Q4 2025 ACI Worldwide Inc Earnings Call

February 26, 2026

Operator: Thank you for standing by. My name is Janice, and I will be your conference operator for today. At this time, I would like to welcome everyone to the ACI Worldwide, Inc. Fourth Quarter and Full Year Ended 2025 Financial Results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star one again. Thank you. I would now like to turn the call over to John Kraft. Please go ahead.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.

Speaker #1: If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to John Kraft.

Speaker #1: Please go ahead.

Speaker #2: Thank you. And good morning, everyone. On today's call, we will discuss ACI WORLDWIDE's fourth quarter and full year 2025 results, as well as our financial outlook for 2026.

John Kraft: Thank you. Good morning, everyone. On today's call, we will discuss ACI Worldwide's Q4 and full year 2025 results, as well as our financial outlook for 2026. We will open the line for your questions. The slides accompanying this webcast can be found at aciworldwide.com under the Investor Relations tab and will remain available after the call. As always, today's call is subject to safe harbor and forward-looking statements. You can find the full text of these statements in our earnings press release and in our filings with the SEC. These documents describe important risk factors that could cause actual results to differ materially from those indicated in any forward-looking statements. Joining me this morning are Thomas Warsop, our President and CEO, and Robert Leibrock, our Chief Financial Officer.

Speaker #2: We will then open the line for your questions. The slides accompanying this webcast can be found at ACI WORLDWIDE.COM under the Investor Relations tab and will remain available after the call.

Speaker #2: As always, today's call is subject to safe harbor and forward-looking statements. You can find the full text of these statements in our earnings press release and in our filings with the SEC.

Speaker #2: These documents describe important risk factors that could cause actual results to differ materially from those indicated in any forward-looking statements. Joining me this morning are Tom Warsop, our President and CEO, and Bobby Liebrock, our Chief Financial Officer.

Speaker #2: Tom will begin with an overview of our Q4 and full year performance, strategic highlights, and the progress we're making against our long-term plan. Bobby will then review our financial results in more detail, including segment performance, cash flow, and our outlook for 2026.

John Kraft: Tom will begin with an overview of our Q4 and full year performance, strategic highlights, and the progress we're making against our long-term plan. Bobby will review our financial results in more detail, including segment performance, cash flow, and our outlook for 2026. We will open the line for questions. With that, I'll turn it over to Tom.

Speaker #2: We will then open the line for questions. With that, I'll turn it over to Tom.

Speaker #3: Thanks, John. And good morning, everyone. I appreciate you joining our Q4 and full year 2025 earnings call. And let me start with the headline.

Thomas Warsop: Thanks, John. Good morning, everyone. I appreciate you joining our Q4 and full year 2025 earnings call. Let me start with the headline. 2025 was a very strong year for ACI. We delivered another year of double-digit revenue growth, improving margins, and solid free cash flow, all of which are consistent with or better than the long-term financial framework we outlined at our Investor Day two years ago. For the full year 2025, we delivered $1.76 billion in total revenue. That's up 10% from 2024. That was our second consecutive year of double-digit revenue growth. Adjusted EBITDA increased 9% to $507 million. Our adjusted net EBITDA margin expanded to 42%. We also continued to execute against our capital deployment strategy.

Tom Warsop: Thanks, John. Good morning, everyone. I appreciate you joining our Q4 and full year 2025 earnings call. Let me start with the headline. 2025 was a very strong year for ACI. We delivered another year of double-digit revenue growth, improving margins, and solid free cash flow, all of which are consistent with or better than the long-term financial framework we outlined at our Investor Day two years ago. For the full year 2025, we delivered $1.76 billion in total revenue. That's up 10% from 2024. That was our second consecutive year of double-digit revenue growth. Adjusted EBITDA increased 9% to $507 million. Our adjusted net EBITDA margin expanded to 42%. We also continued to execute against our capital deployment strategy.

Speaker #3: 2025 was a very strong year for ACI. We delivered another year of double-digit revenue growth, improving margins, and solid free cash flow—all of which are consistent with, or better than, the long-term financial framework we outlined at our investor day two years ago.

Speaker #3: For the full year 2025, we delivered $1.76 billion in total revenue. That's up 10% from 2024. And that was our second consecutive year of double-digit revenue growth.

Speaker #3: Adjusted EBITDA increased 9% to $507 million and our adjusted net EBITDA margin expanded to $42%. We also continue to execute against our capital deployment strategy, our balance sheet remains exceptionally strong, and we ended 2025 with $196 million of cash on hand, net debt leverage ratio of 1.2 times.

Thomas Warsop: Our balance sheet remains exceptionally strong. We ended 2025 with $196 million of cash on hand, net debt leverage ratio of 1.2x. This gives us significant flexibility to continue executing on our growth agenda while also returning capital to shareholders. In 2025, we repurchased 4.2 million shares, about 4% of the outstanding shares at the beginning of the year, for $203 million. This strong performance is a direct reflection of our committed focus to our multi-year value creation strategy. As a reminder, our strategy emphasizes growth within our core vertical markets, disciplined operational execution, and a return-driven approach to capital allocation. I also want to take a moment to discuss some of the important strategic successes we had at a segment level during 2025. First, in our Payment Software segment.

Tom Warsop: Our balance sheet remains exceptionally strong. We ended 2025 with $196 million of cash on hand, net debt leverage ratio of 1.2x. This gives us significant flexibility to continue executing on our growth agenda while also returning capital to shareholders. In 2025, we repurchased 4.2 million shares, about 4% of the outstanding shares at the beginning of the year, for $203 million. This strong performance is a direct reflection of our committed focus to our multi-year value creation strategy. As a reminder, our strategy emphasizes growth within our core vertical markets, disciplined operational execution, and a return-driven approach to capital allocation. I also want to take a moment to discuss some of the important strategic successes we had at a segment level during 2025. First, in our Payment Software segment.

Speaker #3: This gives us significant flexibility to continue executing on our growth agenda while also returning capital to shareholders. In 2025, we repurchased $4.2 million shares, about 4% of the outstanding shares at the beginning of the year, for $203 million.

Speaker #3: This strong performance is a direct reflection of our committed focus to our multi-year value creation strategy. As a reminder, our strategy emphasizes growth within our core vertical markets, disciplined operational execution, and a return-driven approach to capital allocation.

Speaker #3: I also want to take a moment to discuss some of the important strategic successes we had at a segment level during 2025. First, in our Payment Software segment, in 2025, we took a major step forward in scaling our bank and merchant businesses by unifying them into a new segment we call Payment Software.

Thomas Warsop: In 2025, we took a major step forward in scaling our bank and merchant businesses by unifying them into a new segment we call Payment Software. This increases efficiency, it accelerates innovation, and it simplifies our operating structure. This part of our business delivered 9% revenue growth and 10% adjusted EBITDA growth. Demand was broad-based, with issuing and acquiring solutions growing 11%, building on strong double-digit growth in 2024. The year also saw meaningful growth in real-time payments, with new contracts for both central infrastructure and bank solutions. In Q4, we signed a large European bank to Kinetic, our cloud-native payments hub. This was the second Kinetic signing in 2025, that's further validation of its differentiated architecture and our long-term modernization vision. Customer interest continues to accelerate. Kinetic is central to our long-term strategy.

Tom Warsop: In 2025, we took a major step forward in scaling our bank and merchant businesses by unifying them into a new segment we call Payment Software. This increases efficiency, it accelerates innovation, and it simplifies our operating structure. This part of our business delivered 9% revenue growth and 10% adjusted EBITDA growth. Demand was broad-based, with issuing and acquiring solutions growing 11%, building on strong double-digit growth in 2024. The year also saw meaningful growth in real-time payments, with new contracts for both central infrastructure and bank solutions. In Q4, we signed a large European bank to Kinetic, our cloud-native payments hub. This was the second Kinetic signing in 2025, that's further validation of its differentiated architecture and our long-term modernization vision. Customer interest continues to accelerate. Kinetic is central to our long-term strategy.

Speaker #3: This increases efficiency, it accelerates innovation, and it simplifies our operating structure. This part of our business delivered 9% revenue growth and 10% adjusted EBITDA growth.

Speaker #3: Demand was broad-based, with issuing and acquiring solutions growing 11%, building on strong double-digit growth in 2024. The year also saw meaningful growth in real-time payments, with new contracts for both central infrastructure and bank solutions.

Speaker #3: In the fourth quarter, we signed a large European bank to Connecticut, our cloud-native payments hub. This was the second Connecticut signing in 2025, and that's further validation of its differentiated architecture and our long-term modernization vision.

Speaker #3: Customer interest continues to accelerate. Connecticut is central to our long-term strategy. It offers customers both the immediate stability of proven technology and a path to modernization through a modern cloud-native architecture.

Thomas Warsop: It offers customers both the immediate stability of proven technology and a path to modernization through a modern cloud-native architecture. Kinetic's combination of capability, ACI's proven reliability, and future readiness are major differentiators. Earlier in the year, we also signed one of our largest competitive takeaways in the Asia Pacific region in our issuing and acquiring segment. We're making progress on getting this customer live, and we fully expect to use them as a reference as we actively pursue other potential customers with outdated systems. In real-time account-to-account payments, we continue to sign new logos and extend our reach with existing customers. In Q4, we signed an important expansion with PayNet, Malaysia's real-time account-to-account national infrastructure. In Q4, we also went live with Banco de la República, the Central Bank of Colombia, which was a very strategic regional win for ACI.

Tom Warsop: It offers customers both the immediate stability of proven technology and a path to modernization through a modern cloud-native architecture. Kinetic's combination of capability, ACI's proven reliability, and future readiness are major differentiators. Earlier in the year, we also signed one of our largest competitive takeaways in the Asia Pacific region in our issuing and acquiring segment. We're making progress on getting this customer live, and we fully expect to use them as a reference as we actively pursue other potential customers with outdated systems.

Speaker #3: Connecticut's combination of capability, ACI's proven reliability, and future readiness are major differentiators. Earlier in the year, we also signed one of our largest competitive takeaways in the Asia-Pacific region in our issuing and acquiring segment.

Speaker #3: We're making progress on getting this customer live, and we fully expect to use them as a reference as we actively pursue other potential customers without dated systems.

Tom Warsop: In real-time account-to-account payments, we continue to sign new logos and extend our reach with existing customers. In Q4, we signed an important expansion with PayNet, Malaysia's real-time account-to-account national infrastructure. In Q4, we also went live with Banco de la República, the Central Bank of Colombia, which was a very strategic regional win for ACI.

Speaker #3: In real-time account-to-account payments, we continue to sign new logos and extend our reach with existing customers. In Q4, we signed an important expansion with PayNet, Malaysia's real-time account-to-account national infrastructure.

Speaker #3: In the fourth quarter, we also went live with Banco de la República, the central bank of Colombia, which was a very strategic regional win for ACI.

