Hello and welcome to ACI Worldwide Inc. reports Financial Results for the Quarter Ended March 31, 2025. [Operator Instructions] And please note that this call is being recorded. I’d like to turn the call over to John Kraft. You may begin.

Thank you and good morning, everyone. On today’s call, we will discuss the company’s first quarter 2025 results as well as our financial outlook for the rest of the year. We will take the questions at the end. The slides accompanying this call and webcast can be found at aciworldwide.com under the Investor Relations tab and will remain available after the call. Today’s call is subject to Safe Harbor and forward-looking statements like all of our events. You can find the full text of both statements in our presentation deck and earnings press release, both of which are available on our website and with the SEC. On this morning’s call is Tom Warsop, our President and CEO; and Scott Behrens, our CFO. But before I turn it over, I wanted to make you aware that ACI will be participating in several conferences in Q2; The 20th Annual Needham Technology Media and Consumer Conference on May 12; Barclay’s 15th Annual Emerging Payments in FinTech Forum in New York City on May 20; The Annual Seaport Growth Discovery Conference on May 15; Compass Point’s Virtual Bus Tour on June 2; The Baird 2025 Global Consumer Technology and Services Conference in New York City on June 5; and D.A. Davidson’s Consumer and Technology Conference in Nashville on June 11. With that, I’ll turn the call over to Tom.

Thanks, John, and good morning, everyone. As always, I appreciate you joining our earnings conference call this morning. I’ll start with some comments about the quarter and then I’m going to hand it over to Scott, and he’ll discuss detailed financial results as well as expectations for the rest of 2025 and then we’ll open it up for questions. To begin, Q1 was a very strong start for us. We grew revenue 25% and EBITDA 95%. You probably recall, I’ve said several times, that we have been pushing our teams to sign both renewals and new business earlier in the year to both derisk accomplishment of our full year targets and to allow us to more quickly focus on longer-term, more strategic opportunities. I’m happy to report this pressure continues to yield results, in fact, we were able to sign more revenue in Q1 than I – even I expected. As a reminder, renewal contracts yield revenue on the date of the renewal, and that doesn’t matter how early we signed them. So I think it’s probably clear that the incremental revenue this quarter comes from net new business and better-than-expected transaction volumes, not renewals. Some of the new business we signed was originally expected in Q2, but I’m sure you agree with me that we’d rather have it earlier. Scott is going to walk you through the guidance a bit later, but this strong start positions us very well to achieve first half and full year results in line with our previous indications. So we won’t be able to sustain a 25% revenue growth rate throughout the year, but I’m very pleased we delivered so much revenue growth so early. On our last earnings call, I mentioned the organizational improvement we made in combining the bank segment and the…

Thanks, Tom, and good morning, everyone. I first plan to review our financial results for the quarter and then provide our outlook for the rest of 2025. We’ll then open the line for questions. Q1 2025 revenue was $395 million, up 25% from Q1 2024 and total, adjusted EBITDA was $94 million, up 95% from Q1 2024. Looking at the results by segment, our Payment Software segment revenue increased 42%, and adjusted EBITDA more than doubled versus Q1 2024, and our Billers segment revenue increased 11%, while adjusted EBITDA increased 1% from Q1 2024. We continued to see strong cash flow growth in Q1 with cash flow from operating activities of $78 million. We ended the quarter with strong liquidity, including $230 million in cash on hand and approximately $853 million of total debt outstanding. This represents a net debt leverage ratio of 1.2x, which is below our stated target of 2x that we discussed previously. As of today, we have repurchased approximately 1 million shares of our stock year-to-date for $52 million and half of the $320 million remaining on our share repurchase authorization. Also in the quarter, we sold our non-controlling interest in India-based mine gate to PayU India. The gain on sale is included in other income and expense on the income statement. And even though we’ll no longer have a minority investment in mine gate, we will continue our strategic partnership with them in the region. As we look at our outlook for the rest of the year, obviously, there has been a lot of volatility in the capital markets in recent weeks, but we’re comfortable that we are fairly insulated from a lot of the macroeconomic events. Meaning on the Payment Software side of the business, as you know, these are mission-critical payment systems and…

