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]