Core Viewpoint - ACI Worldwide (ACIW) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - ACI Worldwide's rising earnings estimates suggest an improvement in its underlying business, likely leading to increased stock prices as investors respond positively to this trend [5][8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of performance, where Zacks Rank 1 stocks have generated an average annual return of +25% since 1988 [7][9]. - ACI Worldwide's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10]. Earnings Estimate Details - For the fiscal year ending December 2025, ACI Worldwide is expected to earn $2.84 per share, with a 0.3% increase in the Zacks Consensus Estimate over the past three months [8].

Industry Overview - The mobile payments market is experiencing rapid growth due to the shift from cash to digital transactions, driven by convenience and security [1][9] - Increased internet penetration and smartphone usage are contributing to the adoption of digital payments, transforming everyday transactions [3] - The industry is diversifying with contactless payment options such as mobile wallets, biometrics, and QR codes, enhancing the global digital payments market [4] Company Insights - **PayPal Holdings Inc. (PYPL)**: - Benefiting from robust growth in total payment volume and strengthening customer engagement [10][11] - Expected revenue and earnings growth rates of 4% and 12% respectively for the current year [12] - **JPMorgan Chase & Co. (JPM)**: - Projected net interest income (NII) growth at a CAGR of 2.9% by 2027, supported by business expansion and loan demand [13] - Expected revenue and earnings growth rates of -0.2% and -1.3% respectively for the current year [15] - **Intuit Inc. (INTU)**: - Strong momentum in Online Services revenues driven by Mailchimp, payroll, and Money [16] - Expected revenue and earnings growth rates of 11.7% and 13.7% respectively for the current year [19] - **ACI Worldwide Inc. (ACIW)**: - Powers electronic payments for over 5,000 organizations globally, executing $14 trillion in payments daily [21][22] - Expected revenue and earnings growth rates of 8% and 7.6% respectively for the current year [22] - **Remitly Global Inc. (RELY)**: - Engaged in providing digital financial services, with an expected revenue growth rate of 27.9% and earnings growth of over 100% for the current year [23][24]

Core Viewpoint - ACI Worldwide (ACIW) shows potential for significant upside, with a mean price target of $64.6 indicating a 45% increase from the current price of $44.55 [1] Price Targets - The average price target consists of five estimates ranging from a low of $60.00 to a high of $77.00, with a standard deviation of $7.4, suggesting a variability in analyst estimates [2] - The lowest estimate indicates a 34.7% increase, while the highest suggests a 72.8% upside [2] - A low standard deviation indicates a higher agreement among analysts regarding price movement [9] Analyst Sentiment - Analysts are optimistic about ACIW's earnings prospects, as indicated by a trend of upward revisions in earnings estimates [4][11] - The Zacks Consensus Estimate for the current year has increased by 0.1% due to one upward revision and no negative revisions in the last 30 days [12] Zacks Rank - ACIW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, which supports the stock's potential upside [13] Caution on Price Targets - While price targets are a common metric, they should not be the sole basis for investment decisions due to historical inaccuracies in predicting actual stock price movements [3][7][10] - Analysts may set overly optimistic price targets influenced by business relationships, which can lead to inflated estimates [8]

PART I – FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (unaudited)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(unaudited)) This section presents ACI Worldwide's unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show the company's financial position as of June 30, 2025, compared to December 31, 2024, highlighting changes in assets, liabilities, and stockholders' equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | **Total Assets** | $3,138,283 | $3,025,293 | | **Total Liabilities** | $1,744,785 | $1,600,966 | | **Total Stockholders' Equity** | $1,393,498 | $1,424,327 | - Total assets increased by **$112.99 million**, primarily driven by an increase in current assets, notably settlement assets - Total liabilities increased by **$143.82 million**, mainly due to higher current liabilities, particularly settlement liabilities - Total stockholders' equity decreased by **$30.83 million**, influenced by treasury stock repurchases partially offset by retained earnings growth [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations detail the company's revenues, operating expenses, and net income for the three and six months ended June 30, 2025, compared to the same periods in 2024 | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Total Revenues | $401,258 | $373,479 | +7.44% | $795,823 | $689,498 | +15.42% | | Operating Income | $34,858 | $53,701 | -35.09% | $93,374 | $63,261 | +47.61% | | Net Income | $12,202 | $30,887 | -60.49% | $71,072 | $23,136 | +207.11% | | Basic EPS | $0.12 | $0.29 | -58.62% | $0.68 | $0.22 | +209.09% | | Diluted EPS | $0.12 | $0.29 | -58.62% | $0.67 | $0.22 | +204.55% | - Net income for the three months ended June 30, 2025, decreased significantly by **60.49%** year-over-year, while for the six months, it increased by **207.11%** year-over-year[16](index=16&type=chunk) - Total revenues showed consistent growth, increasing by **7.44%** for the three-month period and **15.42%** for the six-month period[16](index=16&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents the net income and other comprehensive income (loss) components, primarily foreign currency translation adjustments, to arrive at total comprehensive income for the three and six months ended June 30, 2025 and 2024 | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Net Income | $12,202 | $30,887 | -60.49% | $71,072 | $23,136 | +207.11% | | Foreign Currency Translation Adjustments | $14,651 | $(2,208) | +763.54% | $22,530 | $(4,612) | +588.55% | | Comprehensive Income | $26,853 | $28,679 | -6.43% | $93,602 | $18,524 | +405.31% | - Foreign currency translation adjustments significantly improved, moving from a loss in 2024 to a gain in 2025 for both three and six-month periods, positively impacting comprehensive income[18](index=18&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) These statements detail the changes in each component of stockholders' equity, including common stock, additional paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive