ACI Worldwide, Inc.

to both statements on the first and final pages of our presentation deck, a copy of which is available on our website as well as with the SEC. On this morning's call is Ocalan Almeida, our President and CEO, and Scott Behrens, our CFO. Before I hand it over, I want to remind everybody that we are hosting an Analyst Day on November 17 and look forward to seeing you in New York City. Please register your attendance via our Investor Relations website. With that, I'd like to turn the call over to Ocalan.

Thank you, John. Hello, everyone, and thank you for joining our third quarter 2021 earnings conference call. I will summarize by saying that we are pleased with our progress to date, the results we are seeing, and confident in delivering our full-year financial commitments. We now expect organic revenue growth of 5% and EBITDA growth of 6% to 7% in 2021. This organic revenue growth is well above the past trends. As a result, we are raising our 2021 guidance. And importantly, we are on track to deliver the Rule 40 this year for the first time. I would like to share more details on how we have been moving our three-pillar strategy from design and implementation to delivery and results. Starting with our first pillar, Fit for Growth. In 2020, we launched a new strategy to transform the ACI organization. We called it Fit for Growth. That work was all about rethinking how we approach our business, streamlining our structure, sharpening our go-to-market strategy, and getting us ready to take the next steps in our evolution. In an environment of pressures from the COVID pandemic, we focused on cost discipline and profitability improvement. By year end 2020, we implemented a new and optimized organizational structure to streamline internal processes, making the company leaner and more efficient. In doing so, we achieved $60 million in annual savings. These actions helped us grow adjusted EBITDA by 17% and increased our net adjusted EBITDA margin by more than 450 basis points in 2020. We're encouraged by this growth in 2020. This growth has occurred in a challenging year where most of our customers were contending with the COVID pandemic. But Fit for Growth is also about our customers. we have worked to ensure customers remain at the center of what we do at ACI. We streamlined our organization to enable those closest to the action to make decisions, which was the goal of our new structure. Customers are telling us our efforts to simplify have sped up decision-making. In establishing a new commercial function, we significantly increased our sales force fit on the street presence. This group represents most of our customer-facing roles and is already generating success. For example, roughly one-third of our bill payment segment pipeline originates from recently hired salespeople. Our robust and energized sales force now has more urgency to deepen relationships and build continuity with customers. With a more empowered workforce that can work more directly with customers, The result is a faster time to market while elevating our customer experience. We increased our sales and market investments significantly. Along with these investments, we also implemented a disciplined and analytical approach to deploy our capital strategically. It means our product strategy aligns with high return errors. As we near the end of 2021, these efforts are showing results and we're increasingly optimistic about our future growth prospects. Moving to our second pillar, Focus on Growth, we have continued investing in our customers' digital transformation as they modernize their payment systems. Our priorities, such as cloud, real-time, and last-mile technologies, are also priorities of our customers. We also converged our merchant platforms, allowing customers to leverage the combination of e-commerce and point-of-sale. Our integrated solutions bring together online gateway, fraud management, and Omnicommerce capabilities into an integrated solution. At the highest level, our three focus on growth initiatives are real-time payments covering both low and high value real-time, as well as investments in last mile. Sophisticated global merchants with focus on innovation in Omni and e-commerce. Emerging growth markets, specifically across Latin America, the Middle East, Africa, Asia, and South Pacific. When you take all these efforts together, you begin to see what we are doing differently. We have a targeted strategy and we also have the organizational structure and cultural alignment to win. We are flying on all cylinders and are now seeing the results. Our sales efforts produced consolidated net new ARR bookings up 50% from the third quarter of 2020. As we mentioned last quarter, COVID pressures dissipated earlier in the North American markets, and third quarter ARR in the Americas nearly doubled from last year. We are seeing improvements in international markets, although these areas are still soft. Our Q3 revenue and EBITDA were both, once again, within the range we provided. To date, in 2021, we have signed 96% of our expected revenue for the fourth quarter, or 99% of the guided revenue for the full year. This progress today is considerably above previous years. We are confident in our expectation for accelerated organic and recurring revenue growth this year. And to repeat, we expect to achieve the rule of 40 for the first time in 2021. I want to highlight some of our critical wins in the third quarter, attachment to the strength of our global sales organization and our strategic focus. Many of these wins are from established global, regional, and national organizations across the spectrum, from corporations to central governments. We also see increasing demand for our services from fintech companies, including cryptocurrency and buy now, pay later firms. We recorded wins across all three business segments in North America, Asia, Middle East, Europe, Africa, and Latin America. In North America, we renewed and struck a new deal with a long-time ACI customer. They will utilize the ACI enterprise payments platform to create a growth and modernization path. A top U.S. bank selected ACI for domestic and international wires and paved the path to converge more payment types on the same platform. We made a significant win back with a major bank, one of the top 15 banks in the U.S., utilizing ACI high-value real-time payments to address both U.S. and non-U.S. payments needs for the critical ISO mandate. We are partnering with a major information technology firm to provide support and services to a leading bank in Canada to implement their payments modernization strategy. In Asia, CIMB Bank Behart a large Malaysian-based bank with a footprint spanning the region will utilize ACI high-value real-time payments. This win was a competitive takeaway. CIMB and other wins recognized our ongoing focus on high-value real-time payments modernization. We had two important wins in India, with one of the country's largest banks and the leading white-label ATM service providers. Both sign on to use ACI issuing and acquiring. These wins with established and new ACI customers are built on our ability to provide global solutions as customers focus on this critical area of issuing and acquiring. JCB, a major global payment scheme, has selected ACI as its next generation digital payment partner. Turning to the Middle East, one of our key focus on growth geographies. We had a renewal and a new deal with two major financial institutions in Saudi Arabia. They will utilize the ACI Enterprise Payment Platform with platform extensibility and a path to modernize as part of Saudi Arabia's Vision 2030 program. In Europe, a leading British payment service provider renewed ACI issuing and acquiring. In Latin America, one of the largest processors and acquirers will leverage ACI issuing and acquiring to replace several in-house platforms they use for chargebacks. In Africa, a leading Zimbabwe-based payment service provider that enables banks to provide their customers with innovative and agile technology platforms renewed the agreement for ACI issuing and acquiring. In our merchant segment, We saw continued progress in our grocery vertical while we were also cementing several new e-commerce deals. Albertsons, one of the US top 10 supermarkets, has selected ACI Omnicommerce to help simplify its payments processes and manage its service in our cloud, supporting our multi-acquiring offer. One of the UK's largest grocers, renewed and extended their in-store payments, e-commerce, and fraud solutions relationship with ACI. These wins grew out of our continued focus on the grocery segment around the world and the ability of our payments orchestration technology and cloud services to meet the digital transformation needs of these customers. I also want to mention a new deal with a European merchant that will facilitate access to new acquirers and provide new services with ACI secure e-commerce and fraud management. Some of our wins in the biller segment include a new deal with a leading higher education ERP system as their preferred partner. This deal will replace payment processing for 150 plus institutions and universities currently utilizing PayPal Payments Pro. This win grew out of ACI's focus on the higher education segment and our continued innovation, including areas like student portal. A new deal with BCU, a top U.S. regional credit union, which will upgrade their current systems to ACI SpeedPay. Roadrunner Account Services, a leading finance company for recreational vehicles, has chosen ACI SpeedPay to modernize its payment systems and offer mobiles technology to customers. Leading global industry research firms also recognize ACI Solutions' leadership. We achieved the best-in-class ranking in the 2021 ITE Matrix Leading U.S. Cash Management Vendors Landscape Report. We were named a leader in corporate digital banking platforms by Celent, which highlighted our solid customer base and support. We won several awards from Juniper, including Payments Innovation of the Year for ACI Secure eCommerce. Additionally, we received full patent approval for our incremental learning technology and an innovative industry-first approach to machine learning. Before handing the call over to Scott, I want to say, that I'm incredibly proud of the ACI team and what we have achieved for our customers and our business so far. I am enthusiastic about what the future will bring. With that, I will turn it over to Scott to discuss financials. Scott?

