ACI WORLDWIDE, INC. (ACIW): what the price assumes

In the published model solve dated 2026-Q2, anchored at $52.95, ACI WORLDWIDE, INC. (ACIW) is priced for +18.0% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/ACIW

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 10% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.1%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• The distinguishing fact is where this software sits: the 10-K describes "supporting 44 global payment schemes and providing the central infrastructure to 11 central banks directly operating the scheme using ACI software", which is plumbing rather than product.
• The largest single risk is timing rather than demand, because a large share of revenue is recognized on software licenses whose renewal dates management does not control, against a cost base the filing describes as "relatively fixed and based in part on anticipated revenue levels, which can be difficult to predict".
• Second-quarter results are due August 6, 2026, with management having guided the quarter to revenue of $420 million to $440 million.

Bull Case

Watch what the company did with its money last year, because capital allocation is the cleanest window into what management actually believes. The 10-K records that "During 2025, we repaid $400.0 million for the redemption of the 2026 Notes and $20.9 million of other debt payments", and separately that "we used $202.6 million to repurchase common stock". Then, in the same filing, "In October 2025, the Board approved the repurchase of the Company's common stock of up to $ 500.0 million". Retiring a maturity outright and buying back stock in the same year is not a hedge. It is a company generating enough to do both, deciding that its own equity is the better asset.

The balance sheet supports that reading. Net borrowings run about 2.32 times operating income on a pre-tax basis, with interest covered roughly 5 times over. Share count has fallen about 3% a year over the four years to March 2026. None of those figures describe stress, and taken together they explain why the company could redeem a maturity outright rather than roll it.

The reason the cash keeps arriving is where this software sits in the payments stack. The 10-K describes "supporting 44 global payment schemes and providing the central infrastructure to 11 central banks directly operating the scheme using ACI software". Read that twice. Eleven central banks run their national payment rails on this company's code. That is not a vendor relationship that gets re-bid on price at the next procurement cycle, because the cost of getting it wrong is a country's payments system going dark. Switching costs in enterprise software are usually asserted; here they are structural.

The growth is showing up in the part of the business that carries the margin. The filing reports that "Payment Software Segment Adjusted EBITDA increased $48.7 million for the year ended December 31, 2025, compared to the same period in 2024, primarily due to a $74.3 million increase in revenue primarily related to an increase in license revenues", against a $25.6 million increase in costs. Software licenses that scale without proportionate cost are the whole argument for owning a payments software company rather than a payments processor.

Against the biller-software cohort, the 16.3% operating margin is respectable rather than exceptional: Jack Henry (JKHY) runs at 26.0%, SS&C (SSNC) 23.1%, Paylocity (PCTY) 21.3%, Evertec (EVTC) 19.1%, while Global Payments (GPN) sits at 15.3% and FIS at 15.9%. What separates ACI from the middle of that group is not today's margin but the direction of the mix, since license and cloud revenue carry different economics from the services work that used to sit alongside them.

The bear case is that the whole thing depends on modernization timetables set by other people. That is true. It is also why eleven central banks are customers rather than prospects, and the company has been converting that position into retired debt and retired shares while the argument gets settled.

Bear Case

The variable with the most leverage on this thesis is not competition or pricing. It is public policy. Real-time payment rails get built when a central bank or a regulator decides they will be built, on a timetable set by legislation and budget cycles rather than by a sales team. That is why the company can describe itself as the infrastructure behind schemes operated by central banks, and it is also why a change of government, a deferred modernization budget, or a slipped mandate date moves revenue that no amount of selling can pull forward. A demand curve owned by policymakers looks like a moat in good years and like a queue in bad ones.

The second regulatory-adjacent exposure sits inside the company's own product transition, and the filing names it precisely. ACI faces "pricing pressure if our current customers migrate from higher‑priced legacy arrangements to ACI Connetic with different pricing or consumption models", and warns that "Any shift toward usage‑based or cloud‑delivered services could introduce revenue variability, require new go‑to‑market motions, or necessitate changes to partner programs and channel economics." Moving a customer base from perpetual and term licenses to consumption pricing is the same journey enterprise software has run for two decades, and it reliably compresses reported revenue during the crossing even when the destination is better.

