ACI Worldwide (ACIW) Q3 2026 Earnings Call Transcript

DATE

Thursday, Nov. 5, 2026

CALL PARTICIPANTS

• SVP, Head of Strategy and Finance - John Kraft
• President and CEO - Thomas Woodrow Warsop
• Chief Financial Officer - Robert Leibrock

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TAKEAWAYS

• Revenue -- $427 million, representing a 12% decrease driven primarily by the timing of high-margin software license renewals.
• Recurring Revenue -- $309 million, growing 4% due to strength in software-as-a-service and platform-as-a-service fees.
• Adjusted EBITDA -- $98 million, reflecting a 43% decrease as high-margin renewals shifted toward the final quarter of the year.
• New ARR Bookings -- $24 million, increasing 86% across both the Payment Software and Biller segments.
• GAAP Diluted EPS -- $0.32, compared to $0.88 in the prior-year period.
• Adjusted Diluted EPS -- $0.54, down 50% from the same period last year.
• Operating Cash Flow -- $119 million, rising 63% for the quarter and bringing nine-month year-to-date cash flow to $254 million.
• Payment Software Revenue -- $216 million, declining 24% as the second-half revenue profile is heavily weighted toward the fourth quarter.
• Payment Software Adjusted EBITDA -- $107 million, yielding a segment margin of 49% compared to 64% last year.
• Biller Revenue -- $210 million, increasing 6% behind transaction volume and new business wins.
• Biller Revenue Net of Interchange -- $66 million, growing 5% as the company focused on interchange optimization and pricing initiatives.
• Biller Adjusted EBITDA -- $34 million, maintaining a net adjusted EBITDA margin of 51%.
• Full-Year 2026 Revenue Guidance -- $1.895 billion to $1.925 billion, which management reiterated based on strong visibility into the renewal schedule.
• Full-Year 2026 Adjusted EBITDA Guidance -- $550 million to $565 million, raised from a previous range of $545 million to $560 million.
• Q4 2026 Revenue Guidance -- $612 million to $642 million, reflecting the concentration of scheduled license renewals.
• Q4 2026 Adjusted EBITDA Guidance -- $257 million to $272 million.
• Share Repurchases -- $50 million, consisting of approximately 935,000 shares repurchased during the third quarter.
• YTD Share Repurchases -- $157 million, representing 3.4 million shares at an average price of $45.69.
• Net Debt Leverage Ratio -- 1.3 times adjusted EBITDA, supported by $219 million in cash on hand.
• Total Liquidity -- $587 million, including cash and available capacity under the company's credit facility.
• Revenue Visibility -- 95%, as more than 95% of the full-year outlook is already signed, contracted, or associated with renewals.

SUMMARY

ACI Worldwide, Inc. (NASDAQ:ACIW) reported that its strategic transition from a payments infrastructure provider to a leader in payments intelligence is progressing through the advancement of its ACI Kinetic and Speedpay 1 platforms. Management stated that while third quarter financial results were influenced by the timing of high-margin software license renewals, the company remains on track to meet its full-year targets. The company reported significant growth in new annual recurring revenue bookings and strong cash flow generation, which supports its capital allocation strategy of returning 50% to 60% of full-year operating cash flow to shareholders. Management emphasized that its software now facilitates emerging payment types, including stablecoin settlement and blockchain-based ledgers, to address the increasing complexity of the global payments ecosystem.

• Management reported that the ACI Kinetic platform achieved its first live customer production and signed a major bank in Africa, with CEO Warsop stating, "Momentum with ACI Kinetic is strong."
• The Biller segment's sales team reached its full-year target before the end of the third quarter, which Warsop noted were results "beyond my initial expectations."
• The acquisition of Cranium Ventures integrated multirail card switching capabilities into the ACI Kinetic ecosystem and added technical talent from major industry payment switches.
• The company expanded its technological capabilities by announcing general availability for ACI Kinetic for cards and integrating USDC stablecoin settlement in collaboration with Circle.
• Management observed a shift in customer interest during the Sibos conference, where the company held more than double the meetings compared to the previous year and received specific inquiries regarding the progress of ACI Kinetic.