Speaker #3: We also renewed and expanded our relationship with Canada's leading digital payments network. In the US, FedNow and RTP adoption is slowly increasing, and we're optimistic that volumes will continue to grow and be material.

Thomas Warsop: We also renewed and expanded our relationship with Canada's leading digital payments network. In the US, FedNow and RTP adoption is slowly increasing, and we're optimistic that volumes will continue to grow and be material. In 2025, ACI's biller segment delivered another year of strong, consistent performance, with full year revenues growing 13% and segment-adjusted EBITDA expanding year-over-year, reflecting continued transaction growth and investment in advancing our market-leading ACI Speedpay platform. The segment benefited from sustained momentum across core electronic bill payment transaction growth and ongoing customer adoption of ACI's go-forward platform, Speedpay One. We added many new biller logos and expanded relationships with many other customers, including one of the country's largest insurance billers and a top credit union, to add new payment types and an upgraded modern payment experience.

Tom Warsop: We also renewed and expanded our relationship with Canada's leading digital payments network. In the US, FedNow and RTP adoption is slowly increasing, and we're optimistic that volumes will continue to grow and be material. In 2025, ACI's biller segment delivered another year of strong, consistent performance, with full year revenues growing 13% and segment-adjusted EBITDA expanding year-over-year, reflecting continued transaction growth and investment in advancing our market-leading ACI Speedpay platform.

Speaker #3: In 2025, ACI's biller segment delivered another year of strong consistent performance. With full-year revenues growing 13% and segment-adjusted EBITDA expanding year over year, reflecting continued transaction growth and investment in advancing our market-leading speed pay platform.

Speaker #3: The segment benefited from sustained momentum across core electronic bill payment transaction growth and ongoing customer adoption, of ACI's go-forward platform speed pay one. We added many new biller logos and expanded relationships including one of the country's largest insurance billers and a top credit union, to add new payment types and an upgraded modern payment experience.

Tom Warsop: The segment benefited from sustained momentum across core electronic bill payment transaction growth and ongoing customer adoption of ACI's go-forward platform, Speedpay One. We added many new biller logos and expanded relationships with many other customers, including one of the country's largest insurance billers and a top credit union, to add new payment types and an upgraded modern payment experience.

Speaker #3: ACI is gaining share in the biller market as more billers consolidate onto modern outsourced digital bill pay platforms. ACI is increasingly the partner of choice.

Thomas Warsop: ACI is gaining share in the biller market as more billers consolidate onto modern, outsourced digital bill pay platforms. ACI is increasingly the partner of choice. I'll let Bobby cover the financials in a moment, first, I want to address a topic that's top of mind for many investors: the impact of Generative AI on the software industry and the volatility that has come with this. At ACI, we view Generative AI as a significant opportunity, not a threat. We are already deploying it across the enterprise to improve engineering productivity, to enhance customer outcomes, and to reduce structural costs, all while supporting our strong margins and cash flow profile. There's been a lot of speculation about whether AI could fundamentally disrupt software.

Tom Warsop: ACI is gaining share in the biller market as more billers consolidate onto modern, outsourced digital bill pay platforms. ACI is increasingly the partner of choice. I'll let Bobby cover the financials in a moment, first, I want to address a topic that's top of mind for many investors: the impact of Generative AI on the software industry and the volatility that has come with this. At ACI, we view Generative AI as a significant opportunity, not a threat. We are already deploying it across the enterprise to improve engineering productivity, to enhance customer outcomes, and to reduce structural costs, all while supporting our strong margins and cash flow profile. There's been a lot of speculation about whether AI could fundamentally disrupt software.

Speaker #3: I'll let Bobby cover the financials in a moment, but first, I want to address a topic that's top of mind for many investors. The impact of generative AI on the software industry and the volatility that has come with this.

Speaker #3: At ACI, we view generative AI as a significant opportunity—not a threat. We are already deploying it across the enterprise to improve engineering productivity, to enhance customer outcomes, and to reduce structural costs.

Speaker #3: All while supporting our strong margins and cash flow profile. There's been a lot of speculation about whether AI could fundamentally disrupt software. While modern AI tools are very effective at generating code and we use them extensively for this, ACI's platforms are not simply collections of software modules or computer programs.

Thomas Warsop: While modern AI tools are very effective at generating code, and we use them extensively for this, ACI's platforms are not simply collections of software modules or computer programs. They are large-scale, mission-critical transaction processing systems operating at global scale, built on decades of payments expertise, deeply embedded regulatory and network rules, and proprietary data derived from billions of transactions. Generative AI is a powerful tool, but it is only one component of what is required to design, operate, and continuously evolve industrial-grade payments platforms. From a technical perspective, our advantage rests on three foundations: transaction-level data at massive scale, deep domain expertise in payment message flows and exception handling, and highly resilient infrastructure engineered for always-on, high-throughput environments. AI augments these foundations, it does not replace them.

Tom Warsop: While modern AI tools are very effective at generating code, and we use them extensively for this, ACI's platforms are not simply collections of software modules or computer programs. They are large-scale, mission-critical transaction processing systems operating at global scale, built on decades of payments expertise, deeply embedded regulatory and network rules, and proprietary data derived from billions of transactions. Generative AI is a powerful tool, but it is only one component of what is required to design, operate, and continuously evolve industrial-grade payments platforms. From a technical perspective, our advantage rests on three foundations: transaction-level data at massive scale, deep domain expertise in payment message flows and exception handling, and highly resilient infrastructure engineered for always-on, high-throughput environments. AI augments these foundations, it does not replace them.

Speaker #3: They're large-scale, mission-critical transaction processing systems operating at global scale. Built on decades of payments expertise, deeply embedded regulatory and network rules, and proprietary data derived from billions of transactions.

Speaker #3: Generative AI is a powerful tool but is only one component of what's required to design, operate, and continuously evolve industrial-grade payments platforms. From a technical perspective, our advantage rests on three foundations: transaction-level data at massive scale, deep domain expertise in payment message flows and exception handling, and highly resilient infrastructure engineered for always-on high-throughput environments.

Speaker #3: AI augments these foundations. It does not replace them. And when combined, those three foundations are difficult to replace and they provide ACI with durable, long-term competitive advantage and they lead to strong sticky relationships.

Thomas Warsop: When combined, those three foundations are difficult to replace, and they provide ACI with durable, long-term competitive advantage, and they lead to strong, sticky relationships. We at ACI are applying AI in three primary ways. First, engineering productivity. Our development teams are using a combination of industry standard and proprietary AI tools to accelerate design, coding, testing, and maintenance across extremely complex code bases. These platforms involve thousands of interdependent components, integrations, and country-specific variations, AI helps our engineers move faster while maintaining the reliability and security our customers require. As adoption deepens and training completes, we expect these productivity gains to compound over time. Second, operational efficiency. We're using AI to automate and scale knowledge-intensive workflows across our business. One example is our ability to index, query, and analyze our entire corpus of customer contracts in real time.

Tom Warsop: When combined, those three foundations are difficult to replace, and they provide ACI with durable, long-term competitive advantage, and they lead to strong, sticky relationships. We at ACI are applying AI in three primary ways. First, engineering productivity. Our development teams are using a combination of industry standard and proprietary AI tools to accelerate design, coding, testing, and maintenance across extremely complex code bases. These platforms involve thousands of interdependent components, integrations, and country-specific variations, AI helps our engineers move faster while maintaining the reliability and security our customers require. As adoption deepens and training completes, we expect these productivity gains to compound over time. Second, operational efficiency.

Speaker #3: We at ACI are applying AI in three primary ways. First, engineering productivity. Our development teams are using a combination of industry-standard and proprietary AI tools to accelerate design, coding, testing, and maintenance across extremely complex code bases.

Speaker #3: These platforms involve thousands of interdependent components, integrations, and country-specific variations, and AI helps our engineers move faster while maintaining the reliability and security our customers require.

Speaker #3: As adoption deepens and training completes, we expect these productivity gains to compound over time. Second, operational efficiency. We're using AI to automate and scale knowledge-intensive workflows across our business.

Tom Warsop: We're using AI to automate and scale knowledge-intensive workflows across our business. One example is our ability to index, query, and analyze our entire corpus of customer contracts in real time.

Speaker #3: One example is our ability to index, query, and analyze our entire corpus of customer contracts in real-time. This allows us to instantly assess regulatory impacts contractual obligations and pricing terms across the installed base, and that dramatically increases productivity in legal and compliance functions while lowering costs as we scale our business.

Thomas Warsop: This allows us to instantly assess regulatory impacts, contractual obligations, and pricing terms across the installed base. That dramatically increases productivity in legal and compliance functions while lowering costs as we scale our business. Third, I think most importantly, enhanced customer value. I want to give you an example within ACI Kinetic. We're applying AI models trained on data from billions of historical transactions to address one of the most complex and costly problems in payments, exception handling, and payment repair. Today, many large institutions employ hundreds of people to manually resolve errors in high-volume payments. By embedding AI-driven intelligence directly into the transaction flow, we are able to automatically identify likely corrections when there is an error and dramatically reduce manual intervention. The result is lower operating costs, faster settlement, and a materially better customer experience.

Tom Warsop: This allows us to instantly assess regulatory impacts, contractual obligations, and pricing terms across the installed base. That dramatically increases productivity in legal and compliance functions while lowering costs as we scale our business. Third, I think most importantly, enhanced customer value. I want to give you an example within ACI Kinetic. We're applying AI models trained on data from billions of historical transactions to address one of the most complex and costly problems in payments, exception handling, and payment repair.

Speaker #3: Third, and I think most importantly, enhanced customer value. I want to give you an example within ACI Kinetic. We're applying AI models trained on data from billions of historical transactions to address one of the most complex and costly problems in payments: exception handling and payment repair.

Speaker #3: Today, many large institutions employ hundreds of people to manually resolve errors in high-volume payments. By embedding AI-driven intelligence directly into the transaction flow, we are able to automatically identify likely corrections when there is an error and dramatically reduce manual intervention.

Tom Warsop: Today, many large institutions employ hundreds of people to manually resolve errors in high-volume payments. By embedding AI-driven intelligence directly into the transaction flow, we are able to automatically identify likely corrections when there is an error and dramatically reduce manual intervention. The result is lower operating costs, faster settlement, and a materially better customer experience.

Speaker #3: The result is lower operating costs, faster settlement, and a materially better customer experience. This capability cannot be created by an LLM, large language model alone, it requires deep domain expertise purpose-built software, and of course, unmatched data.

Thomas Warsop: This capability cannot be created by an LLM, large language model, alone. It requires deep domain expertise, purpose-built software, and of course, unmatched data at scale. In short, while we understand the broader concerns around AI and software, at ACI, we're leaning in. We have an AI-first approach across the company that's coordinated through what we call our Velocity program. We are already seeing tangible benefits across productivity, efficiency, and customer outcomes. Quite simply, the combination of our resilient infrastructure, our extensive proprietary data, and our unique domain expertise will allow ACI to continue delivering mission-critical payment and billing software that is deeply embedded in our customers' operations and very difficult to replace. We believe this positions ACI to remain a leader as payments technology continues to evolve. One last important item before I turn it over to Bobby.