Timing risk compounds both. The filing acknowledges that results "may also fluctuate from quarter to quarter and year to year due to a variety of factors, including changes in product sales mix that affect average selling prices, and the timing of customer renewals", against a cost base that is "relatively fixed and based in part on anticipated revenue levels, which can be difficult to predict." Fixed costs against lumpy license revenue is a formula that produces occasional violent misses, and operating cash flow already moved the wrong way: "Cash flows provided by operating activities were $322.8 million for the year ended December 31, 2025, compared to $358.7 million for the same period in 2024."

Now put that against what the price requires. At today's level the market is paying roughly 23 times company-wide operating income, and holding that price requires operating growth to run at the ceiling the business can self-fund for about 5.6 years. Only about 30% of comparable fast growers have sustained that pace over such a stretch. The requirement is not an implausible growth rate, and the company has recently delivered rates in that neighborhood. The stretch is entirely in duration, and duration is precisely the thing a policy-driven demand curve cannot promise.

The frames that value what the business earns now, rather than what it might earn across a long compounding window, land a long way below. Against earnings power the price sits about 2.97 times where those methods reach, and against asset value about 2.21 times. That is a wide gap to close on schedule, and if the growth window shortens by even a year or two, the multiple has nothing underneath it but the license cycle.

Valuation

At $56.25 the market is paying about 23 times company-wide operating income. What that buys is not a margin recovery, because the price does not need one: the operating margin the price leans on is roughly 12.6%, below the 16.3% currently being earned. What it needs is time. Holding this level requires operating profit to grow at the ceiling the business can fund out of its own cash flow for roughly 5.6 years, and only about 30% of comparable fast growers have sustained a pace like that over such a window.

The methods split along exactly that line. The forward frames, which credit the next several years of compounding, land at or slightly above the price. The peer-multiple frame also reaches it, but the way it gets there is worth stating plainly: it applies a broad technology-sector earnings multiple to this company's profit, and the actual payment-software cohort is a different animal, with Visa (V) at a 61.1% operating margin and Mastercard (MA) at 57.9% against ACI at 16.3%. The frames anchored on what the company earns and owns today land far below. Against earnings power the price sits about 2.97 times where those methods reach; against asset value, about 2.21 times.

Read as a pattern, that is a duration premium rather than a quality premium, and the rarity check agrees: the multiple sits at the very top of its peer distribution, well beyond the upper quartile. The sensitivity is worth knowing too, because it is not small. Each additional point of required return shortens the growth window the price implies by roughly 1.7 years, which means a shift in rates does more damage to this valuation than a shift in next year's revenue would.

Underneath the multiple, the filed inputs are solid rather than spectacular. The 10-K reports that "Adjusted for the impact of foreign currency, total revenue for the year ended December 31, 2025, increased $156.6 million, or 10%, as compared to the same period in 2024." That is a genuine double-digit result, and it is also the growth rate that has to persist, not accelerate, for the price to hold.

Solvency bounds the downside without changing the argument. Net borrowings sit about 2.32 times operating income on a pre-tax basis, interest is covered roughly 5 times over, and share count has fallen about 3% a year over the four years to March 2026. The borrowings are not unsecured, which is worth knowing: the filing states that "The obligations of the borrowers in respect of the Credit Facilities are secured by first-priority security interests in substantially all assets of the borrowers". A stumble here would still be a multiple event rather than a solvency event, and that is a meaningful distinction. The balance sheet is not what would force a decision. The length of the growth window is.

Catalysts

Second-quarter 2026 results are scheduled for August 6, 2026, with a call the same morning. Management guided the quarter to revenue of $420 million to $440 million, and the first quarter set a reasonable bar for it: revenue of $426 million, up 8% as reported and 6% in constant currency, with GAAP net income of $38 million. The constant-currency figure is the one to watch, because currency has been flattering the reported line.