Thank you very much, Scott. Before I conclude my remarks about the quarter and the year, let me pause to offer my sincere personal thanks to Scott for all of his contributions to ACI. Scott has been working at ACI for nearly two decades, and he has been a true partner to me. His leadership and individual contributions have been a key part of our success throughout that time. Scott’s transparent approach to his decision to retire gives us the opportunity to execute the robust succession plan we already had in place and have had in place for a long time. I’ve already begun working on it, and Scott is committed to supporting us throughout the transition. I’m really pleased for Scott and his family as they enter this next phase. I’ll keep you informed about our progress in filling these very big shoes. As I conclude, it’s an exciting time for global electronic payments. Change is constant and ACI is at the heart of all that excitement. We power the world’s payments ecosystem and that’s exactly where we want to be. Our leadership team is intensely focused on delivering for our customers, for our people and for you, our investors. We understand very clearly that delivering strong shareholder value is our job, and we intend to continue doing just that. Thank you for joining our call this morning and for the faith you show through your ownership and support of ACI shares. Operator, we can now take questions.

[Operator Instructions] And your first question comes from the line of Trevor Williams with Jefferies. Trevor, please go ahead.

Great, thanks. Hey, guys. Good morning and Scott, congrats on the retirement, well deserved. Maybe if I could just ask the first one on the current environment and, Tom, you kind of alluded to this in your prepared remarks. It sounds like you guys aren’t seeing anything yet, at least in terms of the way that your customers are behaving. But maybe just based on your discussions and over the last month or two, Tom, with your customers? I mean, is there any kind of wavering that you’re seeing just in terms of decision-making time lines, willingness to take on kind of more investment in modernization and just kind of how you guys are thinking about that potentially playing out over the rest of the year, just given the macro uncertainty? Thanks.

Yes. Thanks. And no is the short answer. It’s interesting. I was telling Scott and John, I just returned from the Middle East and spoke with many customers. And the way those conversations went, it was almost identically in each instance. First, small top introductions; second, what’s going on with these tariffs and the President and all the changes and how is that impacting your business? And so we had a good conversation. Of course, I just took for the opportunity to turn that question around and say, well, how are you thinking about it? And is it going to change the way you think about your business as a whole? And then, of course, selfishly, is it going to have any impact on the way we think about expanding your relationship and in each instance, that absolutely announce. The answer was no, it had no impact on what we are doing. In fact, they didn’t say it this way because they would, of course, but the feeling I get is, it may create a little bit more opportunity for us, especially on the modernization front, that’s specifically you mentioned that. And that’s a good call out because the way that we’re thinking about modernization and Connetic, it has so many positive impacts for the customers and their customers that I think most of the people I’m talking to you see it as an opportunity to get better faster. And so I don’t know exactly how big that opportunity will be in exactly when it will come, but we’re not seeing a negative at this point at all. We’re seeing a little bit of positive momentum. So I feel great about that. And the last point I’ll make on this is, I said and Scott said and we’ve talked about this a lot that we’ve been pushing to get deals closed earlier. And that absolutely happened in Q1. Some of those deals we expected in Q2, we were able to get signed in Q1. And one of the – I think 1 very small driver to that was customers saying, let’s get this done now so that we can start to get some benefits given all the uncertainty, let’s push to get it done faster, which is great. So that’s kind of what I’m alluding to. That’s what we’re seeing at the moment, it is a little bit of positive and really haven’t seen negative at this point.

Okay. That’s great. For my follow-up, I wanted to ask on Stablecoins, it’s something that we’re starting to hear a lot more bound, especially as it relates to more cross-border B2B money movement. First, can you just remind us within the bank’s business, what exposure you have to cross border, if at all? And then secondarily, is this something that’s coming up at all in your discussion with your bank’s customers, their willingness to look at Stablecoin is kind of kind of an alternative rail for money movement and just where ACI could potentially fit in that discussion? Thanks.