INDUSTRY GLOSSARY

• ACI Kinetic: A cloud-native, multitenant payments platform designed to support any payment type consistently across diverse rails.
• Speedpay 1: A next-generation bill payment platform providing cloud-native consumer convenience and integration capabilities for billers.
• ARR (Annual Recurring Revenue): The expected annual revenue from new accounts, applications, and add-on sales contracts signed during a period.
• USDC: A digital stablecoin pegged to the U.S. dollar, used for settlement alongside traditional payment rails.
• Payments Orchestration: The process of coordinating and managing multiple payment rails and types to optimize transaction outcomes.
• Interchange Fees: Fees paid by merchants to credit card-issuing banks for processing transactions, which ACI seeks to optimize for billers.
• SWIFT: A global messaging network used by financial institutions to securely transmit information and instructions for financial transactions.
• Net Debt Leverage Ratio: A financial metric measuring a company's total debt minus cash, relative to its earnings before interest, taxes, depreciation, and amortization.

Full Conference Call Transcript

Operator: Hello, everyone. Thank you for joining us, and welcome to ACI Worldwide Inc. Reports financial results. After today's prepared remarks, we will host a question-and-answer session. To withdraw your question, press 1 again. Will now hand the conference over to John Kraft. John? Please go ahead.

John Kraft: Thank you for joining us. On today's call, we will discuss ACI Worldwide's third quarter 26 results as well as our updated financial outlook for the remainder of the year. We will then open the line for your questions. The slides and press release accompanying this webcast can be found at aciworldwide.com under the Investor Relations tab and will remain available after this call. Today's call is subject to Safe Harbor and forward looking statements. You can find the full text of these statements in our earnings materials and with the SEC. Joining me this morning are Thomas Woodrow Warsop, our president and CEO, and Robert Leibrock, our chief financial officer.

Before I turn it over to Tom, though, I would like to highlight several upcoming conferences where members of the team will be participating. Seaport's fourth annual TMT conference Monday, 11/16/2026, Stephens' Annual Investment Conference in Nashville, Wednesday, 11/18/2026. And the thirtieth annual UBS Global Technology and AI Conference in Scottsdale, 12/02/2026. We look forward to meeting with many of you at these events. With that, I will turn it over to Tom. Tom?

Thomas Woodrow Warsop: Good morning, everyone. Thank you for joining us. We delivered solid third quarter results with revenue and EBITDA coming in ahead of our expectations. Even more importantly, we made significant progress against the strategy we have been laying out for you. I am proud to say ACI has a lot of momentum right now, I will give you a flavor of the specific events and trends we are seeing that make us even more confident in ACI's future than we already were. These are truly exciting times. Operationally, we continue to perform at a high level. While some of our financial metrics were down from last year, that is not a surprise.

We told you to expect this due to the timing of renewals. And I know you all remember we cannot change the revenue recognition date of renewals no matter when we sign them. We delivered another quarter of better than expected financial results, and we remain on track for our full year financial targets. Bobby is going to give you some details on the quarter's performance. And as I said, I will walk through some of the team's key accomplishments from the quarter, and provide an update on our strategic road map. Since our last analyst day, we have talked about where payments are going. And the role we think ACI can play in that future.

Payments are becoming increasingly real time, intelligent, and multi-rail. Our customers need to support more payment types and make smarter decisions. About how transactions move while continuing to modernize mission critical infrastructure without sacrificing resilient security or scale. In a world where so much is changing all at once, I am often asked about ACI's secret sauce. What is it that makes us truly special and differentiated from our competitors? We combine deep payments industry expertise industry leading software and infrastructure, unique and massive data, and the neutrality in terms of payments rails and types.

All this is propelling us on our strategic journey from a leading payments infrastructure provider to a pioneer in payments orchestration to, in the future, a leader in payments intelligence, driving beneficial outcomes for our customers and for the industry. This is a big vision. I think ACI is uniquely positioned to make it real. We already play strongly in the first 2 legs of that journey, payments infrastructure and orchestration. The work we are doing now to turn the huge volumes of data our software sees every day into actionable, powerful information is underway. it is a challenging path, but 1 we are excited about. and positioned to take advantage of.

Expect to hear more about this journey each quarter and in upcoming investor touch points. To execute the journey I just described, we must maintain our leading position in the payments infrastructure space. that is where we get the fuel for that payments intelligence: the data. And I want to share tangible evidence that our strategies in this segment, particularly with respect to ACI Kinetic and Speedpay 1 are coming together and working. First, during the third quarter, we announced 2 new ACI Kinetic customer signings. Just for completeness, I remind you that it is a 2022-native, multi-tenant payments platform, which we have designed to support any payment type consistently.

