ACIW

• Overall Financial Results: Q2 2026 total revenue hit $430 million, up 7% reported (6% constant currency). Adjusted diluted EPS grew 54% year-over-year to $0.54, while adjusted EBITDA grew 12% to $91 million, with net adjusted EBITDA margin expanding 200 basis points to 34% year-over-year even as R&D investment increased 17% to support innovation. Year-to-date 2026 total revenue reached $956 million, up 8% reported, with adjusted EBITDA of $196 million (up 12% reported) and a 36% year-to-date net adjusted EBITDA margin. Net new ARR bookings were $18 million and new license and services bookings were $59 million for the quarter, with stronger bookings expected in the second half of 2026. The company ended Q2 with $167 million in cash and a 1.2x net leverage ratio, with year-to-date operating cash flow of $135 million.
• Strategic Product Progress: The company signed its first U.S.-based Kinetic cloud-native payments platform customer in Q2 2026, with a second U.S. Kinetic customer signed shortly after quarter-end. Kinetic has the fastest growing pipeline of any ACI solution set, with all signings to date structured as SaaS agreements, and the platform already supports 8 U.S. payment rails. Over 100 customers are now live on the Speedpay One cloud-native biller platform, with growing adoption across the installed base and new customer wins.
• AI Integration and Operational Efficiency: AI capabilities are built directly into Kinetic and Speedpay One. Tangible operational benefits already achieved include: cutting payment scheme mandate interpretation time from 2-3 weeks to minutes/hours, freeing incremental engineering capacity; reducing biller product re-architecture effort by 50%, saving over 6,000 engineering hours; automating up to 85% of a previously manual customer support process, saving ~10 hours per week per user. Product-specific AI functionality includes dynamic intelligent routing and scoring for Kinetic, and accelerated API deployment tools for Speedpay One.
• Capital Allocation Strategy: The company maintains a balanced approach, allocating 50-60% of 2026 operating cash flow to share repurchases, while retaining flexibility for organic growth investments and strategic acquisitions focused on accelerating cloud-based payments modernization. $41 million was deployed for share repurchases in Q2, bringing year-to-date repurchases to $107 million. Management regularly evaluates all inorganic strategic options including acquisitions, divestitures, and partnerships, with current technology valuations more attractive than in recent years.
• Industry Tailwinds: Growing payments ecosystem complexity, combined with outdated legacy infrastructure, has made payments modernization a top strategic priority for financial institutions worldwide, creating significant long-term demand for ACI's modern platform solutions.

• Full-year 2026 revenue guidance was raised to a range of $1.895 billion to $1.925 billion, up from the prior range of $1.89 billion to $1.92 billion.
• Full-year 2026 adjusted EBITDA guidance was raised to a range of $545 million to $560 million, up from the prior range of $540 million to $555 million.
• The 40%/60% revenue split between Q3 and Q4 2026 (driven by the timing of high-margin payment software license renewals) is maintained as previously guided, implying Q3 2026 revenue of $417 million to $427 million and Q3 2026 adjusted EBITDA of $90 million to $95 million. The higher fourth-quarter weighting reflects historical contract renewal timing (not a change in business performance) and results in an even larger skew of adjusted EBITDA to Q4 due to the higher margin of payment software.
• The company reaffirms its expectation of upper single-digit full-year revenue growth for the Biller segment, and expects net revenue growth to track gross revenue growth more closely in the second half of 2026.
• Management expects full-year net new ARR bookings and new license and services bookings to grow year-over-year, with a larger concentration of deal signings weighted to the second half of 2026.

ACI Worldwide operates two product segments: 1. Payment Software: Q2 2026 revenue was $196 million, up 9% reported (7% constant currency), accounting for 45.6% of total Q2 revenue. Segment adjusted EBITDA was $94 million, up 12% reported (9% constant currency), with a 48% net adjusted EBITDA margin. Within the segment, issuing and acquiring revenue grew 33% constant currency driven by large customer renewals and expansions; merchant and anti-fraud solutions grew mid-single digits; real-time payments revenue declined year-over-year due to lower renewal opportunity volume, though underlying demand and pipeline remain strong. 2. Biller: Q2 2026 revenue was $234 million, up 5% on both reported and constant currency bases, accounting for 54.4% of total Q2 revenue. Adjusted EBITDA declined year-over-year, partially due to difficult comparisons against unusually strong prior-year volumes and non-recurring margin benefits, plus a one-time non-recurring charge related to a terminated partnership included in adjusted EBITDA. Underlying demand remains healthy, with over 100 customers now live on the Speedpay One cloud-native platform, and the company maintains its expectation of upper single-digit full-year segment growth.

• Quarterly revenue and bookings results can fluctuate based on the timing of large contract signings and renewals.
• Biller segment results faced short-term headwinds from difficult year-over-year comparisons against unusually strong prior-year volumes and non-recurring prior-year margin benefits.
• Real-time payments revenue faced a temporary year-over-year decline due to a lower volume of renewal and expansion opportunities in the quarter, though underlying demand remains strong.

Q: Can you explain the 40/60 Q3/Q4 revenue split, confirm it was expected, and provide an update on Kinetic's U.S. pipeline and customer profile? / A: The 40/60 split reflects the scheduled timing of five-year payment software license renewal dates, which management had visibility into at the start of the year, and matches historical booking patterns from earlier in the decade. The Q2 2026 U.S. Kinetic win was an existing customer converting to the new platform, with a growing, fastest-in-portfolio pipeline spanning new, converted existing, and hybrid customers. Kinetic supports 8 U.S. payment rails, all signings to date are SaaS, and guidance does not rely on near-term Kinetic revenue; the first major outside customer (Solaris) is expected to go live in H2 2026.

Q: Can you address speculation about a potential Biller divestiture and comment on the current health of the Biller segment? / A: Evaluating all strategic options (acquisitions, divestitures, partnerships) to maximize shareholder value is standard ongoing practice for the company, and management does not comment on market rumors. The Biller segment is healthy: year-to-date bookings are strong, 80% of Q2 bookings were customer expansions, two new logos were added in Q2, and the segment remains on track for upper single-digit full-year growth that will accelerate in H2 2026.

Q: How has Kinetic changed customer perception of ACI, historically viewed as a provider of older legacy technology? / A: Leading with Kinetic has created an entirely new customer dialogue: instead of selling point software solutions, ACI now discusses how to help customers modernize their entire payments infrastructure, improve end-customer experiences, and reduce operating costs. This shift has already started to change market perception of ACI as a leading innovator, supported by the company's shift to a two-segment general manager operating model that increased internal focus and improved external go-to-market execution.

Q: What is driving the surprisingly strong growth in issuing and acquiring, and what are the primary Kinetic use cases for the U.S. market? / A: Issuing and acquiring growth is broad-based, driven by organic payment volume growth, consistent pricing power on renewals, and new value-add cross-sold products, with a durable high retention business model supporting strong expansion from existing customers. Initial U.S. Kinetic wins are focused primarily on account-to-account payments including real-time payments and high-value wire transfers, though there is broad-based interest including card payments, and the platform already supports all major payment types.