S1 Corporation (SONE-NASDAQ)

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September 11, 2009 Issue

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S1 Corporation’s Focus Remains On Providing Leading Organizations With Financial Services Software Solutions That Give Them A Competitive Advantage

Company Profile:

S1 Corporation (Nasdaq: SONE) provides financial services software to more than 3,000 organizations worldwide. Leading banks, credit unions, retailers, and processors depend on S1 for solutions to drive their payments, online banking and branch banking operations. S1’s products deliver flexibility, reliability and scalability with a lower total cost of ownership built on open systems technology. For more than 20 years, S1 has been a leader in developing, deploying and supporting solutions that deliver a competitive advantage to its customers.

Paul Parrish
Chief Financial Officer

Paul Parrish is the Chief Financial Officer of S1 Corporation. Paul brings more than 27 years of experience in corporate finance, accounting, financial planning and analysis, and financial reporting to S1. Paul joined S1 in January 2009 from Infor Global Solutions, a global enterprise software company, where he served as Senior Vice President, Controller and Principal Accounting Officer. Prior to this role, Paul spent ten years at the John H. Harland Company where he served in various roles including Senior Vice President of Finance, Information Technology and Chief Financial Officer of their Printed Products Division, and the Vice President and Chief Financial Officer of their Software and Services Division. A certified public accountant, Paul also spent more than 13 years at Deloitte & Touche.

Software & Services

S1 Corporation
705 Westech Drive
Norcross, GA 30092
Phone: 404-923-3500


Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – September 11, 2009

Mr. Parrish, what is the focus of S1 Corporation today, and how has it changed in the last year?

Mr. Parrish: “S1 Corporation’s focus is on providing leading banks, credit unions, retailers and processors financial services software solutions that give them a competitive advantage.”


CEOCFO: What is the competitive landscape?
Mr. Parrish: “The market for financial and payments software is competitive and rapidly evolving. The key to success in this space is a solid reputation for meeting the customer’s needs.”


CEOCFO: Give us an example of what an S1 Corporation product can do that others might not be able to do or that you can do better.

Mr. Parrish: “More than 3,000 organizations use our software to drive their payments, online banking and branch banking operations. Our history is built on a belief that innovation must demonstrate its value to the bottom line. Our reputation is founded on a belief that integrity precedes all other goals we have for our business. The latter is our most important differentiator.”


CEOCFO: Do banks tend to stay with you once they started with your product?
Mr. Parrish: “The systems we sell are critical to the daily operations of our customers. Once our solutions are in place, the banks, credit unions and retailers we sell to are unlikely to replace them as long as we keep our eye on the ball in terms of customer support and service.”


CEOCFO: Are you a global company?

Mr. Parrish: “We have customers in more than 50 countries that we support with over 1,600 employees providing domain and local expertise working from offices in major cities throughout the world.”


CEOCFO: Is there any particular concentration or areas where you would like to go into more?

Mr. Parrish: “The US accounts for approximately 70% of our revenues with opportunity being created by the replacement of proprietary legacy systems in tier one financial institutions and retailers. Replacement of legacy systems in the Middle East and Southeast Asia also presents us with significant growth opportunities.”


CEOCFO: Where do you see growth coming from?

Mr. Parrish: “We have seen growth in many of our solution areas with corporate internet banking and payments currently presenting the most potential.”


CEOCFO: You have five main products; will you briefly touch on each one?

Mr. Parrish: “We offer internet banking that financial institutions use to service their consumer, small business and corporate clients.

We offer branch banking, which includes teller, sales, and service and call-center solutions. We offer mobile banking and voice banking.  Lastly, we offer card payment solutions, which includes software to drive ATM networks, retailer point of sale terminals, in-store card management systems and merchant acquirers.”


CEOCFO: How much business is to banks and how much to retailers?

Mr. Parrish: “A majority of our business is with financial institutions though we have a number of large, marquis retail customers.”


CEOCFO: What is the financial picture like for S1?
Mr. Parrish: “2008 was one of S1’s best years for total revenue and adjusted EBITDA and the first six months of 2009 have shown continued improvement over 2008. Last year, we experienced strong cash flows, net income of $22 million and adjusted EBITDA of $43 million. Through the end of June 2009, we reported $22 million of adjusted EBITDA, had a cash balance of over $75 million, and shareholders’ equity of $220 million.”


CEOCFO: What is the revenue model?

Mr. Parrish: “We license software under both a perpetual and subscription license model depending on the product and the market we are selling to. We also host the software in our data center under multi-year contracts.”


CEOCFO: Security still is a very important issue; how do you address it and keep ahead of it?

Mr. Parrish: “Privacy and security are two of the most important areas that a potential customer evaluates before selecting a vendor and we constantly focus on keeping our products current with all regulatory and association mandates, including those related to security. We also work very closely with our customers to make sure our products are installed and managed in a secure environment.”


CEOCFO: Are there new products or applications you are working on?

Mr. Parrish: “We continue to focus on R&D that will make our customers more competitive and profitable.”   


CEOCFO: Are people coming to you at this point?

Mr. Parrish: “S1 is known as a leader with blue chip customers and we enjoy high name recognition in the marketplace. We serve nine of the top 15 banks in the United States, three of the top five banks in Canada, five of the top ten retailers in the UK, one of the world’s largest card issuers and one of the world’s largest quick serve restaurants. Our solutions have received excellent evaluations by leading product analysts. Trust is the key and these credentials are essential to building trust.”


CEOCFO: What should potential investors expect going forward, and why should they be paying attention?

Mr. Parrish: “We have been showing growth year over year, even in a difficult economy. We reported 11.5% revenue growth in 2008, and announced that we are expecting high single digit revenue growth in 2009.”


CEOCFO: In closing, is there anything investors might not understand about S1 Corporation that they really should get?

Mr. Parrish: “Over the past 2 and half years, S1 has significantly improved customer satisfaction and our operating results have positively reflected this improvement.”


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“2008 was one of S1’s best years for total revenue and adjusted EBITDA and the first six months of 2009 have shown continued improvement over 2008.” - Paul Parrish

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