ACI Worldwide's Biller Charge, EBITDA Signals Don't Match in Q2 2026 Earnings Call

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $430M, up 7% YOY
• EPS: $1.32 per diluted share (implied from 54% growth), up 54% YOY
• Operating Margin: 34%, up from 32% last year

Guidance:

• Revenue for full year 2026 expected to be $1.895B, up from prior range of $1.89B-$1.92B.
• Adjusted EBITDA for full year 2026 expected to be $545M-$560M, up from $540M-$555M.
• Revenue weighted 40% in Q3 and 60% in Q4 for second half 2026.
• Q3 revenue expected to be $417M-$427M.
• Q3 adjusted EBITDA expected to be $90M-$95M.
• Expect ~40% adjusted diluted EPS growth for second half 2026.

Business Commentary:

Financial Performance and Strategic Growth:

• ACI Worldwide reported a 7% revenue growth and a 12% EPS growth for the second quarter, with an increase in full-year adjusted EBITDA growth guidance by 54%.
• The strong financial results were driven by strategic growth investments, particularly in the Kinetic platform, and disciplined expense management.

Kinetic Platform Adoption:

• The company signed its first U.S.-based Kinetic customer in Q2 and another in Q3, indicating a growing pipeline and traction with the Kinetic solution.
• This adoption is a result of strategic growth investments and the platform's ability to simplify complex payments environments with a modern cloud-native approach.

AI Integration and Efficiency Gains:

• ACI is integrating AI into its solutions, such as the AI mandate analyzer reducing interpretation time from weeks to minutes and AI-supported re-architecture work cutting effort by 50%.
• These advancements are part of ACI's strategy to enhance product capabilities and operational efficiency, thereby driving growth and customer satisfaction.

Payment Software and Issuing/Acquiring Strength:

• Payment software revenue increased by 9% on a reported basis, driven by a 33% growth in issuing and acquiring in constant currency.
• This strength is attributed to large expansions with renewing customers and new product launches, reflecting ACI's position as a strategic technology partner.

Biller Segment Performance:

• Despite a 5% revenue growth impacted by challenging comparisons against unusually strong prior-year volumes, the underlying health of the biller business remains strong.
• Growth is supported by increasing adoption of the SpeedPay One platform, with expectations for upper single-digit growth for the full year.

Sentiment Analysis:

Overall Tone: Positive

• CEO stated 'financial performance was strong' and 'the quarter was fulfilling.' Management raised full-year revenue and EBITDA guidance, citing 'strong first half performance and our confidence in the opportunities we see ahead.' The tone emphasized being 'well-positioned to continue delivering profitable growth' and being 'on track for a strong finish to the year.'

Q&A:

• Question from Jeff Cantwell (Seaport Research): Can you talk more about the Q3 this year? What are the major call-outs? Can you give Q4 guidance? Why is there a 40%, 60% cadence? And can you confirm whether that was expected?
  Response: The 40-60 revenue split between Q3 and Q4 is driven by the timing of high-margin payment software renewals and is similar to historical patterns; it reflects strong visibility and confidence in the pipeline.

• Question from Jeff Cantwell (Seaport Research): Can you tell us about the Kinetic signing in the U.S.? How did it come about? Was it an existing customer? What does the pipeline look like?
  Response: The first U.S. Kinetic signing was with an existing customer, who will convert from another solution. The Kinetic pipeline is the fastest-growing and includes a mix of new, existing, and hybrid opportunities.

• Question from Jeff Cantwell (Seaport Research): Could you comment on potential sale of the biller segment? How would you frame your approach to M&A?
  Response: Evaluating potential acquisitions, divestitures, and partnerships is part of normal course business to drive shareholder value; there is nothing unusual in the current evaluation process.

• Question from Pete Heckman (DA Davidson): How is the Kinetic platform changing customer perception of ACI, and could it lead to adoption of other solutions?
  Response: Kinetic has shifted customer dialogues from selling software to helping modernize payments infrastructure, positioning ACI as an innovator rather than just a traditional software provider.

• Question from Pete Heckman (DA Davidson): Regarding the one-time item in Biller related to a partnership termination, was it included in adjusted EBITDA, and what was its approximate dollar value?
  Response: The partnership termination charge was not excluded from adjusted EBITDA; it was less than half the magnitude of the overall adjusted EBITDA decline in the segment for the quarter.

• Question from George Sutton (Craig-Hallum): Can you provide more detail on the strength in the issuing and acquiring business, particularly large expansions?
  Response: Strength was broad-based across the solution areas, driven by high retention rates, multi-year demand for real-time payments, and cross-sell of new value-added services.

