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ACI WORLDWIDE, INC. (ACIW)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue of $482.4M (+7% YoY) and recurring revenue of $298.3M (+10% YoY) drove adjusted EBITDA of $170.6M (+2% YoY), with both segments contributing; management raised FY25 revenue and adjusted EBITDA guidance and expanded buyback authorization to $500M .
  • Results beat S&P Global consensus: revenue $482.4M vs $465.1M*, and adjusted EPS $1.09 vs $0.986*, with upside also versus intra-quarter Q3 guidance (rev $460–$470M; adj. EBITDA $155–$165M) .
  • Payment Software grew 4% YoY (Q3), Biller grew 10% YoY; bookings were healthy (ARR +14% YoY to $12.6M; license/services +21% YoY to $81.4M) .
  • Strategic catalysts: first customer signed for cloud-native ACI Connetic (called “Kinetic” on the call), BitPay partnership (stablecoin/crypto rails), and a tuck-in “Payment Components” acquisition to accelerate Connetic roadmap; none expected to be immediately material to revenue but are important strategically .

What Went Well and What Went Wrong

  • What Went Well

    • Broad-based growth with recurring revenue up 10% YoY and healthy bookings; Biller +10% YoY and Payment Software +4% YoY in Q3; ARR bookings +14% YoY .
    • Strategic progress: first Connetic (Kinetic) customer signed (Solaris) with strong pipeline; management emphasized resonance of the architecture with banks/fintechs; “winners … are investing, and they’re often choosing ACI” .
    • Capital allocation: raised FY25 guidance (rev $1.730–$1.754B; adj. EBITDA $495–$510M) and expanded buyback authorization to $500M; repurchased ~0.4M shares in Q3 (3.1M YTD) .

  • What Went Wrong

    • Profitability leverage modest in Q3: adjusted EBITDA +2% YoY and net adjusted EBITDA margin down 1ppt YoY to 49% (49% vs 50% prior year) .
    • Cash flow timing: YTD cash from operations $201.1M vs $232.3M prior year, reflecting receivables and tax timing; Q3 CFO noted careful FX risk management across ~90 countries with ~75% revenue outside U.S. .
    • Near-term revenue from Connetic to phase in post-implementation (SaaS model) — “when transactions start to flow”; early deals likely not large discrete amounts, implying gradual contribution .

Financial Results

Consolidated results (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($M)$394.6 $401.3 $482.4
GAAP Diluted EPS ($)$0.55 $0.12 $0.88
Adjusted EPS ($)$0.51 $0.35 $1.09
Adjusted EBITDA ($M)$94.1 $80.9 $170.6
Net Adjusted EBITDA Margin (%)36% 32% 49%

Actual vs S&P Global consensus (Q3 2025)

MetricConsensus*Actual
Revenue ($M)$465.1*$482.4
Adjusted EPS ($)$0.986*$1.09

Values with asterisk (*) retrieved from S&P Global.

Segment performance (oldest → newest)

SegmentQ1 2025 Revenue ($M)Q1 2025 Segment Adj. EBITDA ($M)Q2 2025 Revenue ($M)Q2 2025 Segment Adj. EBITDA ($M)Q3 2025 Revenue ($M)Q3 2025 Segment Adj. EBITDA ($M)
Payment Software$200.7 $106.6 $179.3 $83.3 $284.0 $181.7
Biller$193.9 $30.9 $221.9 $39.8 $198.3 $32.1

KPIs and bookings (oldest → newest)

KPIQ1 2025Q2 2025Q3 2025
Recurring Revenue ($M)$285.7 $321.7 $298.3
SaaS & PaaS Fees ($M)$237.1 $271.3 $246.9
ARR Bookings ($M)$8.9 $24.3 $12.6
License & Services Bookings ($M)$50.0 $58.1 $81.4

Non-GAAP adjustments (Q3): total EPS adjustments were $0.21, primarily stock-based compensation ($0.13), plus amortization of acquired intangibles ($0.04) and software ($0.03), and small transaction-related expense ($0.01) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$1.710–$1.740B $1.730–$1.754B Raised
Adjusted EBITDAFY 2025$490–$505M $495–$510M Raised
RevenueQ3 2025 (intra-q guide vs actual)$460–$470M $482.4M Above range
Adjusted EBITDAQ3 2025 (intra-q guide vs actual)$155–$165M $170.6M Above range

