ACI Worldwide's 2025 Q1 Earnings Call: Unpacking Contradictions in Macroeconomic Impact, Revenue Growth, and Payment Innovations
Monday, May 19, 2025 1:12 pm ET
2min read Impact of macroeconomic uncertainty on decision-making timelines, 2025 revenue guidance and pipeline, real-time payments growth expectations, impact of macroeconomic uncertainty on customer strategy, and growth opportunities for Payment Software and Biller segments are the key contradictions discussed in ACI Worldwide's latest 2025Q1 earnings call.
Strong Financial Performance in Q1:
- ACI Worldwide Inc. reported revenue of $395 million for Q1 2025, up 25% from Q1 2024, and adjusted EBITDA of $94 million, up 95% year-over-year.
- The growth was driven by better-than-expected transaction volumes and an increase in net new business, particularly in the Asia Pacific and Latin America regions.
Segment Performance: Payment Software:
- The Payment Software segment's revenue grew 42%, and adjusted EBITDA more than doubled compared to Q1 2024.
- This growth was attributed to significant new logo wins in the Asia Pacific and Latin America regions, along with the introduction of the next-generation payments hub solution, Connetic.
Cash Flow and Financial Management:
- Cash flow from operating activities was $78 million, and the company had $230 million in cash on hand with total debt outstanding at $853 million.
- ACI repurchased approximately 1 million shares year-to-date for $52 million and sold its noncontrolling interest in India-based mine gate, contributing to strong liquidity and shareholder value creation.
Strategy and Product Innovation:
- ACI combined its bank and merchant segments into a new business unit, simplifying operations and generating new pipeline opportunities.
- The introduction of the Connetic platform is expected to expand ACI's addressable market and facilitate modernization journeys for customers, enhancing profitability and growth prospects.
Strong Financial Performance in Q1:
- ACI Worldwide Inc. reported revenue of $395 million for Q1 2025, up 25% from Q1 2024, and adjusted EBITDA of $94 million, up 95% year-over-year.
- The growth was driven by better-than-expected transaction volumes and an increase in net new business, particularly in the Asia Pacific and Latin America regions.
Segment Performance: Payment Software:
- The Payment Software segment's revenue grew 42%, and adjusted EBITDA more than doubled compared to Q1 2024.
- This growth was attributed to significant new logo wins in the Asia Pacific and Latin America regions, along with the introduction of the next-generation payments hub solution, Connetic.
Cash Flow and Financial Management:
- Cash flow from operating activities was $78 million, and the company had $230 million in cash on hand with total debt outstanding at $853 million.
- ACI repurchased approximately 1 million shares year-to-date for $52 million and sold its noncontrolling interest in India-based mine gate, contributing to strong liquidity and shareholder value creation.
Strategy and Product Innovation:
- ACI combined its bank and merchant segments into a new business unit, simplifying operations and generating new pipeline opportunities.
- The introduction of the Connetic platform is expected to expand ACI's addressable market and facilitate modernization journeys for customers, enhancing profitability and growth prospects.
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