As we announced in our press release, we successfully put Solaris into production as our first live Kinetic customer. In addition to those developments, a few days ago, we signed up 1 of the largest banks in Africa. We expect that implementation to go live in 2027. Momentum with ACI Kinetic is strong. Transactions are beginning to flow. The pipeline continues to build. The customer list is growing. Second, we accelerated our road map in card payments. Through the acquisition of Cranium Ventures. Cranium's software now forms an important part of the ACI Kinetic ecosystem. Strengthening our multi rail card payment switching capabilities and bringing immediate transaction volumes from important industry players onto the Kinetic platform.

Cranium also strengthens our leadership talent in the cards payment space. Uniting the architects of the most significant payment switches in the world under the ACI umbrella. And third, we expanded the platform's capabilities by announcing general availability for ACI Kinetic for cards and by embedding JPMorgan's Connexus account and payee verification into our fraud solution. To help banks stop real time payments fraud before funds move. We also integrated with Swift's blockchain based ledger And in recent days, our collaboration with Circle to facilitate USDC stablecoin settlement alongside traditional payment rails was announced. that is a lot of progress in a few months. I have not even gotten to our biller business, Speedpay.

At the beginning of 2026, we began running the biller business with a more independent focus. Restructuring its go to market approach around the vertical specialists that we have on our sales and account management team. And bringing on dedicated new leadership for both sales and account management. Also invested in new tools and processes tailored to this business to make these functions more efficient and effective. Including generative AI workflow support. The results so far are beyond my initial expectations. The sales team accomplished more than its full year target before the end of the third quarter. And they are still going strong. On the product side, Speedpay 1 is our next generation bill payment platform.

Providing cloud native, consumer convenience, extensive configuration and integration capabilities for billers in all our supported industry verticals. In the third quarter, we continue to rapidly onboard customers to Speedpay 1, and the feedback from these customers continues to be overwhelmingly positive. These customers are among our best salespeople. In the third quarter, we delivered our largest release of new capabilities for Speedpay 1 in recent memory. In person payments, our first disbursements client going live, and a new developer portal. The architecture and underlying technology of Speedpay 1 has allowed us to build capabilities to facilitate stable coin real time, and many other payment types for billers.

Demand for these payment types is in the early stages, but we are ready. And we are partnering with our customers to find ways to make the bill payment process simpler, quicker, and more convenient. All these updates are not disconnected product announcements nor are they simply individual customer wins. They are strategic proof points. Of real progress against the strategy first laid out in 2024 and that we have been relentlessly executing against. I will give you some examples to back all this up. The progress I am highlighting is really beginning to show up in the metrics and deal flow we use to track the trajectory of the business.

New ARR bookings were up 86% year over year to approximately $24 million with growth across both payment software and biller. Let me highlight a few of the key new and expanded customer relationships that have added up to that number. These are all new since we were last together. Our relationship with Interpog in Brazil brings together acquiring, payments intelligence, fraud prevention, and orchestration on a modern platform leveraging our partnership with RS2 and demonstrating how our ecosystem can extend the breadth of what we deliver to customers. We expanded our bill payment partnerships with Exeter and National Grid, solidifying our leadership position in the utilities vertical of the bill payment segment.

We signed a net new customer in Malaysia, further strengthening our very strong position in the country's real time payments ecosystem. We signed up 2 US financial institutions for ACI Connect And as I mentioned a minute ago, early in Q4, we signed a new contract with 1 of the largest banks in Africa, and they will begin their adoption of the ACI Kinetic platform next year. Beyond these signings, our pipeline of new business opportunities continues to build. At the end of September, I was in Miami at Sibos, 1 of the largest global banking conferences. And the level of interest in ACI was remarkable.

Our team held a record number of meetings with customers, prospects, partners, and industry leaders, more than double what we had last year at the same conference. And the tenor of those conversations has clearly changed. A year ago or 2 years ago, the opening question at our booth was often what does ACI do? This year, many people came up to us asking, how's ACI Kinetic going? That change depicts the kind of interest that turns into pipeline. Our teams are already following up on many leads. All these wins underscore a key truth about the payments industry. No 1 knows for sure which individual payment types or rails ultimately win.

