ACI Worldwide Q1 Earnings Call Highlights

Key Points

• Q1 results: ACI reported revenue of $426 million (6% organic growth in constant currency) and adjusted EBITDA of $105 million with margin expanding to 38%, and raised 2026 guidance to $1.89–$1.92 billion in revenue and $540–$555 million in adjusted EBITDA.
• Segment momentum: Payment Software showed strong SaaS and real-time payments performance (real‑time +22%, merchant +21%) while Biller accelerated with 10% revenue growth and margin expansion above 50%, and management highlighted the Connetic modernization platform as an emerging SaaS driver (early wins expected but not materially factored into 2026 guidance).
• Capital and balance sheet: ACI repurchased ~1.5 million shares for ~$65 million in Q1 (about 5.7 million since 2025), plans to allocate 50–60% of cash from operations to buybacks, and finished the quarter with $162 million cash, $812 million total debt and net leverage of 1.3x.

ACI Worldwide NASDAQ: ACIW reported first-quarter 2026 results that management said reflected a strong start to the year, supported by organic growth, margin expansion, and higher bookings. The company also raised its full-year revenue and adjusted EBITDA outlook following what it described as solid execution across its two operating segments, Payment Software and Biller.

First-quarter performance: organic growth and margin expansion

John Kraft, who opened the call, said the company would review first-quarter results and an updated financial outlook for 2026. President and CEO Thomas Warsop said ACI delivered 6% organic revenue growth in constant currency, noting the quarter built on what he described as “the strongest first quarter in the company’s history last year.”

Warsop said operational efficiency and operating leverage drove “over 160 basis points of FX adjusted, net adjusted EBITDA margin expansion” and 8% adjusted EBITDA growth, while share repurchases helped produce double-digit growth in adjusted EPS.

Chief Financial Officer Robert Leibrock reported total revenue of $426 million, up 8% year-over-year on a reported basis and up 6% in constant currency. Recurring revenue was $313 million, up 10% as reported and up 8% in constant currency. Adjusted EBITDA was $105 million, up 12% year-over-year as reported (8% in constant currency), and adjusted EBITDA margin expanded to 38% from 36% a year earlier.

Leibrock added that ACI took “certain one-time cost reduction actions in G&A during the quarter,” which were excluded from adjusted EBITDA.

Segment results: Payment Software steady, Biller accelerates

In Payment Software, Leibrock said revenue increased 2% in constant currency to $214 million. He said demand for cloud offerings continued, with SaaS revenue growing 11% in the quarter excluding FX. Segment recurring revenue (SaaS and maintenance) grew 9% year-over-year as reported, or 6% in constant currency.

By product area, Leibrock cited “particular strength in real-time payments and merchant,” which grew 22% and 21% in constant currency, respectively, driven by transaction-based volume growth. Fraud management was “essentially flat,” and issuing and acquiring were also flat, maintaining revenue levels reached in the year-ago quarter. Payment Software adjusted EBITDA was $113 million, up 2% year-over-year in constant currency, with EBITDA margin flat at 53% as operating leverage was offset by continued investment in growth initiatives, including ACI Connetic.

In Biller, Leibrock said revenue increased 10% to $212 million, driven by higher transaction volumes and new customer wins. Revenue net of interchange increased 5% year-over-year. Biller adjusted EBITDA rose 10% to $34 million, and EBITDA margin net of interchange was 51%, up more than 200 basis points, which Leibrock attributed to operating leverage from new implementations and incremental volume from existing customers.

Leibrock also highlighted the mix of top ARR contributors in the quarter, saying three were consumer finance, three were utilities, two were insurance, and two were government and higher education. He said three of the 10 were new logos, while seven were expansions with existing customers.

Bookings, platforms, and market commentary

ACI reported net new ARR bookings of $12 million, up 39%, while new license and services bookings were $50 million, flat year-over-year against what management characterized as a strong prior-year comparison. On the Q&A, Leibrock told analyst George Sutton that the 39% growth in new ARR bookings was “one of the most encouraging” data points, spanning both segments, including Biller’s Speedpay platform and SaaS offerings across Payment Software.

Warsop emphasized real-time payments momentum, stating that the real-time payments portion of the business grew revenue by over 20% in the quarter, driven by increasing volumes that can expand contract values at renewal. He offered an example involving a BASE24 renewal in Asia where ACI drove mid-single-digit pricing growth on renewing transactions and “25% plus” pricing growth related to net new real-time transactions, resulting in a higher total contract value.