loss, for the three and six months ended June 30, 2025 and 2024 | Metric (in thousands) | Balance as of Dec 31, 2024 | 6 Months Ended June 30, 2025 | Balance as of June 30, 2025 | | :-------------------- | :------------------------- | :--------------------------- | :-------------------------- | | Common Stock | $702 | $0 | $702 | | Additional Paid-in Capital | $731,927 | $1,615 | $733,542 | | Retained Earnings | $1,598,085 | $71,072 | $1,669,157 | | Treasury Stock | $(784,914) | $(126,046) | $(910,960) | | Accumulated Other Comprehensive Loss | $(121,473) | $22,530 | $(98,943) | | **Total Stockholders' Equity** | **$1,424,327** | **$(30,829)** | **$1,393,498** | - The company repurchased **2,713,799 shares** of common stock for **$134.656 million** during the six months ended June 30, 2025, contributing to the decrease in total stockholders' equity[23](index=23&type=chunk) - Net income of **$71.072 million** for the six months ended June 30, 2025, increased retained earnings[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The condensed consolidated statements of cash flows provide a summary of cash generated from or used in operating, investing, and financing activities for the six months ended June 30, 2025, compared to the same period in 2024 | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | | Net Cash Flows from Operating Activities | $128,018 | $178,258 | -28.18% | | Net Cash Flows from Investing Activities | $29,553 | $(23,978) | +223.24% | | Net Cash Flows from Financing Activities | $(129,543) | $(170,273) | +23.92% | | Net Increase (Decrease) in Cash and Cash Equivalents | $33,937 | $(14,703) | +331.09% | | Cash and Cash Equivalents, End of Period | $298,955 | $224,118 | +33.39% | - Cash flows from operating activities decreased by **$50.24 million**, primarily due to lower customer receipt collections and higher income taxes paid, partially offset by improved profitability[27](index=27&type=chunk)[190](index=190&type=chunk) - Cash flows from investing activities significantly improved, turning from a net outflow of **$23.98 million** in 2024 to a net inflow of **$29.55 million** in 2025, driven by proceeds from the sale of an equity investment[27](index=27&type=chunk)[193](index=193&type=chunk) - Cash flows from financing activities showed a reduced net outflow, primarily due to proceeds from the revolving credit facility and term loans, partially offset by the redemption of 2026 Notes and common stock repurchases[27](index=27&type=chunk)[195](index=195&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on accounting policies, revenue, debt, intangible assets, stock compensation, segment information, and income taxes [1. Condensed Consolidated Financial Statements](index=11&type=section&id=1.%20Condensed%20Consolidated%20Financial%20Statements) This note outlines the basis of presentation for the unaudited financial statements, including accounting policies, estimates, and the sale of an equity investment | Other Current Liabilities (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Vendor financed licenses | $16,155 | $14,462 | | Operating lease liabilities | $8,559 | $9,265 | | Income taxes payable | $3,347 | $3,284 | | Accrued interest | $1,124 | $8,810 | | Other | $35,441 | $37,987 | | **Total other current liabilities** | **$64,626** | **$73,808** | - The company sold its **30% equity interest** in an Indian payment technology company for **$46.0 million** in March 2025, recognizing a gain of **$25.9 million**[41](index=41&type=chunk) - Goodwill balance as of June 30, 2025, was **$1.2 billion**, allocated **$809.0 million** to Payment Software and **$417.0 million** to Biller, following a realignment of reporting units[39](index=39&type=chunk) [2. Revenue](index=13&type=section&id=2.%20Revenue) This note details the company's revenue recognition policies in accordance with ASC 606, including the composition of total receivables, changes in deferred revenue, and revenue allocated to remaining performance obligations | Receivables (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------- | :------------ | :---------------- | | Billed receivables, net | $172,985 | $196,728 | | Current accrued receivables, net | $225,179 | $217,671 | | Long-term accrued receivables, net | $345,608 | $360,079 | | **Total receivables, net** | **$743,772** | **$774,478** | | Deferred Revenue (in thousands) | Amount | | :------------------------------ | :----- | | Balance, December 31, 2024 | $94,723 | | Deferral of revenue | $62,708 | | Recognition of deferred revenue | $(70,348) | | Foreign currency translation | $2,540 | | **Balance, June 30, 2025** | **$89,623** | - Revenue allocated to remaining performance obligations was **$724.0 million** as of June 30, 2025, with approximately **52%** expected to be recognized over the next 12 months[48](index=48&type=chunk) [3. Debt](index=14&type=section&id=3.%20Debt) This note provides details on the company's debt structure, including the Credit Agreement, Senior Notes, and an overdraft facility. It highlights the redemption of the 2026 Notes and the issuance of an Incremental Term Loan | Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Term loans | $643,750 | $462,500 | | Revolving credit facility | $260,000 | $70,000 | | 5.750% Senior notes, due August 2026 | $0 | $400,000 | | Debt issuance costs | $(5,729) | $(7,923) | | **Total debt** | **$898,021** | **$924,577** | - On June 18, 2025, the company redeemed in full its outstanding **5.750% Senior Notes due 2026**, which had a principal amount of **$400.0 million**[37](index=37&type=chunk)[61](index=61&type=chunk) - An Incremental Term Loan of **$200.0 million** was entered into on June 18, 2025, under the Credit Facility[53](index=53&type=chunk) - The company was in compliance with all financial debt covenants as of June 30, 2025[62](index=62&type=chunk) [4. Software and Other Intangible Assets](index=16&type=section&id=4.%20Software%20and%20Other%20Intangible%20Assets) This note provides information on the carrying amounts and accumulated amortization of the company's software and other intangible assets, along with estimated future amortization expenses | Asset Category (in thousands) | June 30, 2025 Net Balance | December 31, 2024 Net Balance | | :---------------------------- | :------------------------ | :-------------------------- | | Software for internal use | $88,574 | $92,893 | | Customer relationships | $156,538 | $165,377 | | Amortization Expense (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Software for internal use | $15,600 | $15,800 | $31,200 | $31,300 | | Other intangible assets | $5,300 | $8,200 | $10,500 | $16,700 | - Estimated future amortization expense for software and other intangible assets totals **$88.574 million** and **$156.538 million**, respectively, as of June 30, 2025[68](index=68&type=chunk) [5. Stock-Based Compensation Plans](index=17&type=section&id=5.