Our opportunity is to help customers operate across all of them. This is where ACI thrives. At the nexus of tremendous complexity. Helping financial institutions, merchants, and billers navigate the challenges and drive business outcomes. Our position in the middle of the payments ecosystem gives us the ammunition and standing to lead the journey I talked about before. Payment infrastructure, to payment orchestration, to payment intelligence, to outcomes. As I mentioned, in addition to our strategic advancements, we are continuing to execute on our existing business and drive value for shareholders. In the quarter, revenue was $427 million. Recurring revenue increased 4% to $309 million. Through the first 9 months, we generated approximately $1.28 billion of revenue.

Bobby will take you through the financial results and the year over year dynamics in more detail. But we are proud of what is been delivered so far. Cash generation was particularly strong. In the third quarter, We generated $119 million of operating cash flow in Q3, that is up 63% year over year. And it brings our operating cash flow through the first 9 months to $254 million. that is up 26%. All of that especially the cash generation, is giving us the flexibility to invest behind our strategy while we continue to return meaningful capital to shareholders.

We repurchased approximately $50 million of ACI shares during Q3, and that brings our year to date repurchases to approximately $157 million. About 3.4 million shares. We have nearly $300 million remaining on our share repurchase authorization, and we remain committed to a disciplined capital allocation strategy that balances investments to advance our growth strategy with the return of capital to shareholders. Our balance sheet is in a strong position, and it provides us ample flexibility to continue to execute on our plan. So stepping back, our Q3 results provide further evidence that the strategy we have laid out is taking hold. there is still plenty of work ahead. We need to convert pipeline.

We need to continue to scale Kinetic beyond initial customers. We need to execute against our cards road map, and we need to continue strengthening Speedpay 1. But I like the position we are building. The future of payments will have more rails, more endpoints, more data, and more choices about how money moves. We believe intelligence and orchestration become more valuable in that world and ACI has the payments expertise the technology, the customer relationships, and the scale to play an important role as this continues to evolve. And we are off to a strong start in Q4. I have already mentioned a couple of times.

We recently signed 1 of the largest African banks as our first ACI Kinetic customer on that continent. We also signed a very significant biller customer in the early weeks of the quarter. These are intense exciting times in the payments industry and ACI is making tangible progress in terms of our strategy. We intend to remain a leader in the payments infrastructure segment to support the entire industry in the journey to payments intelligence. I am proud of our performance, and I am encouraged about the future. I will turn it over to Bobby now to take you through our third quarter financial results and our full year guidance in more detail. Bobby.

Robert Leibrock: Thank you, Tom, and good morning, everyone. We delivered another quarter of better than expected revenue and adjusted EBITDA. While revenue and earnings declined year over year, that comparison reflects the license renewal timing we have discussed throughout the year rather than a change in our underlying business performance. We have also made important progress against our strategic priorities. Including ACI Kinetic's first customer go live and new customer wins, expanded capabilities through the acquisition of Cranium Ventures, and continued progress on Speedpay 1. At the same time, we generated strong cash flow and returned meaningful capital to shareholders. For the full year, we are reiterating our revenue outlook, and raising our adjusted EBITDA expectations.

Reflecting our performance through the third quarter and continued productivity and expense discipline, while preserving investment in our strategic growth priorities. Third quarter revenue $427 million at the high end of our guidance range and adjusted EBITDA was $98 million above our guidance range. Revenue declined 12% year over year. While adjusted EBITDA declined 43%. With net adjusted EBITDA margin of 35% compared to 49% last year. As we discussed, these comparisons reflect the timing of our high margin payment software license renewals with our second half revenue profile much more heavily weighted towards Q4 this year. Recurring revenue increased 4% year over year to $309 million Net income was $33 million, compared with $91 million a year ago.

GAAP diluted earnings per share was $0.32, and adjusted diluted earnings per share was $0.54. Through the first 9 months, revenue was approximately $1.28 billion, essentially unchanged from the prior year. Recurring revenue increased 6% year over year to $959 million Adjusted EBITDA was $294 million down 15% year over year with a net adjusted EBITDA margin of 36%. compared with 40% a year ago. As we enter Q4, the remaining license renewal schedule is expected to drive significant year over year growth in revenue and adjusted EBITDA, and margin. Turning to payment software. Third quarter revenue was $216 million. Down 24% year over year. Recurring revenue declined 1% year over year.