The company raised its full-year 2026 revenue and adjusted EBITDA guidance ranges alongside those first-quarter results, the adjusted measure being company-defined. Raising a full-year range one quarter into the year is a statement about visibility on renewals rather than about demand, and this is a business where those two things are genuinely separable.

The commercial development running underneath the quarters is ACI Connetic, the cloud-native payments hub the company is moving customers onto. Its progress will show up in the revenue mix rather than in a press release: license revenue is what carried the segment's growth in 2025, and a faster migration toward consumption-based pricing would trade some of that near-term reported revenue for a longer, steadier stream. The second-quarter mix disclosure is where the trade becomes visible.

Peer Cohorts (Per Segment, With Filing Citations)

Payment Software (reported)

• V (VISA INC.)
• FY2025 10-K: …in support of client usage of Visa's payment services and value-added services related to certain Issuing Solutions OTHER REVENUE Consists mainly of value-added services primarily related to Advisory and Other Services and certain Issuing Solutions; license fees for use of the Visa brand or technology; and fees for…
• FY2025 10-K: …Payments volume is the primary driver for our service revenue, and the number of processed transactions is the primary driver for our data processing revenue. Payments volume represents the aggregate dollar amount of purchases made with cards and other form factors carrying the Visa, Visa Electron, V PAY and…
• MA (Mastercard Inc)
• FY2025 10-K: …of expertise and technology designed to enhance payment processes, customer engagement and portfolio performance through targeted strategies and data-driven recommendations. Digital and Authentication We offer global digital enablement and authentication capabilities that operate across all digital channels including…
• FY2025 10-K: …we provide services and solutions: • General Purpose Payments Networks. We compete worldwide with payments networks such as Visa, American Express, JCB, China UnionPay and Discover, among others. These competitors tend to offer a range of card-based payment products. Some competitors have more market share than we do…
• PYPL (PayPal Holdings, Inc.)
• FY2025 10-K: …PayPal and Venmo branded checkout experiences allow customers to complete purchases in just a few steps without having to enter payment and address information. These seamless experiences reduce cart abandonment and drive higher conversion rates for merchants. Our BNPL solutions are embedded into our branded checkout…
• FY2025 10-K: …as well as merchants, who will receive payment in certain circumstances, such as establishing proof of shipment or delivery of an eligible item to the customer. We believe that these programs are generally consistent with or broader than protections provided by other participants in the payments industry. Our ability…
• GPN (GLOBAL PAYMENTS INC.)
• FY2025 10-K: …to improve operating income and operating margin by generating synergies to lower the cost base of those businesses. Revenues Merchant Solutions. The majority of our Merchant Solutions revenues are generated by services priced as a percentage of transaction value or a specified fee per transaction, depending on card…
• FY2025 10-K: …Our value proposition is to provide differentiated, high-quality, responsive and secure services to all our customers. We also focus on providing distinctive customer service from the sales process, to onboarding, to ongoing support across our business. The majority of our revenue is generated by services priced as a…

Biller (reported)

