We are ready to move on to our next presentation. Please give a warm welcome to CEO Louis Hoch and Chief Accounting Officer Michael White of Usio.
Hello, everybody. Quick housekeeping thing. If you do not have a raffle ticket, see Kim at the back. We are giving away a $500 Mastercard wearable, but you have to be at this presentation to win it. If you do not have one of those red tickets, go get one because it could be worth $500.
Wow.
Yeah. I think she is taking bribes, so it is not a bad thing if you pay her $100 to get $500. I am Louis Hoch. I am the CEO of Usio, and Usio is a fintech payment processor. We are unique because we believe that consumers should be able to choose how they get paid, and merchants should be able to offer all payment channels. All of our tech supports every payment channel that exists today.
Last year, for example, from checks, last year we printed 8 million checks, believe it or not, and it goes up every year, to the latest and greatest is a clearinghouse or Fed ACH real-time payments that we support, and everything in between. We have four divisions within our company. They are all very complementary. In fact, we have customers that use all four, including L.A. County here. This is 12 million people.
We are the company that mails your fees and fines letter and embeds a QR code so that it populates your payment screen for you.
We also, for L.A. County, we mail out checks for if you pay too much taxes or too much fees. They also have 13 active card programs for us. Of course, we process when you pay your parking fines, that is us. Because we are in L.A., people always ask me if I can get rid of their parking tickets, and the quick answer is yes, I can prevent not mailing you the letter, but it is not going to do you any good. Four operating divisions we will go through in detail, me and Michael. Even though we are a micro-cap company, we deal with the biggest companies in the United States. Verizon is a customer. T-Mobile is a customer.
Top four drug companies, Pfizer, Medtronic, Eli Lilly, they're all customers. 200 cities and counties in the U.S. do business with Usio, including seven out of the top 10 largest cities like L.A. and New York City. We're going to talk about each one of the divisions in detail here, but the first one is payment facilitation. Payment facilitation is card processing. So it's credit and debit card processing. But what's unique about payment facilitation is that we only sell to integrated software vendors. A lot of our competitors spend time trying to sell to individual merchants. We don't believe that that's the best go-to-market strategy. Instead, we sell to software vendors that write software for industry verticals. One of our customers is a company called PracticeSuite.
They have 20,000 doctor's offices that run their software, and they've chosen to integrate in our tech stack so that they can control the whole workflow of the payment, which makes sense for their customer base. They get to control all the branding. But in payment facilitation, we also share half of the revenue derived from a payment with our software companies or our integrated software companies.
This part of our business, as you'll see on every part of our business, is growing through some exponential growth. Not only our revenues are up, our profitability is way up. This has been a year that our operating leverage is really being demonstrated in the metrics and financials that we're producing. ACH is direct debit or credit off your checking account. We run that through the Fed. We are a very large ACH processor.
In fact, if we were a bank, we'd be the 50th largest bank at all Fed windows where our competition can't. This part of our business, like all divisions, is growing really, really well. We pre-announced the metrics for this current reporting period, which we are going to report on November 10th. You can see on our next slide, but you can also see on this slide that we're experiencing 34% year-over-year growth on our volume that we're processing for ACH as compared to the same six-month period of last year. Again, ACH has a 70% gross margin for Usio. In the pre-announcement, we talked about this last quarter, Q3, for our ACH division set all-time records for Usio in volume. That's something really to say because we do a huge amount of volume in ACH.
So for Usio to grow that much, it's growing off a big number. Last quarter, third quarter, was the best ever which beat the previous best, which was Q2 of this year, which Q2 beat the previous best was Q1. I guess you're kind of getting the story. The last six quarters have been all record volumes for ACH, all-time records. So really excited about seeing that trend continue, but not only continue in a big way for the third quarter. Michael White, our Chief Accounting Officer, is going to pick up here with card issuing.
Thanks, everyone. Card issuing is our disbursement platform where we issue prepaid Mastercards primarily through government programs and nonprofits. Louis mentioned L.A. County as a great example. They have 13 active card programs. An example is there is a program for if people are applying for a job and they need to get to their job interview, and do not have access to transportation. L.A. County has a program where funds will go onto a prepaid card to pay for the transportation. That is just one example. As you can see, in the first half of 2026, just under $115 million was spent on prepaid cards that we issued. That is up 9% year-over-year.
You can see over the past several periods here, we have had some difficult comps in this business line, whether there was a couple one-time programs, and then just last year there was a loss of a customer through a reseller. It was not our direct customer, but a customer of one of our customers. On the next slide, I am going to talk about some exciting things ahead for this business line. Both of these in the education realm, one being state school vouchers. Through a partner, we currently process 37 state school voucher programs. In the past 12 months, that equates to $1.3 billion in payments. The great thing about these programs is they are recurring. Of those 37 states, five are active card programs. The remaining go out via ACH.