%20Stock-Based%20Compensation%20Plans) This note details the company's stock-based compensation plans, including activity for employee stock purchase plans, stock options, performance share awards (TSRs), and restricted share units (RSUs), along with associated compensation expenses | Stock-Based Compensation Expense (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Stock-based compensation expense | $16,400 | $10,700 | $28,000 | $18,800 | | Corresponding tax benefits | $2,600 | $1,700 | $4,400 | $3,100 | - Unrecognized compensation expense as of June 30, 2025, was **$77.6 million** for RSUs (weighted average period of **2.2 years**) and **$30.2 million** for TSRs (weighted average period of **1.7 years**)[74](index=74&type=chunk) - During the six months ended June 30, 2025, **507,754 TSRs** granted in fiscal 2022 vested at a **200% payout rate**, and **674,034 RSUs** vested[72](index=72&type=chunk)[73](index=73&type=chunk) [6. Common Stock and Treasury Stock](index=19&type=section&id=6.%20Common%20Stock%20and%20Treasury%20Stock) This note outlines the company's stock repurchase program, including the number of shares repurchased and the remaining authorized amount - The company repurchased **2,713,799 shares** for **$134.7 million** during the six months ended June 30, 2025[77](index=77&type=chunk) - As of June 30, 2025, the maximum remaining amount authorized for purchase under the stock repurchase program was **$223.5 million**[77](index=77&type=chunk) - Since the program's inception, the company has repurchased **65,581,636 shares** for approximately **$1.2 billion**[77](index=77&type=chunk) [7. Earnings Per Share](index=19&type=section&id=7.%20Earnings%20Per%20Share) This note provides the reconciliation of weighted average shares outstanding used to compute basic and diluted earnings per share | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic weighted average shares outstanding | 104,376 | 105,395 | 104,860 | 106,097 | | Dilutive effect of stock options, RSUs, and contingently issuable shares | 727 | 771 | 1,100 | 718 | | Diluted weighted average shares outstanding | 105,103 | 106,166 | 105,960 | 106,815 | - The diluted EPS computation excluded **2.0 million** and **1.7 million** anti-dilutive options, RSUs, and contingently issuable shares for the three and six months ended June 30, 2025, respectively[80](index=80&type=chunk) [8. Other, Net](index=20&type=section&id=8.%20Other,%20Net) This note details the components of 'Other, net' income or expense, primarily foreign currency transaction gains/losses, gain on sale of equity investment, and loss on extinguishment of debt | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Foreign currency transaction gains (losses) | $(5,300) | $16 | $(7,487) | $(2,019) | | Gain on sale of equity investment | $0 | $0 | $25,927 | $0 | | Loss on extinguishment of debt | $(1,093) | $0 | $(1,093) | $0 | | Equity investment earnings | $0 | $1,140 | $0 | $1,150 | | **Total other, net** | **$(6,393)** | **$1,156** | **$17,347** | **$(869)** | - A significant gain of **$25.9 million** from the sale of an equity investment contributed to a positive 'Other, net' for the six months ended June 30, 2025[82](index=82&type=chunk) - A **$1.1 million** loss on extinguishment of debt was recorded due to the redemption of the 2026 Notes[82](index=82&type=chunk) [9. Segment Information](index=20&type=section&id=9.%20Segment%20Information) This note details the company's segment reporting structure, which was realigned in 2025 into two operating segments: Payment Software and Biller. It provides financial data, including revenue and Segment Adjusted EBITDA, for each segment - In 2025, the company realigned its segment reporting to Payment Software (including bank and merchant customers) and Biller, with the CEO acting as the chief operating decision maker[83](index=83&type=chunk)[84](index=84&type=chunk) | Segment Revenue (in thousands) | 3 Months Ended June 30, 2025 Revenue | 3 Months Ended June 30, 2024 Revenue | 6 Months Ended June 30, 2025 Revenue | 6 Months Ended June 30, 2024 Revenue | | :----------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Payment Software | $179,343 | $181,666 | $380,068 | $322,823 | | Biller | $221,915 | $191,813 | $415,755 | $366,675 | | **Total Revenue** | **$401,258** | **$373,479** | **$795,823** | **$689,498** | | Segment Adjusted EBITDA (in thousands) | 3 Months Ended June 30, 2025 Adj. EBITDA | 3 Months Ended June 30, 2024 Adj. EBITDA | 6 Months Ended June 30, 2025 Adj. EBITDA | 6 Months Ended June 30, 2024 Adj. EBITDA | | :------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Payment Software | $83,278 | $94,587 | $189,839 | $146,876 | | Biller | $39,785 | $37,435 | $70,680 | $68,172 | | **Total Segment Adjusted EBITDA** | **$123,063** | **$132,022** | **$260,519** | **$215,048** | - Payment Software Segment Adjusted EBITDA decreased by **$11.3 million** for the three months ended June 30, 2025, but increased by **$43.0 million** for the six months, driven by revenue growth in license and capacity[178](index=178&type=chunk)[180](index=180&type=chunk) - Biller Segment Adjusted EBITDA increased by **$2.4 million** for the three months and **$2.5 million** for the six months ended June 30, 2025, primarily due to revenue increases offset by higher payment card interchange and processing fees[179](index=179&type=chunk)[181](index=181&type=chunk) [10. Income Taxes](index=25&type=section&id=10.%20Income%20Taxes) This note provides information on the company's effective tax rates, unrecognized tax benefits, and the potential impact of new tax legislation | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Effective Tax Rate | 32% | 23% | 21% | 30% | - The effective tax rate for the three months ended June 30, 2025, was **32%**, compared to **23%** in the prior year, while for the six months, it was **21%** compared to **30%**[99](index=99&type=chunk)[100](index=100&type=chunk) - Unrecognized tax benefits for uncertain tax positions were **$21.0 million** as of June 30, 2025, with a potential decrease of **$0.8 million** within the next 12 months[102](index=102&type=chunk) - The company is assessing the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements[103](index=103&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=27&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's analysis of the company's financial condition, operational results, liquidity, and critical accounting estimates [Forward-Looking