• Question from George Sutton (Craig-Hallum): What are the primary Kinetic use cases in the U.S.
  Response: Initial U.S. use cases are concentrated around account-to-account payments, including real-time payments, high-value payments (like wire transfers), and SWIFT payments.

Contradiction Point 1

Biller Segment Partnership Termination Charge

Contradiction on whether the charge is operational or a true one-time item.

Pete Heckman (DA Davidson) - Pete Heckman (DA Davidson)

2026Q2: The impact from the terminated partnership is not a one-time charge excluded from adjusted EBITDA. It flowed through to adjusted EBITDA... - Robert LeBrock(CFO) & Tom Warsop(CEO)

Was the one-time item in Biller from the terminated partnership included in adjusted EBITDA, and what was its approximate dollar value? - Peter Heckmann (D.A. Davidson)

2026Q2: The partnership termination charge flowed through to EBITDA and was not excluded as an add-back. The impact of this charge was less than half of the overall year-over-year EBITDA decline, with the rest driven by... seasonality. - Robert Leibrock(CFO) & Thomas Warsop(CEO)

Contradiction Point 2

Biller Segment Full-Year Revenue Growth Expectation

Contradiction on the Biller segment's growth trajectory within the year.

What are the key factors driving this quarter's earnings performance? - Jeff Cantwell (Seaport Research)

2026Q2: The full-year expectation is for upper single-digit revenue growth in Biller. - Robert LeBrock(CFO) & Tom Warsop(CEO)

Can you provide an update on your M&A strategy regarding the Biller segment? - Jeff Cantwell (Seaport Research)

2026Q2: The Biller business (ACI Speedpay) is healthy... It is expected to grow in the upper single digits for the full year, accelerating in the second half. - Thomas Warsop(CEO) & Robert Leibrock(CFO)

Contradiction Point 3

Expected Revenue Contribution from Connetic/Kinetic Platform

Contradiction on the near-term materiality of revenue from the new platform.

Jeff Cantwell (Seaport Research) - Jeff Cantwell (Seaport Research)

2026Q2: Kinetic is a modern, cloud-native SaaS platform and is enabled across eight U.S. payment rails. - Tom Warsop(CEO)

Can you provide more details on the Q3/Q4 call-outs, the 40% / 60% revenue cadence for the second half, whether this was expected, and the specifics of the U.S. Kinetic signing (e.g., existing/new customer, asset size) and current Kinetic pipeline? - Jeff Cantwell (Analyst, Seaport)

2026Q1: For 2026, there is no material revenue dependency on Connetic, as the pipeline is split between hybrid deployment models. - Bobby Leibrock(CFO)

Contradiction Point 4

M&A Strategy and Capital Allocation Focus

Shift from disciplined, specific M&A focus to a broader, less defined continuous evaluation.

Jeff Cantwell (Seaport Research) - Jeff Cantwell (Seaport Research)

2026Q2: ACI continuously evaluates potential acquisitions, divestitures, and partnerships as part of its capital allocation strategy. The company is focused on opportunities that accelerate growth, particularly in its cloud-native offerings. - Tom Warsop(CEO) & Robert LeBrock(CFO)

Can you discuss Q3/Q4 performance, the 40%/60% revenue cadence for H2, the expected nature of this cadence, details on the U.S. Kinetic signing (existing/new customer, asset size), the current Kinetic pipeline, and provide an update on the M&A strategy in light of recent Biller segment rumors? - Charles Nabhan (Stephens Inc., Research Division)

2025Q4: M&A focus is on two primary areas: accelerating Connetic platform development (potentially via technology acquisitions) and expanding geographically into specific regions. The company is opportunistic but disciplined, ensuring acquisitions align with strategic goals. Capital allocation for 2026 includes returning 50%–60% of operating cash flow to shareholders via share repurchases, while preserving capacity for strategic M&A within a target leverage range of 2x. - Thomas Warsop(CEO) & Robert Leibrock(CFO)

Contradiction Point 5

Revenue Cadence for the Back Half of the Year

Explanation for the 40/60 split between Q3/Q4 shifts from being a typical, expected pattern to being framed as a specific, driving factor.

What are Jeff Cantwell's insights from Seaport Research on the earnings call? - Jeff Cantwell (Seaport Research)

2026Q2: The 40% / 60% split between Q3 and Q4 is driven by the timing of high-margin Payment Software renewals and expansions. This pattern (40-60) is typical for this time of year and reflects strong visibility... - Tom Warsop(CEO) & Robert LeBrock(CFO)

Can you explain the 40% / 60% revenue cadence for the second half and if this was expected? - Jeffrey Cantwell (Seaport Research Partners)

2025Q4: The back-half weighted profile is typical and driven by the phasing of renewal fees and new deal implementations. - Robert Leibrock(CFO) & Thomas Warsop(CEO)