Usio (NASDAQ:USIO) reported record first-quarter fiscal 2026 revenue and processing activity, with management saying the payments technology company remains on track to meet its full-year outlook for double-digit revenue growth and positive adjusted EBITDA.
On the company’s earnings call, Paul Manley, senior vice president of investor relations, described the quarter as a record period for Usio, citing “very strong growth” that led to record processing volumes and quarterly revenues. He said the company also achieved positive adjusted EBITDA, GAAP net income and positive operating cash flow.
“All in all, a strong start to what we expect to be a very solid and potentially extraordinary year,” White said.
Revenue Growth Broad-Based Across Key Units
White said ACH and complementary services revenue increased 25%, while card revenue rose 23%. Output Solutions revenue grew 19% in the quarter, accelerating from 8% growth in the previous quarter. Card issuing revenue declined in the quarter, but management said it expects that business to grow during the year.
Excluding the impact of interest revenue, White said business unit-level growth was 17%. He added that most of the quarter’s revenue was recurring, no single client accounted for more than 10% of total revenue and client retention remained high.
Margins were lower than the prior-year period, which White attributed partly to a decrease in top-line interest income, which carries 100% gross margin, as well as revenue mix. He said the company expects margins to improve over the balance of the year.
Usio reported approximately $130,000 in net income for the quarter ended March 31, 2026, with White noting that results did not benefit from extraordinary items. The company used about $235,000 in cash for stock repurchases and ended the quarter with more than $7.7 million in operating cash, up roughly $300,000 from the end of 2025. White said only one small-term loan remains outstanding.
Card Business Lifted by PayFac Growth
Greg Carter, executive vice president of payment acceptance and chief revenue officer, said the card business posted all-time records for quarterly revenue, transactions and dollar volume processed. Card revenue rose 23% year over year to a record $9.7 million.
Carter said PayFac has become the predominant driver of the card business, representing 78% of card revenue. He said Usio expects overall card performance to more closely track PayFac, which has been growing at a better than 20% rate.
He cited new enterprise implementations as contributors, including a multi-location building supply organization and an online specialty sporting goods retailer, both of which provided a full quarter of processing volume. Carter also pointed to growth in Usio’s Filtered Spend program, saying new merchants are activating “practically every day” as the program expands geographically from the Northeast into other U.S. regions.
During the question-and-answer session, Carter said the worst of attrition from the company’s legacy Singular portfolio appears to be behind it.
ACH, Real-Time Payments and Prepaid Opportunities
Louis Hoch, founder, chairman and chief executive officer, said ACH recorded record transaction volumes, dollars processed and return check transactions processed. He also said PINless Debit continues to grow at a better than 50% rate.
Hoch highlighted Real-Time Payments, or RTP, as an emerging growth opportunity. He said Usio processed about 2,000 RTP transactions in January and more than 200,000 in the most recent month. While management initially expected RTP to take volume from ACH, Hoch said it has instead been pulling from PINless Debit, even as PINless continues to post record performance. He said RTP generates less revenue per transaction than PINless Debit but has a more lucrative margin profile.
Prepaid implemented 27 new accounts in the quarter and processed more than $80 million in card loads, Hoch said. In card issuing, Usio signed an agreement with a large regional bank to serve as a new sponsor and strategic partner. Hoch also said an existing client remains on track to launch two state-sponsored school choice voucher programs using Usio card issuing and ACH, with expected distributions exceeding $1 billion.
In response to an analyst question about prepaid growth, Jerry Uffner, head of card issuing, said the regional bank partnership includes multiple programs expected to roll out in the third quarter. He also cited a strategic fintech partnership with deals expected to roll out no later than June, along with several other material implementations.
Output Solutions and PostCredit Initiatives
Hoch said Output Solutions is off to a record start, with pieces processed and mailed up 31% and electronic documents processed and delivered up 41% in the first quarter. The unit added six new cities, two county governments and four other customer accounts, all but two of which represented new recurring revenue.
April activity in Output Solutions was up 50% compared with April of last year, Hoch said. He also said a new printer is scheduled for installation in June, describing it as four times faster than existing equipment, cheaper to maintain and less supply-intensive.
Management also discussed Usio ONE, the company’s cross-selling strategy, and PostCredit, a platform intended to help clients manage settlements through a Usio-managed account. Hoch said PostCredit is expected to be market-ready in the coming months and that all new card, ACH, prepaid and other clients will automatically receive a PostCredit account once it is live, with a longer-term goal of rolling it out to existing clients.
Guidance Reiterated
Despite citing a strong start to the year, Hoch said management believes it is prudent to remain cautious early in 2026. The company reiterated its guidance for 10% to 12% revenue growth in 2026 and continued positive adjusted EBITDA.
During the Q&A session, Hoch said the company believes gross margins may have bottomed in the quarter and could return to a 23% to 25% range in the short term, depending on product mix, RTP growth, electronic presentment in Output Solutions and interest income trends.
About Usio (NASDAQ:USIO)
Usio, Inc (NASDAQ: USIO) is a financial technology company that delivers integrated payment, transaction processing, and money services solutions. The company’s platform combines merchant acquiring, multi‐rail payment enablement and business management tools to support merchants, financial institutions and business partners in automating and securing electronic and cash‐based transactions.
Through its subsidiaries, Usio provides a broad range of products and services, including point-of-sale terminals, payment gateway services, automated teller machine (ATM) processing, bill payment, money order issuance, domestic and international money transfer and remittance solutions.
-tbk-logo-1200x675.png){kind=logo}
