Q4 2023 ACI Worldwide Inc Earnings Call
Participants
John Kraft; Head of Strategy & Finance; ACI Worldwide Inc
Thomas Warsop; Chief Executive Officer; ACI Worldwide Inc
Scott Behrens; Chief Financial Officer; ACI Worldwide Inc
Peter Heckmann; Analyst; D.A. Davidson & Co.
Jeff Cantwell; Analyst; Seaport Global Securities LLC
Presentation
Operator
Ladies and gentlemen, thank you for standing by. My name is Cath, and I will be your conference operator today. At this time, I would like to welcome everyone to the ACI Worldwide, Inc. first quarter and full-year ended 2023 financial results. (Operator Instructions)
I would now like to turn the conference over to John Kraft. Please go ahead.
John Kraft
Thank you, and good morning, everyone. On today's call, we will discuss the company's fourth-quarter and full-year 2023 results. We will also discuss the financial outlook for the rest of 2024, and we'll 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 in our presentation deck and earnings release, both of which are available on our website and with the SEC.
On this morning's call is Tom Warsop, our President and CEO; and Scott Behrens, our CFO. Before we begin, we wanted to make sure that everyone was aware of our upcoming Analyst Day which will be held in New York City on March 12. Please reach out if you haven't received an invitation.
With that, I'll turn the call over to Tom.
Thomas Warsop
Good morning, and thank you for joining our call. I'm going to start with some high-level thoughts on my first year as CEO, and I'll provide comments about our 2023 performance. I'll finish by reiterating my confidence in our ability to take advantage of strong market opportunities in 2024 and beyond. And then as usual, I'll hand it over to Scott and he'll discuss financial results in more detail and our outlook for 2024 and we'll open the line for questions after that.
As you probably know, I've been the CEO first on an interim basis and then since June of last year on a longer-term basis. And during that time, I made it a point to personally visited many customers, partners and fellow ACS team members as possible.
In that year.
I've met in person more than 70% of our employees and all of our top 10 customers in more than 15 countries across five continents. And following those visits, I'm even more convinced that ACI is a company with world-class solutions, talented employees and a customer base unmatched in the industry. Our market position, combined with the substantial opportunities for expansion and growth in industry with the near continual change puts us in a position to accelerate our growth and help customers achieve and exceed their strategic objectives for in the future.
In a moment, I'm going to start with 2023, we had a solid performance. We exited the year strong, and that has set us up to accelerate our growth. This year. We delivered results in line with or above our expectations and with the guidance we provided to you this time last year, we saw strength in our biller segment with revenue growth of 9% and EBITDA growth of 32% in 2023. We went live with the first two of several phases of the implementation of a large new filler customer that we signed in 2022 more phases of that program go live in 2024 and they're on track. We also signed a large new utility customer is on track to go live and begin ramping in the middle of 2024, and we continue to make incremental progress with our interchange improvement program. Our banking segment saw notable strength in cross-sales of our anti-fraud and real-time payment solutions, and those saw revenue growth of 35% and 24%, respectively in 2023. Our anti-fraud solution utilizes artificial intelligence and proprietary access to ACI. generated Big Data to truly lead in the category. So we continue to be excited about our opportunities in real-time payments to illustrate our continued success in this area around the world. We signed up three new central infrastructures in the quarter, including our bank book, the loan approval account that Colombia and the Nepal clearinghouse. We're now supporting nine central infrastructures globally along with more than 25 national and regional real-time payment schemes.
And lastly, in our Merchant segment that we had a bit of a slow start to 2023, we exited the year with a strong Q4 rate of growth, and we expect growth to accelerate in 2024. We remain excited about leveraging our best-in-class payments expertise to help our clients offer the Optimal payment choices to their consumers while providing a safe, secure payment processing environment.
Our proprietary AI-driven fraud management tools are helping to protect our billers and merchants from fraudulent transactions. Perhaps most importantly, our sales pipeline is strong and growing, and we expect to see particularly strong demand in our banking segment. As I mentioned in our last call, the maturation of real-time payments around the world is driving an intense analysis of payments, technology infrastructures by banks everywhere.