Segment adjusted segment adjusted EBITDA was $107 million down 41% year over year. Net adjusted EBITDA margin was 49% compared with 64% last year. Looking ahead for payment software, our focus is on executing our scheduled renewals, maintaining strong retention, and converting the remaining new business pipeline to deliver our full year outlook. While continuing to advance the product road map and customer implementations Tom described. In our biller segment, third quarter revenue increased 6% year over year to $210 million Revenue net of interchange fees increased 5% to $66 million. Adjusted EBITDA was $34 million and net adjusted EBITDA margin was 51%. In line with last year.

We are seeing the benefit of the investments we have made in Speedpay. With new capabilities creating additional opportunities to expand existing customer relationships, and win new customers. At the same time, the gap between gross and net revenue growth narrowed in Q3. Reflecting progress and improving the economics of the business. We remain focused on reducing interchange cost through pricing initiatives and leveraging our scale in negotiations with card networks. Interchange remains an important factor in biller's performance. And we continue to pursue opportunities to retain more of our revenue and translate growth into improved profitability. Turning to bookings. New ARR bookings were approximately $24 million in Q3. Up 86% year over year.

With growth across both payment software and biller. New license and services bookings were $64 million, down 21% from the prior year quarter. On a trailing 12 month basis, new ARR bookings were $79 million. Down 3%. And new license and services bookings were $238 million down 22%. The strong Q3 ARR performance is encouraging. And we are seeing an increasing number of customers opt for our cloud and consumption based delivery versus traditional license contracts. While these hosted contracts do not produce significant revenue upfront, They provide a long tail of ratable revenue. Our focus remains on bringing these customers into production so those bookings convert into recurring revenue.

We have a strong pipeline to close out the year and continue to expect growth for both full-year 2026 new ARR and new license and services bookings. Cash generation was also strong. Third quarter operating cash flow was $119 million up 63% year over year. Through the first 9 months, operating cash flow was $254 million up 26% from $201 million last year. That cash generation supports our balanced capital allocation strategy. Investing in our product road map and customer delivery, pursuing targeted acquisitions such as Cranium Ventures, and returning capital to shareholders while maintaining a strong balance sheet. We ended September with $219 million of cash. and $821 million of debt.

Representing a net debt leverage ratio of 1.3 times adjusted EBITDA. Total cash and available liquidity under our credit facility was $587 million. During Q3, we were purchased over 900 thousand shares for $50 million. That brings year to date repurchases to approximately 3.4 million shares for $157 million We had approximately $299 million remaining under our share repurchase authorization at quarter end. We continue to expect to allocate 50% to 60% of full year operating cash flow to share repurchases subject to market conditions, while maintaining flexibility to invest in our strategic priorities. Turning to guidance, we are reiterating our full-year 2026 outlook for revenue, and raising our adjusted EBITDA expectations.

We continue to expect revenue of $1.895 billion to $1.925 billion. And we are raising our adjusted EBITDA guidance to $550 million to $565 million. From the previous range of $545 million to $560 million. Our outlook continues to reflect a strong fourth quarter weighting from payment software license renewals. Our priorities are clear. Execute against the remaining license pipeline, continue customer onboarding, and maintain disciplined expense management to deliver our full year commitments. To that end, more than 95% of our full-year 2026 revenue outlook is already signed and contracted or is associated with license contracts renewing before the end of the year. In summary, we delivered another better than expected quarter.

With strong new ARR bookings, and cash generation. And we raised our adjusted EBITDA outlook. We remain focused on delivering our full year commitments while investing in long term growth executing our balanced capital allocation strategy. With that, we would be happy to take your questions.

Operator: Thank you. We will now begin the question-and-answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the q and a roster. Your first question comes from the line of Jeffrey Cantwell with Seaport Research. Your line is open.

Jeffrey Cantwell: Hey. Thanks for taking my questions. Tom, can you talk more about sales and the sales environment? Are you meeting, missed missing or exceeding expectations for sales this year? And could you tell us about Kinetic in particular how you are feeling about the sales momentum there? Also, can you more about the pipeline there and where you are seeing opportunity, whether it is domestically or internationally or both? And I guess, at some point, are you going to start showing us proof points that kinetic client signings and implementations are translating into revenue? Thanks.

