ACI Worldwide, Inc. (ACIW) Q2 2026 Earnings: Revenue $430M (+7.3%)
ACIW — Q2 2026 Financial Report Analysis
Q2 · Fiscal year 2026 · Published by Pham Hop
ACI Worldwide's Q2 2026 revenue rose 7% to $430.4M and net income jumped to $31.8M on bank license renewals, lower interest and a favorable tax and currency comparison, while bill-payment profit fell 13%.
Revenue
$430M
+7.3% YoY
Net income
$32M
+160.6% YoY
Diluted EPS
$0.31
+158.3% YoY
Operating margin
10.4%
This period vs a year ago
Same period last year
This period
Revenue▲+7.3%
≈$401M
$430M
Net income▲+160.6%
≈$12M
$32M
Diluted EPS▲+158.3%
≈$0.12
$0.31
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
ACI Worldwide sells the software that banks, retailers and bill-collecting companies use to move money: card authorization, instant bank-to-bank transfers, fraud screening and online bill payment. In the second quarter of 2026 (April to June) revenue rose 7% to $430.4 million and net income jumped to $31.8 million from $12.2 million. The jump in profit is real but flattered by comparison: last year's quarter was weighed down by currency losses, a debt-refinancing charge and an unusually high tax rate. The operating improvement underneath is smaller, and it came almost entirely from one-off software license deals with banks, while the bill-payment business had a weaker quarter.
At a glance
License revenue up 21% to $68.8 million. Licenses are multi-year software deals that are booked mostly up front when signed or renewed, so this number swings with deal timing. It supplied $12.1 million of the $29.2 million revenue increase.
Net income up 161%, but operating income up 28%. More than half of the $21.1 million rise in pre-tax profit came from items below operating income — mostly the absence of last year's currency and refinancing losses, plus lower interest costs.
Full-year guidance raised by $5 million at both ends (revenue now $1.895–$1.925 billion), but roughly 55% of that revenue and about two-thirds of adjusted EBITDA still has to arrive in the second half, mostly in Q4.
The numbers
Metric
Q2 2026
Q2 2025
YoY Change
Total revenue
$430.4M
$401.3M
+7.3%
Revenue net of interchange (pass-through card fees removed)
$264.8M
$250.2M
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+5.8%
Recurring revenue (SaaS/PaaS + maintenance)
$336.3M
$321.7M
+4.5%
License revenue
$68.8M
$56.7M
+21.3%
Operating income
$44.6M
$34.9M
+28.1%
Operating margin
10.4%
8.7%
+1.7 pts
Net income
$31.8M
$12.2M
+160.6%
Diluted EPS (GAAP)
$0.31
$0.12
+158.3%
Adjusted diluted EPS (company measure)
$0.54
$0.35
+54%
Adjusted EBITDA (company measure)
$90.8M
$80.9M
+12%
Net adjusted EBITDA margin
34%
32%
+2 pts
GAAP figures are from the 10-Q; adjusted EBITDA, adjusted EPS, recurring revenue and net-of-interchange figures are the company's own non-GAAP measures from its August 6 earnings release. Operating margin means the share of revenue left after running the business, before interest and tax.
Where the growth came from
ACI reports two businesses, and they moved in opposite directions this quarter.
Payment Software (banks and merchants): revenue $196.4 million, up 9%; segment adjusted EBITDA $93.6 million, up $10.3 million. The 10-Q attributes the segment's profit gain to "a $17.0 million increase in revenue primarily related to an increase in license revenues, partially offset by a $6.7 million increase in cash operating expense." By product line the picture is lumpy:
Payment Software product line
Q2 2026
Q2 2025
Change
Issuing and acquiring (card processing)
$116.3M
$85.1M
+37%
Merchant payments
$41.1M
$39.7M
+4%
Payments intelligence (fraud)
$16.1M
$15.2M
+6%
Real-time payments
$22.9M
$39.5M
−42%
The earnings release says card issuing and acquiring grew 33% in constant currency (stripping out exchange-rate moves) "driven by large expansions with renewing customers," while real-time payments fell "due to renewal timing." In other words, this is mostly a question of which big bank contracts came up for renewal in which quarter, not a shift in demand between the two products. The license explanation in the 10-Q says the same thing: the increase "was driven by license renewal timing as well as the relative size of new license and capacity events." Currency also helped: $2.1 million of the $12.1 million license increase was from foreign currencies strengthening against the dollar.
The steadier, subscription-like part of this segment grew slowly: recurring revenue was $102.3 million, up 3% (2% in constant currency).
