ACI Worldwide Announces $400 Million Share Repurchase Authorization

Rhea-AI Summary

ACI Worldwide (NASDAQ: ACIW) has announced a $400 million share repurchase authorization. This new authorization includes $65 million remaining from the company's existing buyback program. So far in 2024, ACI has repurchased about 3 million shares for $106 million. The repurchase can be executed at management's discretion either in the open market, through privately negotiated transactions, or via Rule 10b5-1 plans. The authorization has no expiration date, providing flexibility for future buybacks.

Positive

• The new $400 million share repurchase authorization signals confidence in the company's future performance.
• Including the $65 million remaining from the existing authorization, ACI has a robust buyback plan.
• In 2024, ACI has already repurchased 3 million shares for $106 million, indicating active management of shareholder value.
• The authorization has no expiration date, allowing flexible execution of the buyback program.

Negative

• Significant share repurchases can deplete company cash reserves, potentially impacting future investments.
• Frequent buybacks could indicate a lack of profitable reinvestment opportunities within the company.

Insights

Financial Analyst

ACI Worldwide's announcement of a $400 million share repurchase authorization signals a strong commitment to returning value to shareholders. A share repurchase program can be a positive sign, indicating that the company believes its stock is undervalued. This move can boost investor confidence, potentially increasing the stock price in the short term due to reduced supply in the market and signaling management's confidence in the company's future performance.

However, it's important to consider the opportunity cost. The company could use these funds for other growth initiatives, such as R&D, acquisitions, or debt reduction. Investors should weigh the benefits of immediate value return against the long-term growth potential.

In the context of ACI's financial health, a significant repurchase suggests they have a robust cash flow and a strong balance sheet. Investors should monitor their future earnings reports and cash reserves to ensure this repurchase doesn't strain their finances.

Share repurchase programs are often seen positively by the market, but it's important to evaluate the broader financial strategy. If ACI can maintain or enhance its operational performance, this repurchase could lead to substantial shareholder value over time.

Market Research Analyst

The share repurchase program authorized by ACI Worldwide is a strategic move that can have several market implications. From a market perspective, share buybacks can improve earnings per share (EPS) by reducing the amount of shares outstanding, which often leads to a higher stock price. This can be particularly attractive to long-term investors seeking capital appreciation.

Moreover, the timing and method of repurchase (open market, privately negotiated transactions, Rule 10b5-1 plans) give management flexibility, allowing them to optimize the repurchase process based on market conditions. This flexibility can be advantageous in maximizing the program's effectiveness.

From a competitive standpoint, this decision might influence investor sentiment positively, particularly if competitors are not making similar moves. However, it's vital to keep an eye on industry trends and peer actions. The payments software market is competitive and strategic moves like this can set ACI apart in terms of shareholder value proposition.

OMAHA, Neb.--(BUSINESS WIRE)-- ACI Worldwide (NASDAQ: ACIW), a global leader in mission-critical, real-time payments software, announced that its Board of Directors has authorized the repurchase of $400 million in shares of the company’s common stock. The new approval includes $65 million remaining under the company’s existing share repurchase authorization. Year to date 2024, ACI has repurchased approximately 3 million shares for $106 million.

Repurchases may be made at management’s discretion in the open market, through privately negotiated transactions and through Rule 10b5-1 plans. This authorization does not expire.

About ACI Worldwide

ACI Worldwide is a global leader in mission-critical, real-time payments software. Our proven, secure and scalable software solutions enable leading corporations, fintechs and financial disruptors to process and manage digital payments, power omni-commerce payments, present and process bill payments, and manage fraud and risk. We combine our global footprint with a local presence to drive the real-time digital transformation of payments and commerce.

© Copyright ACI Worldwide, Inc. 2024.

ACI, ACI Worldwide, ACI Payments, Inc., ACI Pay, Speedpay and all ACI product/solution names are trademarks or registered trademarks of ACI Worldwide, Inc., or one of its subsidiaries, in the United States, other countries or both. Other parties' trademarks referenced are the property of their respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240613466516/en/

Investor Relations

John Kraft

SVP, Head of Strategy and Finance

239-403-4627 / john.kraft@aciworldwide.com

Source: ACI Worldwide

FAQ

What did ACI Worldwide announce regarding share repurchases?

ACI Worldwide announced a new $400 million share repurchase authorization, which includes $65 million remaining from its existing authorization.

How many shares has ACI Worldwide repurchased in 2024?

ACI Worldwide has repurchased approximately 3 million shares in 2024 for $106 million.

Does the new share repurchase authorization have an expiration date?

No, the new share repurchase authorization does not have an expiration date.

Under what circumstances can ACI Worldwide repurchase shares?

ACI Worldwide can repurchase shares in the open market, through privately negotiated transactions, or via Rule 10b5-1 plans at management's discretion.