Thomas Woodrow Warsop: Yeah. Thanks, Jeffrey. So in terms of the sales environment, I think the most interesting thing. I will give you 2 points on that. And I think big picture, we are achieving what we expect and need from sales and think both Bobby and I mentioned the strong growth of ARR bookings in the quarter. And we have a biller team that is, I mean, like, knocking it out of the park. They are just hitting on all cylinders, whatever analogy you wanna use. They are doing great. They have met their full year target already. And as I said, they are still going strong. Likewise or similarly, anyway, on.

In terms of our Kinetic sales, we are really happy with how that is coming through. And I know that is 1 of the other parts of your question is, when do you start to see revenue? We have actually started to see small amounts of revenue, from Kinetic, but as expected, the live customer is a consumption-based deal. SaaS deal. And so we have small amounts of revenue that will ramp over time, and these other deals that we have announced, you know, we are up to several deals signed now. Most of those will go live next year, and we will start to see a much more meaningful revenue coming through throughout the year next year.

So, backing up to your question, I am pleased with the work the sales team is doing I think we are you know, we are doing really, really well on Biller. We are doing well and as expected I think. On the, overall growth level that is being driven by our sales and account management team on the payment software side. So feel good about it generally. Bobby?

Robert Leibrock: Yeah. I think. Hey, Jeffrey. it is Bobby. The only thing I would add, 1, like Tom said, we are positioned well for the year to deliver towards the high end of our high single digit revenue model. that is supported with, like you saw, over 80% ARR bookings in the quarter. And like I said, in the in my opening remarks, we see both ARR bookings our new license and services bookings growing nicely for the full year.

As you peel back Tom's comments on Kinetic, you know, while not a material stand alone financial contributor in our model right now, it is, as we have talked about, very strategically important. it is helping us win new customers. it is deepening existing relationships. there is a really healthy mix as you look across our wins to date in the pipeline. Of net new customers for us or net new applications. And modernizing the relationships and the products they use from us today. So we are really seeing a benefit from Kinetic across the business and that sales cycle on payment software and happy with the way that is performing.

Thomas Woodrow Warsop: Yeah. Just on 1 thing, just building on what Bobby just said. The African bank customer I just mentioned is actually a really good example. it is an existing customer but they have now purchased Kinetic for a new line for us. This is net new with an existing customer. So we are excited about that. And it is an example of what Bobby was saying that strategically important for lots of reasons and certainly not least of which is, it expands the lens through which we look at the overall relationships with many of these customers.

Jeffrey Cantwell: Okay. Great. Appreciate all that. And then as we look ahead to 2027, now in November right now. So I am curious if you guys have any thoughts for everyone here on next year. Should we be taking Q4's exit rate, for example, extrapolate from that? Should we take the full year revenue growth you guys are putting up this year and use that as a proxy What are the puts and takes of the outlook for next year as you sit here today? Any color there would be great. Thanks.

Robert Leibrock: Yeah. I think. So I will jump in first, Jeffrey. So 1, we are really excited about the position. I hope that came across in Tom's opening comments on the progress and. That we are making. We are not going to jump into specific 2027 guidance right now. We are in the middle of that planning process. The other part is we have a huge Q4 here that we are really focused on delivering, and feel we feel confident about. But if I do step back, you know, we see healthy underlying demand across all cylinders of our business. You know, Tom talked about the biller business, which we actually see really healthy net revenue net of interchange.

Revenue accelerating here, and we see that continuing next year. As you look across payment software, we have got 2 businesses with our issue and acquiring and our account to account. That are really starting to benefit from the kinetic investments we have made across both of those. And inorganic investments like Cranium Ventures we announced in last quarter. And then Tom talked a lot about some of our emerging opportunity ambition around payment intelligence. And you will hear more about that, and that will develop over the next year too. So you could tell we are continuing to invest in the areas we see the strongest returns. That will support our long term strategy.

We remain confident in the underlying health of the business, and our ability to deliver against the longer term model.

Jeffrey Cantwell: Understood. Thanks, guys.

Thomas Woodrow Warsop: Yep. We will give you the guidance as usual on the year end call in February.

Operator: Your next question comes from the line of Brett Huff with Stephens Inc. Your line is open.