Yes. Sure. So just on cross-border, we have a lot of business that facilitates – our software in many ways facilitates cross-border payments. I mean, just 1 example is SWIFT. So SWIFT payments, we handle, I think, at least trillions of dollars a day in those cross-border very large payments. So we do a lot with it. We’re – I’d say the next phase – and I’ve probably talked about this several times, but just I think it’s very important. The real-time payments ecosystem in the world at the moment is almost all inside of a country, a little bit regionally in a couple of places around the world, but some super interesting use cases get facilitated once you start allowing and I’ll come back to why I used the word specifically allowing cross-border real time payments. So our technology already is ready for cross-border real time. That’s not the issue. The issue is the regulators have to agree on what the rules are. And we’ve seen a little bit of that start to happen, in particular, as one example, Singapore and UPI in India. So in Singapore, there are some limited examples where you can use UPI, which is the Indian real time payment scheme to make payments while you are traveling in Singapore for an Indian national. So that’s just one example, but we’re going to start to see more of those, and I’ll get really interested. Now you asked about Stablecoin, I do – I get lots of questions, and we have lots of discussion around Stablecoin. It’s interesting. It’s very interesting. There is certainly potential there. But at this point, certainly, the bank customers, it’s mostly a, hey, what do we think might happen with Stablecoin. Is that – is it going to be a big deal or not? I don’t know how big and how fast. I think there is a place for Stablecoin. Now that is not exactly responsive to your question, Trevor, but our software, we have allowed and facilitated crypto payments for a long time. Coins are very, very, very small. But it’s no problem for us from a technology perspective. So we’re carefully and interestedly thinking about what’s coming and what might be possible. I think for us, it’s more about making sure we are working with our customers to take advantage of opportunity in the future. That’s not – there is not – we are not concerned about being able to handle it and facilitate it. It’s more about where does the market go? And so we’re keeping an eye on that.

Okay, alright. Appreciate all that. Thanks again guys.

Yes, thanks Trevor.

And your next question comes from the line of Jeff Cantwell with Seaport Research. Jeff, please go ahead.

Thanks very much. First of all, congrats, Scott, job well done. I want to wish you the best in retirement.

Thanks, Jeff.

Can you talk more to us about Payment Software that was over $200 million in the quarter, that was up 42%. So, if you think about the overall revenue guidance, how are you thinking about that segment over the course for the remainder the year? Am I just explaining some of the puts and takes as far as revenue and growth expectations for that line? And how we should be thinking about modeling that? Thanks.

Sure. So, I will let Scott comment. But I mean the big picture we are pretty much in the same spot we were when we gave guidance in Q1 for the full year. What really happened was – and again, I think this is a really good news. But what really happened is we were able to sign quite a bit more of that net new in Q1 than we originally thought we would. And so if you look at the first half, the guidance we provided is basically right on where we expect it to be. And so what happened is we were able to shift those net new signings into Q1, which is a great thing from my perspective. I hope you see it that way, too. We did sign some of the renewals early also, but that didn’t affect anything because of the way the accounting rules work. So, directly responding to your question, we have the same expectations essentially for the full year as we did at the beginning of the year. But great news we have to shift some of it forward. So, Scott, you can go with it.

Yes. The only other thing I would add to that is, yes, so we are still tracking to call it a 7% to 9% constant currency revenue growth and that’s in total, the payment software plus biller. If you look at Q1 year-over-year revenue growth, that’s the recurring base of the business, that was up 8% in Q1. So, that was right in that range. Q2 is lining up to look very similar. So, that kind of solid predictable revised base of recurring revenue is lining up in that 8% range. And then where you are going to have some variabilities on some of these bank license deals. So, got a lot more done in Q1. Q2 will be a little lighter in terms of those license deals and then it will pick up again in Q3 and Q4. But if you look at it, you are modeling that underlying base recurrent revenue about that 8% mark and then the variability in any given quarter is going to come from the timing of license fees. So, it will pick back up again in Q3. But overall, we are still tracking to that 7% to 9% constant currency growth for the year.