Statements](index=27&type=section&id=Forward-Looking%20Statements) This subsection provides a cautionary statement regarding forward-looking statements in the report, emphasizing that actual results may differ materially due to various risks and uncertainties - Forward-looking statements are based on current expectations and involve risks and uncertainties, and actual future results may vary materially[105](index=105&type=chunk)[106](index=106&type=chunk) - The company disclaims any obligation to update forward-looking statements, except as required by law[106](index=106&type=chunk) [Overview](index=27&type=section&id=Overview) This section provides an overview of ACI Worldwide's global payments technology business and key market trends influencing its operations - ACI Worldwide delivers software solutions for intelligent payments orchestration, serving banks, merchants, and billers globally[109](index=109&type=chunk)[110](index=110&type=chunk) - Key trends impacting strategies include increasing digital payment transaction volumes, adoption of real-time payments (e.g., FedNow, UPI), cloud technology adoption, payments intelligence/fraud prevention, omni-commerce, and open banking[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - The company aims for growth through organic sources, partnerships, alliances, and strategic acquisitions[119](index=119&type=chunk) [Backlog](index=29&type=section&id=Backlog) This section presents the company's 60-month backlog estimate, categorized into Committed and Renewal Backlog, and outlines the key assumptions and exclusions used in its calculation | Backlog (in millions) | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------ | :------------- | :---------------- | | Payment Software | $3,333 | $3,142 | $3,102 | | Biller | $3,712 | $3,597 | $3,604 | | **Total** | **$7,045** | **$6,739** | **$6,706** | | Backlog Type (in millions) | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :------------------------- | :------------ | :------------- | :---------------- | | Committed | $2,321 | $2,257 | $2,413 | | Renewal | $4,724 | $4,482 | $4,293 | | **Total** | **$7,045** | **$6,739** | **$6,706** | - Total 60-month backlog increased to **$7,045 million** as of June 30, 2025, from **$6,706 million** at December 31, 2024, driven by growth in both Payment Software and Biller segments, particularly in Renewal Backlog[124](index=124&type=chunk) [RESULTS OF OPERATIONS](index=31&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, comparing revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 [Three Month Period Ended June 30, 2025 Compared to the Three Month Period Ended June 30, 2024](index=31&type=section&id=Three%20Month%20Period%20Ended%20June%2030,%202025%20Compared%20to%20the%20Three%20Month%20Period%20Ended%20June%2030,%202024) This subsection analyzes the financial results for the three months ended June 30, 2025, compared to the same period in 2024, detailing changes in revenue streams, operating expenses, and net income | Metric (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Total Revenues | $401,258 | $373,479 | $27,779 | 7% | | Operating Income | $34,858 | $53,701 | $(18,843) | (35)% | | Net Income | $12,202 | $30,887 | $(18,685) | (60)% | - Total revenue increased by **$27.8 million (7%)** year-over-year, with a **$1.4 million** positive impact from foreign currency strengthening[128](index=128&type=chunk) - Operating income decreased by **$18.8 million (35%)** and net income decreased by **$18.7 million (60%)**, primarily due to higher operating expenses, including cost reduction strategies and increased personnel/professional fees[127](index=127&type=chunk)[142](index=142&type=chunk)[151](index=151&type=chunk) [Revenues (Three Months)](index=31&type=section&id=Revenues) Revenue analysis for the three months ended June 30, 2025, showing growth in SaaS/PaaS and Maintenance, offset by decreases in License and Services revenue | Revenue Type (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | SaaS and PaaS | $271,258 | $235,399 | $35,859 | 15% | | License | $56,711 | $65,582 | $(8,871) | (14)% | | Maintenance | $50,421 | $48,733 | $1,688 | 3% | | Services | $22,868 | $23,765 | $(897) | (4)% | - SaaS and PaaS revenue increased by **$35.9 million (15%)**, driven by new customer go-lives and higher transaction volumes[130](index=130&type=chunk)[135](index=135&type=chunk) - License revenue decreased by **$8.9 million (14%)** due to license renewal timing and the relative size of new license and capacity events[133](index=133&type=chunk) - Maintenance revenue increased by **$1.7 million (3%)**, primarily due to consumer price index uplifts on contracted maintenance[134](index=134&type=chunk)[136](index=136&type=chunk) [Operating Expenses (Three Months)](index=33&type=section&id=Operating%20Expenses) Analysis of operating expenses for the three months ended June 30, 2025, showing increases in Cost of Revenue, R&D, Selling and Marketing, and General and Administrative, partially offset by a decrease in Depreciation and Amortization | Expense Type (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Cost of Revenue | $234,800 | $203,238 | $31,562 | 16% | | Research and Development | $41,107 | $35,410 | $5,697 | 16% | | Selling and Marketing | $28,741 | $28,551 | $190 | 1% | | General and Administrative | $37,651 | $24,993 | $12,658 | 51% | | Depreciation and Amortization | $24,101 | $27,586 | $(3,485) | (13)% | - Cost of revenue increased by **$31.6 million (16%)**, mainly due to higher payment card interchange and personnel expenses[141](index=141&type=chunk)[143](index=143&type=chunk) - General and administrative expenses surged by **$12.7 million (51%)**, including **$5.1 million** for cost reduction strategies and higher personnel and professional fees[148](index=148&type=chunk)[151](index=151&type=chunk) - Depreciation and amortization decreased by **$3.5 million (13%)** due to fully amortized intangibles[149](index=149&type=chunk) [Other Income and Expense (Three Months)](index=35&type=section&id=Other%20Income%20and%20Expense) Review of other income and expense items for the three months ended June 30, 2025, including interest expense, interest income, and other net items | Metric (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Interest Expense | $(14,527) | $(18,471) | $3,944 | (21)% | | Interest Income | $3,934 | $3,953 | $(19) | 0% | | Other, Net | $(6,393) | $1,156 | $(7,549) | (653)% | - Interest expense decreased by **$3.9 million (21%)** due to lower comparative debt balances and decreased interest rates[152](index=152&type=chunk) - Other, net shifted from an income of **$1.2 million** in 2024 to an expense of **$6.4 million** in 