When these institutions think about which firms to work with to address this critical need. Aca is virtually always on the list and near the top because of our history, market presence and proven expertise. We are a usual suspects. The fact that many of the largest financial institutions in the world already rely on our proven software means we're the only choice for a lower risk, high reliability modernization, ACOs, reliability and scalability are unquestioned and we are seeing significant demand for our solutions, including our payments hub across the globe.
Speaking of our payments hub, we're engineering it to support on-premise cloud and SaaS delivery models, making us a great choice for large and mid tier financial institutions alike, mid-tier or super regional sized customers in the past that often did not have the established infrastructure to take advantage of ACA's, highly reliable and scalable software. Our newer solutions, cloud enablement and SaaS offerings have made this possible. You'll hear more about this at Analyst Day, but I want to reiterate this is a net new opportunity for us. It substantially increases the size of our historic addressable market and it presents an opportunity to bolster our already accelerating growth rate.
Our biller segment, we saw a significant turnaround in 2023. We'll see further growth in 2024 as we had a full year benefit of customer go-lives we saw in 2023, as well as the go-lives of additional large customers sold during last year. This revenue growth, combined with continued success in our interchange improvement program, will continue to deliver margin improvement in our Merchant segment, our investments are paying off. We saw Q4 deliver the strongest rate of quarterly growth of the year, and we expect that momentum to carry into 2024. In fact, we signed a significant new customer in the fuel source segment in the first week of the year. A great way to start.
Overall, I'm pleased with where we are as a company. We have a strong balance sheet. We have leverage below our long-term target, and we're accelerating our top line as we've long promised for managing our expenses well with a strong team. We have a strategy in place that positions us well to accelerate growth in 2024 and beyond. I'm also happy to announce that today we have appointed two new members to our already strong Board of Directors to Trynka McCallum, who spent many years at SAP software company, Red Hat, most recently as Vice President of customer and product experience at one Bonita, the former President of go fund me and General Manager of Braintree, which is now part of PayPal Trynka and one will provide great support as we expand our SaaS businesses and drive accelerated productivity through more use of generative AI, large learning models and machine learning saying both of them have overseen before before I turn it over to Scott, I want to remind you of our upcoming Analyst Day.
As John mentioned, we're hosting an event in New York City on March 12th. We invite you to attend in person or online as we discuss our business segments and exciting global opportunities.
With that, I'm going to turn it over to Scott to discuss financials and guidance.
Scott?
Scott Behrens
Thanks, Tom.
And good morning, everyone. I first plan to go over our financial results for 2023. I'll then provide our outlook for 2024. We'll then open the line for questions. I'll be starting my comments on Slide 4 with key takeaways from the fourth quarter. Q4 2023 revenue was 477 million, up 5% from Q4 2022. And we continue to see solid growth in our underlying recurring revenue, which was up 7% compared to Q4 2022. Adjusted EBITDA was 210 million, up 8% from Q4 2022. Our EBITDA growth contributed to strong cash flow growth in Q4 2023, with cash flow from operating activities of $86 million more than doubled Q4 2022.
As we look at the segment results, our paint segment revenue increased 3% and bank segment adjusted EBITDA was up 1% compared to Q4 2020 to our merchant segment, revenue increased 4% and segment adjusted EBITDA increased 2% versus Q4 2022. And during the year, we saw improvement in the segment as expected, with revenue growth accelerating as we exited the year. Our biller segment saw the biggest improvement year over year with revenue increasing 9% and segment adjusted EBITDA increasing 60% versus Q4 2022. The growth in revenue and profitability in the segment is driven by both new customer go-lives as well as notable progress with our interchange improvement program.
Turning next to slide 5, with key takeaways for the full year 2023. Revenue for the full year was 1.45 billion, up 5% from 2022. Adjusted EBITDA was $395 million, up 10% from 2022. And cash flow from operating activities was 169 million, up 19% from 20. We ended 2023 with 164 million in cash on hand and total debt outstanding of approximately 1 billion. Our net debt leverage ratio was 2.2 times. That is down from 2.6 times at the beginning of the year and is below our long-term target of 2.5 times. Also of note here in February, we completed the refinancing of our credit facility that was set to expire in April 2025 with a new five year credit facility on substantially the same economic terms as our existing facility, we repurchased approximately 1 million shares for 28 million in Q4 2023 and have further purchased an additional 2 million shares for $62 million so far here in 2024, which in total represents approximately 2.8% of our shares outstanding. And we currently have $110 million remaining on our repurchase authorization during 2024, we expect to continue to deploy a significant portion of our cash flow to share buybacks.
