ACI Worldwide, Inc. Reports Financial Results for the Quarter Ended June 30, 2018
NAPLES, Fla - ACI Worldwide (NASDAQ: ACIW), a leading global provider of real-time electronic payment and banking solutions, today announced financial results for the quarter ended June 30, 2018.
ACI signed several exciting contracts in the quarter, including the largest credit card company in Japan, a top US grocery chain, and 14 Immediate Payments deals. New bookings so far in 2018 are up 52% over the first half of 2017 and the pipeline remains substantial,” commented Phil Heasley, President and CEO, ACI Worldwide. “Financial results in Q2 were in line with our expectations and we remain confident in achieving our full year guidance.”
Q2 2018 FINANCIAL SUMMARY
In Q2, new bookings were $127 million, which was down 7% compared to Q2 2017. Year-to-date, new bookings are up 52%.
Effective January 1, 2018, the company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition (“ASC 605”).
Under ASC 606, revenue in Q2 2018 was $235 million. Under ASC 605, Q2 2018 revenue was $241 million, up slightly from Q2 2017.
In Q2 2018, revenue from ACI’s On Demand segment was $114 million. On a constant GAAP basis, ACI’s On Demand segment revenue was $113 million, versus $113 million last year, and segment net adjusted EBITDA margin decreased from last year. On Demand segment net adjusted EBITDA margins are adjusted for pass through interchange revenue of $46 million, for both Q2 2018 and 2017. ACI On Premise segment revenue was $121 million on a reported basis. On a constant GAAP basis, ACI’s On Premise segment revenue was $128 million, versus $127 million last year, and segment adjusted EBITDA margin was 48% versus 49% in Q2 2017.
ACI ended Q2 2018 with a 12-month backlog of $837 million and a 60-month backlog of $4.3 billion. After adjusting for foreign currency fluctuations, our 12-month backlog increased $13 million and our 60-month backlog decreased $28 million from Q1 2018.
Cash flows from operating activities in Q2 were $26 million, up from $13 million in Q2 2017. Adjusted operating free cash flow in Q2 was $13 million, up from $2 million in Q2 2017. ACI ended Q2 2018 with $59 million in cash on hand and a debt balance of $687 million, both down slightly from Q1 2018. In the quarter ACI repurchased 1 million shares for $23 million, or an average price of $23.38 per share. Year-to-date, ACI has repurchased 2.3 million shares for $54 million, or an average price of $23.21 per share. The company has $176.6 million remaining on its share repurchase authorization.
The company expects the adoption of ASC 606 to impact the timing and amount of revenue recognition for its on-premise licensing arrangements. The company does not expect the adoption of ASC 606 to have a significant impact on its other revenue streams or cash flows from operations. The company has provided its full year and second quarter outlook under both ASC 606 and ASC 605 in order to provide additional transparency. The company will continue to provide actual results under both ASC 606 and ASC 605 throughout 2018.
For the full year 2018 under ASC 606, the company expects revenue to be between $1.03 billion and $1.055 billion and adjusted EBITDA to be in a range of $255 million to $270 million, which excludes approximately $7 million in significant transaction-related expenses. We expect between $230 million and $240 million of revenue under ASC 606 in the third quarter.
For the full year 2018 under ASC 605, the company expects revenue to be between $1.05 billion and $1.075 billion, which represents 3-5% growth over 2017 on a comparable GAAP basis. Adjusted EBITDA is expected to be in a range of $270 million to $285 million, which excludes approximately $7 million in significant transaction-related expenses. We expect between $235 million and $245 million of revenue under ASC 605 in the third quarter. We expect full year 2018 new bookings growth to be in the low double digits.