2025, primarily due to foreign currency transaction losses and a **$1.1 million** loss on extinguishment of debt[154](index=154&type=chunk) [Income Taxes (Three Months)](index=35&type=section&id=Income%20Taxes) Brief reference to income tax details provided in Note 10 of the financial statements - Income tax expense for the three months ended June 30, 2025, was **$5.67 million**, down from **$9.45 million** in the prior year[127](index=127&type=chunk) - The effective tax rate for the three months ended June 30, 2025, was **32%**[99](index=99&type=chunk) [Six Month Period Ended June 30, 2025 Compared to the Six Month Period Ended June 30, 2024](index=36&type=section&id=Six%20Month%20Period%20Ended%20June%2030,%202025%20Compared%20to%20the%20Six%20Month%20Period%20Ended%20June%2030,%202024) This subsection analyzes the financial results for the six months ended June 30, 2025, compared to the same period in 2024, detailing changes in revenue streams, operating expenses, and net income | Metric (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Total Revenues | $795,823 | $689,498 | $106,325 | 15% | | Operating Income | $93,374 | $63,261 | $30,113 | 48% | | Net Income | $71,072 | $23,136 | $47,936 | 207% | - Total revenue increased by **$106.3 million (15%)** year-over-year, with foreign currency impact being not meaningful[158](index=158&type=chunk) - Operating income increased by **$30.1 million (48%)** and net income significantly increased by **$47.9 million (207%)**, driven by strong revenue growth and a positive shift in 'Other, net' income[157](index=157&type=chunk)[175](index=175&type=chunk) [Revenues (Six Months)](index=36&type=section&id=Revenues) Revenue analysis for the six months ended June 30, 2025, showing strong growth across all revenue streams, particularly in License revenue | Revenue Type (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | SaaS and PaaS | $508,341 | $451,131 | $57,210 | 13% | | License | $141,204 | $95,555 | $45,649 | 48% | | Maintenance | $99,063 | $96,487 | $2,576 | 3% | | Services | $47,215 | $46,325 | $890 | 2% | - License revenue increased significantly by **$45.6 million (48%)**, driven by the relative size of new license and capacity events[160](index=160&type=chunk)[164](index=164&type=chunk) - SaaS and PaaS revenue increased by **$57.2 million (13%)**, primarily due to new customer go-lives and higher transaction volumes[159](index=159&type=chunk)[164](index=164&type=chunk) [Operating Expenses (Six Months)](index=37&type=section&id=Operating%20Expenses) Analysis of operating expenses for the six months ended June 30, 2025, showing increases across most categories, particularly Cost of Revenue and General and Administrative, with a decrease in Depreciation and Amortization | Expense Type (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Cost of Revenue | $448,178 | $394,345 | $53,833 | 14% | | Research and Development | $80,015 | $70,403 | $9,612 | 14% | | Selling and Marketing | $60,927 | $55,301 | $5,626 | 10% | | General and Administrative | $65,243 | $50,993 | $14,250 | 28% | | Depreciation and Amortization | $48,086 | $55,195 | $(7,109) | (13)% | - Cost of revenue increased by **$53.8 million (14%)**, primarily due to higher payment card interchange and personnel expenses[166](index=166&type=chunk)[173](index=173&type=chunk) - General and administrative expenses increased by **$14.3 million (28%)**, driven by higher personnel and professional fees, including a **$6.1 million** increase in stock-based compensation[169](index=169&type=chunk)[174](index=174&type=chunk) - Depreciation and amortization decreased by **$7.1 million (13%)** due to fully amortized intangibles[170](index=170&type=chunk) [Other Income and Expense (Six Months)](index=38&type=section&id=Other%20Income%20and%20Expense) Review of other income and expense items for the six months ended June 30, 2025, highlighting a significant gain from the sale of an equity investment | Metric (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | :--------- | | Interest Expense | $(29,210) | $(37,481) | $8,271 | (22)% | | Interest Income | $7,998 | $7,962 | $36 | 0% | | Other, Net | $17,347 | $(869) | $18,216 | 2096% | - Interest expense decreased by **$8.3 million (22%)** due to lower comparative debt balances and decreased interest rates[171](index=171&type=chunk) - Other, net significantly improved from an expense of **$0.9 million** in 2024 to an income of **$17.3 million** in 2025, primarily driven by a **$25.9 million** gain on the sale of an equity method investment[175](index=175&type=chunk) [Income Taxes (Six Months)](index=39&type=section&id=Income%20Taxes) Brief reference to income tax details provided in Note 10 of the financial statements - Income tax expense for the six months ended June 30, 2025, was **$18.44 million**, up from **$9.74 million** in the prior year[157](index=157&type=chunk) - The effective tax rate for the six months ended June 30, 2025, was **21%**[99](index=99&type=chunk) [Segment Results](index=39&type=section&id=Segment%20Results) This section summarizes the financial performance of the Payment Software and Biller segments, highlighting changes in revenue and Segment Adjusted EBITDA for both the three and six-month periods | Segment (in thousands) | 3 Months Ended June 30, 2025 Revenue | 3 Months Ended June 30, 2024 Revenue | 6 Months Ended June 30, 2025 Revenue | 6 Months Ended June 30, 2024 Revenue | | :--------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Payment Software | $179,343 | $181,666 | $380,068 | $322,823 | | Biller | $221,915 | $191,813 | $415,755 | $366,675 | | Segment (in thousands) | 3 Months Ended June 30, 2025 Adj. EBITDA | 3 Months Ended June 30, 2024 Adj. EBITDA | 6 Months Ended June 30, 2025 Adj. EBITDA | 6 Months Ended June 30, 2024 Adj. EBITDA | | :--------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Payment Software | $83,278 | $94,587 | $189,839 | $146,876 | | Biller | $39,785 | $37,435 | $70,680 | $68,172 | - Payment Software revenue decreased by **$2.3 million** for the three months but increased by **$57.2 million** for the six months, primarily due to license and capacity revenue growth[178](index=178&type=chunk)[180](index=180&type=chunk) - Biller revenue increased by **$30.1 million** for the three months and **$49.1 million** for the six months, driving Segment Adjusted EBITDA growth despite increased operating expenses[179](index=179&type=chunk)[181](index=181&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity needs, sources of funds, available liquidity, and activities related to its stock repurchase program and cash flows - Primary liquidity needs include funding operating expenses, debt