Analyst: Morning, Tom, Bobby, and John. Thank you. it is good to be back. Nice to speak with you guys. 1, thanks for the 95% stat on line of sight. I think the comment was 95% either is contracted from the pipe or is associated with a renewal Can you unpack any more of that at all as you might expect I think you guys talked about this, always 4Q loaded. This particular 4Q is bigger than normal. Any additional commentary on that now that we are kind of halfway through or almost halfway through and you have a little a little more visibility? just any color there would be helpful.

Robert Leibrock: Yeah. I will jump in, Brett. This is Bobby. So 1, let me start with we feel really good about Q4. We have got strong visibility, like I indicated in my opening comments, on the core components for the quarter. And, you know, the. As you mentioned, the larger than normal Q4 is really a facet of the timing of the renewals. And we are going to post, you know, super strong growth in the fourth quarter. When you look at that on balance across Q3, and the timing there versus Q4, we are gonna have a second half that is growing upper single to double digits both on revenue and EBITDA. Underneath that business.

On the 95 plus visibility we have across the component you mentioned, predominantly, the addition on top of that is gonna be the strong new business that we have been generating across both of our segments. And as you get into the higher, low end of our guidance range that we have put out there for Q4 and the year, Some of that is gonna be how customers choose to contract those.

As we have been working through those with customers, how much do they commit up front versus how much do they want as more of a consumption on top of that up front commitment. that is kind of the high and low kind of variables that would move us towards the high end of the range towards or the other side. But like I started, we take a balanced approach to guidance. I know you and I are just starting to work together here as you have taken up coverage. I think everyone would say Tom and I take a balanced approach to guidance. We do what we say. We say what we are gonna do.

And underneath of that, we feel good about Q4, and we have got a lot of visibility and confidence in hitting these numbers. Great. Super helpful. Thank you. And the follow-up, Cranium Ventures, it looks like it was fairly small. Any detail on how much rev contribution we need to think about if we are trying to get to an organic number? Any commentary on that? Yeah. I will. I will jump in on that, and then maybe Tom can say a comment or 2 on why, strategically, we are really excited about it, both from the people we onboarded as ACRs and the product that we are embedding there.

But it. it is really not material from a financial standpoint, from an organic revenue or inorganic slice there. We see more of it out in front of us from a synergy of combining our teams the product focus there. So, really, just a tuck in of some of that IP and that team not a financial moving needle over here.

Thomas Woodrow Warsop: Yeah. Got it. So, Brett, certainly not in not in 2026, for sure. it is it is immaterial, but strategically super important because it. We are always, of course, looking at investments in Kinetic and thinking about a build versus buy scenario. And it is what we get with Cranium helps us on the-- we decided to buy, Which accelerates our card-- the card aspect of what we are building for Kinetic. So that is great. And then the people, which I alluded to, we get. We got some amazing talent. As we bought the, the Cranium business. And, I-- yeah, I just-- I will I will be a little more specific about what I said.

Now the architects of all of the meaningful payment switches in the world now work for us. And so that is pretty exciting. And it is creating an opportunity. I mean, not only are we gonna see some transaction growth from the software that we have now embedded into Kinetic, But now we have a really cool go to market opportunity because we have so much expertise and so much experience with, with customers and. That are using our competitors' products and it is making it even more interesting for us to go chase those opportunities. Great. Appreciate the color, guys. Nice to speak with you. Thanks, Brett. Thanks, Brett.

Operator: And, again, if you would like to ask a question, please press star 1 to raise your hand. Our final question comes from the line of George Sutton with Craig-Hallum. Line is open.

George Sutton: Hey, guys. This is Logan on for George this morning. I wanted to start with a question on pricing on renewals. I am just curious if you could talk about how that has trended here over the past year or so? Are you seeing that be a good lever? And you have obviously talked quite a bit about how important Kinetic is in a lot of these discussions. With customers who maybe are not ready to use it quite yet. But just curious if you have seen the presence of that and sort of providing that road map, have any impact on your ability to push price increases on renewals?

Thomas Woodrow Warsop: Yeah. So let me let me start with the second part of your question. Logan. It is-- Kinetic has been a key part of the not only net new sales, and we. We have given the example a couple of times in previous calls about the very large deal we did in Asia Pacific that we would never have gotten that deal. Without the Kinetic road map because the. That customer's all about it. Right? They want the solution now, and then they are they are totally bought into the road map. So that continues to be the scenario. As we go talk to. And by the way, it works for existing customers and new customers.

