ACI Worldwide, Inc.

Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the ACI Worldwide, Inc. First Quarter 2023 Financial Results Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I would like to turn the conference over to John Kraft. Please go ahead.

Thank you, and good morning, everyone. On today's call, we will discuss the company's first quarter 2023 results and financial outlook for the rest of the year. We will take your questions at the end. The slides accompanying this call and webcast can be found at aciworldwide.com under the investor relations tab and will remain available after the call. Today's call is subject to safe harbor and forward-looking statements, like all of our events. You can find the full text of both statements on the first and final pages of our presentation deck, a copy of which is available on our website and with the SEC. On this morning's call is Tom Warsop, our interim president and CEO, and Scott Behrens, our CFO. With that, I'd like to turn the call over to Tom.

Thanks, John. Good morning. and thank you all for joining our first quarter 2023 earnings conference call. I'll start this morning with some brief comments on the quarter, and then I'll hand it over to Scott to discuss the detailed financials and our outlook for Q2 and the remainder of the year. We'll then open the line for questions. We delivered first quarter results that were consistent with our expectations and reflect our team's strong execution despite an uncertain economic environment. Total recurring revenue grew 9 percent, driven by the growth in biller and bank segments, while consolidated revenue was $290 million, down 5 percent year over year, and that was due mainly to the timing of license-based renewals, as we discussed last call. Both growth rates are adjusted for foreign exchange impact and the corporate online banking business divestiture. Total adjusted EBITDA was $25 million, down 59 percent, As you may recall, these license renewals tend to be extremely high margin. New ARR bookings for the quarter were $11 million. When looking at the new ARR bookings on a trailing 12-months basis, which is how I like to look at it, this removes some of the quarterly fluctuations. Trailing 12-month ARR as of Q1 was $100 million, which is up 8% compared to the same metric from March 2022. Turning to our segment results, we're pleased with our performance this quarter in our biller segment, which saw an 11% revenue increase and adjusted EBITDA increase of 12%. This growth was driven by customer onboarding and by the meaningful steps we've taken to address the inflation-driven interchange, mainly impacting our utility subsector. We've now built an interchange improvement plan for all of our client accounts, and we've made substantial progress in recontracting across our book of business. The results of these efforts is coming through the P&L and I expect continued progress throughout the year. As I told you last time, this is an effort that may stretch into next year before reaching full completion. Our bank and merchant segment revenue declined versus last year as we expected, which, as I said, is driven mainly by the timing of our license-based renewal calendar. With the significant majority of this year's renewals expected to occur in the latter part of 2023, we remain confident in our full-year guidance. We're also continuing to make meaningful investments in our merchant segment, particularly in our go-to-market and new and innovative capabilities. We expect these investments to accelerate growth in this segment over the long term. Let me turn to some of our latest trends and some of our wins. We expanded our SaaS business with a less traditional U.S.-based FinTech customer. And that included several new product implementations on their behalf. We had wins with payments orchestration with important new European e-commerce vendors. We had renewals and expansions with several merchant clients, including a top U.S.-based fast food chain and a top domestic grocer. We had a new anti-fraud win with the Saudi Arabian national payments infrastructure. a new issuing and acquiring contract with one of the largest processors in Mexico. And finally, in real-time payments, we signed expansions with several customers, including a Middle Eastern real-time payment system, as well as financial institutions and acquirers in Asia. In the US, the official launch of the real-time payment system, dubbed FedNow, is expected in July of this year. ACI has been instrumental in the piloting and testing of that program, and we just launched our ACI Real-Time Payments Cloud. This is a unique offering in the industry and will include built-in fraud protection with transaction scoring, all offered in a Microsoft Azure cloud-based deployment. Just last week, I met with a central bank in Africa, speaking of real-time payments, and I discussed with them the possibilities that real-time payments creates, including how their overall economy can benefit from the many use cases inherent with real-time payments. It was only a first dialogue, but that conversation further cemented my position about the future potential for real-time payments in the developing markets and around the world. Overall, I'm pleased with the progress we made in the quarter and our team's execution amid the challenging market environment. While we recognize there's more internal work to be done, we're confident we have the right overall strategy in place to capitalize on the significant opportunities before us. Looking ahead, we're on track to achieve our full year 2023 guidance and our long-term revenue growth target of 7% to 9% by 2024. We're energized by the opportunities in the pipeline that will help us achieve that goal, particularly within real-time payments and cloud-based technologies. Now I'll turn it over to Scott to discuss financials and our guidance. Scott?