ACI Gain New Business and Post Loss

From PaymentsNews.com:

“ACI Worldwide has announced that MasterCard Worldwide has selected ACI's electronic payment solutions as key elements of the new MasterCard Integrated Processing Solutions (IPS) announced in early April. MasterCard IPS provides banks a suite of branded debit network and card issuer processing services including PIN and signature debit and prepaid processing, and ATM driving. “

They have used their BASE24-eps software, ACI’s most famous. This will be used in addition to ACI’s Payments Manager, which will be used to monitor all transaction activity.

As well as this, they have announced the following new contracts in their first quarter financial results:

EMEA: Added new BASE24-eps(tm) customer locations in Romania and Kyrgystan. Products selected across the region include BASE24(tm) combinations, the ACI Money Transfer System, and application infrastructure tools.
Asia: Bank and credit card customers added wholesale products including ACI Enterprise Banker, ACI Payments File Manager, Proactive Risk Manager, Trade Manager, NET24 XPNET and File Connect
Thailand: Kasikorn Bank purchased a global payment hub comprised of multiple products in an IBM environment
United States: A large supermarket chain purchased BASE24(tm) and Golden Gate.
Italy: A banking customer added BASE24-pos and Simulation Services for Enterprise Testing
6 new customers signed, including new users of ACI Enterprise Banker, BASE24-eps(tm) and Proactive Risk Manager
16 new applications added to existing customer relationships ranging from ACI Retail Commerce Server and Proactive Risk Manager for Enterprise.

Despite all this, they have made a loss, a wider first quarter loss than last year.

The problem with a service company such as ACI becomes clear – that the contracts can only go on the balance sheet when they have been delivered. Especially since ACI is going through such a sustained period of growth so short term costs such as salaries are going up rapidly before these large contracts can go on.

I think the situation will be a lot different in a couple of years time, and I think prospectors would get a bargain if they buy the shares now ($17.42 as at 9th May) and wait for two years, or I will eat my hat, or the nearest equivalent (like a cat).