Okay. Great. Thank you. And then as a follow-up, during the quarter, you announced a partnership with Ingo Payments and Speedpay. That was around digital disbursements. Can you maybe talk about that, frame that for us? Help us understand what you are doing strategically and then how we might see certain areas like biller/Speedpay evolve as we think about yourselves doing partnerships with Ingo and maybe even some others. So, also, what’s the right way to be thinking about biller’s growth? Can you just remind us about that segment given all the changes in macro, I wanted to ask what your thoughts are there for the segment. Thanks.

Yes. So, a couple of thoughts, let me start with the second question first. So biller, we feel, just as was actually made a little bit better about biller now than we did at the beginning of the year. We have talked about the IRS moving from three providers to two, us being one of the two. So, the numbers aren’t fully in yet from the tax season, but we are cautiously optimistic there. And just as a reminder, most of the bill payment that we facilitate, a significant majority of that is non-discretionary. So, we are – it’s your car payment, your tuition bill, your electric bill, etcetera, etcetera, you got to pay those bills. And so we are not expecting – certainly not expecting big negative impact from some of this uncertainty, there will be puts and takes. But we are not seeing negative impacts. And again, cautiously optimistic on the IRS and tax in general. So, that’s – we are feeling good about it, no change in our view for the full year and going forward. So, that’s that piece. And then you asked about Ingo Payments in particular, and let me just tell you about that, when you talk about disbursements. We are – only, it’s clear, we are really good at the bill payment part, so selecting the money on behalf of our customers. The next big opportunity is disbursements and I give you one quite interesting use case. I used – for several years, I ran workers’ compensation and/or healthcare third-party administrators. And the biggest headache that I had was how to efficiently and effectively disburse claim payments to healthcare providers. So, this is only one new space. But that was really hard to do. It was expensive, it was painful. And so by partnering to allow the disbursement side, the opposite of the bill pay side and that can take many for us, not just healthcare, but that is sort of the other piece of the puzzle. So, as we get better at that as we expand that business now, it’s all – it’s a money movement business instead of a bill payment business. And that has a lot of incremental opportunity. It’s much more interesting that value propositions that are much more robust. So, that’s why we are doing this. It’s small. The business – that part of the business is smaller, honestly, just starting. But over time, we expect that to grow, and we expect we will get better and better in that area.

Great. Thanks very much. Congrats on the results.

Thank you, Jeff.

And your next question comes from the line of Peter Heckmann with D.A. Davidson. Peter, please go ahead.

Hey. Good morning. Thanks for taking my questions. I wanted to – I have a few questions. But on the recent merger divestiture within merchant acquiring and issuer business of global payments and FIs, how do you think ACI shakes out there? Is it something where customers on both sides don’t envision to change, or could there be something that changes there based on change of ownership of those two businesses?

Yes. I mean we are – it’s obviously early days in that. We don’t have any special insight into how they are thinking about that business going forward. But they are both very good customers of ours, and we have strong relationships with both of them. So, I think – and again, too early to say, but we are actually excited. I am personally excited about how did they figure it out us trying – we are going to try to be a partner to them. We are – how do they – how can we help them bring the pieces together and facilitate faster growth. I don’t have anything specific for you at the moment because we literally haven’t spoken to them about it. I think they are still getting their feet under the desk after the announcements and trying to figure out how to do. So, I don’t have any specific for you. I think it’s a good opportunity for us to really show how we partner with a customer – with two customers.

Okay. And then it looks like we are shaking up to have about 45% of revenue in 2025 in the first half and a little bit more front-end loaded than normal. In terms of thinking about the back half in that 55%, would you expect it to kind of look like historicals of maybe 25% of revenue in the third quarter and 32% in the fourth quarter or…?

Yes, Pete, I think that the – yes, I think that goes back to my previous comment, if you look at how that model that underlying base revenue, call out of that 8% and then the variability in Q3 and Q4 will be predominantly not license fees, so both renewables find a net new. And Q4 is always a little bit heavier than Q3. So, I would say that, that mix is for the second half.

Probably, right. Okay. Great. And then if you hear me just on Connetic, it sounds like we are making some nice progress there and – but like what milestones should we be thinking about this year in terms of kind of a number of demos, beta customers? And then when do you think you actually start to see some customers go live, the first customers go live in the GA version.