And finally, turning to Slide 6. With our outlook for 2024, we expect to accelerate revenue growth to 7% to 9% in 2024, with revenue in a range of 1.547 to 1.576 billion. We expect 2024 adjusted EBITDA to be in a range of 418 to $428 million. And to help with your modeling, you'll find a few additional guidance assumptions on Slide 7. Net interest expense is expected to approximate 50 to 55 million, and depreciation and amortization is expected to approximate 115 to $120 million. Non-cash share-based compensation expense is expected to approximate 30 to $35 million. Our effective tax rate should approximate 25%. And lastly, our diluted share count should be around 108 million, which excludes future share buyback activity. We expect our revenue phasing by quarter to follow our historical seasonality with Q1 2020 for revenue to be in a range of 300 to $310 million and EBITDA to be in a range of 25 to 35 million.
So in summary, we're very pleased with the 2023 results, which delivered revenue and EBITDA in the mid to high end of our guidance ranges that we provided to you at this time last year. That strong EBITDA growth and a resulting strong cash flow generation was used in part to pay down debt, resulting in our lowest leverage ratio in five years. And finally, we exited the year strong and see that momentum carrying into 2024 and in particular, the strength we're seeing in the underlying recurring revenue base of the business, which was up 7% in 2023, combined with the visibility and predictability of the license renewals next year. And the maturity of the sales and implementation pipeline sets us up well to deliver our 7.9% growth from 2022 we are pleased that this growth rate is in line with the long-range outlook we provided at our last Analyst Day in 2021 and demonstrates our ability to deliver results and look forward to sharing more about our new long-term outlook at our Investor Day in a couple of weeks.
With that, we'll now open up the line for questions.
Operator?
Operator?
Question and Answer Session
Operator
(Operator Instructions) Peter Heckmann, D.A. Davidson.
Peter Heckmann
Wanted to see if you could give a little bit more color or interpretation on your bookings numbers. As you said, you're getting both ARR. and licenses and services bookings. And and when we look at those certainly down year over year on the ARR side, following a relatively stronger year in 2022, how should we interpret the air bookings and now the license and service bookings in terms of incorporating in that in the model?
I mean, historically with the with this that in total bookings, yes.
Directionally, that had some value that air bookings had been having a harder time kind of extrapolating that into when did those start to have an impact and how concerned should we be with or with the bill DOWN bookings for the year?
Scott Behrens
Yes. Thanks, Peter. Scott. Yes, we've talked about this now for a number of quarters. The one aspect of the ARR metric is it doesn't really capture the booking success that we have in the base business in the which is predominantly on-prem. And so we've been talking about our license and service sales. We put that we put that into the bookings table this quarter. That is up whether you're looking at the quarter over quarter year over year is up in the 16% to 17% range. And that's really where we've been seeing our success. So it's more of a function of which segment we're seeing success in bookings in 2023. And that's coming from banks really, if you look at banks over the last three years in terms of revenue growth, it's been coming out of coming out of COVID. If you exclude Dragonfly, our digital banking sale revenue, the banks has been really our strongest segment. It's been up 8% to 9% on a constant currency basis. And so we're continuing to see that strong bookings growth in the bank segment in license and services in 23.
The only other thing I'd point out is, if you recall in 2022. On the ARR side, we did have our largest our biller deal that we've ever sold was into 2022 comps. So it's in that that sort of deal size did not recur in 2023?
John Kraft
Yes, I think that was the only point I would have. And I'll just reiterate the point Scott just made. So 2022 is a little bit of an anomaly in that way. You mentioned that, Pete, when you signed two of the largest deals we've ever had in the history of that business and those showed up in the 2022 ARR numbers. We did not expect to repeat that in 2023. Of course, we didn't, but total bookings were very strong and we we were very confident in that the guidance that Scott just presented to you.
Peter Heckmann
Great.