As we talk about that Kinetic road map, they are very excited about it. And as you said, some of them are not ready for it yet, but they know they need it. And so that is a. it is a huge-- it is a huge driver of our ability to qualify and move deals down the path. So we are really, really excited about it. And it does have a positive impact on the pricing leverage that we have. I mean, we have pricing leverage anyway, but it is certainly helpful because customers are they. They are not looking at a renewal with us in the short run. They are looking at it really long term.

So it is you know, the next 5 years, sure, And, hey. I know these guys have a path that, that I wanna be on for much longer. So it is it is good all the way around, and Bobby may have a more quantified view.

Robert Leibrock: No. I. I would agree with the. Where Tom went with that, Logan. The thing I would add is pricing is definitely something that is a part of our margin equation too. When you look at what we have been able to deliver and we plan to deliver for the year, we have another year positioned here where we think that EBITDA. And we have guided to EBITDA is gonna go faster than revenue. and expand margin. And when you look through that, that is gonna flow straight to EPS, which EPS is gonna end up growing twice the rate of EBITDA. You saw the strong cash generation we had on a year to date basis. Growing 20%.

You are gonna continue to see that come through for the full year. We are gonna have a really good strong cash year. So if I zoom out, you know, pricing is definitely you know, part of the equation and part of our-- the premium we can get for across our portfolio. And it is 1 of the high value reasons we are able to deliver the model we can too.

George Sutton: Understood. And then secondly, I just wanted to follow-up on your comments about the strength in biller sales right now. Just curious maybe get your thoughts on the underlying drivers there relative to the market improving and customers looking to move to platforms like yours as opposed to maybe just some of the product upgrades and you guys taking share. And I guess, if you think about the current sales performance you feel like that sort of supports a double digit level of growth?

Thomas Woodrow Warsop: Yeah. Let me talk about the biller sales and how-- why is that happening? I mean, I assume that is part of the question, which is perfectly logical. And I would say there are 2 main drivers for that. Number 1 is, we continue to invest and see the improvements in the underlying technology, the experience that we can provide to billers and to consumers through Speedpay 1. So as we invest in that, that is coming through. I think I may have said that customers that are on Speedpay 1, well over 100 customers now on Speedpay 1.

They have become some of our best salespeople and they are anxious to tell other potential customers that you need to see this. it is great. So that is 1 driver. But probably the bigger driver is the leadership changes that we have made in our sales and account management team over the last year or so We put you know, we put, for example, our the woman that is running our sales team for Biller is-- she's amazing. She's hungry, she's organized, she's driven, and that permeates through the whole team. And so she's put better processes in place, She's put new and better tools in place. that is all great.

But I think it is more about the culture and the expectation setting and the. You know, she is someone that just does not take no for an answer. She's like, go get it. And so, that attitude, that culture that is been created, I would say, is the largest driver of the improved results. And then that is being backed up within the context of the investments that we have been making. So we are really excited about it. As I said, they have achieved their full year target by the end of the third quarter. What that really means is that I set the quota too low.

So, you know, we will try not to make that mistake next year.

Robert Leibrock: Yeah. The thing I would add, Logan, is I would have started back where Tom did on The first part of it is us. it is our portfolio, our execution, and our go-to-market. The other part that I would add to that is an attractive market for us. I think there is 2 scale players in this market. We are 1 of them. And, really, there is a lot of white space in that for us to go attack. I talked about it in the past. A lot of these new bookings are established relationships that we have.

That they are opening up a new payment type or they are opening up the corporate side of their house versus, you know, we might have had more of the consumer side. And the trust we have built with the platform we have gives us a lot of sole source opportunities to go in and double and triple the share of wallet that we might have from a homegrown solution or a more long in the tooth legacy provider there. So the market the market meets the same demand and the execution that we have been able to bring there, too.

George Sutton: Got it. Okay. Thanks, guys.

Thomas Woodrow Warsop: Thanks, Logan.

Operator: There are no further questions at this time. I will now turn the call back to the company for closing remarks.

Thomas Woodrow Warsop: Alright. Well, thank you, everybody for joining us. As we have said, we are very pleased with the way the year has gone so far. We are very focused on delivering that strong big fourth quarter that Bobby mentioned a minute ago. And we really appreciate your support. And we look forward to continued success together. So thanks. Thanks for your time today.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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