Thanks, Ocalan, and good morning, everyone. I first plan to go through our financial results for Q3 and then provide some additional commentary regarding our increased outlook for the rest of the year. We'll then open the line for questions. We had a solid third quarter and once again delivered results within our guidance range. We have now delivered a string of quarterly financial results in line with or above our guidance. Recurring revenue in Q3 reached $245 million, representing 70% of our total revenue for the quarter and up 1% compared to Q3 last year. As Ocalan mentioned, we also made significant progress in advancing our full-year bookings pipeline and have now signed contracts representing more than 99% of our full-year 2021 revenue outlook. Our pipeline momentum is notably higher than we've typically recorded by November, which allows us to raise our forecast for the year and reinforces our confidence in delivering on this increased full-year guidance. Total revenue for the quarter was $317 million, up slightly from Q3 last year. Adjusted EBITDA on the quarter was $74 million down from Q3 last year, primarily due to the timing and mix of higher margin license contracts. Turning to our three business segments and our banking segment, recurring revenue increased 2% and total revenue increased 5% as financial institutions started to revisit projects previously delayed by COVID. In our merchant segment, recurring revenue increased 11% as we continue to see double-digit transaction growth in our e-commerce solution. And finally, in our biller segment, recurring revenue and total revenue declined 2% versus Q3 last year. If you recall, last year our biller segment had significant tax payment-related volumes as the tax deadline for federal and state tax filings was pushed into Q3 last year. We ended the quarter with $141 million in cash on hand and nearly $500 million available on our credit facility after paying down $35 million in debt in the quarter. We ended the quarter with $1.1 billion of debt representing a net debt leverage ratio of 2.8 times and expect to be at or below our targeted 2.5 times net leverage ratio as we exit 2021. Looking ahead, we are increasing our revenue guidance and now expect full year 2021 revenue to be in the range of $1.355 to $1.36 billion, up from previous expectations of $1.335 to $1.345 billion. We now expect adjusted EBITDA to come in at the high end of our range, so we're now expecting EBITDA to be in the range of $380 to $385 million. And it is worth repeating that we have 99% of the year's top line revenue already signed and under contract and are simply waiting on the calendar to recognize the revenue. This traction is notably higher than in past years, which gives us high confidence in our increased guidance targets. And the higher revenue growth as we exit 2021, combined with the strength of our ARR bookings we're seeing here in the second half of the year, are setting us up well for accelerating growth as we enter 2022. With that, I will pass it back to Ojalon for some closing comments. Ojalon?