That's good to hear that. And then in terms of interchange, and you had said in the press release that you do expect a net adjusted EBITDA margins and for the year to expand a bit.
Scott Behrens
So would that imply that interchange is maybe going to grow at about the same rate or maybe even a little bit faster than total revenue?
I wouldn't necessarily, I would say generally in line with I think we still have some room for improvement there. And obviously, we had a big big improvement between 22 and 23 in terms of all the initiatives that we've put in place. But there's still there's still more to go. So I would say it's in line with or less than the total rate of revenue growth in that in that door segment.
John Kraft
Yes, I mean, I think it's fair to say though, we as Scott said, we had a big improvement in 2023, and we don't have enough room to repeat that. But we do expect to see continued improvement and expansion of margin.
Peter Heckmann
Okay. Okay. That's fair. I'll get back in the queue.
Operator
Jeff Cantwell, Seaport Research.
Jeff Cantwell
Okay, thanks, guys. Can you talk about the guidance you gave for 2024 and your revenue growth of 7%, which was indicated and explain how you're thinking about revenue growth by segment.
John Kraft
Can you break that out for us?
Thomas Warsop
And then specifically on your banking segments, what opportunities are you seeing there right now with clients maybe give us some flavor to what we should expect to see there in 2024 and maybe tell us about your pipeline. Thanks.
Scott Behrens
Yes, on the 2020 forecast, I think if you look at relative to 2023 on the the biller segment grew 9% in 2023. But that growth really was a function of, call it, three things, one is just your same-store sales growth. Second is the go-live and ramping up net new client business. And the third piece was the some of the repricing elements of dealing with the interchanges, we had 2022. So you've got to 2024, two of those three elements are still going to be. There may be some repricing on the left, but on a biller should fall back into call it that that's within the 7% to 9% growth rate that we're talking about in terms of total company, the bank business, which is in the last three year, kegger has been about eight plus percent on 2024.
Will what kind of look like you'd be back to kind of mean reversion this year was only a couple of two or 3% for next year will will be back within that kind of three year average in that merchant, which was a drag essentially on growth in 2023. And as we talked about exited the year stronger and that that exit rate will carry into next year, we'd expect the merchant business really to be at the high end of our consolidated growth rate. So they're all all line up pretty much within that 7% to 9% growth, but a little bit different dynamics by each segment.
John Kraft
Yes. And then on the I think your question was about banks, the bank segment and opportunities and pipeline. So we're seeing a number of different types of opportunities and it depends on which region of the world you're in, but I'll give you I give you kind of a flavor for it. So in a week, we continue to see price increases as we renew with our existing customers. So those are based on primarily on two things, volumes. So they need to buy more capacity from us than they did the last time and then price increases related to the inflation that has happened between of the last renewal and this one.
So that's one driver, but that's that's in our more developed markets and then we look at places like Latin America and Asia. We see we see new opportunities with with financial institutions. And those are many of those are driven by what I mentioned in my comments earlier, the the understanding that real-time payments volumes are coming and that it depends on which country you're in, whether you whether these financial institutions have seen those volumes ramp yet or not, but everyone knows they're coming and they're thinking about how do I make sure that my payments infrastructure can handle that increase of volume because these are to large extent, those real-time payments are cannibalizing cash transactions.
And so does a bank and a bank in Latin America doesn't know what they have to do with the cash transaction for that. But as it moves to real-time payments, that changes and they need to make sure they're ready for the for the volume and there they're making sure that they are they're trying to make sure they are and that when that opportunity comes for us to talk to them, they want to continue to take advantage of our proven scalability, reliability and then. So if they don't have it or they're looking to talk to us about it, if they do already have some of our software there, they're asking for our help to make sure the rest of their infrastructure can handle that increased volume. So those are some flavors of it. The pipeline is very strong, it's growing and that dynamic about being ready for the ramp in volume that they know is coming eventually. That's one of the key drivers.
Okay.
John Kraft
That's great.
Thomas Warsop
And my follow-up on that on real-time payments is one of the biggest question really getting inbound about your opportunity is there's so much focus on that now, but my understanding is for your footprint is much broader than that globally. So would you mind. I don't want to preempt your Analyst Day and the answer too much here but today. But would you mind mapping out where you see the most significant opportunities for real-time payments is a very opposite, Asia Lat Am et cetera, or how would you characterize it?