Yes. So, well, in terms of – I don’t know the exact number of people. We have already given a pretty significant number of demos and the way I thought about this was I did not want our salespeople to be out there selling. I call it sales by PowerPoint. And we have all seen this, I am sure we are – it’s really easy to show somebody a really core technology if it’s not real. And in PowerPoint, I don’t want to do that. We did not do that. We did not get any demos. We talk generally about Connetic. We are calling Connetic in the beginning, but we talk generally about it, both of them, they expect more. We now – at the end of last year, as planned, we had our super robust working demo since we can actually show what looks like absolutely real transactions with test data that’s robust and looks like the data that customers expect. So, we had doubt since, I think the beginning of December of last year. On – at the end of April as planned, we released version 1.0, which is, I actually think pretty positive, a little differently. I think it’s 0.1 or something like that, but anyway, the first version that could be deployed, and so we are using that now as the basis of our demo. So, we are going to have a lot of demos this year. I don’t know exactly how many we have given. I don’t know exactly how many we are going to give this year, but there is a tremendous demand to see more, to understand how it works. Let’s play with it with real – our real data. I get this question a lot. And we are prepared to do that.…

Great. That’s good to hear. I will get back in the queue. I appreciate that you talk.

Thanks Peter.

And your next question comes from the line of George Sutton with Craig-Hallum Capital. George, please go ahead.

Hey. Good morning guys. Logan on for George and congrats on another nice quarter here. Maybe to start, Tom, you called out an increase in the pipeline opportunities as a result of being now combined bank and merchant segments. Can you just maybe give us any more detail on what you mean by that? And then maybe just broadly kind of any benefits you have seen in the go-to-market motion there?

Sure. So, I will give you an example. I am going to give you a – I can give you a customer name on this, but I recently was traveling in – well, it is the Middle East as well. I made two trips to the Middle East in the last six weeks. It’s an interesting region, lots happening. But what we – what I was talking to some of a very big bank that has a big set of customers that are large merchants. And historically, we have approached bank customers and bank value propositions almost completely independently from those merchant opportunities. And I will give you a specific, because it’s about fraud. And so we have great fraud solutions, but we have tended to create value propositions that are specifically aimed at the bank or specifically aimed at a merchant. So, I was having this conversation with the bank whose customers are mostly big merchants, and they were really interested in how we package our fraud solutions so that the bank gets the benefit, and they have specific needs. And then they can also use those same basic tools and same approaches to help their merchant customers get better fraud detection and prevention, better insights into what’s happening with transactions. And so because we have now combined those businesses and I have one customer success manager, so that’s like an account manager that we call an account manager, we have more in that for both the merchant opportunity and the bank opportunity calling on this customer, we were able to have a much more comprehensive discussion about the opportunity. And so that turned into a pipeline opportunity. It’s sitting in our sales force pipeline now. And I think in the past, that wouldn’t be the case. We would have – maybe we would have had a bank opportunity, maybe we would have a merchant opportunity, but this combined thing, we wouldn’t have had that yet. We might have gotten the intervention. So, that’s a specific example of that. But I think – the big thing is, we are now – we have begun to frame our sales team and our account management team across all of the solutions in payment software. And so now they can have much more robust conversations with customers across all of those products and services instead of having to say, well, let me bring in one of my colleagues to talk about this sort of thing. We are not having to do that as much. So, that’s the – there is a little bit of an efficiency thing. And the last thing I was talking about and what that’s leading to this incremental different pipeline opportunities. So, that’s what I was alluding to.

Got it. Appreciate the detail. And maybe just a quick follow-up, I will still be able to see the numbers when the Q comes out, but can you just give us a sense for what the contribution was from real-time payments this quarter? And then maybe just broadly kind of how should we think about like the cadence of that revenue? I mean I look at it being, I think, kind of flat last year relative to fiscal ‘23, and it feels like that doesn’t really represent the true momentum there. So, maybe just kind of help us square that and how we should think about that going forward?