Biller (online bill payment for utilities, insurers, lenders and others): revenue $234.1 million, up 5%; segment adjusted EBITDA $34.7 million, down 13%. Headline Biller revenue includes the card-network fees ACI collects and passes straight through (interchange), which were $165.6 million this quarter, up from $151.1 million. The 10-Q says Biller profit fell "due to a $17.1 million increase in cash operating expense primarily for payment card interchange and other processing fees, partially offset by a $12.1 million increase in revenue." Strip the pass-through out and Biller's own revenue was about $68 million, down 3% year over year; management blames a tough comparison with heavy customer onboarding in the second quarter of 2025, plus "certain discrete operating expenses" and spending on its Speedpay ONE platform.
What the headline numbers hide
Most of the profit jump sits below operating income. Pre-tax income rose $21.1 million. Of that, $9.8 million came from higher operating income, $4.2 million from lower net interest expense (interest expense fell to $12.0 million from $14.5 million after last year's refinancing, and interest income rose to $5.6 million), and $7.1 million from the swing in "other, net": last year's quarter had a $5.3 million foreign-currency loss and a $1.1 million loss on redeeming its 2026 notes, versus a $0.7 million currency gain this year.
The tax rate did a lot of work. The effective tax rate was 18% versus 32% a year earlier. At last year's rate, this quarter's $38.9 million of pre-tax income would have produced about $26.5 million of net income, roughly $0.26 a share instead of $0.31.
Buybacks helped EPS too. Diluted shares fell 3.3% to 101.7 million. ACI repurchased 2.5 million shares for $107.4 million in the first half.
Adjusted EPS of $0.54 excludes $0.14 a share of stock-based compensation (a real cost paid in shares rather than cash), plus acquisition-related amortization and $2.7 million after tax of restructuring and transaction-related costs. Stock-based compensation rose to $18.7 million in the quarter from $16.4 million, and to $35.6 million in the first half from $28.0 million. The adjusted measure does not strip out last year's currency loss, so its 54% growth is also helped by the easy comparison.
Cash conversion is good. Operating cash flow for the first half was $135.0 million against $70.1 million of net income, helped by non-cash charges (amortization, stock pay) and the company says by lower interest payments. After $28.2 million spent on equipment and capitalized software, about $106.8 million was left — and ACI spent exactly $106.8 million on buybacks, plus $19.1 million buying back shares to cover employees' taxes on vested stock. Net revolver borrowing rose by $25.0 million, so buybacks are running at the full level of free cash flow and a bit beyond it.
Receivables are not a warning sign. Current receivables rose to $459.3 million from $445.9 million, but long-term accrued receivables (license revenue recognized before it is billed) fell to $357.8 million from $391.7 million, so the combined total went down.
Sales pipeline indicators are softer than the income statement. Net new annual recurring revenue (ARR) bookings — new subscription revenue signed in the quarter — were $18 million, down 25%; on a trailing twelve-month basis new ARR was down 15% and new license and services bookings were down 12%. Committed backlog (contracted revenue over the next five years) fell to $2,128 million from $2,304 million at the end of 2025, while total 60-month backlog was flat at $7,281 million only because the company's estimate of renewal backlog rose.
Takeaway: ACI's net income rose 161%, but the operating engine grew far less: revenue after pass-through card fees rose 5.8%, recurring revenue 4.5%, and much of the rest came from bank license renewals landing in this quarter plus a comparison against a year-ago quarter hit by currency and refinancing losses. The business that looked strong this quarter (licenses) is the one that is least predictable from quarter to quarter.
Outlook
Management raised full-year 2026 guidance to revenue of $1.895–$1.925 billion (from $1.890–$1.920 billion) and adjusted EBITDA of $545–$560 million (from $540–$555 million), and still expects full-year Biller revenue growth in the high single digits. For the third quarter it guides to revenue of $417–$427 million and adjusted EBITDA of $90–$95 million, and it expects the second half to split about 40% / 60% between Q3 and Q4 because high-margin license renewals cluster at year end. It also expects to spend 50–60% of operating cash flow on buybacks and says it expects full-year growth in both new ARR and new license and services bookings.
That guidance leaves a lot riding on the fourth quarter. First-half revenue was $856.2 million and adjusted EBITDA $196.0 million, so at the midpoint the company needs roughly $1.05 billion of revenue and $356 million of adjusted EBITDA in the second half — after the Q3 guide, Q4 alone would have to deliver around $630 million of revenue and about $265 million of adjusted EBITDA, close to half the year's profit. That seasonality is normal for ACI, but it means the raised guide is mostly a bet on renewal timing that hasn't happened yet.
What to watch in the Q3 report: whether Biller's revenue net of interchange returns to growth once the tough 2025 onboarding comparison passes (management's high-single-digit full-year target depends on it); whether the bookings decline reverses as promised, especially the Payment Software contracts management said slipped in timing; and whether ACI Connetic, the cloud payments platform for which the company signed its first two U.S. customers this quarter, starts showing up in new ARR.