John Kraft
Well, I don't I'm not trying to be flippant on this, but it's all of the above because where I think you probably know this, but just so we're on the same page, largest real-time payment market today in the world of India. That's the largest by far Brazil and China. Those are the three largest real-time payment markets in the world. And the rest of the world is to some extent playing catch-up. But the European Central Bank has mandated the the availability and support of real-time payments across the Eurozone. So you've got I mean, you have real-time payments in Europe, of course, but that is getting a lot more attention. And then Latin America is is an up and comer outside of Brazil. It's still relatively small volumes with real-time payments, but that's changing. And I mentioned we signed the central bank of Colombia in terms of supporting the their their real-time payments central infrastructure. That's just one example in Latin America. But I think that you will continue to see significant growth in the focus on and volumes of real campaigns in Latin America, but also in Asia and certainly in Europe. So lots of opportunity.
You mentioned Fed now, I mean, Fed now still a new thing. It's only a few months in and the Fed has not published specific volumes yet, but we expected them to be pretty small at the beginning and they are above. We're getting new institutions signing on it at an increasing rate. And I don't have the exact number from the Fed in front of me, but the number of institutions has grown a lot since since that started. And what's what's really interesting too, is the clearing is a real-time payments and transactions have benefited from the all the marketing, the Fed's done around that now we are starting to see increased volumes. I think it's going to take continue to take a while before the volumes are extremely large. But again, to me the most interesting thing is the discussions that the anticipation our real-time payment volume increase is generated for us, and that's that's really good for us. It's it puts us in a position to help our customers deal with one of the biggest issues they're wrestling with right now.
Yes.
Scott Behrens
The only other thing I'd add to that is just in terms of a metric of our Real-Time Payments solution. Revenue growth in 2023 was 23% over 2022. And very little of the I mean, very little of that, if any right now is coming from Fed now. So there's really no there's not a real contingency on our 2024 outlook or in our longer-term outlook on, you know, A. or we're predicting a tipping point on that. Now specifically, really a lot of our growth historically in the near term is coming from international.
Thomas Warsop
Okay, great. Appreciate all the color. Thank you.
Operator
And our next question comes from the line of Charles Eden with Stephens Inc., please go ahead. Your line is open.
John Kraft
Good morning, guys, and thank you for taking my question. As we think through the model for banking in 24, I was hoping you could comment on the renewal schedule. I think you said in the past that it was it would be a little more evenly distributed relative to 23. And I know Q3 was a big quarter for you had the big renewal there. But anything you could say around the on the cadence as we think through the model for banking would be helpful.
Yes.
Scott Behrens
What I would look at just I would phase the bank revenue in your modeling for 24, pretty consistent with 2023. We're always going to have kind of that second half and predominantly fourth quarter renewal timing. So if you model it consistent with 2023 that should set the up well for 20.
John Kraft
Got it. And on a follow-up, I wanted to drill into the biller segment a little bit and get a sense for what verticals specifically are driving the growth from both the new bookings, same store standpoint?
Yes, I don't know that there's a single vertical that that drove it. I think the biggest growth because of the new sales that we've mentioned were the utilities and telecommunications segments. But we've seen we've seen good growth across the verticals that we support, but those would be the two largest.
Got it. And if I could sneak one more in on capital allocation. You're in a pretty good spot from a balance sheet standpoint. You had mentioned that you're on the priority is buybacks. However, you do have that flexibility. So I was wondering if you could comment on M&A and if on your appetite towards potential targets that would potentially accelerate your go to market certain areas across your businesses.
Scott Behrens
Anything you could say there would be helpful or I mean, I think we would always be opportunistic, but obviously in the it's been a number of years since we have done an acquisition, we did make the divestiture of our digital banking business. And in 2022, I would say just the I would look and look at 2024 at this point, very similar to 23. And that the balanced approach of both share buybacks and de-levering is really the the target capital allocation. I would just say I think we'd always be opportunistic if there was something accretive, but the balance this year is targeted to share buyback and and delevering Got it.
John Kraft
I appreciate all the color.
