Q2 2024 Summary
Published Feb 18, 2025, 5:23 PM UTCInitial Price$33.38April 1, 2024
Final Price$39.18July 1, 2024
Price Change$5.80
% Change+17.38%
- ACI Worldwide raised its full year 2024 revenue and adjusted EBITDA guidance, expecting revenue between $1.557 billion and $1.591 billion and adjusted EBITDA between $423 million and $438 million, due to strong performance in the first half, particularly from the Biller segment, which saw revenue growth of 13% in Q2.
- The company has a strong sales pipeline, especially for its next-generation payment hub program, with high interest from customers and potential new logos, indicating potential for future growth.
- Over $100 million in renewal contracts were signed early in the first half of 2024, derisking the full year forecast and allowing the company to focus on new deals in the second half, which could boost future revenues.
- The company's raised guidance relies heavily on the overperformance of the Biller segment, particularly due to a faster-than-expected ramping of new customers and strong tax-related volumes, which are largely second-quarter phenomena and may not continue in future quarters. This suggests that the elevated 13% growth in Biller revenue may not be sustainable.
- The strong third-quarter guidance depends on the timing of bank license deals, with a focus on closing new license deals in Q3 to reduce reliance on Q4. This introduces risk if deals are delayed, and the company acknowledges the need to sign new business in the second half.
- The company is incentivizing early renewals, which may be pulling forward revenue from future periods. While this helps de-risk the current year's forecast, it could potentially impact revenue growth in subsequent years if not offset by new business.