• SSNC (SS&C TECHNOLOGIES HOLDINGS, INC.)
• FY2025 10-K: …Joinder, we borrowed $ 800.0 million in aggregate principal amount of incremental term A-9 loans ("Term A-9 Loans"), the net proceeds of which were used to finance in part the acquisition of Battea, the payment of fees and expenses related thereto and for working capital and general corporate purposes. The Term A-9…
• FY2025 10-K: …semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2024. The net proceeds of the Term B-8 Loans and from the sale of the 6.5% Senior Notes were used to repay all amounts owed under the term B-3 loans, the term B-4 loans, the term B-5 loans, the term B-6 loans and the term B-7…
• VERX (Vertex, Inc.)
• FY2025 10-K: …to the extent services have been performed and the Company has a right under the contract to bill and collect for such performance. Subscription-based customers are generally invoiced annually at the beginning of each annual subscription period. The Company's payment terms typically range from 30-60 days. Accounts…
• FY2025 10-K: …and events of default. Net proceeds from the Term Loan were used to fund ongoing working capital, capital expenditures, permitted distributions, permitted acquisitions, and general corporate purposes of the Company and its subsidiaries. The Company paid $ 983 in financing costs in connection with the Second Amendment…
• JKHY (JACK HENRY & ASSOCIATES, INC.)
• FY2025 10-K: …of technology solutions and payment processing services primarily to community and regional banks and credit unions. The Company's operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks…
• FY2025 10-K: …a contemporary, adaptable administrative portal. In addition to bill payment capabilities, we provide a 'pay a loan' feature, an 'open looped' real-time person-to-person ("P2P") solution, and account-to-account ("A2A") transfer features. The array of money movement options maintains consumer and business engagement…
• EVTC (EVERTEC, Inc.)
• FY2025 10-K: …Agreement"). Under the Revolving Facility the Company may request up to $20.0 million as part of the swingline, which consists of short-term borrowings, that allows the Company to obtain same-day, short-duration advances to address immediate liquidity needs. On October 30, 2023, EVERTEC and EVERTEC Group entered into…
• FY2025 10-K: …and treaties, or the interpretation thereof; tax policy initiatives and reforms (such as those related to the One Big Beautiful Bill Act, or OBBBA, Organization for Economic Co-Operation and Development's ("OECD") Base Erosion and Profit Shifting, or BEPS, project and other initiatives); the practices of tax…
• FIS (Fidelity National Information Services, Inc.)
• FY2025 10-K: Date: February 24, 2026 By: /s/ Anil S. Chakravarthy Anil S. Chakravarthy Director Date: February 24, 2026 By: /s/ Kourtney Gibson Kourtney Gibson Director Date: February 24, 2026 By: /s/ Lisa A. Hook Lisa A. Hook Director Date: February 24, 2026 By: /s/ Kenneth T. Lamneck Kenneth T. Lamneck Director 109 Table of…
• FY2025 10-K: -K 001-16427 4.4 5/21/2019 4.8 Twenty-First Supplemental Indenture, dated as of May 21, 2019 between FIS and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee. 8-K 001-16427 4.5 5/21/2019 4.9 Twenty-Fourth Supplemental Indenture, dated as of May 21, 2019 between FIS and The…
• GPN (GLOBAL PAYMENTS INC.)
• FY2025 10-K: …operate, as well as providers such as Worldline, Nexi, Adyen, Block and Stripe. We have seen competition internationally increase and expect that trend to continue as new companies enter our markets and existing competitors expand or consolidate their product lines and services. Issuer Solutions, which is presented…
• FY2025 10-K: …minimum tax based on global adjusted financial statement income and a 1% excise tax on share repurchases effective beginning January 1, 2023. The corporate alternative minimum tax did not have a material effect on our reported results, cash flows or financial position. On July 4, 2025, the One Big Beautiful Bill Act…
• TYL (TYLER TECHNOLOGIES, INC.)
• FY2025 10-K: …The 2024 Credit Agreement matures on September 25, 2029, and loans may be prepaid at any time, without premium or penalty, subject to certain minimum amounts and payment of any SOFR breakage costs. The 2024 Credit Agreement replaced Tyler's previous $500.0 million unsecured credit facility under the credit agreement…
• FY2025 10-K: …Fees and Services 43 PART IV Item 15. Exhibits, Financial Statement Schedules 44 Item 16. Form 10-K Summary 46 Signatures 47 2 PART I ITEM 1. BUSINESS. DESCRIPTION OF BUSINESS Tyler Technologies, Inc. ("Tyler" or "Company") is a leading provider of integrated software and technology management solutions for the…
• PCTY (PAYLOCITY HOLDING CORPORATION)
• FY2025 10-K: …"accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o Emerging growth company o If an emerging growth company, indicate by check mark if the registrant has…
• FY2025 10-K: …methods including on-demand and webinars, all of which are available via our mobile app. Our clients can create a variety of content for their employees including via a Sharable Content Object Reference Model (SCORM), embedded video and various document types. Custom content is supplemented by a library of hundreds…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.