Tom Warsop: This capability cannot be created by an LLM, large language model, alone. It requires deep domain expertise, purpose-built software, and of course, unmatched data at scale. In short, while we understand the broader concerns around AI and software, at ACI, we're leaning in. We have an AI-first approach across the company that's coordinated through what we call our Velocity program. We are already seeing tangible benefits across productivity, efficiency, and customer outcomes. Quite simply, the combination of our resilient infrastructure, our extensive proprietary data, and our unique domain expertise will allow ACI to continue delivering mission-critical payment and billing software that is deeply embedded in our customers' operations and very difficult to replace. We believe this positions ACI to remain a leader as payments technology continues to evolve. One last important item before I turn it over to Bobby.

Speaker #3: At scale. In short, while we understand the broader concerns around AI and software, at ACI, we're leaning in. We have an AI-first approach across the company.

Speaker #3: That's coordinated through what we call our Velocity program. And we are already seeing tangible benefits across productivity, efficiency, and customer outcomes. And quite simply, the combination of our resilient infrastructure, our extensive proprietary data, and our unique domain expertise will allow ACI to continue delivering mission-critical payment and billing software that is deeply embedded in our customers' operations and very difficult to replace.

Speaker #3: We believe this positions ACI to remain a leader as payments technology continues to evolve. And one last important item before I turn it over to Bobby, I'm pleased to share that as part of our ongoing board refreshment process, we announced today the appointment of Kim De Beers, whose unique skill set and deep professional and advisory experience will further strengthen the board of directors' governance approach and risk culture, complementing the backgrounds of our other directors.

Thomas Warsop: I'm pleased to share that as part of our ongoing board refreshment process, we announced today the appointment of Kim deBeers, whose unique skill set and deep professional and advisory experience will further strengthen the board of directors' governance approach and risk culture, complementing the backgrounds of our other directors. This appointment follows the previously announced additions of Didier Lamouche and Todd Ford back in October 2025. As part of a planned succession, Jan Estep and Charlie Peters have transitioned off the board. I would personally like to welcome Kim and of course, thank Jan and Charlie for their many years of helpful service. I've enjoyed our time together, and I look forward to hearing about your future endeavors. In summary, 2025 was another year of significant progress for ACI Worldwide.

Tom Warsop: I'm pleased to share that as part of our ongoing board refreshment process, we announced today the appointment of Kim deBeers, whose unique skill set and deep professional and advisory experience will further strengthen the board of directors' governance approach and risk culture, complementing the backgrounds of our other directors. This appointment follows the previously announced additions of Didier Lamouche and Todd Ford back in October 2025. As part of a planned succession, Jan Estep and Charlie Peters have transitioned off the board. I would personally like to welcome Kim and of course, thank Jan and Charlie for their many years of helpful service. I've enjoyed our time together, and I look forward to hearing about your future endeavors. In summary, 2025 was another year of significant progress for ACI Worldwide.

Speaker #3: This appointment follows the previously announced additions of DDA Lemouche and Todd Ford back in October of 2025. And as part of a planned succession, Jan Estep and Charlie Peters have transitioned off the board.

Speaker #3: I would personally like to welcome Kim and, of course, thank Jan and Charlie for their many years of helpful service. I've enjoyed our time together and I look forward to hearing about your future endeavors.

Speaker #3: In summary, 2025 was another year of significant progress for ACI Worldwide. We had strong, balanced growth, expanding profitability, and broadening global demand for all of our solutions, including our cloud-native Kinetic platform.

Thomas Warsop: We had strong, balanced growth, expanding profitability and broadening global demand for all of our solutions, including our cloud-native Kinetic platform. We continued to invest in our AI-first roadmap, including Kinetic capabilities such as real-time payments and digital currency connectivity, including stablecoins, reflecting the themes we've talked about throughout 2025. I'm proud of our team, and I'm excited for the opportunities ahead to continue our shareholder value creation journey. I'll hand it over to Bobby to talk more about our financial results and the outlook for 2026. Bobby?

Tom Warsop: We had strong, balanced growth, expanding profitability and broadening global demand for all of our solutions, including our cloud-native Kinetic platform. We continued to invest in our AI-first roadmap, including Kinetic capabilities such as real-time payments and digital currency connectivity, including stablecoins, reflecting the themes we've talked about throughout 2025. I'm proud of our team, and I'm excited for the opportunities ahead to continue our shareholder value creation journey. I'll hand it over to Bobby to talk more about our financial results and the outlook for 2026. Bobby?

Speaker #3: And we continue to invest in our AI-first roadmap, including Kinetic capabilities such as real-time payments and digital currency connectivity, including stablecoins, reflecting the themes we've talked about throughout 2025.

Speaker #3: I'm proud of our team, and I'm excited for the opportunities ahead to continue our shareholder value creation journey. I'll hand it over to Bobby to talk more about our financial results and the outlook for 2026.

Speaker #3: Bobby?

Speaker #2: Thank you, Tom. And good morning, everyone. I'll begin with a brief review of our fourth quarter results, then focus primarily on our full year 2025 performance.

Robert Leibrock: Thank you, Tom. Good morning, everyone. I'll begin with a brief review of our Q4 results, then focus primarily on our full year 2025 performance, reflecting our long-term full year approach to managing the business. I'll close with our outlook and capital allocation priorities for 2026. The Q4 was a solid close to a year of strong execution. Total revenue in the quarter was $482 million, up 6% year-over-year, and recurring revenue was $304 million, up 13%, reflecting continued strength across both segments and growing demand for our recurring software-led offerings. For the full year, total revenue was $1.76 billion, representing 10% growth versus 2024. Recurring revenue was $1.21 billion, up 11%, underscoring the durability and quality of our revenue base.

Bobby Leibrock: Thank you, Tom. Good morning, everyone. I'll begin with a brief review of our Q4 results, then focus primarily on our full year 2025 performance, reflecting our long-term full year approach to managing the business. I'll close with our outlook and capital allocation priorities for 2026. The Q4 was a solid close to a year of strong execution. Total revenue in the quarter was $482 million, up 6% year-over-year, and recurring revenue was $304 million, up 13%, reflecting continued strength across both segments and growing demand for our recurring software-led offerings. For the full year, total revenue was $1.76 billion, representing 10% growth versus 2024. Recurring revenue was $1.21 billion, up 11%, underscoring the durability and quality of our revenue base.

Speaker #2: Reflecting our long-term full year approach to managing the business, I'll close with our outlook in capital allocation priorities for 2026. The fourth quarter was a solid close to a year of strong execution.

Speaker #2: Total revenue in the quarter was $482 million, up 6% year over year, and recurring revenue was $304 million, up 13%. Reflecting continued strength across both segments, and growing demand for our recurring software-led offerings.

Speaker #2: For the full year, total revenue was $1.76 billion, representing 10% growth versus 2024. Recurring revenue was $1.21 billion, up 11%, underscoring the durability and quality of our revenue base.

Speaker #2: We delivered adjusted EBITDA of $506 million, an increase of 9% year over year, and expanded net adjusted EBITDA margin to 42%, reflecting disciplined execution and the operating leverage inherent in our software model, which provides flexibility to continue investing in the business while returning capital to shareholders.

Robert Leibrock: We delivered adjusted EBITDA of $506 million, an increase of 9% year-over-year, and expanded net adjusted EBITDA margin to 42%, reflecting disciplined execution and the operating leverage inherent in our software model, which provides flexibility to continue investing in the business while returning capital to shareholders. Net new ARR bookings increased 7% to $70 million, while new license and services bookings were $255 million, down 12%. This year-over-year comparison primarily reflects the timing of contract signings between periods, with 2025 representing a more normalized Q4 to Q1 booking cadence and no change in underlying demand or deal quality. As Tom outlined, our results reflect broad-based demand across both segments and continued customer adoption of our modern payment and bill pay platforms.

Bobby Leibrock: We delivered adjusted EBITDA of $506 million, an increase of 9% year-over-year, and expanded net adjusted EBITDA margin to 42%, reflecting disciplined execution and the operating leverage inherent in our software model, which provides flexibility to continue investing in the business while returning capital to shareholders. Net new ARR bookings increased 7% to $70 million, while new license and services bookings were $255 million, down 12%. This year-over-year comparison primarily reflects the timing of contract signings between periods, with 2025 representing a more normalized Q4 to Q1 booking cadence and no change in underlying demand or deal quality. As Tom outlined, our results reflect broad-based demand across both segments and continued customer adoption of our modern payment and bill pay platforms.

Speaker #2: Net new ARR bookings increased 7% to $70 million, while new license and services bookings were $255 million, down 12%. This year-over-year comparison primarily reflects the timing of contract signings between periods, with 2025 representing a more normalized Q4 to Q1 booking cadence and no change in underlying demand or deal quality.

Speaker #2: As Tom outlined, our results reflect broad-based demand across both segments, and continued customer adoption of our modern payment and bill pay platforms. In payment software, revenue increased 9% to $942 million, and adjusted EBITDA grew 10% to $544 million.

Robert Leibrock: In Payment Software, revenue increased 9% to $942 million, adjusted EBITDA grew 10% to $544 million. We continue to see increasing demand for our cloud-based offerings, with SaaS revenue growing 15% in Q4 and 11% for the full year, alongside continued strength across our broader Payment Software portfolio. Growth was broad-based across issuing and acquiring, real-time payments, fraud management, and merchant solutions. We also continued to make progress advancing ACI Kinetic, including the key customer wins Tom referenced as part of our long-term platform and modernization strategy. As payment complexity increases globally, our large bank and processor customers continue to expand their relationships with ACI over time. Turning to biller, revenue increased 13% to $818 million, adjusted EBITDA grew 7% to $141 million.

Bobby Leibrock: In Payment Software, revenue increased 9% to $942 million, adjusted EBITDA grew 10% to $544 million. We continue to see increasing demand for our cloud-based offerings, with SaaS revenue growing 15% in Q4 and 11% for the full year, alongside continued strength across our broader Payment Software portfolio. Growth was broad-based across issuing and acquiring, real-time payments, fraud management, and merchant solutions. We also continued to make progress advancing ACI Kinetic, including the key customer wins Tom referenced as part of our long-term platform and modernization strategy. As payment complexity increases globally, our large bank and processor customers continue to expand their relationships with ACI over time. Turning to biller, revenue increased 13% to $818 million, adjusted EBITDA grew 7% to $141 million.

Speaker #2: We continue to see increasing demand for our cloud-based offerings, with SaaS revenue growing 15% in Q4 and 11% for the full year, alongside continued strength across our broader payment software portfolio.

Speaker #2: Growth was broad-based across issuing acquiring, real-time payments, fraud management, and merchant solutions, we also continue to make progress advancing ACI Kinetic, including the key customer wins Tom referenced, as part of our long-term platform and modernization strategy.

