Ladies and gentlemen, thank you for standing by and welcome to the ACI Q1 Earnings Announcement [Operator Instructions] Please be advised that this conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. John Kraft. Thank you. Please go ahead, sir.

Thanks, Justin and good morning everybody. Thank you all for joining us on this earnings call for the quarter ending March 31, 2020. Today’s call like all of our events is subject to both Safe Harbor and forward-looking statements. You can find the full text of both statements on the first and final pages of our presentation deck today, a copy of which is available on our website, as well as with the SEC. I’m joined this morning by Odilon Almeida, our President and CEO; and Scott Behrens, our CFO. With that, I’ll turn it over to over Odilon.

Good morning, everyone. Thank you for joining us for our first quarter 2020 earnings conference call and my first one as President and CEO of ACI Worldwide. In the next few minutes, we will cover the Q1 results, our response to the COVID-19 crisis and my view about the medium and long-term growth potential of our company. We are pleased with our first quarter financial performance. We generated revenue of $291 million, up 42% over last year. From a profitability perspective, our adjusted EBITDA increased to $38 million, with margin expansion to 19% from 5% last year. We are fortunate to have a resilient business model, which involves multiyear customer commitments with a large contractual backlog of $5.7 billion. In addition, nearly 75% of our annual revenues are recurring in nature, which provide us with reliable cash flows. In the quarter, we generated $58 million in cash flow from operations and exit Q1 with a strong liquidity position, consisting of $119 million in cash on the balance sheet and $270 million of available revolver capacity. Now I would like to turn your attention to the current COVID-19 situation. I hope, first and foremost, that you and your families are staying safe and well. The last few months have posed unprecedented challenges for countries and communities around the world. We are committed to doing everything we can to ensure the health, safety and well-being of our employees, all while enabling them, include implementation teams to seamlessly support our customers, without interruption. Our team has remained highly focused on providing our customers with a software-led payment solutions they need, at a time when digital payments are more critical than ever. We are fortunate to have a strong customer base, which includes large global banks, financial intermediaries, bidders and omnichannel retailers, including e-commerce,…

Thanks Odilon and good morning everyone. I first plan to go through our results for the quarter and then provide an update on our outlook for the rest of the year. We’ll then open the line for questions. I’ll be starting my comments on Slide 8, with key takeaways from the quarter. New bookings were $120 million, up 7% from Q1 last year. We ended the quarter with a 12 month backlog of $1.1 billion and a 60 month backlog of $5.7 billion. Q1 revenue came in at $291 million, up 42% compared to Q1 last year, with our On-Demand business growing 76%, driven primarily by the Speedpay acquisition. While our On-Premise business grew 3%, with particular strength coming from our real-time payment solution, which grew 20% over Q1 last year. This revenue growth contributed to strong growth in adjusted EBITDA, with Q1 EBITDA coming in at $38 million, up from $8 million in Q1 last year. We continue to see EBITDA margin expansion in our On-Demand business, with net EBITDA margins increasing to 22% in Q1, from essentially zero in Q1 last year. And this really shows again, the scale of our On-Demand business, where we’re able to layer on incremental recurring revenue on to a relatively fixed cost structure. We also saw EBITDA margin expansion in our On-Premise segment, with EBITDA margins improving to 31% from 29% last year. Turning next to Slide 9, starting with debt and liquidity, cash flow from operations was $58 million in the quarter, up 36% from Q1 last year. We ended the quarter with significant liquidity with $119 million in cash and $270 million available on our revolver. We use cash in the quarter to pay down $19 million of debt and also repurchased 1 million shares of our stock. Our current…

[Operator Instructions] Your first question comes from the line of Joseph Vafi from Canaccord. Your line is open. Please ask your question.

Hi, good morning. Thanks for taking my call and welcome and congratulations Odilon, on the new position. I was wondering if we could talk a little bit more about strength and real-time payments in the quarter? And then, perhaps as a follow-up, what you see as the strategy in real-time moving forward? Thank you.

Yes, well, I think – Joe, this is Scott. I mean that the growth in the quarter, the 20% growth is pretty consistent with the types of double-digit growth we’ve been seeing in real time for a number of years. I will say, that we did have a net – one of our net new logo sales in the quarter, was actually a fast growing U.S. commercial bank that purchased both our Universal Online Banker, in combination with real-time payments. We also had one of our Asian – existing Asian customers, that renewed retail payments, but also purchased a real-time payments as well. So we’re seeing it – again consistent with what we’ve seen as double-digit growth now for a number of years. Obviously, we see that as a fast growing segment with a significant amount of opportunity, and we’re selling at both net new – new logos, as well as combining it with our renewals.

So Joe, nice meeting you and just to reinforce, I mean this will continue to be one area of priority for us. There’s a lot of growth in real time around the world. And you know that real-time is different in every country that you go. And I think that is a place that you can really build a strength from a local point of view and we have the DNA to do that. So I foresee a great future for us in real-time payments.

Thank you.

[Operator Instructions] Your next question comes from the line of George Sutton from Craig-Hallum. Your line is open, please ask your question.

Thank you. First Scott, thanks for the customer mix breakdown. I think that’s helpful and Odilon welcome to your first call. So I have a bigger picture question, given that you’ve just joined a question I think a lot of investors have been asking, there aren’t a lot of remaining payment businesses in this size range, most of them have been acquired and scale is really important. So I’m curious, where you see ACI fitting into the long-term payments market with that, kind of as a backdrop and maybe from the perspective of the On-Demand in the On-Premise?

Sure. Nice to meet you. I see ACI with a very relevant space going forward and this is a scale business. There is always a space for differentiation. And I think that ACI is well positioned to differentiate itself or to continue to differentiate itself in some very specific areas. For example, real-time payments. It’s a part of strength for us and as you know, I mean it’s not about having global scale in real time, it’s about having local scale, in the country that you are, and we are very well positioned on that. And it is a race, and we are driving this race very consciously. And there are also other spaces that you can create differentiation. So I think that there is a very strong value proposition for ACI going forward.

Could you discuss organic growth potential? Take a longer-term view outside of the COVID era? I’m curious what you envision that opportunity to be?

Yes, I’m not, I’m not giving numbers at this point. But what I can tell you is that, I think that we are very well positioned. And the opportunities, there are significant opportunities. I think if you look at the company, the company has been very successful in organic, and we will continue to do that. Also it has been very successful in differentiating its offerings, like the R&D investment and so forth. There is one part that we can improve, and that should be no surprise, because that was said, I think by the end of last year in the investors meeting, which is really about the scaling part of the business. It is about the go-to-market part of the business, and that’s my DNA. My DNA is on growth, as in revenue growth, and it’s about the structure you have, it is about the process you have and it is about the culture you have. I use one kind of phrase all the time, which is blood on the teeth on sales, right, and I think you’re going to see much more of that in our business going forward.

Thank you.

[Operator Instructions] There are no further questions at this time. Please continue.

Well, thanks everybody for joining. We look forward to catching up in the coming weeks. Have a good afternoon.

This concludes the conference call. Thank you for participating. You may now disconnect.