Q2 2026 Usio Inc Earnings Call Transcript
Key Points
- Usio Inc (USIO) delivered its second consecutive quarter of positive GAAP net income and EPS, with revenue growth accelerating to 19% year-over-year.
- The PayFac business saw a 43% revenue increase, with merchant count up 34% in the first half of 2026, driving strong card revenue growth of 28%.
- ACH revenue grew 21% with transactions up 34%, and July set a new monthly ACH transaction record, indicating continued momentum.
- Output Solutions revenue increased 22% in Q2, with new high-speed printer expected to reduce costs and improve production efficiency.
- The company raised its full-year revenue growth guidance to 14%-16% (from 10%-12%), reflecting strong performance and growth prospects.
- New growth opportunities include school voucher programs (5-6 states, ~$1.5 billion in potential volume) and university loan refunds, which could boost card issuing and ACH volumes.
- The upcoming UCO Ion platform is expected to drive higher margins through float income and cross-selling across all business lines.
- Cash and cash equivalents decreased to $6.4 million from the beginning of the year, partly due to timing of annual cash outlays.
- Card loads were flat and transactions down slightly in card issuing, despite purchase volume rebounding 11%.
- Operating cash flow was lower in the first half compared to last year, though adjusted for the prior-year employee retention credit, it increased.
- The shift from pinless debit to RTP transactions modestly weighs on top-line revenue, though it improves profitability.
- Gross margins remain in the 23%-25% range, with improvement expected only with the full rollout of Ion, which is still in development.
- The company used $371,000 to repurchase shares, which may limit capital for other investments, though it signals confidence.
Welcome to UCO's second quarter fiscal 2026 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now. Like to turn the conference over to Michael White, Senior Vice President and Chief Accounting Officer. Please go ahead, sir.
Thank you, operator, and thank you everyone for joining our call today. Welcome to UCO's second fiscal quarter 2026 conference call. The earnings release, which we issued today after the market closed, is available on our website at uco.com under the Investor Relations tab. On this call with me today are Louis Hoak, our Chairman and CEO and Greg Carter, Executive Vice President of Payment Acceptance and Chief Revenue Officer.
In addition, Houston Frost, Senior Vice President and Chief Product Officer and Jerry Upner, Head of Card Issuing, will be available during the question-and-answer session. Let me remind our listeners that certain statements made during the call today constitute forward-looking
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