requirements, acquisitions, capital expenditures, and lease payments, expected to be met by cash flow from operations, cash equivalents, and revolving credit facility[182](index=182&type=chunk) | Available Liquidity (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $189,697 | $216,394 | | Availability under revolving credit facility | $338,100 | $528,100 | | **Total liquidity** | **$527,797** | **$744,494** | - Total liquidity decreased by **$216.7 million**, primarily due to increased borrowings on the revolving credit facility used to redeem the 2026 Notes[184](index=184&type=chunk) - The company repurchased **2,713,799 shares** for **$134.7 million** during the six months ended June 30, 2025, with **$223.5 million** remaining authorized under the stock repurchase program[187](index=187&type=chunk) [Cash Flows](index=40&type=section&id=Cash%20Flows) Detailed analysis of cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, compared to the same period in 2024 | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Operating activities | $128,018 | $178,258 | | Investing activities | $29,553 | $(23,978) | | Financing activities | $(129,543) | $(170,273) | - Operating cash flows decreased by **$50.2 million**, mainly due to lower customer receipt collections and higher income taxes paid[190](index=190&type=chunk) - Investing activities generated a net inflow of **$29.6 million**, a significant improvement from a **$24.0 million** outflow in the prior year, primarily due to proceeds from the sale of an equity investment[193](index=193&type=chunk) - Financing activities resulted in a net outflow of **$129.5 million**, a decrease from **$170.3 million** in the prior year, influenced by debt redemptions, new borrowings, and stock repurchases[195](index=195&type=chunk) [Contractual Obligations and Commercial Commitments](index=41&type=section&id=Contractual%20Obligations%20and%20Commercial%20Commitments) This section states that there have been no material changes to contractual obligations and commercial commitments since the last Form 10-K, other than those disclosed in Note 3, Debt - No material changes to contractual obligations and commercial commitments for the six months ended June 30, 2025, beyond those detailed in Note 3, Debt[196](index=196&type=chunk) [Critical Accounting Estimates](index=41&type=section&id=Critical%20Accounting%20Estimates) This section reiterates the critical accounting policies and estimates, including revenue recognition, intangible assets and goodwill, stock-based compensation, and accounting for income taxes, noting no significant changes during the period - Critical accounting policies and estimates include Revenue Recognition, Intangible Assets and Goodwill, Stock-Based Compensation, and Accounting for Income Taxes[198](index=198&type=chunk)[204](index=204&type=chunk) - There were no significant changes to critical accounting policies and estimates during the six months ended June 30, 2025[198](index=198&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=42&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the company's exposure to market risks, primarily related to fluctuations in foreign currency exchange rates and interest rates, and quantifies the potential impact of these risks - No material changes to market risk for the six months ended June 30, 2025, excluding the impact of interest rate changes, inflationary pressures, and global financial market uncertainty[199](index=199&type=chunk) - A hypothetical **10%** increase or decrease in effective interest rates would increase or decrease interest income by **$0.3 million** annually[200](index=200&type=chunk) - For the **$903.8 million** outstanding under the Credit Facility (floating rate of **6.17%** as of June 30, 2025), a hypothetical **10%** increase or decrease in effective interest rates would change interest expense by approximately **$5.6 million**[201](index=201&type=chunk) - The company does not engage in foreign currency hedging transactions or hold derivative financial instruments for speculation[199](index=199&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=42&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025[202](index=202&type=chunk) - There have been no material changes in internal control over financial reporting during the quarter ended June 30, 2025[203](index=203&type=chunk) PART II – OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=43&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section states that the company is not currently a party to any legal proceedings that are likely to have a material adverse effect on its financial condition or results of operations - The company is not involved in any legal proceedings that are expected to have a material adverse effect on its financial condition or results of operations[205](index=205&type=chunk) [ITEM 1A. RISK FACTORS](index=43&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section indicates that there have been no material changes to the risk factors previously disclosed in the company's annual report on Form 10-K - No material changes to the risk factors disclosed in the Form 10-K for the fiscal year ended December 31, 2024[206](index=206&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=43&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section provides information on the company's common stock repurchases during the three months ended June 30, 2025, under its authorized stock repurchase program | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--------------------------------- | :----------------------------- | :--------------------------- | | April 1, 2025 through April 30, 2025 | 899,556 | $52.09 | | May 1, 2025 through May 31, 2025 | 1,266,817 | $47.69 | | June 1, 2025 through June 30, 2025 | 543,950 | $46.42 | | **Total** | **2,710,323** | | - The company repurchased **2,710,323 shares** of common stock during the three months ended June 30, 2025[207](index=207&type=chunk) - As of June 30, 2025, approximately **$223.5 million** remained authorized for purchase under the stock repurchase program[207](index=207&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=44&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section states that there are no defaults upon senior securities to report [ITEM 4. MINE SAFETY DISCLOSURES](index=44&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that mine safety disclosures are not applicable to the company [ITEM 5. OTHER INFORMATION](index=44&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section provides updates on Rule 10b5-1 plans and changes to equity award agreements for executive leadership - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[211](index=211&type=chunk) - The