Operator
Your next question comes from the line of Joe Vafi with Canaccord Genuity. Please go ahead. Your line is open.
John Kraft
Good morning. This is Carlos Annie on for Joe. Thanks for taking our questions. First off, Tom, you touched on our Gemini and large language models in in your remarks. Can you give us some examples of how you're using JNI currently? And what are some near-term opportunities for you there?
Scott Behrens
And I have a follow-up to your.
John Kraft
Sure, three three primary use cases for us with the with Gen and LOMs. So first of all, it's a fraud detection and prevention, which I've mentioned before and through. You've heard a lot about it. We've been using AI for over a decade in our in our fraud detection prevention and solutions. And we have patents and proprietary methods of creating algorithms and training models, and we have excellent product there. And part of the reason is the use of AI and the continued use of AI that's use case number one, use case number two is customer service. And so as an example, we have we have. We haven't completed this for all products, but for some of our products, we have loaded into copilot. We use Microsoft copilot for a secure environment, but we've loaded every piece of documentation we have for for several of our of our products, our solutions, and that includes FAQs, WikiAnswers inquiries from customers and the answer's all of it. And we then trained trained the model and we are now we are now able to get very good productivity from our customer service representatives, the people that handle inquiries about our software products, people that deal with outages or issues that our customers are having, we're able to get them productive in a fraction of the time that it used to take us with longer-term training and ultimately, we're going to make that same kind of knowledge base with the AI on top of it available directly to our customers so that they can get answers to questions faster and it improves the productivity of our team. So that number two, customer service number three, probably predictably for a software company is software developed. And we have we have employed generative AI with our developers and what we've been able to do. So I'll just give you one example. We have several, but here is the one that I find most interesting is we've we have created a way to extract logic from proven software. So some people, call it legacy at band to the use of the word legacy inside of it. But our proven software. We've taken functionality out of it and created micro services. And in a matter of minutes, we create a microservice in a matter of minutes, and we do that by using generative AI. And then we are we include a human in the loop, of course, because AI, you can't just trust the output of a bot. And so we create these microservices. And then we have we have our team, it, tweak them and check validity. So we are getting about 80% roughly accuracy in these microservices, and we're taking that to 100% or as close as possible with with our team members. And so that we're getting a probably overall, we're getting at least 30% productivity improvement by using AI and in the case of these microservices, we're seeing 10 times or more 10 X, not 10% more productivity from our team. So I don't know that we'll get that every time on every every application, but it's a pretty exciting stuff that's allowing us to move very rapidly. So those are the three primary use cases.
That's great color. Thanks from And my follow-up is on digital assets. Are you providing any products and services on the crypto side right now? And how are you thinking about this space? If you and if you see any opportunities given some of the recent developments like the spot Bitcoin ETF.
Thomas Warsop
Thank you.
John Kraft
Yes, thanks. I was just before I walked in here, I was watching the ad the the founder of one of the ZTS. talking about the explosion that we've seen. But but to answer your question, so many of our products are perfectly happy to facilitate a transaction in Bitcoin. It doesn't really matter very much to us what the what the medium is, whether it's whether it's dollars or pounds or Bitcoin or central bank digital currency and it doesn't really matter to our applications. And we have absolutely built in the ability to use use crypto where where it makes sense. So we're fine with all of that I don't I wish I was smart enough to tell you what all the impacts of the bitcoin ETFs are. I might not be here right now might be on the beach somewhere, but I don't know. But we're going to obviously continue. We're a very important player in the payments ecosystem. Digital commerce, to a large extent, relies on ACI. We're going to make sure that our products can support whatever medium and mechanisms, consumers and commercial customers want to use.
Well, thank you.
Operator
Again, if you would like to ask a question press star, followed by the number one on your touchtone telephone keypad or NetCracker.
Next question comes from the line Nigel Sutton with Craig Hallum. Please go ahead. Your line is open.
John Kraft
Yes, this is James on for George. Nice results. So the recurring revenue growth in the bank segment over the last couple of quarters have been pretty encouraging. Could you talk about what's driving the strength there? And then last quarter, you also mentioned moving down market. Could we sort of get an update on those efforts? And then lastly, would you be able to sort of quantify what you think is a sustainable growth rate for the real-time payment solutions over there?
