ACI Worldwide (ACIW) Q2 FY26 earnings call: guidance and Q&A

Why is there a 40-60% revenue weighting between Q3 and Q4 this year, and was this expected?

Management confirmed the 40-60 split was expected and communicated last quarter. It's driven by the timing of payment software license renewals, which provides high visibility. The higher skew to Q4 also implies an even higher skew for EBITDA due to the high-margin nature of the software business.

“Last quarter, 90 days ago, I gave headlights into the Q3, Q4 guide as being more of a 40-60 split versus the last couple of years, it's been 50-50. You go back and you compare, call it, 3, 4, 5 years ago, you'll see that same 40-60 split, which is indicative of the types of customers and the concentration we see in Q4 this year, and we feel good about that.”

asked by Jeffrey Cantwell · answered by Robert Leibrock

Can you provide more details on the U.S. Connetic signing, including whether it was an existing or new customer, its size, and the Connetic pipeline?

The Q2 signing was an existing customer converting to Connetic, which is positive. The Connetic pipeline is the fastest-growing solution set, encompassing new and existing customers. All Connetic signings to date have been SaaS, validating the cloud-native platform. Solaris is expected to go live on Connetic in H2.

“So the one we signed in the quarter, it is an existing customer, and that's great news actually because that's -- we're attacking opportunities across all types of customers, net new, existing customers that will convert and then a little bit hybrid.”

asked by Jeffrey Cantwell · answered by Thomas Warsop

Given recent articles about the Biller segment, can you discuss ACI's general approach to M&A and potential divestitures?

Management stated that evaluating potential acquisitions, divestitures, and investments is a normal course of business to drive shareholder value. They do not comment on specific market rumors but emphasized the health and strong performance of the Biller business, including its ARR bookings and customer retention.

“I mean, as I said in the prepared remarks, we -- this is sort of normal course of business. We evaluate constantly what's the best way to drive shareholder value, and we look at potential acquisitions, potential divestitures, different kinds of investments. We do that all the time.”

asked by Jeffrey Cantwell · answered by Thomas Warsop

How is Connetic changing the perception of ACI among customers, moving from an older technology provider to an innovator, and can this attract non-customers?

Management confirmed that Connetic is leading to very different dialogues with customers and prospects. ACI is now seen as a 'current innovator' by leading with a vision for payments modernization and helping customers transform their business and infrastructure, not just selling software. This focus is also improving internal alignment and customer satisfaction across both segments.

“Now we're much more likely to be seen as an innovator.”

asked by Peter Heckmann · answered by Thomas Warsop

Can you elaborate on the surprisingly strong performance in issuing and acquiring, particularly the large expansions?

The strength was broad-based, driven by volume growth, effective pricing power on renewals, and successful new product launches and cross-selling. The business benefits from durable mid-single-digit retention rates and strong demand in real-time payments, leveraging ACI's agnostic approach to payment types.

“So we had volume growth, which is great. So one of the really great things about being in the payment business, of course, is that payment volumes grow, and they tend to continue to grow. So we have that. We have good pricing power, and we exercised that on renewals. And then we had some nice new product launch, so value-add services, more cross-sell.”

asked by George Sutton · answered by Thomas Warsop