Board approved new forms of Restricted Share Unit (RSU) and Performance Share Award (PSA) agreements for executive leadership, revising the definition of retirement and applying retirement treatment only after six months from the grant date[212](index=212&type=chunk) - An omnibus amendment was approved for former CFO Scott Behrens's outstanding RSUs and PSAs, incorporating the revised retirement provision and specifying settlement timing[214](index=214&type=chunk) [ITEM 6. EXHIBITS](index=45&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents, equity award agreements, and certifications - The exhibits include various corporate documents, equity award agreements (e.g., Form of Performance Share Award Agreement, Form of Executive Restricted Share Unit Award Agreement), and certifications (e.g., Section 302 and 906 certifications)[216](index=216&type=chunk) [SIGNATURE](index=46&type=section&id=SIGNATURE) This section contains the signature of the registrant, ACI Worldwide, Inc., by its Principal Financial Officer, Robert W. Leibrock, certifying the filing of the report - The report is signed by Robert W. Leibrock, Executive Vice President, Chief Financial Officer, and Chief Accounting Officer of ACI Worldwide, Inc., on August 7, 2025[220](index=220&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q2 2025 increased by 7% year over year and 15% compared to the full year 2024, reflecting strong business momentum [5][10] - Adjusted EBITDA for Q2 was $181 million, down 13% year over year, primarily due to the timing of license-based contracts [20] - Recurring revenue grew to $322 million, accelerating to 13% growth compared to last year [20] Business Segment Data and Key Metrics Changes - The biller segment revenue grew by 16% in Q2 and 13% for the first half of 2025, driven by strong performance in government, consumer finance, and utility markets [20][22] - Payment software segment revenue was roughly flat in Q2 but grew by 18% for the first half of 2025, with adjusted EBITDA increasing by 29% [21][22] Market Data and Key Metrics Changes - The company signed notable new contracts, with annual recurring revenue (ARR) bookings in Q2 up 86%, bringing first half 2025 new ARR bookings growth to 71% [6][20] - The estimated sixty-month backlog exceeded $7 billion for the first time, indicating strong future revenue potential [12][73] Company Strategy and Development Direction - The company is focused on enhancing its technology leadership and innovation, particularly with the launch of Kinetic, a next-generation payments hub platform [6][7] - ACI Worldwide is committed to returning capital to shareholders, having repurchased approximately 2.4% of its common shares outstanding [8][24] - The company is well-positioned to benefit from the adoption of stablecoins, which could drive cross-border real-time payments [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving upper single-digit revenue growth targets for 2025, supported by a strong pipeline and business momentum [10][26] - The leadership highlighted the importance of early contract signings to improve sales efficiency and revenue recognition [11][19] Other Important Information - ACI Worldwide was recognized as one of CNBC's World's Top Fintech Companies for 2025 and one of Time's America's Best Midsize Companies in 2025 [15] - The company plans to host an event called "Payments Unleashed" in October 2023 to celebrate its 50th anniversary and discuss emerging trends in payments [27] Q&A Session Summary Question: Update on stablecoins and bank customer conversations - Management indicated readiness for stablecoin transactions and emphasized the potential for cross-border real-time payments facilitated by stablecoins [32][34] Question: Acceleration in the Biller segment - Management noted strong performance in the Biller segment, particularly from government contracts, and expects continued strong performance for the rest of the year [38] Question: Areas of strength in ARR bookings - Management reported a diverse mix of deals contributing to ARR growth, with no single deal dominating the performance [43][44] Question: Trends in government investment and backlog strength - Management stated that there hasn't been a fundamental change in customer investment strategies, but ACI is better positioned to capitalize on existing demand [68][69] Question: Capital allocation strategy and buybacks - Management confirmed a flexible capital allocation strategy, focusing on growth investments and share buybacks, while remaining open to M&A opportunities [78][80] Question: Unit economics of stablecoin transactions - Management explained that real-time payments generate significantly more revenue than debit transactions, with stablecoin transactions expected to follow a similar trend [88][90] Question: Q3 EBITDA guidance - Management provided insights into the factors influencing Q3 EBITDA guidance, including expected revenue growth from payment software and the timing of new deals [92][96]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 increased by 7% year over year and 15% compared to 2024, leading to an upward revision of full-year guidance for revenue and adjusted EBITDA [4][18] - Adjusted EBITDA for Q2 was $181 million, down 13% year over year, primarily due to the timing of license-based contracts [18] - Cash balance at the end of Q2 was $190 million, with a net leverage ratio of 1.4 times adjusted EBITDA, significantly below the previously discussed target of two times [7][21] Business Segment Data and Key Metrics Changes - The biller segment revenue grew by 16% in Q2 and 13% for the first half of 2025, driven by strong performance in government, consumer finance, and utility markets [5][19] - Payment software segment revenue was roughly flat in Q2 but grew by 18% for the first half of 2025, with recurring revenue accelerating to 8% growth in Q2 [5][19] - Annual recurring revenue (ARR) bookings in Q2 were up 86%, bringing first half 2025 new ARR bookings growth to 71% [5][20] Market Data and Key Metrics Changes - The company is experiencing strong demand for its Kinetic platform, which is cloud-native and offers enhanced capabilities for real-time payments and wire transfers [6][12] - The backlog has exceeded $7 billion for the first time, indicating strong future revenue potential [10][70] Company Strategy and Development Direction - The company is focused on enhancing shareholder returns through share repurchases and investments in technology leadership [6][21] - ACI Worldwide is well-positioned to benefit from the adoption of stablecoins, which could drive more cross-border real-time payments [11][13] - The company aims to continue