Speaker #2: As payment complexity increases globally, our large bank and processor customers continue to expand their relationships with ACI over time. Turning to biller, revenue increased 13% to $818 million, and adjusted EBITDA grew 7% to $141 million.

Speaker #2: Growth was driven by continued transaction volume, with existing customers and strong new business momentum across utilities, government, and consumer finance, as more billers consolidate onto modern digital bill pay platforms.

Robert Leibrock: Growth was driven by continued transaction volume with existing customers and strong new business momentum across utilities, government, and consumer finance as more billers consolidate onto modern digital bill pay platforms. The segment continues to perform consistently with a revenue profile and margin structure that are well understood and predictable. We also continue to make progress advancing Speedpay One, our next-generation biller platform, which supports our long-term modernization strategy for the segment. Both segments provide a balanced growth profile with recurring revenue and exposure to multiple end markets, while each continues to invest in modern platforms and capabilities to meet evolving customer needs. Turning to cash flow and the balance sheet. Cash flow from operating activities in 2025 was $323 million, compared to $359 million in 2024, reflecting normal timing differences in working capital, including receivables and deferred revenue.

Bobby Leibrock: Growth was driven by continued transaction volume with existing customers and strong new business momentum across utilities, government, and consumer finance as more billers consolidate onto modern digital bill pay platforms. The segment continues to perform consistently with a revenue profile and margin structure that are well understood and predictable. We also continue to make progress advancing Speedpay One, our next-generation biller platform, which supports our long-term modernization strategy for the segment.

Speaker #2: The segment continues to perform consistently, with our revenue profile and margin structure that are well understood and predictable. We also continue to make progress advancing speed pay one, our next-generation biller platform, which supports our long-term modernization strategy for the segment.

Speaker #2: Both segments provide a balanced growth profile with recurring revenue and exposure to multiple end markets. While each continues to invest in modern platforms and capabilities to meet evolving customer needs, turning to cash flow and the balance sheet.

Bobby Leibrock: Both segments provide a balanced growth profile with recurring revenue and exposure to multiple end markets, while each continues to invest in modern platforms and capabilities to meet evolving customer needs. Turning to cash flow and the balance sheet. Cash flow from operating activities in 2025 was $323 million, compared to $359 million in 2024, reflecting normal timing differences in working capital, including receivables and deferred revenue.

Speaker #2: Cash flow from operating activities in 2025 was $323 million, compared to $359 million in 2024, reflecting normal timing differences in working capital including receivables and deferred revenue.

Speaker #2: Underlying cash generation remained strong. We ended the year with $196 million of cash on hand in total debt of $823 million, resulting in a net debt leverage ratio of 1.2X adjusted EBITDA, below our targeted leverage range of 2X.

Robert Leibrock: Underlying cash generation remains strong. We ended the year with $196 million of cash on hand and total debt of $823 million, resulting in a net debt leverage ratio of 1.2x adjusted EBITDA, below our targeted leverage range of 2x. Our balance sheet remains a significant strategic asset and provides flexibility to invest in growth while returning capital to shareholders. Capital allocation continues to be a core component of our value creation framework. In 2025, we returned $203 million to shareholders through the repurchase of approximately 4.2 million shares, or about 4% of shares outstanding. We ended the year with $456 million remaining on our current share repurchase authorization. Turning to our outlook for 2026.

Bobby Leibrock: Underlying cash generation remains strong. We ended the year with $196 million of cash on hand and total debt of $823 million, resulting in a net debt leverage ratio of 1.2x adjusted EBITDA, below our targeted leverage range of 2x. Our balance sheet remains a significant strategic asset and provides flexibility to invest in growth while returning capital to shareholders. Capital allocation continues to be a core component of our value creation framework. In 2025, we returned $203 million to shareholders through the repurchase of approximately 4.2 million shares, or about 4% of shares outstanding. We ended the year with $456 million remaining on our current share repurchase authorization. Turning to our outlook for 2026.

Speaker #2: Our balance sheet remains a significant strategic asset and provides flexibility to invest in growth while returning capital to shareholders. Capital allocation continues to be a core component of our value creation framework.

Speaker #2: In 2025, we returned $203 million to shareholders through the repurchase of approximately $4.2 million shares, or about 4% of shares outstanding. We ended the year with $456 million remaining on our current share repurchase authorization.

Speaker #2: Turning to our outlook for 2026. Building on the momentum Tom described, our guidance reflects the durability of our recurring revenue base and continued growth driven by new customer wins, share of wallet expansion, and increasing adoption of our cloud-native and real-time payment capabilities.

Robert Leibrock: Building on the momentum Tom described, our guidance reflects the durability of our recurring revenue base and continued growth, driven by new customer wins, share of wallet expansion, and increasing adoption of our cloud-native and real-time payment capabilities. For the full year, we expect revenue growth of 7% to 9% on a constant currency basis, or $1.88 to $1.91 billion. For Q1, we expect revenue in the range of $405 to $415 million. In terms of revenue phasing, we continue to expect a more second half-weighted revenue profile, with approximately 44% of full-year revenue in the first half of 2026 and 56% in the second half, consistent with historical seasonality.

Bobby Leibrock: Building on the momentum Tom described, our guidance reflects the durability of our recurring revenue base and continued growth, driven by new customer wins, share of wallet expansion, and increasing adoption of our cloud-native and real-time payment capabilities. For the full year, we expect revenue growth of 7% to 9% on a constant currency basis, or $1.88 to $1.91 billion. For Q1, we expect revenue in the range of $405 to $415 million. In terms of revenue phasing, we continue to expect a more second half-weighted revenue profile, with approximately 44% of full-year revenue in the first half of 2026 and 56% in the second half, consistent with historical seasonality.

Speaker #2: For the full year, we expect revenue growth of 7 to 9% on a constant currency basis, or 1.88 to 1.91 billion, for the first quarter we expect revenue in the range of $405 to $415 million.

Speaker #2: In terms of revenue phasing, we continue to expect a more second-half weighted revenue profile, with approximately $44% of full-year revenue in the first half of 2026 and $56% in the second half, consistent with historical seasonality.

Speaker #2: We expect adjusted EBITDA of $530 to $550 million for the full year, and $88 to $93 million in the first quarter, this outlook reflects continued cost discipline while reinvesting in high-return initiatives and maintaining flexibility to support our long-term roadmap.

Robert Leibrock: We expect adjusted EBITDA of $530 to 550 million for the full year and $88 to 93 million in Q1. This outlook reflects continued cost discipline while reinvesting in high return initiatives and maintaining flexibility to support our long-term roadmap. As we look at capital deployment for 2026, our approach reflects the strength and flexibility of our current financial position. We expect to allocate approximately 50% to 60% of our cash flow from operating activities to share repurchases in 2026, subject to market conditions and business needs, while continuing to invest organically and preserving capacity for disciplined strategic M&A within our targeted leverage range.

Bobby Leibrock: We expect adjusted EBITDA of $530 to 550 million for the full year and $88 to 93 million in Q1. This outlook reflects continued cost discipline while reinvesting in high return initiatives and maintaining flexibility to support our long-term roadmap. As we look at capital deployment for 2026, our approach reflects the strength and flexibility of our current financial position. We expect to allocate approximately 50% to 60% of our cash flow from operating activities to share repurchases in 2026, subject to market conditions and business needs, while continuing to invest organically and preserving capacity for disciplined strategic M&A within our targeted leverage range.

Speaker #2: As we look at capital deployment for 2026, our approach reflects the strength and flexibility of our current financial position. We expect to allocate approximately $50 to 60% of our cash flow from operating activities to share repurchases in 2026, subject to market conditions and business needs.

Speaker #2: While continuing to invest organically and preserving capacity for disciplined strategic M&A within our targeted leverage range. To provide additional transparency and support investor understanding, below adjusted EBITDA our current expectations include net interest expense of approximately $30 million for the full year, depreciation and amortization of approximately $90 million, non-cash compensation expense of approximately $65 to $75 million, and an effective tax rate of approximately 25%.

Robert Leibrock: To provide additional transparency and support investor understanding, below adjusted EBITDA, our current expectations include net interest expense of approximately $30 million for the full year, depreciation and amortization of approximately $90 million, non-cash compensation expense of approximately $65 to 75 million, and an effective tax rate of approximately 25%. We also expect capital expenditures of approximately $45 million in 2026, and cash taxes in the range of $80 to 90 million. On share count, we expect diluted shares outstanding of approximately 105 million, excluding any impact from future share repurchase activity. Stepping back from detailed guidance, I want to put both our 2025 performance and our 2026 outlook into broader context. Since joining ACI last year, the consistency of execution and financial discipline across the organization has been clear.

Bobby Leibrock: To provide additional transparency and support investor understanding, below adjusted EBITDA, our current expectations include net interest expense of approximately $30 million for the full year, depreciation and amortization of approximately $90 million, non-cash compensation expense of approximately $65 to 75 million, and an effective tax rate of approximately 25%. We also expect capital expenditures of approximately $45 million in 2026, and cash taxes in the range of $80 to 90 million. On share count, we expect diluted shares outstanding of approximately 105 million, excluding any impact from future share repurchase activity. Stepping back from detailed guidance, I want to put both our 2025 performance and our 2026 outlook into broader context. Since joining ACI last year, the consistency of execution and financial discipline across the organization has been clear.

Speaker #2: We also expect capital expenditures of approximately $45 million in 2026, and cash taxes in the range of $80 to $90 million. On share count, we expect diluted shares outstanding of approximately $105 million, excluding any impact from future share repurchase activity.

Speaker #2: Stepping back from detailed guidance, I want to put both our 2025 performance and our 2026 outlook into broader context. Since joining ACI last year, the consistency of execution and financial discipline across the organization has been clear.

Speaker #2: In 2025, we delivered double-digit revenue growth, expanded margins, strong cash flow generation, and meaningful capital returns. Looking ahead to 2026, we enter with solid momentum, strong customer demand, and a position of financial strength that allows us to both return capital to shareholders and invest in a compelling innovation agenda to support continued execution.

Robert Leibrock: In 2025, we delivered double-digit revenue growth, expanded margins, strong cash flow generation, and meaningful capital returns. Looking ahead to 2026, we enter with solid momentum, strong customer demand, and a position of financial strength that allows us to both return capital to shareholders and invest in a compelling innovation agenda to support continued execution. With that, Tom and I would be happy to take your questions.

Bobby Leibrock: In 2025, we delivered double-digit revenue growth, expanded margins, strong cash flow generation, and meaningful capital returns. Looking ahead to 2026, we enter with solid momentum, strong customer demand, and a position of financial strength that allows us to both return capital to shareholders and invest in a compelling innovation agenda to support continued execution. With that, Tom and I would be happy to take your questions.

Speaker #2: With that, Tom and I would be happy to take your questions.