Yes, this is Scott. Yes. On real-time payments, that is almost entirely on-premise. So, you are going to have volatility when you look at quarter-to-quarter because of timing of renewals and timing of new deals, it doesn’t have as big of a base of that kind of recurring revenue stream. And it’s, call it, 10% of the overall business, and it’s going to grow at double digits. So, I think we are going to have year-over-year comparability, I guess based on the timing of the renewals. But if you look at it over the course of the year, it will still be real time and fraud detection are still going to be our highest growing segments, full double-digit growers over the near and long-term.

Okay. Got it. Thanks for taking my questions.

Thank you.

And your final question comes from the line of Alex Neumann with Stephens. Alex, please go ahead.

Hi. Good morning. Thanks for taking my question. Just to start off, could you discuss where you are seeing traction in different product areas that led to some of the higher net new business this quarter?

Yes, sure. So, a lot of it came from our issuing and acquiring solutions, which those are flagship solutions for us. They are absolutely proven technologies, [Technical Difficulty] solution. Our clients used to – they were just talking about them. But what’s really interesting is – and if I use that Asia Pacific competitive takeaway net new as the example, we won that deal for two reasons, and they are obviously connected, but there are two reasons. One, here is a customer that needed a better issue in acquiring solution right now, and they were one of those few very large nation of the world that don’t use our Phase 24 platform. And they wanted to use it. It was sort of a historical reason. I didn’t even know all the reasons, but they didn’t use it before, and they really – they knew it was a great solution. They were interested, but they have never decided to make the effort to switch. But then, piece number two happened. And I had the first conversation, but smarter people in me follow-up and helps this bank understand the journey that we can allow them to make to modernize their entire payment infrastructure with Connetic. And so we were able to tell them, we can solve your problem right now with the best solution in the market, and we allow you to show your Board, your stakeholders of all kinds that you have a very clear lower risk, absolutely rational path to get from where you are to where you want to be, cloud, cloud native, rapid scalability, vertical or horizontal, all of the things that we are able to deliver and so the combination of those two things, solve their problem now, give them a very clear path in the future. That was, it was almost a no-brainer for them. Once they were able to dig in, talk to other customers, talk to our architects, understand that was going to work. that became very clear to them that this is the right way to go, let’s do it. And so that basic conversation is happening in multiple places around the world. I had a few of those conversations last week. In the Middle East, very similar, and that – that is what is getting prospective customers and our current customers really interested in exploring opportunities going forward.

Okay. Makes sense. And then for 1Q, what was the uplift on biller this quarter from the reduction vendors for IRS processing? And then what are your expectations for FX on growth for ‘25.

Well, billers total revenue grew 11% in the quarter. And we don’t describe or we don’t call out what any particular customer delivers. But it was obviously a contributor to the Q1 growth. We will see that further a little bit more in Q2, but that was obvious contributor not just through the IRS, but for other customers that we do build it for a tax preparation software. So, I would say it’s more broadly, not just the IRS, but our tax partners as well. We don’t really what were published, what we get from an individual customer, but definitely contributed to the uptick growth. And on the full year FX, we are probably talking, it’s going to give us, it’s going to be, call it, $5 million more on the year than we thought coming into the year. We started the year with about – we thought it was going to be about a headwind on FX of about $12 million, $13 million that’s come down by $5 million.

Great. Thank you for taking my questions.

Thanks Alex.

There is no further question at this time. I would now turn the call back to the company.

Okay. Well, thank you. First of all, thanks for joining us again and we appreciate the support. I look forward to continuing to deliver for our shareholders and delivering more and more shareholder value and the very – the last thing I want to say is, I want to reiterate my intense personal thanks to Scott, because he has been, as I have said, he has been an amazing partner to me. I have known Scott now for about 10 years. In multiple ways, we have interacted in multiple ways and each one of those ways and opportunities has been a super positive experience for me, and I hope it asks for him and after nearly a few decades of service, he absolutely deserves to enter the next phase and great for him, great for his family. We will obviously mention that he is going to be – he has been very clear, he is going to be tremendously supportive to us as we find his replacement. I don’t know if replacement is even the right word. But the next CFO of ACI and we are well underway in that process. And as I have said, we will keep you up-to-date, but congratulations, Scott. Thanks everybody for joining.

Thanks everyone.

That concludes today’s call. Thanks all for joining.