its strategy of signing new contracts and renewals earlier in the year to improve sales efficiency [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving upper single-digit revenue growth targets for 2025, supported by a strong pipeline and positive customer feedback on new products [8][24] - The leadership team emphasized the importance of modernization and the ability to bring new products to market faster, which is critical for maintaining competitive advantage [66][68] Other Important Information - ACI Worldwide was recognized as one of CNBC's World's Top Fintech Companies for 2025 and one of Time's America's Best Midsize Companies in 2025 [14] - The company plans to host an event called "Payments Unleashed" in October 2023 to celebrate its 50th anniversary and discuss emerging trends in payments [25] Q&A Session Summary Question: Update on stablecoins and bank customer conversations - Management indicated that ACI is ready for stablecoin transactions and is positioned in the middle of the payments infrastructure for banks, facilitating these transactions as demand increases [30][31] Question: Acceleration in the Biller segment - Management noted strong performance in the Biller segment, particularly from government contracts, and expects continued progress, though not at Q2 levels [38][39] Question: Areas of strength in ARR bookings - The company reported a diverse mix of deals contributing to ARR growth, with no single deal dominating the performance [44][45] Question: Trends in investment from governments and banks - Management stated that there hasn't been a fundamental change in investment trends, but ACI is better positioned to capitalize on existing demand for payment modernization [65][68] Question: Capital allocation strategy and buybacks - The company remains flexible in its capital allocation strategy, focusing on buybacks and potential M&A opportunities to enhance growth [73][76] Question: Unit economics of stablecoin transactions - Management explained that real-time payments generate significantly more revenue than debit transactions, with stablecoin transactions expected to follow a similar trend as adoption increases [84][86]

Financial Performance - ACI's Payment Software segment revenue grew by 18% and Biller segment grew by 13% in the first half of 2025 compared to the same period last year[12] - Adjusted EBITDA for the first half of 2025 increased by 24% compared to the first half of 2024[13] - The company repurchased 2.4 million shares in Q2 2025, representing 2.4% of shares outstanding[13,24] - ACI's net adjusted EBITDA margin was 34% in the first half of 2025, up from 31% in the first half of 2024[18,24,28] - ACI had $175 million in adjusted EBITDA in the first half of 2025[18,24] - Cash flow from operating activities was $128 million in the first half of 2025[18] Financial Position - ACI's cash balance was $190 million as of June 30, 2025[18,24] - The net debt leverage ratio was 1.4x[18,24] - The company retired $400 million senior unsecured notes maturing in 2026[24] Guidance - ACI is raising its full-year outlook for both revenue and adjusted EBITDA for 2025[13,24,36] - Updated full year 2025 revenue guidance is $1710 million to $1740 million, compared to the prior guidance of $1690 million to $1720 million[23] - Updated full year 2025 adjusted EBITDA guidance is $490 million to $505 million, compared to the prior guidance of $480 million to $495 million[23]

ACI Worldwide (ACIW) came out with quarterly earnings of $0.35 per share, beating the Zacks Consensus Estimate of $0.27 per share. This compares to earnings of $0.47 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +29.63%. A quarter ago, it was expected that this maker of software for electronic payments would post earnings of $0.33 per share when it actually produced earnings of $0.51, delivering a surprise of +54.55%. There ...

Core Viewpoint - ACI Worldwide (ACIW) shares have increased by 2.1% recently, with a mean price target of $64.6 suggesting a potential upside of 41.4% from the current price of $45.7 [1] Price Targets and Analyst Consensus - The average price target for ACIW ranges from a low of $60.00 to a high of $77.00, with a standard deviation of $7.4, indicating a relatively tight clustering of estimates [2] - The lowest estimate suggests a 31.3% increase, while the highest indicates a 68.5% upside [2] - Analysts' price targets can be misleading, as they often set overly optimistic targets due to business incentives [8][10] Earnings Estimates and Potential Upside - There is strong agreement among analysts regarding ACIW's ability to report better earnings, which supports the expectation of an upside [4][11] - The Zacks Consensus Estimate for the current year has increased by 0.1% over the past month, with no negative revisions [12] - ACIW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Conclusion on Price Movement - While consensus price targets may not be reliable for predicting the extent of ACIW's gains, they can provide a useful guide for the direction of price movement [14]

Core Insights - ACI Worldwide is a global payments technology provider that facilitates a wide range of transactions, including card payments and account-to-account transfers, operating in 95 countries for over five decades [2][4]. Group 1: Company Overview - ACI Worldwide supports various industries such as utilities, government, insurance, healthcare, higher education, mortgages, subscriptions, and telecommunications [3]. - The company is headquartered in the US and has a business presence across the Americas, the Middle East, Asia-Pacific, Europe, and Africa [3]. Group 2: Product and Service Offerings - ACI provides software solutions for credit, debit, and prepaid card payments, as well as account-to-account payments for banks, billers, and merchants [2]. - Recent product launches include ACI Instant Pay for real-time payments in January 2023, ACI Wallets for accepting over 200 digital wallets in 70+ countries, and a digital central infrastructure for central banks and financial institutions introduced in September 2023 [6]. Group 3: Partnerships and Collaborations - In February 2025, ACI partnered with UK-based fintech Banfico to offer payment verification services to banks and payment providers in the UK and Europe [6]. Group 4: Performance and Competitive Analysis - The report includes insights into ACI's operational and financial performance, benchmarking against competitors, and a detailed overview of its revenue model [6][8]. - ACI's significant events and milestones, including partnerships and product launches, are highlighted to assess its competitive dynamics in the alternative payments industry [6].