ACI Worldwide's 2019 Results: A Rocky Road to 2020 Guidance

In an era where forecasts can be more elusive than a unicorn, ACI Worldwide, Inc. (NASDAQ: ACIW) has released its preliminary earnings for 2019, revealing a revenue forecast that falls short of its previous guidance. The company announced that it expects to report revenues between $1.255 billion and $1.265 billion, a notable 20% increase over 2018. However, this is below the earlier EPS consensus of $1.315 billion to $1.345 billion. Ouch.

Adjusting Expectations

Alongside its revenue forecast, ACI also provided adjusted EBITDA projections of $300 million to $310 million?again, a 20% uptick year-over-year but still lagging behind the former guidance of $360 million to $380 million. Craig Saks, the company?s Interim President and CEO, pointedly mentioned the hiccup caused by a major customer expansion contract that didn?t materialize as anticipated in December. In the world of earnings surprises, this one has surely left some analysts scratching their heads.

2020: Looking Ahead

As for 2020, ACI is cautiously optimistic, projecting revenue between $1.48 billion and $1.51 billion, along with adjusted EBITDA in the range of $425 million to $445 million. The absence of the expected large customer contract from their guidance may signal a more cautious approach moving forward, but Saks believes ACI is well-positioned to capitalize on positive trends in the payments sector. The double-digit growth projection for this year might just be the silver lining investors are looking for.

Conference Call Insights

Mark your calendars for January 14, 2020, at 8:30 am EST?ACI will host a conference call to discuss these results in greater detail. Investors can tune in via their website or by dialing in. It?s always a good idea to listen to the executives themselves; it?s like watching a magician reveal their secrets?except less flashy and with more financial jargon.

The Bigger Picture

What does all this mean for the sector? ACI's struggles with customer contracts might reflect broader market challenges in electronic payments and banking solutions. As fintech continues to evolve, companies must adapt quickly to changing customer demands and market conditions. ACI's cautious optimism could serve as a bellwether for its peers, who may also be reassessing their revenue forecasts in light of shifting market dynamics.

Conclusion

In conclusion, while ACI Worldwide's preliminary results for 2019 show promising growth, the earnings surprise in their guidance calls for a careful reevaluation of expectations. With a solid plan for 2020, the company seems poised for a rebound, but it remains to be seen whether they can capitalize on the opportunities that lie ahead. If nothing else, this serves as a reminder in the world of finance: always expect the unexpected.