Speaker #1: Thank you. We will now begin the question-and-answer session. At this time, I would like to remind everyone, in order to ask questions, press Start, then the number 1 on your telephone keypad.

Operator: Thank you. We will now begin the question and answer session. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your first question is coming from the line of Jeff Kendall with Seaport Research. Please go ahead.

Speaker #1: Your first question is coming from the line of Chef Kentville with Seaport Research. Please go ahead.

Speaker #3: Go ahead.

Jeff Kendall: Hi, thanks a lot. I think you answered the big questions that are out there right now about AI in your prepared remarks. Thanks for all that. I wanted to ask you a question on your revenue guidance for 2026. Can you just go through the building blocks and cadence? By building blocks, I'm curious how you get to an acceleration in the back half of the year. Is that coming from the Payment Software segment or from biller? What are those drivers under the hood? You know, kind of second, what gives you the confidence that you can accelerate revenue growth in the back half? I know you tend to have a lot of visibility. I wanted to kick the tires on that back half acceleration, what you see as the drivers. Thanks.

Jeff Cantwell: Hi, thanks a lot. I think you answered the big questions that are out there right now about AI in your prepared remarks. Thanks for all that. I wanted to ask you a question on your revenue guidance for 2026. Can you just go through the building blocks and cadence? By building blocks, I'm curious how you get to an acceleration in the back half of the year. Is that coming from the Payment Software segment or from biller? What are those drivers under the hood? You know, kind of second, what gives you the confidence that you can accelerate revenue growth in the back half? I know you tend to have a lot of visibility. I wanted to kick the tires on that back half acceleration, what you see as the drivers. Thanks.

Speaker #4: Hi. Thanks a lot. And I think you answered the big questions that are out there right now about AI and your prepared remarks. So thanks for all that.

Speaker #4: I wanted to ask you a question on your revenue guidance for 2026. Can you just go through the building blocks and cadence? By building blocks, I’m curious how you get to an acceleration in the back half of the year.

Speaker #4: Is that coming from the payment software segment or from Billr? And what are those drivers under the hood? And then, kind of second, what gives you the confidence that you can accelerate revenue growth in the back half?

Speaker #4: I know you tend to have a lot of visibility. So I wanted to kick the tires on that back half acceleration, what you see as the drivers.

Speaker #4: Thanks.

Robert Leibrock: Hey, Jeff Kendall, good morning, it's Robert Leibrock. I'll jump in. Appreciate the question, and to put it in context, as I zoom out and look at, you know, 2025, we delivered 10% growth. We had a strong start to the year as we talked about it, 15% in first half of 2025, and then delivered 10% on the full year. Some of this, as you point out, is gonna be, you know, how the phasing one year compares to the next. I appreciate the question because it really shows the strength that we see entering 2026. You know, think about our guidance of 7% to 9% growth. I'll start with a statement of that's pretty balanced across both of our segments.

Speaker #5: So hey, Jeff, good morning. It's Bobby. I'll jump in. So I appreciate the question. To put it in context, as I zoom out and look at 2025, we delivered 10% growth.

Bobby Leibrock: Hey, Jeff Kendall, good morning, it's Robert Leibrock. I'll jump in. Appreciate the question, and to put it in context, as I zoom out and look at, you know, 2025, we delivered 10% growth. We had a strong start to the year as we talked about it, 15% in first half of 2025, and then delivered 10% on the full year. Some of this, as you point out, is gonna be, you know, how the phasing one year compares to the next. I appreciate the question because it really shows the strength that we see entering 2026. You know, think about our guidance of 7% to 9% growth. I'll start with a statement of that's pretty balanced across both of our segments.

Speaker #5: We had a strong start to the year as we talked about at 15% in the first half of '25. And then delivered 10% in the full year.

Speaker #5: So, some of this, as you point out, is going to be how the phasing one year compares to the next. But I appreciate the question because it really shows the strength that we see entering 2026.

Speaker #5: Thinking about our guidance of 7 to 9% growth, I'll start with a statement of that's pretty balanced across both of our segments. We see both Billr and payment software with strength to contribute into that high single-digit model.

Robert Leibrock: We see, you know, both biller and Payment Software with strength to contribute into that high single digit model. We have, as you mentioned, you know, given our high recurring revenue model, we've got great visibility in this guidance looking at this year. As you think about the first half versus the second half, a lot of that's gonna do with the renewal fees phasing we see in that visibility, and as we see the implementations and the new bookings and such that we've signed this year. We feel good about the demand we're seeing across the board and how that plays out throughout the year.

Bobby Leibrock: We see, you know, both biller and Payment Software with strength to contribute into that high single digit model. We have, as you mentioned, you know, given our high recurring revenue model, we've got great visibility in this guidance looking at this year. As you think about the first half versus the second half, a lot of that's gonna do with the renewal fees phasing we see in that visibility, and as we see the implementations and the new bookings and such that we've signed this year. We feel good about the demand we're seeing across the board and how that plays out throughout the year.

Speaker #5: We have, as you mentioned, given our high recurring revenue model, we've got great visibility in this guidance looking at this year. And as you think about the first half versus the second half, a lot of that's going to do with the renewal phasing we see in that visibility.

Speaker #5: And as we see the implementations and the new bookings and such that we've signed this year. So we feel good about the demand we're seeing across the board and how that plays out throughout the year.

Speaker #6: Yeah. And Jeff, this is Tom. The Bobby already said this, but I'll just say a little bit differently. We have a lot of visibility as you highlighted.

Thomas Warsop: Yeah, and Jeff, this is Tom. Bobby already said this, but I'll just say it a little bit differently. We have a lot of visibility as you highlighted, and not just on the renewal book. Just as a reminder for everybody, I know you all know this, but when we sign a renewal, it doesn't matter when you sign it, the revenue gets recognized on the date of renewal. We can do a lot to accelerate signing. We can't do much to change when that revenue gets recognized. We have a lot of visibility there.

Tom Warsop: Yeah, and Jeff, this is Tom. Bobby already said this, but I'll just say it a little bit differently. We have a lot of visibility as you highlighted, and not just on the renewal book. Just as a reminder for everybody, I know you all know this, but when we sign a renewal, it doesn't matter when you sign it, the revenue gets recognized on the date of renewal. We can do a lot to accelerate signing. We can't do much to change when that revenue gets recognized. We have a lot of visibility there.

Speaker #6: And not just on the renewal book and just as a reminder for everybody, I know you all know this, but when we sign a renewal, it doesn't matter when you sign it.

Speaker #6: The revenue gets recognized on the date of renewal. So that we can do a lot to accelerate signing. We can't do much to we can't do anything really to change when that revenue gets recognized.

Speaker #6: So we have a lot of visibility there. We also have a great deal of visibility to the deals that we talked about a few of them specifically deals that were signed in 2025 and being implemented in 2026.

Thomas Warsop: We also have a great deal of visibility to the deals that we talked about a few of them, specifically, deals that were signed in 2025 and being implemented in 2026. Revenue recognition typically happens when you go live, and you start to see volume in the biller and merchant part of the business, especially. We have a lot of visibility there. Those deals are on track to implement as expected. We have high confidence in the revenue coming through. We have very strong and growing pipeline in our key products, especially our Kinetic products. All of that gives us a lot of confidence, and it's a little bit more back-end weighted than last year.

Tom Warsop: We also have a great deal of visibility to the deals that we talked about a few of them, specifically, deals that were signed in 2025 and being implemented in 2026. Revenue recognition typically happens when you go live, and you start to see volume in the biller and merchant part of the business, especially. We have a lot of visibility there. Those deals are on track to implement as expected. We have high confidence in the revenue coming through. We have very strong and growing pipeline in our key products, especially our Kinetic products. All of that gives us a lot of confidence, and it's a little bit more back-end weighted than last year.

Speaker #6: And so revenue recognition typically happens when you go live and you start to see volume in the Billr and Merchant part of the business, especially.

Speaker #6: And so we have a lot of visibility there. We those deals are on track to implement as expected. And then we have high confidence in the revenue coming through.

Speaker #6: And we have very strong and growing pipeline in our key products, especially our Kinetic products. So all of that gives us a lot of confidence.

Speaker #6: And it's a little bit more back-end weighted than last year, but that's sort of a normal thing that it fluctuates a little bit year to year, largely based on that renewal book, but also in tandem with the deals that we sign and expect to implement.

Thomas Warsop: That, that's sort of a normal thing, that it fluctuates a little bit year to year, largely based on that renewal book, but also, in tandem with the deals that we sign and expect to implement.

Tom Warsop: That, that's sort of a normal thing, that it fluctuates a little bit year to year, largely based on that renewal book, but also, in tandem with the deals that we sign and expect to implement.

Jeff Kendall: Got it. This is a little technical, but if we take the midpoints of your 2026 guidance, it does look like adjusted EBITDA, while it tracks revenue growth more or less, it does imply a slight compression. My question is, can you talk about why? Meaning, what's in the business plan for this year, or maybe should we chalk that up to some of the conservatism you guys have shown over the past couple of years. What are the main call-outs for adjusted EBITDA margins for this coming year? Thanks.

Jeff Cantwell: Got it. This is a little technical, but if we take the midpoints of your 2026 guidance, it does look like adjusted EBITDA, while it tracks revenue growth more or less, it does imply a slight compression. My question is, can you talk about why? Meaning, what's in the business plan for this year, or maybe should we chalk that up to some of the conservatism you guys have shown over the past couple of years. What are the main call-outs for adjusted EBITDA margins for this coming year? Thanks.

Speaker #4: Got it. And then this is a little technical, but if we take the midpoints of your 2026 guidance, it does look like adjusted EBITDA, while it tracks revenue growth more or less, it does imply a slight compression.

Speaker #4: So my question is, can you talk about why? Meaning, what's in the business plan for this year? Or maybe should we chalk that up to some of the conservatism you guys have shown over the past couple of years?

Speaker #4: What are the main callouts for adjusted EBITDA margins for this coming year? Thanks.

Speaker #5: Yeah. I'll jump in. So as you point out on the revenue, as I mentioned, we're guiding 7 to 9 percent growth. We feel good about that, the visibility of it.

Robert Leibrock: Yeah, I'll jump in. As you point out on the revenue, as I mentioned, we're guiding 7% to 9% growth. We feel good about that, the visibility of it, and we feel good about the operating leverage we're seeing in the business. The guide on EBITDA is, you know, on a growth basis, about 6% to 9% as well. Both kind of straddling that high single digit range. As you think underneath of it, we expanded about 100 basis points of margin in 2025. That's, you know, I think about 300 basis points in 2024. We're showing the operating leverage.

Bobby Leibrock: Yeah, I'll jump in. As you point out on the revenue, as I mentioned, we're guiding 7% to 9% growth. We feel good about that, the visibility of it, and we feel good about the operating leverage we're seeing in the business. The guide on EBITDA is, you know, on a growth basis, about 6% to 9% as well. Both kind of straddling that high single digit range. As you think underneath of it, we expanded about 100 basis points of margin in 2025. That's, you know, I think about 300 basis points in 2024. We're showing the operating leverage.

