ACI Worldwide, Inc. Debt dropped on 15.8% and Net Debt / EBITDA dropped on 1.6x from 5.0x to 3.4x
02/25/2021 • About ACI Worldwide, Inc. (
$ACIW) • By InTwits
ACI Worldwide, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- ACI Worldwide, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 5.5%.
- CAPEX is quite volatile: $18m in 2020, $23m in 2019, $18m in 2018, $26m in 2017, $41m in 2016
- In the last 5 years the company invested considerably less than D&A: $126m vs. $303m
- The company has potentially unprofitable business model: ROIC is 5.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 2.9%. Revenue growth showed slowdown in 20Q4 - it was -3.2% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.0 pp from 21.0% to 24.0% in 2020.
Gross Margin increased slightly on 0.98 pp from 50.9% to 51.9% in 2020. SG&A as a % of Revenue decreased slightly on 0.80 pp from 20.6% to 19.8% in 2020. During 2016-2020 SG&A as a % of Revenue topped in 2017 at 25.5% and was declining since that time.
Net Income margin showed almost no change in 2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.4% in 2020. ACI Worldwide, Inc.'s CAPEX/Revenue decreased slightly on 1.1 pp from 2.5% in 2017 to 1.4% in 2020. It's average CAPEX/Revenue for the last three years was 1.7%. CAPEX as a % of Revenue stuck to a declining trend at -0.60 pp per annum in 2016-2020.
Return on investment
The company operates at low ROIC (5.9%) and ROE (6.2%). ROIC showed almost no change in 2020. ROE showed almost no change in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.4x and Debt / EBITDA is 3.9x. Net Debt / EBITDA dropped on 1.6x from 5.0x to 3.4x in 2020. Debt dropped on 15.8% while cash jumped on 36.2%.
ACI Worldwide, Inc. has no short term refinancing risk: cash is higher than short term debt (346.7%).
Valuation and dividends
The company's trades at EV/EBITDA 17.3x and P/E 59.4x.
Management team
ACI Worldwide, Inc.'s CEO Odilon Almeida has spent 1 year with the company. ACI Worldwide, Inc.'s CFO is Scott W Behrens. Scott W Behrens has 12 years tenure at the company.
Financial and operational results
FY ended 12/31/2020
ACI Worldwide, Inc. ($ACIW) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,006 | 1,024 | 1,010 | 1,258 | 1,294 | 2.9% |
| Gross Profit | 561 | 572 | 579 | 641 | 672 | 4.8% |
| SG&A | 232 | 261 | 225 | 259 | 256 | -1.1% |
| EBITDA | 325 | 187 | 223 | 264 | 310 | 17.3% |
| EBIT | 221 | 85 | 126 | | | |
| Interest expence | 40 | 39 | 42 | | | |
| Tax | 56 | 38 | 23 | | | |
| Net Income | 130 | 5 | 69 | 67 | 73 | 8.3% |
| Stock Based Compensation | 44 | 14 | 20 | | | |
Balance Sheet
|
|---|
| Cash | 76 | 70 | 149 | 121 | 165 | 36.2% |
| Accounts Receivable | 268 | 263 | 348 | | | |
| Accounts Payable | 43 | 35 | 40 | | | |
| Short Term Debt | 90 | 18 | 21 | 49 | 48 | -3.0% |
| Long Term Debt | 654 | 668 | 651 | 1,386 | 1,161 | -16.2% |
Cash flow
|
|---|
| Capex | 41 | 26 | 18 | 23 | 18 | -22.9% |
| Acquisitions | -0 | | | | | |
Ratios
|
|---|
| Revenue growth | -3.9% | 1.8% | -1.4% | 24.6% | 2.9% | |
| EBITDA growth | 44.0% | -42.4% | 19.5% | 18.4% | 17.3% | |
|
|---|
| Gross Margin | 55.8% | 55.8% | 57.4% | 50.9% | 51.9% | 1.0% |
| EBITDA Margin | 32.3% | 18.2% | 22.1% | 21.0% | 24.0% | 3.0% |
| EBIT Margin | 22.0% | 8.3% | 12.5% | | |
| SG&A, % of revenue | 23.0% | 25.5% | 22.3% | 20.6% | 19.8% | -0.8% |
| SBC, % of revenue | 4.3% | 1.3% | 2.0% | | |
| Net Income Margin | 12.9% | 0.5% | 6.8% | 5.3% | 5.6% | 0.3% |
| CAPEX, % of revenue | 4.1% | 2.5% | 1.8% | 1.8% | 1.4% | -0.5% |
|
|---|
| ROIC | 14.8% | 5.9% | 8.0% | 5.9% | 5.9% | 0.0% |
| ROE | 18.4% | 0.7% | 7.6% | 6.2% | 6.2% | 0.1% |
| Net Debt/EBITDA | 2.1x | 3.3x | 2.3x | 5.0x | 3.4x | -1.6x |
| Interest coverage ratio (ICR) | 5.5x | 2.2x | 3.0x | | |
| Interest expence / Average debt | 5.4% | 5.5% | 6.1% | | | |
People
|
|---|
| Insider ownership | 2.7% | 2.7% | 2.7% | | | |
| Employees | 4,111 | 3,979 | 3,807 | | | |
| Revenue/Employee, th. $ | 245 | 257 | 265 | | | |
ACI Worldwide, Inc. ($ACIW) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 291 | 300 | 316 | 387 | | 41.6% | 0.8% | -11.0% | -3.2% |
| EBITDA | 23 | 65 | 136 | 131 | | 3,335.8% | 131.2% | 45.5% | -7.7% |
| Net Income | -24 | 14 | 16 | 67 | | - | 145.9% | -50.1% | 21.0% |
Balance Sheet
|
|---|
| Cash | 119 | 129 | 134 | 165 | | -32.4% | -7.3% | 10.1% | 36.2% |
| Short Term Debt | 49 | 34 | 34 | 48 | | 38.8% | -30.6% | -30.5% | -3.0% |
| Long Term Debt | 1,365 | 1,329 | 1,274 | 1,161 | | 95.9% | -5.3% | -10.4% | -16.2% |
Ratios
|
|---|
| Gross Margin | 43.1% | 50.9% | 49.8% | 61.1% | | -1.1% | 3.0% | -1.1% | 4.3% |
| EBITDA Margin | 7.7% | 21.6% | 43.1% | 33.9% | | 7.4% | 12.2% | 16.7% | -1.6% |
| Net Income Margin | -8.4% | 4.7% | 5.0% | 17.3% | | 4.2% | 2.8% | -3.9% | 3.5% |
Peers in Application Software
Below you can find ACI Worldwide, Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.4% | 14.7% |
|---|
| ACI Worldwide, Inc. ($ACIW) | - | 1.8% | -1.4% | 24.6% | 2.9% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| ACI Worldwide, Inc. ($ACIW) | 55.8% | 55.8% | 57.4% | 50.9% | 51.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| ACI Worldwide, Inc. ($ACIW) | 32.3% | 18.2% | 22.1% | 21.0% | 24.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 2.9% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| ACI Worldwide, Inc. ($ACIW) | 4.1% | 2.5% | 1.8% | 1.8% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| ACI Worldwide, Inc. ($ACIW) | 14.8% | 5.9% | 8.0% | 5.9% | 5.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.9x | -0.7x | 0.4x | 0.0x |
|---|
| ACI Worldwide, Inc. ($ACIW) | 2.1x | 3.3x | 2.3x | 5.0x | 3.4x |