Warsop also discussed progress with ACI Connetic, describing the platform as central to the company’s modernization strategy. He said the company expanded Connetic’s scope to modernize card payments, unify multi-rail U.S. clearing connectivity, and embed fraud and verification capabilities in payment flows. He added that Connetic is frequently part of renewal and RFP discussions because customers ask about modernization roadmaps that reduce risk.

In response to questions about Connetic’s target market, Warsop said the mid-tier remains the primary focus for net new Connetic customers, consistent with prior messaging, but larger institutions are also showing interest and using Connetic as a factor in renewal expansions even if they are not ready to migrate immediately. Leibrock later noted that Connetic’s value proposition includes “intelligent payment orchestration” across multiple payment types, along with AI capabilities being infused into the platform. He also emphasized geographic breadth, noting Payment Software’s international mix and said pipeline is split “a little bit more than half in Europe” with the remainder in the U.S., while customers in other regions are still asking about the roadmap.

Leibrock said ACI is not dependent on Connetic revenue in 2026 guidance due to offering availability and differing revenue models (as-a-service versus customer-managed licensing). Warsop added the early wins have been “primarily…exclusively SaaS,” with initial go-lives expected in the “next few months,” and that Connetic revenue would begin to appear this year but was not a large contribution and “not factored really into our guidance at all.”

Within Biller, Warsop said Speedpay One continued to drive electronic bill payment transaction growth and new customer relationships. He said total new ARR bookings growth was led by Biller and described several contract examples, including a renewal that improved pricing while offsetting interchange increases, and a client that shifted volume from calls to self-service, lowering costs from “about $20 per inbound call to about $1” per self-service interaction while consolidating four platforms into one.

Management also addressed macro uncertainty. Warsop said the conflict in the Middle East and “resulting energy shock” created uncertainty, but argued payments infrastructure remains essential during disruptions. He shared an example of a Middle East customer that insisted on proceeding with an upgrade on schedule despite regional conflict, which he said underscored the mission-critical nature of ACI’s solutions.

Cash flow, balance sheet, and capital return

Operating cash flow was $64 million in the quarter, down from $78 million a year earlier. Leibrock attributed the change to timing and working capital, including a higher concentration of billings late in March, and said the company was not seeing changes in billing discipline or collection patterns and expected timing to normalize in the second quarter.

ACI ended the quarter with $162 million of cash and total debt of $812 million, resulting in net leverage of 1.3 times adjusted EBITDA, which Leibrock said was below the company’s targeted range of 2 times. Total liquidity was $560 million including revolver availability.

On capital allocation, management reiterated its emphasis on returning cash to shareholders. Warsop said the company previously committed to allocating at least 50% to 60% of cash from operations to share repurchases in 2026. Leibrock said ACI repurchased 1.5 million shares for approximately $65 million in the first quarter and has repurchased roughly 5.7 million shares since the start of 2025, representing more than 5% of shares outstanding. The company ended the quarter with $391 million remaining under its current authorization.

Guidance raised for 2026

Leibrock said ACI raised its 2026 guidance based on operational performance, with minimal currency impact relative to February guidance. The company now expects full-year revenue of $1.89 billion to $1.92 billion, representing 7% to 9% growth, and said both Payment Software and Biller are expected to deliver upper single-digit growth.

For the second quarter, ACI guided revenue of $420 million to $440 million, with Payment Software expected to deliver double-digit growth and Biller expected to grow at mid-single digits against a strong prior-year comparison. Leibrock said ACI expects a stronger back half, with a roughly 40/60 revenue split between the third and fourth quarters, consistent with historical patterns.

Adjusted EBITDA guidance was raised to $540 million to $555 million (7% to 10% growth), and second-quarter adjusted EBITDA is expected to be $85 million to $95 million. On the Q&A, Leibrock said first-quarter outperformance was driven primarily by stronger-than-expected upsell and cross-sell on forecasted deals, with “minimal…pull forwards,” and said the company “rolled the bulk of that beat right through to the full year.”

In closing remarks, Warsop said ACI remains focused on executing its strategy amid geopolitical uncertainty, describing the company’s platforms as “mission-critical, highly reliable, and deeply embedded” in customer workflows and positioning ACI to continue delivering long-term shareholder value.

About ACI Worldwide NASDAQ: ACIW

ACI Worldwide NASDAQ: ACIW is a global software company that provides electronic payment and banking solutions to financial institutions, merchants and billers. The company's platforms enable real-time processing of credit, debit, ACH, bill payments, faster payments and money transfers, as well as integrated fraud prevention services. Headquartered in Naples, Florida, ACI serves clients across banking, payments and commerce sectors worldwide.

ACI's modular suite of applications can be deployed on-premise, in the cloud or in hybrid environments to meet diverse operational needs.

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