Speaker #5: And we feel good about the operating leverage we're seeing in the business. The guide on EBITDA is probably on a growth basis is about 6 to 9 percent as well.

Speaker #5: So both kind of straddling that high single-digit range. As you think underneath of it, we expanded about 100 basis points of margin in 2025.

Speaker #5: That's I think about 300 basis points in 2024. We're showing the operating 2025 is going to play out or 2026 will play out similar to 2025, where we're repurposing these investments for our new platforms like Kinetic and SpeedPay One.

Robert Leibrock: If I look at this past year, 2025 is gonna play out, or 2026 will play out similar to 2025, where we're repurposing these investments for our new platforms like Kinetic and Speedpay One. If I comment on 2025, the 100 basis points of margin, underneath of that, we doubled our investment in our Kinetic platform by reprioritizing that. We have similar focus around productivity entering this year. Some of this is the flexibility to invest throughout the year, as we continue to build that out, Jeff. I think we feel good about that. The other thing I'd mention, I hope you appreciate the additional transparency below the EBITDA line items. You know, we tried to give you know, our visibility there.

Bobby Leibrock: If I look at this past year, 2025 is gonna play out, or 2026 will play out similar to 2025, where we're repurposing these investments for our new platforms like Kinetic and Speedpay One. If I comment on 2025, the 100 basis points of margin, underneath of that, we doubled our investment in our Kinetic platform by reprioritizing that. We have similar focus around productivity entering this year. Some of this is the flexibility to invest throughout the year, as we continue to build that out, Jeff. I think we feel good about that. The other thing I'd mention, I hope you appreciate the additional transparency below the EBITDA line items. You know, we tried to give you know, our visibility there.

Speaker #5: If I comment on 2025, the 100 basis points of margin underneath of that, we doubled our investment in our Kinetic platform. By reprioritizing that, we have similar focus around productivity entering this year.

Speaker #5: And some of this is the flexibility to invest throughout the year. As we continue to build that out, Jeff. But I think we feel good about that.

Speaker #5: The other thing I'd mention I hope you appreciate the additional transparency below the EBITDA line items. We tried to give you our visibility there.

Speaker #5: We have to model that out. And I think what you'll see is good double-digit growth on top of that high single-digit EBITDA is possible when you get into the other components that would drive EPS and other pieces too.

Robert Leibrock: We have to model that out. I think what you'll see is, you know, good double-digit growth on top of that high single-digit EBITDA is possible when you get into, you know, the other components that would drive EPS and other pieces too.

Bobby Leibrock: We have to model that out. I think what you'll see is, you know, good double-digit growth on top of that high single-digit EBITDA is possible when you get into, you know, the other components that would drive EPS and other pieces too.

Speaker #6: Yeah. And Jeff, just the to comment on your comment about conservatism, I think I hope that everyone agrees that over the last several years, we've tried to always do what we say.

Thomas Warsop: Yeah, and Jeff, just to comment on your comment about conservatism. You know, I think, I hope that everyone agrees that over the last several years, we've, we try to always do what we say. So, you could call that conservatism. We call it prudence, I think. We wanna make sure that we give you guidance that we feel highly confident in, and we wanna make sure that we continue to deliver on the commitments we make to you.

Tom Warsop: Yeah, and Jeff, just to comment on your comment about conservatism. You know, I think, I hope that everyone agrees that over the last several years, we've, we try to always do what we say. So, you could call that conservatism. We call it prudence, I think. We wanna make sure that we give you guidance that we feel highly confident in, and we wanna make sure that we continue to deliver on the commitments we make to you.

Speaker #6: And so you could call that conservatism. We call it prudence, I think. We want to make sure that we give you guidance that we feel highly confident in.

Speaker #6: And we want to make sure that we continue to deliver on the commitments we make to you.

Speaker #1: Your next question is coming from the line of George Sutton with Craig Helium. Please go ahead.

Operator: Your next question is coming from the line of George Sutton with Craig-Hallum. Please go ahead.

Speaker #7: Thank you. And first time, that was as impressive an explanation of the AI relevance to what you do that I've heard. So I think that was helpful.

George Sutton: Thank you. First, Tom, that was as impressive an explanation of the AI relevance to what you do that I've heard. I think that was helpful. I wanted to address Kinetic in terms of the pipeline. You continue to reference a growing pipeline. Obviously, prior to what you said today, you had signed just one bank with a small use case, but it sounds like there's more significant things coming in addition to the bank you just announced today. Can you walk through the pipeline there?

Speaker #7: I wanted to address Kinetic in terms of the pipeline. You continue to reference a growing pipeline. Obviously, prior to what you said today, you had signed just one bank with a small use case.

Speaker #7: But it sounds like there's more significant things coming in addition to the bank you just announced today. So can you walk through the pipeline there?

Speaker #6: Sure. So yeah, you're absolutely right. We expected to have a relatively longer ramp of new signings. I always expected that. You might remember. We can go back a year or more.

Thomas Warsop: Sure. Yeah, you're absolutely right. We expected to have a relatively longer ramp of new signings. I always expected that. You might remember, we can go back a year or more, and I think I was telling everyone on our earnings calls that I'd actually not given the sales team permission to sell ACI Kinetic because we wanted to make sure we were ready and that the product was there. We started actively selling last year, end of Q1 of last year. We're actually quite pleased with the traction that we've gotten, the sales that we have. They're as expected, and that's great. But the real question is: What about the pipeline? We feel very good about the pipeline.

Tom Warsop: Sure. Yeah, you're absolutely right. We expected to have a relatively longer ramp of new signings. I always expected that. You might remember, we can go back a year or more, and I think I was telling everyone on our earnings calls that I'd actually not given the sales team permission to sell ACI Kinetic because we wanted to make sure we were ready and that the product was there. We started actively selling last year, end of Q1 of last year. We're actually quite pleased with the traction that we've gotten, the sales that we have. They're as expected, and that's great. But the real question is: What about the pipeline? We feel very good about the pipeline.

Speaker #6: And I was I think I was telling everyone on our earnings calls that I'd actually not given the sales team permission to sell Kinetic because we wanted to make sure we were ready.

Speaker #6: And that the product was there and we started actively selling last year, first end of first quarter of last year. So we're actually quite pleased with the traction that we've gotten, the sales that we have.

Speaker #6: They're as expected. And that's great. The real question is, what about the pipeline? And we feel very good about the pipeline. Kinetic is the fastest growing portion of our overall pipeline by a significant margin.

Thomas Warsop: Kinetic is the fastest-growing portion of our overall pipeline by a significant margin, and that's exactly what we expected. It's exactly what we want. Another important point is we did start. You mentioned, I think you said a limited use case. It was a very important use case for a European bank, was the first signing that we had. Again, we understood that because there's a lot of pressure and focus on financial institutions in Europe around instant payments. We knew that customers would need that help, and that's why we built, completely built out that portion of Kinetic's capabilities. We continue to expand, and Bobby was just talking about the continued investment in future products, and Kinetic is a big part of that.

Tom Warsop: Kinetic is the fastest-growing portion of our overall pipeline by a significant margin, and that's exactly what we expected. It's exactly what we want. Another important point is we did start. You mentioned, I think you said a limited use case. It was a very important use case for a European bank, was the first signing that we had. Again, we understood that because there's a lot of pressure and focus on financial institutions in Europe around instant payments. We knew that customers would need that help, and that's why we built, completely built out that portion of Kinetic's capabilities. We continue to expand, and Bobby was just talking about the continued investment in future products, and Kinetic is a big part of that.

Speaker #6: And that's exactly what we expected. It's exactly what we want. And another important point is we did start you mentioned I think you said a limited use case it was a very important use case for a European bank was the first signing that we had.

Speaker #6: And again, we understood that because there's a lot of pressure and focus on financial institutions in Europe around instant payments. We knew that customers would need that help.

Speaker #6: And that's why we built completely built out that portion of Kinetic's capabilities. We continue to expand and Bobby was just talking about the continued investment in future products and Kinetic is a big part of that.

Speaker #6: We continue to expand the functionality. And very, very shortly, we will be launching the card portion of ACI Kinetic. And that will significantly expand the use cases that we can support with our general availability versions of Kinetic.

Thomas Warsop: We continue to expand the functionality, and very shortly, we will be launching the card portion of ACI Kinetic, and that will significantly expand the use cases that we can support with our general availability versions of Kinetic. That's exciting. Even before we launched that portion, we're seeing significant growth month-on-month on the pipeline. These are long sales cycles. These are big decisions for these financial institutions. Again, we expected that, but we are making excellent progress. Pipeline is growing. We continue to add functionality and will continue to add functionality, which continues to increase the level of interest.

Tom Warsop: We continue to expand the functionality, and very shortly, we will be launching the card portion of ACI Kinetic, and that will significantly expand the use cases that we can support with our general availability versions of Kinetic. That's exciting. Even before we launched that portion, we're seeing significant growth month-on-month on the pipeline. These are long sales cycles. These are big decisions for these financial institutions. Again, we expected that, but we are making excellent progress. Pipeline is growing. We continue to add functionality and will continue to add functionality, which continues to increase the level of interest.

Speaker #6: So that's exciting. But even before we launch that portion, we're seeing significant growth month on month on the pipeline. Now, these are long sales cycles.

Speaker #6: These are big decisions. For these financial institutions. And again, we expected that. But we are making excellent progress. Pipeline is growing. We continue to add functionality and will continue to add functionality, which continues to increase the level of interest.

Speaker #6: And then one, I think, quite important point when I look at the pipeline overall for Kinetic, the 2026 potential closes, about two-thirds of those opportunities on a numbers basis are mid-tier.

Thomas Warsop: One, I think, quite important point, when I look at the pipeline overall for Kinetic, the 2026 potential closes, about 2/3 of those opportunities, on a numbers basis, are mid-tier financial institutions. Remember, if we go back, you will probably recall that we made a very specific point of saying that we were targeting the mid-tier, which is something we've never targeted as a company before. That pipeline, that is actually growing even faster than the total pipeline. Again, 2/3 of the opportunities we're working on right now are in that mid-tier segment, which is completely net new for us. It's good news all the way around. We're excited about it. Our sales teams are very excited about having these really compelling value propositions for our customers.

Tom Warsop: One, I think, quite important point, when I look at the pipeline overall for Kinetic, the 2026 potential closes, about 2/3 of those opportunities, on a numbers basis, are mid-tier financial institutions. Remember, if we go back, you will probably recall that we made a very specific point of saying that we were targeting the mid-tier, which is something we've never targeted as a company before. That pipeline, that is actually growing even faster than the total pipeline. Again, 2/3 of the opportunities we're working on right now are in that mid-tier segment, which is completely net new for us. It's good news all the way around. We're excited about it. Our sales teams are very excited about having these really compelling value propositions for our customers.