Scott Behrens
Couple of years?
Yes, the Company what's driving on the bank side of recurring revenue, is it really just the maintenance on the license software. And so that is that's both a function of prices. If those had built in CPI. inflationary mechanisms and then just the go-lives of new customers upsides on the maintenance side, but probably the bigger growth year over year in bank recurring revenues come from the SaaS business. And so that's go-lives and ramping of customers that we've sold in in bank SaaS and bank's assets. Not it's not a significant component of the overall bank business, but had nice growth in 2023.
Yes.
John Kraft
And then you asked about mid tier and we have we've been primarily focused on pipeline development for the the mid-tier. We've got a lot of conversations going but that that isn't it hasn't really shown up much yet, but that's a future opportunity. And those conversations I was mentioning earlier about modernization, many of those are with this mid-tier and just to reiterate and remind everybody, when when we talk about mid-tier, we're talking about 50 to 200, USD50 billion in assets. So these are still very large financial institutions. But historically, our sort of sweet spot has been to 50 billion and up the mega banks. And this so we're we call it mid tier, not everybody might call that mid-tier, but it's a little bit smaller. And that's where they are. They tend to be more interested in SaaS and or cloud models than the mega banks. And that's why that the development of those infrastructures and capabilities. And Scott just referenced the growth that we've seen there on that. That's why that is so important and it's it's generating great conversation.
Great. Pipeline expansion, and we have signed several of those customers and that's what's driving that growth that Scott was just mentioning.
Scott Behrens
Yes, I would say if I look at the our expectation going forward in terms of what real print growth is going to be, it should be a healthy double digit growth, very similar to our fraud detection software capabilities. I mean, we have those are natural cross-sells to the existing customer base. And as you know, we have blue chip bank customer base that has been with us for a long time. And the natural cross-sell of new products to that same customer base is typically going to be in real-time payments and fraud protection. So both those areas should have healthy double digit growth into the future.
John Kraft
And just final point on that, Scott mentioned natural cross sell absolutely right. And real-time payments and fraud are I mean those things go together extraordinarily well. So we often package the two together. So it's a it's a great, great offering.
Great.
Scott Behrens
Couple of offerings.
Great.
John Kraft
And last one for me. Can you just touch on the competitive landscape and biller and merchant and any changes you've seen there just given the momentum you've seen in adding it?
Scott Behrens
Sure.
John Kraft
So I wouldn't say that I've seen a lot of change in that. We tend to see some of the same competitors. I think we have to fight the fight. Let me start with biller a very strong year, obviously, last year and biller and some of the wins that we've talked about for one of the reasons that I think we've seen the success is if you think back a couple of years, we were we were still digesting the Speedpay acquisition from Western Union. And we finished that, I don't know and of 21 ish. And so we were able to turn our full attention to running the business and growing it. And that's definitely worked well, and we expect that to continue to work well. So that's why I think that that's the primary driver in biller on the merchant side, again, kind of the same thing, I wouldn't say there's a big change. I think we did have a bit of a slow start, as we mentioned 23 finished the year pretty strong, and we're seeing very good signs that that's going to continue into 24. And so we should see better growth this year. And that has primarily to do with the the business that's already been sold and is ramping up. So very good visibility in that business. And our sweet spot there tends to be the really large little bit like the banking example I get. It tend to be very large global retailers that are looking for consistent experience, very predictable, very positive experience for their consumer, whether it's in the store online, whatever channel the consumer wants to use and it at the minute tends to be globalized. They don't want a bundled solution from an acquirer typically because they can't. There is no acquire that can handle them everywhere. And so they want that consistent experience and we can do that because we are able to work with any acquirer and make that experience at the at the till or online very positive and consistent across the board. So that is our spot target market. We're very good at it and we're continuing to see success.
Operator
And there are no further questions at this time. Mr. John Kraft, I turn the call over team will.
John Kraft
Thanks, everyone, for joining us today. We appreciate your time.
And look forward to catching up in the company coming weeks as well as at our Analyst Day. Have a great day. Thanks, everybody.
Thank you.
Operator
This concludes today conference. You may now disconnect.
