In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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ACI Worldwide Inc (NASDAQ:ACIW) reported a strong start to 2025 with a 25% increase in revenue and a 95% increase in EBITDA for Q1.
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The company successfully signed new business earlier than expected, contributing to better-than-anticipated transaction volumes.
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The payment software segment saw a 42% revenue growth, with significant new logos signed in Asia Pacific and Latin America.
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ACI Worldwide Inc (NASDAQ:ACIW) launched its next-generation payments hub solution, Kinetic, which is cloud-native and expands the addressable market.
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The company raised its full-year revenue guidance due to strong performance and favorable FX rate changes.
Negative Points
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Despite strong Q1 results, ACI Worldwide Inc (NASDAQ:ACIW) does not expect to sustain a 25% revenue growth rate throughout the year.
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The biller segment showed only a 1% increase in adjusted EBITDA, indicating slower growth compared to other segments.
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There is uncertainty regarding the macroeconomic environment, although the company has not seen negative impacts yet.
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The retirement of CFO Scott Barons introduces potential leadership transition challenges.
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The company faces volatility in capital markets, which could impact future financial performance.
Q & A Highlights
Q: Can you discuss the current environment and any changes in customer behavior due to macroeconomic uncertainties? A: Tom Warsop, President and CEO, stated that there has been no negative impact on customer behavior. Conversations with customers indicate that macroeconomic uncertainties, such as tariffs, have not affected their decision-making or investment in modernization. In fact, some customers are accelerating deal closures to gain benefits sooner amidst uncertainties.
Q: What is ACI Worldwide's exposure to cross-border payments and the potential impact of stablecoins? A: Tom Warsop explained that ACI facilitates significant cross-border payments, including SWIFT transactions. While stablecoins are an interesting topic, discussions with bank customers are mostly exploratory. ACI's technology can handle crypto payments, and the company is focused on future opportunities in this area.
Q: How should we think about the growth expectations for the payment software segment for the rest of the year? A: Scott Barons, CFO, mentioned that the company expects 7-9% constant currency revenue growth for the payment software segment. The recurring base of the business grew 8% in Q1, and similar growth is expected in Q2. Variability will come from the timing of bank license deals, with more activity expected in Q3 and Q4.