Management did not provide explicit OpEx, OI&E, tax rate, or dividend guidance in these materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Cloud-native platform (Connetic/Kinetic)Introduced Connetic (May), building toward rollout; emphasized strategy and modernization tailwinds .First Connetic customer (Solaris); strong pipeline; early deals SaaS and will ramp post go-live; platform resonating with banks/fintechs .Increasing momentum
Pricing powerNot highlighted in Q1 PR; focus on software growth .Pricing is a continuing lever at renewals/expansions; higher value features (Kinetic) support monetization .Positive/ongoing
Bookings/backlog cadenceEarly-year deal timing improved seasonality in H1 .60-month backlog ~$7.1B; expect more balanced quarterly cadence in 2026 vs strong Q1’25 compare .Stabilizing visibility
Biller trajectory/verticalsBiller +11% (Q1), +13% (H1); solid growth .Biller +10% (Q3), strength in utilities/government; Speedpay One ramping; complexity drives outsourcing and win rates .Sustained strength
Crypto/stablecoins & partnershipsNo BitPay yet; focus on platform .BitPay partnership expands stablecoin/crypto acceptance; ACI thought leadership in stablecoins and real-time payments .Expanding capabilities
M&A roadmapNew CFO in Q2; capital allocation balanced .Acquired Payment Components (not material financially) to accelerate Connetic messaging/orchestration and AI-first initiatives .Targeted, strategic

Management Commentary

  • “Q3 continued our positive momentum, with strong revenue, adjusted EBITDA and bookings growth… we signed our first ACI Connetic customer and are encouraged by the early interest and demand for this… cloud-native payments platform” — Tom Warsop, CEO .
  • “With 12% year-to-date growth in both revenue and adjusted EBITDA… we are once again raising our 2025 guidance… and expanded our share repurchase authorization to $500 million” — Robert Leibrock, CFO .
  • “Winners in the marketplace are investing, and they’re often choosing ACI… Kinetic’s architecture… is resonating with customers who are looking to modernize and simplify their payments infrastructure” — CEO .
  • “We ended the quarter with $199 million in cash and a net debt leverage ratio of 1.3x… YTD cash from operations $201 million… reflects the anticipated timing of receivables and tax payments between periods” — CFO .

Q&A Highlights

  • Pricing leverage: renewals/volume expansions support pricing; as Kinetic value increases, ACI expects its “fair share” of pricing — a continued growth lever in 2024–2025 and beyond .
  • Renewal cadence/backlog: 60-month backlog ~$7.1B with double-digit growth; expect more balanced quarterly spread in 2026 vs the heavy Q1’25 compare; variability manageable .
  • Connetic ramp: first deals likely SaaS; revenue starts post-implementation when transactions flow; initial revenue not expected to be large/discrete but strategic impact is broad across customer conversations .
  • Strategic adds: Payment Components acquired to accelerate Connetic (messaging/orchestration); not bought for immediate revenue; BitPay enhances crypto/stablecoin capabilities for customers .
  • Biller verticals: utilities and government strong; Speedpay One improves time-to-market and experience; complexity driving shift from bespoke to outsourced platforms; win rates a competitive advantage .

Estimates Context

  • Q3 beats vs S&P Global: revenue $482.4M vs $465.1M* (+3.7%), adjusted EPS $1.09 vs $0.986* (+10.5%). Upside also vs ACI’s intra-quarter Q3 guidance (rev $460–$470M; adj. EBITDA $155–$165M) .
  • Given beats and a second raise to FY25 guidance, sell-side models likely move higher on both revenue and adjusted EBITDA; mix still skewed to recurring (62% Q3), supporting durability .

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat: Revenue and adjusted EPS beat consensus and topped the company’s own intra-quarter guide; FY25 guidance raised again, signaling sustained momentum into Q4 .
  • Recurring engine: Recurring revenue grew 10% YoY and was 62% of total, underpinning visibility; Biller strength (utilities/government) and Payment Software breadth (issuing, acquiring, fraud, RTP) continue to drive growth .
  • Strategic catalysts: First Connetic customer and strong pipeline, BitPay partnership, and Payment Components acquisition collectively enhance platform competitiveness; expect revenue contribution to phase in over time .
  • Profitability watch: Q3 net adjusted EBITDA margin dipped 1ppt YoY to 49%; monitor operating leverage as mix (interchange, services) and timing of license deals fluctuate .
  • Cash/returns: $199M cash, 1.3x net leverage, $500M repurchase authorization, and 3.1M shares repurchased YTD support capital return optionality .
  • 2026 setup: Management aims for more balanced intra-year cadence and “high single-digit” longer-term growth model with EBITDA tracking revenue; backlog and recurring mix support the trajectory .
  • Risk checks: FX exposure (~75% revenue ex-U.S.) is actively managed; near-term Connetic revenue dependent on implementation timing; YTD cash from ops lower YoY due to timing .

Appendix: Additional Data Points

  • Q3 revenue mix: SaaS/PaaS $246.9M; License $162.0M; Maintenance $51.4M; Services $22.1M .
  • Cash flow: Q3 CFOA $73.0M vs $54.0M prior year; YTD CFOA $201.1M vs $232.3M prior year .
  • Share repurchases: ~0.4M shares ($16M) in Q3; ~3.1M shares ($150M) YTD .