What is really great about the card programs is that as you can see, we are earning revenue on the spend. Like I said, there are 37 active states that we are working with. There is one additional state that is over $1 billion that is in implementation. Really excited about this. Like I said, it is recurring in payments. Just to kind of give you, recurring in nature, kind of give you an idea of the scale of a billion-dollar state. Last year, Usio processed around 8 billion payments total.
The volume of these deals are significant. We are also working with universities for Title IV refunds, which are basically payments back to students that come from the federal government. If you receive a loan that covers both housing and tuition, part of that needs to go back to the student.
What allows us to win deals like this is our consumer choice platform, which allows, Louis alluded to at the beginning, the end user, the student in this case, to choose how they receive their funds. They will receive typically an email from the university, and then letting them know that they have funds available. From there, they can choose to receive the funds via ACH, a prepaid card to their digital wallet, an instant transaction via pinless debit or RTP. We can even send a check. It reduces all barriers to dispersing funds. That same model works for a university, works for a nonprofit, works for a government.
We are seeing it is a great selling point for card issuing. Moving on to Output Solutions. Output Solutions is our print and mail division. We purchased this business in 2020, and again, seeing significant growth here.
You may wonder why a fintech company purchased a print mail facility. Speaking about L.A. County, where we are today, all their fees and fines, we print those notices, and on the notice, we embed a QR code where you scan to pay.
This we primarily sell here to banks, utilities, governments, anyone that is sending recurring statement or recurring invoice. Over first half of the year is up 36% in printed and mailed and 45% in electronic. We also do electronic document hosting. This is talking about Los Angeles County. At the beginning of 2025, we launched what began as an internal initiative, Usio One, which brought all of these four business lines under one umbrella. We had each business line operating separately, and we consolidated to a single sales organization, a single customer support organization, IT, finance, all under one roof.
That is really to take advantage of the operating leverage that we have built over the several years. Additionally, a part of Usio Ion was a cross-selling initiative, and Los Angeles County is an excellent example. They came as a disbursement client. We were doing card programs for them, and then we were able to essentially cross-sell all of our products. They are a great example of a customer that is using all of our programs, printing, disbursements, and payment processing. Obviously, we are having a great year. You can see that through our processing, but there are a few catalysts that are really right in front of us that we are super excited about. One is Usio Ion.
We purchased this software in November of 2025, and Usio Ion is essentially a business banking platform that sits on top of all of our products and takes the model of Square and Stripe and Shopify, the proven model that a payment processor can settle to a wallet within their own platform instead of settling to their customers' external bank accounts. If you are a merchant processing on Shopify and say you are a bookseller, your funds are being settled into your Shopify wallet, and then you can go into your Shopify account and either withdraw it to your bank, or you can use other Shopify services, which is exactly what Usio Ion is.
At any given time, we have between $80 million and $100 million of funds in our ecosystem, and we believe that with Ion, there is access to another $300 million in deposits.
Why that is meaningful to us is when those funds are in our ecosystem, we are earning interest on that. Usio Ion, while it is a great added benefit to our customer base, it is a single platform for all of our products. It is a game changer for Usio as we increase our float, that revenue goes straight to the bottom line. Just a couple of weeks ago, we announced a very exciting partnership with Harris Computer.
Harris Computer is a massive organization under Constellation Software, which is a $60 billion company out of Canada. Harris Computer provides operating platforms for utilities and governmental entities. We partnered with Harris to be their preferred payments provider. Essentially, Usio will, in the back end, plug into Harris's operating software and will begin to process payments and print and mail delivery for their utility client base.
While we are super excited about this, it's essentially a meaningful game changer for Usio. We know it's going to be a little bit of a slow implementation. A lot of governments and utilities are slow movers. This really is exciting for us as a single utility in San Antonio, for example, processes over $1 billion in payments a year. When we're talking about the scale, it blows what Usio in its current state out of the water. We're really excited about this. Back to where we are today. Here's our revenue by business line. For the first 6 months of the year, we reported just over $49 million in revenue. That's 17% growth year-over-year.
You can see in each of the business lines, we're seeing positive growth aside from card issuing, but I did mention that we have some really exciting programs launching with card issuing. Here's a quick financial highlight. Like I've mentioned, revenue's up 17%, gross profit is up 9%, our adjusted EBITDA is up 65%, and our net income from a loss of $600,000, a $100 million swing to, for the first half of the year, $400,000 in positive net income. We're really excited about the operating leverage that we're seeing.
You saw the graphs of the increases in our processing volumes as we're making those new sales and our existing customer base is growing. We're not having to add incremental expenses, hire new people. We have the technology, and so you can see that those results are showing. A quick glance at our balance sheet.
