ACI Worldwide, Inc. (ACIW) - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. ACI Worldwide, Inc. provides software solutions for payments orchestration, serving banks, merchants, and billers globally. The company operates through two primary segments: Payment Software (bank and merchant solutions) and Biller (electronic bill presentment and payment services).
Key Financial Metrics
| Metric (in thousands, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $425,749 | $394,565 |
| Net Income | $38,306 | $58,870 |
| Diluted EPS | $0.37 | $0.55 |
| Operating Cash Flow | $64,247 | $78,221 |
| Cash & Equivalents | $161,757 | $230,057 |
| Total Debt (Gross) | $811,875 | $811,875 |
| Segment Adjusted EBITDA | $147,305 | $137,456 |
Note: Total debt includes $200.0 million in revolving credit facility and $611.9 million in term loans. Interest rate on credit facility was 5.52% as of March 31, 2026.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 8% ($31.2 million) year-over-year. SaaS and PaaS revenue grew 10%, driven by new customer go-lives and higher transaction volumes. License revenue grew 4%, while Services revenue grew 2%.
- Profitability Decline: Net income decreased 35% ($20.6 million) primarily due to the absence of a $25.9 million one-time gain from the sale of an equity method investment recorded in Q1 2025. Operating income decreased slightly by 2% ($1.0 million).
- Expense Increases: General and Administrative (G&A) expenses surged 46% ($12.6 million), largely due to higher professional/legal fees ($5.4 million) and cost reduction strategy charges ($5.4 million). R&D expenses increased 13% due to higher personnel costs.
- Cash Flow: Operating cash flow decreased 18% ($14.0 million) due to timing of customer billings and payments. Investing cash flow turned negative ($14.5 million outflow) compared to a $37.1 million inflow in Q1 2025, which included proceeds from the equity investment sale.
- Stock Repurchases: The company repurchased 1,549,291 shares for $65.8 million during the quarter. Remaining authorization under the program is approximately $390.5 million.
Guidance, Outlook, and Risks
- Backlog: The 60-month backlog estimate stands at $7.289 billion as of March 31, 2026, a slight increase from $7.259 billion at year-end 2025. Committed backlog is $2.244 billion; Renewal backlog is $5.045 billion.
- Strategic Initiatives: Management highlights the launch of ACI Connetic, a cloud-native payments hub, and the impact of the 2025 GENIUS Act on stablecoin workflows as key growth drivers. ISO 20022 compliance milestones were achieved in 2024-2025.
- Risks: The company faces exposure to foreign currency fluctuations, though it uses local currency contracts as a natural hedge. There are no material changes to risk factors from the 2025 10-K. The company is subject to standard credit and liquidity risks associated with its $811.9 million debt load.
- Unusual Items: The Q1 2025 results were significantly boosted by the $25.9 million gain on the sale of an equity investment in an Indian payment technology company, which is not recurring.
Investor Verification Checklist
- Recurring Profitability: Verify the trend in Segment Adjusted EBITDA ($147.3M) excluding the one-time gain from the prior year to assess core operational health.
- G&A Expense Drivers: Investigate the specific nature of the $5.4 million increase in professional/legal fees and the $5.4 million cost reduction charges within G&A.
- Debt Covenants: Confirm continued compliance with leverage ratios (Total Net Leverage < 4.25x; Senior Secured Net Leverage < 3.75x) given the $811.9M debt balance.
- Backlog Realization: Monitor the conversion rate of the $5.045 billion "Renewal Backlog" into actual revenue, as this is an estimate based on historical renewal rates.
- Cash Conversion: Track the timing of billings and collections to understand the variance between Net Income ($38.3M) and Operating Cash Flow ($64.2M).