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SEC filingACI Worldwide's Q3 2025 revenue grew 7% YoY to $482M, driven by 11% SaaS/PaaS growth; operating margin stable at 27%.
In Q3 2025, ACI Worldwide reported total revenue of $482.4 million, a 7% increase compared to $451.8 million in Q3 2024. The growth was primarily driven by a 11% rise in SaaS and PaaS revenue to $246.9 million, fueled by new customer go-lives and higher transaction volumes. License revenue increased 3% to $162.0 million, benefiting from renewal timing and capacity events, while maintenance revenue grew 8% to $51.4 million due to CPI uplifts. Services revenue declined 6% to $22.1 million, reflecting timing of project-related work. Gross margin (implied) was 53.8%, down from 56.3% in the prior year, as cost of revenue increased 13% primarily from higher payment card interchange and personnel costs. Operating income rose 4% to $127.7 million, with operating margin stable at 27%. Net income increased 12% to $91.3 million, supported by lower interest expense (down 19%) and favorable other income.
Payment Software segment revenue grew 4.4% to $284.0 million, with Segment Adjusted EBITDA nearly flat at $181.7 million (margin ~64%). The revenue increase was led by license sales, but it was nearly offset by a $10.9 million rise in cash operating expenses. Biller segment revenue increased 10.4% to $198.3 million, driven by higher transaction volumes. Segment Adjusted EBITDA rose 3.8% to $32.1 million (margin ~16.2%), as revenue growth was partially offset by a $17.5 million increase in cash operating expenses, mainly payment card interchange and processing fees.
The MD&A does not provide specific quantitative guidance for future periods. However, management highlights key trends including increasing digital payment transaction volumes, adoption of real-time payments, cloud technology migration, and fraud prevention. The company continues to seek growth through organic sources, partnerships, and acquisitions. The backlog as of September 30, 2025, was $7.1 billion (60-month), up from $6.7 billion at December 31, 2024, indicating a healthy pipeline. Additionally, a $500 million stock repurchase program was approved on October 31, 2025, signaling confidence in cash generation and shareholder returns.
As of September 30, 2025, ACI Worldwide held $199.3 million in cash and cash equivalents, with total debt of $867.8 million, resulting in net debt of $668.5 million. Shareholders' equity stood at $1.48 billion. The debt structure includes $633.1 million in term loans, $240.0 million drawn on the revolving credit facility, and $5.3 million in debt issuance costs. The company redeemed its $400 million 5.750% Senior Notes due 2026 in full on June 18, 2025, and entered into an incremental $200 million term loan. The credit agreement financial covenants were met, with a consolidated total net leverage ratio not exceeding 4.25x.
The notes do not disclose a separate purchase commitments schedule. However, the company finances certain multi-year software licenses; as of September 30, 2025, $9.5 million was outstanding on such agreements. Off-balance sheet settlement funds totaled $201.7 million, but these are not company obligations.
During the nine months ended September 30, 2025, ACI repurchased 3,073,321 shares for $151.0 million. As of period end, $207.1 million remained under the existing program. Subsequently, on October 31, 2025, the Board approved a new $500 million buyback authorization, replacing the prior remaining amount. No dividends were declared. Capital expenditures (property & equipment and software) totaled $26.4 million, or 2.1% of nine-month revenue.
ACI reports two segments: Payment Software (banks and merchants) and Biller. For the nine months ended September 30, 2025, Payment Software generated $664.1 million in revenue (up 11.6% YoY) with Segment Adjusted EBITDA of $371.5 million (55.9% margin). Biller revenue was $614.1 million (up 12.4% YoY) with Segment Adjusted EBITDA of $102.8 million (16.7% margin). Geographic revenue breakdown: United States $766.1 million (60%), other countries $512.1 million (40%). No single customer exceeded 10% of revenue. The company also provided revenue by solution category, with Issuing and Acquiring being the largest at $396.1 million within Payment Software.
Net income of $162.3M for the nine months ended September 30, 2025, converted to operating cash flow of $201.1M, reflecting a healthy cash conversion ratio of 1.24x. Key non-cash add-backs included $62.7M amortization, $45.4M stock-based compensation, and $9.5M depreciation, partially offset by a $25.9M gain on sale of equity investment. Working capital was a net use of $65.0M, driven primarily by a $34.3M increase in receivables and a $17.6M decline in deferred revenue, partly offset by higher accounts payable ($10.0M).
Capex of $26.4M (property & equipment $7.7M, software $18.6M) represented 13.1% of operating cash flow, a moderate reinvestment rate. The investing cash flow line was positive $19.6M due to $46.0M proceeds from equity investment sale, which more than covered capex.
Share repurchases of $150.0M exceeded operating cash flow, funded by significant debt activity: the company redeemed $400.0M of 2026 Notes, drew $290.0M from its revolving credit facility, and borrowed $200.0M from a term loan, while repaying $120.0M of revolver and $29.4M of term debt. Overall financing cash flow was negative $235.2M, and the net change in cash was a decrease of $11.6M. No dividends were paid.
Large debt redemption ($400M) and equity sale ($46M) are notable non-recurring items. Working capital swings were typical for the business, but the receivables increase and deferred revenue decline warrant monitoring.