As of June 30th, we had $6.5 million in cash. Essentially no debt. It's an equipment loan for just a bank loan for our Output Solutions printer. Looking forward, our guidance for the remainder of the year, which we raised after releasing Q2, is 14%-16% revenue growth. We started the year with a 10%-12% revenue growth. As you can see, first half was at 17%, so we remain conservative in our guidance, and we'll continue to evaluate that as the remainder of the year progresses. We're really, like I mentioned, excited about the operating leverage that we've achieved, our margins expanding, especially as we continue to launch ION, and just the discipline we have in our overhead expenses. We're really excited about where we are today and especially what the next 18 months look like for Usio.
From there, I think we're going to open it up to some questions. We have about 5 minutes.
Congrats on the growth of your ACH business. What is the underlying growth driver of that, and what is the size of the addressable market that you can see in the next
Well, the addressable market for payments is some stupid number. It is just huge. ACH, we have critical volumes already, right? If we were a bank, we would be the 50th largest bank. There is still tons of ACH out there, and use of ACH is going to continue to grow. It is the most economical way to send money.
We are focused on real-time payments, and we are seeing some shifts created by real-time payments from pinless debit, which pinless debit is how Venmo works. But ACH has still got a lot of room. What is making our growth is we have made quite a bit of sales, and we are doing a lot in the student market, these distributions, and a lot of that is going out on ACH. And we are really excited about that market, especially going on cards. If it goes on cards, the revenue is 2% of whatever goes on the card.
A great industry for us to have inroads into. Is there anybody else? Yes, Barry?
Maybe you can talk a little bit about the operating leverage. I look at you more as a SaaS company. As you grow, you talk about the growth opportunities. You do not really need scale because everything is automated electronic systems. Could you talk about that? And then I think, correct me if I am wrong, your fastest-growing division is also your most profitable, or not division, this is fine, ACH, your most profitable, right?
Yeah, ACH is our highest margin business, and it's growing crazy. Are you doing that? Yeah, I was going. Oh, okay. We like to see the continued growth in ACH. Again, we have every payment channel, so it doesn't matter how the market shifts, which consumer behaviors change over time. But if we see a shift from ACH to real-time payments, we're going to be there. We experienced those dramatic shifts during COVID when consumers went a lot to tap and pay, and they didn't want to touch a terminal. But we were already delivering virtual cards, and we were already ready for tap and pay. So while we saw declines on certain parts of our business, we captured it through new channels. As for operating leverage, our tech stack is built. We just continue to evolve it.
We don't really need to add SG&A to continue to add all this volume that we're doing. So we might add some customer service positions because we have more accounts to support, but that's not a huge SG&A hit. Then we might have to buy some more servers in the cloud, so we'll make Microsoft happy. Anybody else? Yes.
Given how fragmented the competitive landscape is, what gives you the right to win?
The landscape's fragmented. Yeah. The beauty of fragmentation is that, like what I just said, we're already in every channel. We don't have to worry about the niche players winning in a certain niche because we have every payment channel. If you mean that there's a lot of competition, to find a company like ours, you have to go to the biggest payment companies, FIS and Fiserv, that have everything that we have. So we're a very nimble company and have proven that we can do a lot with a little. That's why the who's who of clients work with Usio. It's because of our tech stack and our commitment to customer service. Yes.
I've got a question. Obviously, there's a big trajectory increase for the number of transactions, the amount of top-line revenue that's coming through. What are you guys doing to increase profitability per client, per transaction? Is there anything to really just increase that margin profitability?
If you look at our numbers, you can see the operating leverage has already hit the bottom line better than it's hit gross margins, right? The next big catalyst to increase our margins is Usio Ion and settling all those funds to ourselves. Having today, every day, $80 million-$100 million that we're earning interest off, that's not our money, and all of a sudden, that goes to $500 million. Don't want to go the wrong way. That's a new payment stream for us, income stream, and it's 100% margin. That will increase our margins quite a bit. If there's no more questions, Kim, our head of marketing, is going to pick whoever gets this $500. The $500 will come on a wearable, and we use these wearables for a lot of things.
If you go to South by Southwest in Texas, your wearable is your ticket. Plus, you can make your payments in a private scenario, a private network. We are getting to the point where we're going to do away with the wearables and make your retina your wallet for these events. When you register to get your ticket for South by Southwest, you'll scan your retina. When you go there, you just walk through the gates. You don't have to give up your eyes. It's just in the sky. It knows you're there.
Then you can pay for your beer with your retinas, too. All right. It's 500 bucks. I need to find a way for me to keep that. Sorry. All right. The last four numbers are 2809. Who won?
Yay.
Congratulations. There you go.
Thank you so much, guys. This is all the time we have for today.