Source: ACI Worldwide
ACI Worldwide (ACIW), a leading global provider of electronic payment and banking solutions, today announced financial results for the period ended December 31, 2014.
“ACI’s sales bookings in 2014 exceeded expectations as we set several new records, including total SNET and sequential increase in backlog,” commented Phil Heasley, President and CEO, ACI Worldwide. “We are seeing particularly strong demand for our newest solutions, which results in larger and more complex contracts. This new demand has created a record sales pipeline, including pending contracts, and validates our Universal Payments strategy and development efforts. Entering 2015, we are very optimistic about ACI’s growing opportunity in the rapidly changing payments industry.”
Q4 FINANCIAL SUMMARY
New sales bookings, net of term extensions (SNET), increased 10% compared to the prior-year quarter. New application bookings grew 118% over last year, offsetting a 14% decline in add-on and capacity sales. While these results were better than expected, the bookings mix was heavily weighted towards new application and hosted contracts, which require implementation prior to revenue recognition. Consequently a higher percentage of this revenue, and margin, was delayed until future quarters.
Revenue in Q4 was $290 million, an increase of $7 million, or 2%, over the prior-year quarter. Non-GAAP revenue in Q4 was $291 million, an increase of $6 million over the prior-year quarter. Excluding the incremental contribution from Official Payments and Retail Decisions (ReD), non-GAAP revenue declined 6%.
Operating income was $79 million for the quarter, a decline of $7 million from the prior-year quarter. Non-GAAP operating income for the quarter was $86 million, a decline of $8 million from the prior-year quarter. Q4 adjusted EBITDA of $107 million was 9% below the prior year’s $117 million. Operating income and adjusted EBITDA were both impacted by the sales mix and related revenue recognition delays, as discussed above.
Net income for the quarter was $46 million, or $0.40 per diluted share, compared to net income of $50 million, or $0.43 per diluted share, during the same period the prior year. Operating free cash flow in Q4 was $72 million, up from $62 million in the prior-year quarter.
We ended the year with a 60-month backlog of $4.2 billion and 12-month backlog of $903 million, up $46 million and $5 million, respectively, from September 30, 2014. After adjusting for foreign currency fluctuations, our 60-month backlog grew $79 million and our 12-month backlog grew $13 million.
FULL YEAR 2014 FINANCIAL SUMMARY
New sales bookings, net of term extensions for the year was $702 million, up 17% from $600 million in 2013. In particular, we continue to see strong demand for our hosted solutions, with our SaaS bookings up 61% over last year.
Revenue for the full year 2014 was $1.016 billion, an increase of $151 million, or 17%. Non-GAAP revenue for the full year 2014 was $1.018 billion, up 17% from the prior year’s $871 million. These figures include $2 million and $6 million, respectively, in deferred revenue not reportable under GAAP purchase accounting requirements. Excluding the incremental contribution from Online Resources, Official Payments and ReD, organic revenue growth declined 2% for the full year.
Operating income for the full year 2014 was $138 million, versus $123 million for the full year 2013. Non-GAAP operating income for the year was $163 million, up 5% from the prior year’s $155 million. Adjusted EBITDA of $261 million for the year grew 9% from the prior year’s $239 million. Non-GAAP figures include $2 million and $6 million of deferred revenue not reportable under GAAP purchase accounting requirements and exclude significant transaction-related expenses of $23 million and $26 million in 2014 and 2013, respectively. Excluding pass through interchange revenues of $116 million and $38 million in 2014 and 2013, respectively, net adjusted EBITDA margin represented 29% of revenue in 2014, in line with 2013.
Net income for the year ended December 31, 2014 was $68 million, or $0.58 per diluted share, compared to net income of $64 million, or $0.53 per diluted share, in the prior year. Non-GAAP net income for the year was $84 million, or $0.72 per diluted share, versus $85 million, or $0.70 per diluted share for 2013. Operating free cash flow for the year was $134 million, down from $151 million the prior year.
As of December 31, 2014, we had $77 million in cash on hand and a debt balance of $892 million, down from last quarter’s $946 million. We repurchased 3.6 million shares of our stock in 2014 for approximately $70 million and have approximately $138 million remaining on our current authorization.
We expect to generate non-GAAP revenue in a range of $1.05 to $1.08 billion for the full year, which represents 3-6% organic growth after adjusting for foreign currency fluctuations. Adjusted EBITDA is expected to be in a range of $280 to $290 million. We expect to generate between $225 and $235 million in non-GAAP revenue the first quarter. Lastly, we expect full year 2015 net new sales bookings to increase in the upper single digit range.