anyone, anywhere, at any time.
    [Show full text]
  • ACI WORLDWIDE, INC. (Exact Name of Registrant As Specified in Its Charter) Delaware 47-0772104 (State Or Other Jurisdiction of (I.R.S
    Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2008 Commission File Number 0-25346 ACI WORLDWIDE, INC. (Exact name of registrant as specified in its charter) Delaware 47-0772104 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 120 Broadway, Suite 3350 (646) 348-6700 New York, New York 10271 (Registrant’s telephone (Address of principal executive number, including area code) offices, including zip code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.005 par value Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act). Yes o No þ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
    [Show full text]
  • 2016 ACI Worldwide Annual Report
    2016 ANNUAL REPORT ENABLING REAL-TIME ELECTRONIC PAYMENTS FOR ANYONE, ANYWHERE, AT ANY TIME The payments landscape is moving to real time, and ACI is leading the way. Our unique Universal Payments® (UP®) software powers global eCommerce by equipping financial institutions, intermediaries and merchants with the ability to deliver real-time, any-to-any payments that are reliable, efficient and highly secure. Available through ACI’s private cloud or managed on customers’ premises, UP solutions offer access to more payment endpoints and services than any other provider — enabling our customers to create the innovative products and services needed to stand out in today’s competitive market. 2016 marked an important year in the continued buildout of UP solutions for customers both in the cloud and on premise, with ACI answering the call for innovation across eCommerce, immediate payments, retail payments, transaction banking, bill payments and more.” Philip G. Heasley President and Chief Executive Officer FELLOW STAKEHOLDERS Decisions (ReD) and the 2015 acquisition of PAY.ON. This solution helps merchants overcome the challenges Electronic payment systems are the backbone of global of accepting locally-preferred payment methods as well commerce. These systems must function very quickly, as cross-border payments processing with integrated seamlessly, securely and reliably without regard to where fraud management. Since the launch, the solution has a transaction is initiated or completed. won numerous industry awards and seen rapid adoption throughout the world. Universal connectivity ACI’s Universal Payments (UP) solutions deliver the Milestone year for UP Retail Payments™ universal connectivity needed to make real-time electronic solution adoption payments possible by anyone, anywhere, at any time.
    [Show full text]
  • ANNUAL REPORT 2014 GIVES POWER to CUSTOMERS Processing Transactions for More Than 300 Leading Global Retailers 18 of the World’S 20 Largest Banks
    ANNUAL REPORT 2014 GIVES POWER TO CUSTOMERS Processing transactions for more than 300 leading global retailers 18 of the world’s 20 largest banks Over $13 trillion per day in payments and securities transactions More than 125 billion consumer transactions every year 5,600 financial institution, retailer, biller and processor customers globally “ IF MONEY MAKES THREE OR FOUR STOPS ON ITS WAY TO GETTING COMPLETED, THAT MEANS IT HAS THREE OR FOUR DIFFERENT LOCATIONS WHERE IT CAN BE STOLEN. IF IT GOES POINT TO POINT TO GET CLEARED, YOU ELIMINATE THE PLACES IT CAN BE STOLEN .” Phil Heasley, CEO and President, ACI Worldwide Interviewed on CNBC Nightly Business Report, March 12, 2014 — ACI’s Disruption Opportunity Summit FELLOW SHAREHOLDERS 2014 was a year of disruption across the global payments The sense of urgency in addressing eCommerce security issues industry. The internet and mobile device ubiquity brought with is high across the globe. In particular, it is exacerbated in the them new opportunities for real-time, any-to-any commerce, U.S. where the rollout of the EMV standard is expected to drive and non-traditional competitors challenged established more fraud into the online channel, as it has in other markets payment schemes. Consumers and businesses alike continued and regions. Card-not-present (CNP) transactions, which are to demand immediacy and flexibility when conducting seen often in eCommerce, are not protected by EMV, and will financial transactions, expecting seamless experiences from likely experience an increase in fraud. With the ReD acquisition, laptop to mobile to brick-and-mortar business. At the same ACI strengthened its leadership position in the fast-growing time, our customers — financial institutions, processors, payments risk management space, and now serves issuers, retailers and billers — struggled with balancing the ongoing merchant acquirers, retailers and commercial banks as they pressures and costs of fraud prevention, regulatory address disruption in the eCommerce market.
    [Show full text]
  • Form 10-K Transaction Systems Architects, Inc
    QuickLinks -- Click here to rapidly navigate through this document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2001 Commission File Number 0-25346 TRANSACTION SYSTEMS ARCHITECTS, INC. (Exact name of registrant as specified in its charter) Delaware 47-0772104 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 224 South 108th Avenue Omaha, Nebraska 68154 (402) 334-5101 (Address of principal executive offices, (Registrant's telephone number, including zip code) including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Class A Common Stock, $.005 par value Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / / The aggregate market value of the voting stock held by non-affiliates of the registrant on December 19, 2001, based upon the last sale price of the Class A Common Stock on that date, was approximately $349,926,776.
    [Show full text]