Speaker #6: Financial institutions. So remember, if we go back, you will probably recall that we made a very specific point of saying that we were targeting the mid-tier, which is something we've never targeted as a company before.

Speaker #6: And so that pipeline, that is actually growing even faster than the total pipeline. And again, two-thirds of the opportunities we're working on right now are in that mid-tier segment, which is completely net new for us.

Speaker #6: So it's good news all the way around. We're excited about it. Our sales teams are very excited about having these really compelling value propositions for our customers.

George Sutton: One other thing on real-time payments. You mentioned the addition of some additional logos. As a golfer, I'll ask it in this context: What hole are we on, in your view, relative to real-time payment penetration?

Speaker #7: One other thing on real-time payments. You mentioned the addition of some additional logos as a goal for Alaska in this context. What hole are we on in your view relative to real-time payment?

Speaker #7: Penetration.

Speaker #6: Yeah. I like that analogy, George. We're I think we're still pretty early in the cycle. We've done a good job at ACI over the last three or four years of planting flags on the real-time payment side.

Thomas Warsop: Yeah, it's. I like that analogy, George. We're still pretty early in the cycle. We've done a good job at ACI over the last three or four years of planting flags on the real-time payments side. As I mentioned, we had all the different flavors of real-time payments wins. We had some really important implementations, for example, in Colombia, that I specifically mentioned. We're seeing growth in transactions, and that will ultimately lead to growth in revenue. In 2025, that part of our business grew about 8%, and we expect it to continue to be a significant contributor to our growth overall. I'd say we're still early days. We've talked a lot about it. We've had good growth.

Tom Warsop: Yeah, it's. I like that analogy, George. We're still pretty early in the cycle. We've done a good job at ACI over the last three or four years of planting flags on the real-time payments side. As I mentioned, we had all the different flavors of real-time payments wins. We had some really important implementations, for example, in Colombia, that I specifically mentioned. We're seeing growth in transactions, and that will ultimately lead to growth in revenue. In 2025, that part of our business grew about 8%, and we expect it to continue to be a significant contributor to our growth overall. I'd say we're still early days. We've talked a lot about it. We've had good growth.

Speaker #6: As I mentioned, we had all the different flavors of real-time payments wins. We had some really important implementations. For example, in Colombia that I specifically mentioned, and we're seeing growth in transactions.

Speaker #6: And that will ultimately lead to growth in revenue. In 2025, that part of our business grew about 8%. And we expect it to continue to be a significant contributor to our growth overall.

Speaker #6: But I'd say we're still early days. We've talked a lot about it. We've had good growth. We've a lot of wins to show across the world.

Thomas Warsop: We've, we have a lot of wins to show across the world. I think in terms of overall adoption and volumes, we're still in relatively early innings. Sorry, you said golf. On an early hole. Front nine, George.

Tom Warsop: We've, we have a lot of wins to show across the world. I think in terms of overall adoption and volumes, we're still in relatively early innings. Sorry, you said golf. On an early hole. Front nine, George.

Speaker #6: But I think in terms of overall adoption and volumes, we're still in relatively early innings. Sorry, you said golf, so on an early hole.

Speaker #6: Front nine, George.

Operator: Your final question is coming from the line of Charles Nabhan with Stephens. Please go ahead.

Speaker #4: Your final question is coming from the line of Charles Newman, with Steven. Please go ahead.

Speaker #7: Hi. Good morning, and thank you for taking my question. I want to put a finer point on some of the two earlier questions. In the past, you've called renewals as an uplift upon renewals as a tailwind.

Charles Nabhan: Hi, good morning, and thank you for taking my question. I want to put a finer point on some of the two earlier questions. In the past, you've called renewals, as an uplift upon renewals as a tailwind. You've called out CPI, you've called out pricing, you've called out an uplift coming from volumes. Could you maybe touch on that tailwind, and if you're seeing any change in the uplift you're seeing upon renewals? It sounds like we're still early days in terms of the RTP adoption, but are you seeing any changes in that uplift upon renewals? Again, it sounds like we're still on the front nine, but wanted to get a little clarity about that as we think about the building blocks for 2026 and 2027.

Speaker #7: You've called out CPI. You've called out pricing. You've called out an uplift coming from volumes. Could you maybe touch on that tailwind? And if you're seeing any change in the uplift you're seeing upon renewals, it sounds like we're still early days in terms of the RTP adoption.

Speaker #7: But any are you seeing any changes in that uplift upon renewals? It sounds like we're again, it sounds like we're still on the front nine.

Speaker #7: But wanted to get a little clarity about that as we think about the building blocks for 26 and 27.

Robert Leibrock: Yeah, I'll jump in, Chuck. Appreciate the question. It's Bobby. I'll talk about it across both businesses, and I think, you know, a lot of the times when we've talked about those, you know, four or five areas, we've talked about Payment Software, which I'll come to. First, I'll start on the biller business. It grew 13% last year. That business, recurring revenue business, you know, processing model, cloud-native model, that 13%, you know, really had a couple of buckets there. One would be the high retention rates we're seeing, the new logos underneath of it, and the transactions. We see opportunity to continue to grow in that business, one, through price and also through value-added services we can put into there.

Bobby Leibrock: Yeah, I'll jump in, Chuck. Appreciate the question. It's Bobby. I'll talk about it across both businesses, and I think, you know, a lot of the times when we've talked about those, you know, four or five areas, we've talked about Payment Software, which I'll come to. First, I'll start on the biller business. It grew 13% last year. That business, recurring revenue business, you know, processing model, cloud-native model, that 13%, you know, really had a couple of buckets there. One would be the high retention rates we're seeing, the new logos underneath of it, and the transactions. We see opportunity to continue to grow in that business, one, through price and also through value-added services we can put into there.

Speaker #6: Chuck. Appreciate the questions, Bobby. And I'll talk about it across both businesses. And I think a lot of the times when we've talked about those four or five areas, we've talked about payment software, which I'll come to.

Speaker #6: And. But first, I'll start on the biller business that grew 13% last year. And that business, recurring revenue business, processing model, cloud-native model, that 13% really had a couple of buckets there.

Speaker #6: One would be the high retention rates we're seeing. And the new logos underneath of it and the transactions. We see opportunity to continue to grow in that business.

Speaker #6: One, through price. And also through value-added services. We can put into there. In that business model, I see the first three buckets more around retention rates, transactions, and new logos.

Robert Leibrock: In that business model, I see the first three buckets more around retention rates, transactions, and new logos. I think we have opportunity for the fourth and fifth, which would be price and value-added services. That 13%, very solid. The second part, a lot of the question, you're mostly asking a Payment Software question where we grew 9% last year. You know, really happy with that off of double-digit growth the prior year in 2024. Underneath of that, you know, similar to the biller business, our retention rates are very nice. You add on top of that, the transactions we're seeing, which continue to grow in mid-single digit across the market in terms of transaction base. We get respectable price in this area.

Bobby Leibrock: In that business model, I see the first three buckets more around retention rates, transactions, and new logos. I think we have opportunity for the fourth and fifth, which would be price and value-added services. That 13%, very solid. The second part, a lot of the question, you're mostly asking a Payment Software question where we grew 9% last year. You know, really happy with that off of double-digit growth the prior year in 2024. Underneath of that, you know, similar to the biller business, our retention rates are very nice. You add on top of that, the transactions we're seeing, which continue to grow in mid-single digit across the market in terms of transaction base. We get respectable price in this area.

Speaker #6: I think we have opportunity for the fourth and fifth, which would be price and value-added services. So that 13%, very solid. The second part, and a lot of the question you're mostly asking of payment software question where we grew 9% last year, really happy with that off of a double-digit growth the prior year in 2024.

Speaker #6: Underneath of that, the similar to the biller business, our retention rates are very nice. You add on top of that the transactions we're seeing, which continue to grow in mid-single-digit across the market in terms of transaction base.

Speaker #6: We get respectable price in this area. And then I think we're in the early innings in terms of the lift you're going to see in there across real-time payments, especially fraud and the payment intelligent capabilities that we're investing in that will continue to grow those customer relationships.

Robert Leibrock: I think we're in the early innings in terms of the lift you're gonna see in there across real-time payments, especially fraud and the payment intelligent capabilities that we're investing in that will continue to grow those customer relationships, and then Kinetic. Those are the pieces. I will say the fifth, though, is always new logos. This is an area where we had much better progress in 2025. The focus that Eric and the team have across this, our general manager for this space, on new logo pipeline, it's only intensifying. I see good upside in those last two buckets in this business around expansion into the rest of the portfolio and new logos.

Bobby Leibrock: I think we're in the early innings in terms of the lift you're gonna see in there across real-time payments, especially fraud and the payment intelligent capabilities that we're investing in that will continue to grow those customer relationships, and then Kinetic. Those are the pieces. I will say the fifth, though, is always new logos. This is an area where we had much better progress in 2025. The focus that Eric and the team have across this, our general manager for this space, on new logo pipeline, it's only intensifying. I see good upside in those last two buckets in this business around expansion into the rest of the portfolio and new logos.

Speaker #6: And then Kinetic. So those are the pieces. I will say the fifth, though, is always new logos. And this is an area where we had much better progress in 2025.

Speaker #6: And the focus that Eric and the team have across this our general manager for this space on new logo, new logo pipeline, it's only intensifying.

Speaker #6: So I see good upside in those last two buckets in this business around expansion into the rest of the portfolio and new logos. Yeah.

Thomas Warsop: Yeah, Chuck, just one thing to add there. You specifically asked about uplift on renewal. We continue to see very strong performance in that area. We're extremely good at driving cross-sell, upsell, price, all of which contribute to that uplift on renewal. We're very good at it. We're not seeing, we're seeing upside there, not downside.

Tom Warsop: Yeah, Chuck, just one thing to add there. You specifically asked about uplift on renewal. We continue to see very strong performance in that area. We're extremely good at driving cross-sell, upsell, price, all of which contribute to that uplift on renewal. We're very good at it. We're not seeing, we're seeing upside there, not downside.

Speaker #6: And Chuck, just one thing to add there. You specifically asked about uplift on renewal. And we continue to see very strong performance in that area.

Speaker #6: We're extremely good at driving cross-sell upsell price and which all of which contribute to that uplift on renewal. So we're very good at it.

Speaker #6: We expect we're not seeing we're seeing upside there, not downside.

Speaker #5: Got it. And as a follow-up, I wanted to ask about strategic M&A. You mentioned that in your prepared remarks. Wanted to get a sense for and you did a deal, a small deal last year.

Charles Nabhan: Got it. As a follow-up, I wanted to ask about strategic M&A. You mentioned that in your prepared remarks. Wanted to get a sense for. You did a deal, a small deal last year. I wanted to see if there's any particular areas of interest you could point to with respect to inorganic growth.

Speaker #5: I wanted to see if there's any particular areas of interest you could point to with respect to inorganic growth.

Speaker #6: Yeah. Absolutely. So we I have the same comment I've had for quite some time on this. There are two main areas where we're focused, and we will be opportunistic on this.

Thomas Warsop: Yeah, absolutely. We, I have the same comment I've had for quite some time on this. There are two main areas where we're focused, and we will be opportunistic on this. We're not, this is not something where we're out there every day seeking something to buy, but there are a couple of areas. One would be an ability to accelerate what we're doing with Kinetic, 'cause as I mentioned before, we continue to add features, functions, and capabilities into Kinetic. If we find a technology, and it would likely be a technology acquisition, we buy it because we like the technology.

Tom Warsop: Yeah, absolutely. We, I have the same comment I've had for quite some time on this. There are two main areas where we're focused, and we will be opportunistic on this. We're not, this is not something where we're out there every day seeking something to buy, but there are a couple of areas. One would be an ability to accelerate what we're doing with Kinetic, 'cause as I mentioned before, we continue to add features, functions, and capabilities into Kinetic. If we find a technology, and it would likely be a technology acquisition, we buy it because we like the technology.

Speaker #6: We're not this is not something where we're out there every day seeking something to buy. But there are a couple of areas. One would be a ability to accelerate what we're doing with Kinetic because, as I mentioned before, we continue to add features functions capabilities into Kinetic.

Speaker #6: And if we find a technology and it would likely be a technology acquisition, we buy it because we like the technology. If we found something that would enable us to go faster in building out the what we think are the market-leading capabilities of Kinetic, that would be very interesting for us.

Thomas Warsop: If we found something that would enable us to go faster in building out the what we think are the market-leading capabilities of Kinetic, that would be very interesting for us, and we certainly have capacity if we find the right opportunities. That's one, accelerate Kinetic. Number two would be if we can, if we found something that would enable us to expand geographically, for example. There aren't many areas around the world where we don't have a significant presence, but there are a couple of holes, and that could be interesting for us to take a bigger focus on a particular geography. Could be interesting.

Tom Warsop: If we found something that would enable us to go faster in building out the what we think are the market-leading capabilities of Kinetic, that would be very interesting for us, and we certainly have capacity if we find the right opportunities. That's one, accelerate Kinetic. Number two would be if we can, if we found something that would enable us to expand geographically, for example. There aren't many areas around the world where we don't have a significant presence, but there are a couple of holes, and that could be interesting for us to take a bigger focus on a particular geography. Could be interesting.

Speaker #6: And we certainly have capacity if we find the right opportunities. That's one. Accelerate Kinetic. Number two, would be if we can if we found something that would enable us to expand geographically, for example, there aren't many areas around the world where we don't have a significant presence, but there are a couple of holes.

Speaker #6: And that could be interesting for us to take a bigger focus on a particular geography. Could be interesting. So those are the two primary areas that we've been open to.

Thomas Warsop: Those are the two primary areas that we've been, that we've been open to, and I think we still are open to those. A lot of focus in making sure that we are really pushing on Kinetic, accelerating that as much as we possibly can, both with our organic investments that Bobby mentioned before, and then potentially, inorganic. There's nothing, you know, I don't have anything to announce, but that would be interesting to us.

Tom Warsop: Those are the two primary areas that we've been, that we've been open to, and I think we still are open to those. A lot of focus in making sure that we are really pushing on Kinetic, accelerating that as much as we possibly can, both with our organic investments that Bobby mentioned before, and then potentially, inorganic. There's nothing, you know, I don't have anything to announce, but that would be interesting to us.

Speaker #6: And I think we still are open to those. But a lot of focus in making sure that we are really pushing on Kinetic, accelerating that as much as we possibly can, both with our organic investments that Bobby mentioned before and then potentially inorganic.

Speaker #6: Although there's nothing I don't have anything to announce. But that would be interesting to us.

Robert Leibrock: I think, Tom, if I could add, let me put it in context, Chuck, of our broader capital allocation strategy. Last year, we generated, you know, $323 million of cash flow from operating activity, and we returned over $200 million of that to shareholders through share repurchase. We continue to invest in the business. We pay down our debt to a 1.2x leverage. What we wanted to do was get out in front of that this year and give investors the confidence that we have similar levels of planning to deploy 50% to 60% of our cash flow from operating activity, which tends to convert at about, you know, call it, you know, 60%, two-thirds of our EBITDA, to return that to shareholders this year.

Speaker #5: And I think, Tom, if I could add, let me put it in context, Chuck, of a broader capital allocation strategy. So last year, we generated 323 million of cash flow from operating activity.

Bobby Leibrock: I think, Tom, if I could add, let me put it in context, Chuck, of our broader capital allocation strategy. Last year, we generated, you know, $323 million of cash flow from operating activity, and we returned over $200 million of that to shareholders through share repurchase. We continue to invest in the business. We pay down our debt to a 1.2x leverage. What we wanted to do was get out in front of that this year and give investors the confidence that we have similar levels of planning to deploy 50% to 60% of our cash flow from operating activity, which tends to convert at about, you know, call it, you know, 60%, two-thirds of our EBITDA, to return that to shareholders this year.

Speaker #5: And we returned over 200 million of that to shareholders who share or purchase. We continue to invest in the business. We paid down our debt to a 1.2X leverage.

Speaker #5: What we wanted to do was get out in front of that this year and give investors the confidence that we have similar levels of planning to deploy 50 to 60 percent of our cash flow from operating activity, which tends to convert at about call it 60%, two-thirds of our EBITDA to return that to shareholders this year.

Speaker #5: In addition to that, that gives us the flexibility to do exactly what Tom just said around opportunistic M&A. And as I said in the comments, and you saw it in our press release, and we think we can do that within our 2X leverage that we see.

Robert Leibrock: In addition to that gives us the flexibility to do exactly what Tom just said around opportunistic M&A, and as I said in the comments, and you saw it in our press release, and we think we can do that within our 2x leverage that we see. Looking across the market, I think we've tried to give a lot more transparency in how we plan to deploy capital this year, and be opportunistic to invest in the business organically, like Kinetic, continue to look at inorganic opportunities, but maintain our commitment to shareholders with that 50% to 60% return to shareholders through share repurchase.

Bobby Leibrock: In addition to that gives us the flexibility to do exactly what Tom just said around opportunistic M&A, and as I said in the comments, and you saw it in our press release, and we think we can do that within our 2x leverage that we see. Looking across the market, I think we've tried to give a lot more transparency in how we plan to deploy capital this year, and be opportunistic to invest in the business organically, like Kinetic, continue to look at inorganic opportunities, but maintain our commitment to shareholders with that 50% to 60% return to shareholders through share repurchase.

Speaker #5: So looking across the market, I think we're trying to give a lot more transparency in how we plan to deploy capital this year. And be opportunistic to invest in the business organically like Kinetic.

Speaker #5: Continue to look at inorganic opportunities. But maintain our commitment to shareholders with that 50 to 60 percent return to shareholders who share or purchase.

Thomas Warsop: Yeah, absolutely.

Tom Warsop: Yeah, absolutely.

Speaker #6: Yeah. Absolutely. Any more questions, Jan?

Operator: We currently don't have any other questions in queue.

Thomas Warsop: Do we have any more questions, Jen?

Tom Warsop: Do we have any more questions, Jen?

Speaker #7: Thank you. Oh, we don't have any other questions. Thank you. I'll turn the call back over to Tom for closing remarks. Please go ahead.

Operator: We don't have any other questions in queue.

Thomas Warsop: Okay.

Tom Warsop: Okay.

Operator: I'll turn the call back over to Tom for closing remarks. Please go ahead.

Speaker #6: Thanks, Janice. And thank you all for joining us. And thanks for the insightful questions. I just wanted a couple of comments to close. We feel great about 2026.

Thomas Warsop: Thanks, Jen. Thank you all for joining us, and thanks for the insightful questions. Yeah, I just wanted to make a couple of comments to close. We feel great about 2026. We feel great about the momentum we're seeing. Our guidance reflects the clear visibility we have into pipelines, renewals, and implementation schedule. We've talked quite a bit about that this morning. We're taking an AI-first approach across the company. We're already seeing tangible benefits in customer outcomes and productivity. At the same time, we're very clear-eyed about what creates durable advantage in our industry. The platforms we operate are mission-critical. Obviously, they're highly reliable. They need to continue to be so. They're deeply embedded in our customers' critical workflows. We sit at the center of payment flows that are global, highly regulated, and increasingly complex.

Tom Warsop: Thanks, Jen. Thank you all for joining us, and thanks for the insightful questions. Yeah, I just wanted to make a couple of comments to close. We feel great about 2026. We feel great about the momentum we're seeing. Our guidance reflects the clear visibility we have into pipelines, renewals, and implementation schedule. We've talked quite a bit about that this morning. We're taking an AI-first approach across the company. We're already seeing tangible benefits in customer outcomes and productivity. At the same time, we're very clear-eyed about what creates durable advantage in our industry. The platforms we operate are mission-critical. Obviously, they're highly reliable. They need to continue to be so. They're deeply embedded in our customers' critical workflows. We sit at the center of payment flows that are global, highly regulated, and increasingly complex.

Speaker #6: We feel great about the momentum we're seeing. Our guidance reflects the clear visibility we have into pipelines, renewals, and implementation schedule. We've talked quite a bit about that this morning.

Speaker #6: We're taking an AI-first approach across the company. We're already seeing tangible benefits in customer outcomes and productivity. And at the same time, we're very clear-eyed about what creates durable advantage in our industry.

Speaker #6: The platforms we operate are mission-critical. Obviously, they're highly reliable, and they need to continue to be so. They're deeply embedded in our customers' critical workflows.

Speaker #6: And we sit at the center of payment flows that are global, highly regulated, and increasingly complex. From our cloud-native orchestration with Kinetic to speed pays never miss a payment standard, ACI's leading domain expertise and unrivaled global data has earned us trust over many decades.

Thomas Warsop: From our cloud-native orchestration with Kinetic to Speedpay's never-miss-a-payment standards, ACI's leading domain expertise and unrivaled global data has earned us trust over many decades. With a clear strategy, a resilient portfolio, accelerating growth, and significant financial flexibility, we're well-positioned to continue delivering long-term value for our shareholders. Thank you very much again for joining us. Have a wonderful day.

Tom Warsop: From our cloud-native orchestration with Kinetic to Speedpay's never-miss-a-payment standards, ACI's leading domain expertise and unrivaled global data has earned us trust over many decades. With a clear strategy, a resilient portfolio, accelerating growth, and significant financial flexibility, we're well-positioned to continue delivering long-term value for our shareholders. Thank you very much again for joining us. Have a wonderful day.

Speaker #6: With a clear strategy, a resilient portfolio, accelerating growth, and significant financial flexibility, we're well-positioned to continue delivering long-term value for our shareholders. Thank you very much again for joining us.

Speaker #6: Have a wonderful day.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Q4 2025 ACI Worldwide Inc Earnings Call

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