All right. Hi, I'm Louis Hoch, and I'm the CEO of Usio. Usio is traded on the Nasdaq under symbol USIO. We're a fintech payment processor, and our tech stack allows for every payment channel. It's very important. It's a distinction between us and a lot of people in the payments industry. We believe it's very important for consumers to be able to choose how they want to pay or get paid, and same for the merchants, how they want to accept payments from the consumers or other businesses. We support all payment channels, including legacy payment channels like checks. We actually printed eight million checks last year. U.S. government printed 24 million, we printed eight million. We have the latest and greatest in payment channels, including FedNow, The Clearing House. The Clearing House is what Zelle is run on.
We do quite a bit of pinless debit, which is how Venmo works. It's debit card to debit card without a PIN. We have four operating divisions of our company, with the first being payment facilitation, has very unique go-to-market strategy. ACH is direct debits and credits off your checking or savings account. We'll talk more detail about each one of these. Card issuing, we're a card issuer, program manager, processor. We issue cards for many different use cases. Then we have our division Output Solutions that does traditional print and mail, but it's only first-class mail. It's statements, invoicing, primarily for financial institutions and utilities and cities and counties, taxing authorities. Output Solutions also does a lot of electronic document delivery. When you click on your statement at a bank or utility, it's likely us.
We have the who's who of clients, including companies like Verizon, T-Mobile, top four drug companies in the United States we provide clinical trial cards for. We have 200 cities in the United States that we do processing for, including seven out of the top 10 in the United States are our customers. City of New York and L.A. County, big ones, Miami. PayFac is card processing, is credit and debit card processing, and we have unique technology that is very valuable to independent software vendors. On a daily basis, we're not spending our time trying to sell to individual merchants. We sell to integrated software vendors. We make one sell and we get access to thousands of downstream merchants.
One of our customers or ISVs that we like to talk about is a company called PracticeSuite, and PracticeSuite writes software that controls all the functions of a doctor's office, including all the medical aspects, employee management, and then, of course, it has sections, collections and billing. They've chosen to partner with us and integrate and embed our payments, so that they can control the workflow, and branding that best fits their customer base. In PayFac, we share revenue with the software companies, so we become a meaningful source of new income for these software companies, and the integration and the revenue sharing makes these relationships very, very sticky and hard to uncouple. You'll see a lot of these slides when we talk through our divisions. PayFac is doing really well, and a lot of our operating metrics are up.
ACH processing, again, this is credit and debit off your checking or savings account. We have tremendous amount of volume in ACH. So much so that if we were a bank, we would be the 50th largest bank in the United States based upon our volume that we process through the Federal Reserve in a given year. We pre-announced for Q3 what our metrics were for ACH, and you will see that on the next slide. ACH, our highest margin business, 70% gross margin, continues to grow. Every quarter has been the new record high for us for the last six quarters. This chart you are seeing here is six months worth of data, and you can see that it is growing 34% year-over-year. The metrics that we pre-announced this last quarter, Q3, which we will be announcing the financials November 10th or 11th, I do not know. 10th.
You will see ACH in there has grown 39% year-over-year. The dollars associated with those transactions grew 26%. In return checks, those are NSFs, account closed, they are higher revenue transactions for us. Those grew at 44%. We are really excited about the growth that we are continuing to see all year, and it has been a very exciting year for us. I am going to let Michael White, our Chief Accounting Officer, take over from here.
I am Michael White, like Louis said, our Chief Accounting Officer. I am going to talk about the remaining business lines and our financials also. Card Issuing, this is where we issue prepaid Mastercards. We partner with Mastercard. We primarily issue cards for government and non-profit entities. You can see here over the past several quarters, we have had some tough comps, but we are really positioning ourselves to rebound. For the first half of the year, transactions, purchases on our cards were up 9% over 2025. In previous 2024 going to 2025, we lost a customer through a reseller, it was not a direct customer to us, but it was a customer of one of our customers. But as you can see, our volume is improving, and we are really excited about this business line. In the next slide, you will see some of our exciting opportunities that we have.
Here we are earning revenue on interchange wherever a card is swiped, whether that is at an ATM or a store. We have some cool technology that is allowing us to bring this product to things like state school vouchers in the United States. We process for 37 states. It is essentially school choice programs where parents can choose which school their kids go to. It is not determined just by where they live. We are currently processing through a partner, 37 states. In the past 12 months, that was $1.3 billion that we dispersed for states in the United States. Five of those were active card programs and the rest were ACH. We are excited obviously about any of these programs, but especially the card programs because when the funds are going onto cards, we are earning higher revenue through interchange. The $1.3 billion over 37 states, we are super excited about. That is recurring.
As these programs continue to grow, we're excited as these larger state opportunities continue. There's one additional state not included in what we've processed in the last 12 months. That alone is $1 billion. Just to put into scale how big these deals are, in 2025 alone, Usio processed just over $8 billion in total payments across all of our products. As we continue to onboard some of these larger deals, it's substantial growth. Additionally, in the education space, we're partnering with universities to do their Title IV refunds, which in the U.S. is essentially refunds back to the students through federal funds, could be a federal loan that covers both housing and tuition, and some of those funds need to go back to the student. The way we're able to win these deals is through a technology that we call Consumer Choice.
That allows the end user, whether it's a student or it's a citizen receiving funds from a state government, it allows the end consumer to choose how they receive their funds. So essentially, they get a notification that funds are available to them. Then, as Louis mentioned, we have every payment option, so they can choose to get a virtual card to their digital wallet, a physical card mailed to them, a check mailed to them, an ACH to their bank account, a real-time payment. So essentially, it reduces any barriers that, say, a state or a university would have to disperse funds to who they need to get it to. We currently have one university live with 23 in the pipeline. Again, this is also through a partner that we're working with, but we're excited to see both of these opportunities grow.
Next, we'll talk about Output Solutions. Output Solutions is our print and mail division. We acquired this business in 2020, and it's really been a great complimentary services to the payment services that we already provide. As Louis mentioned, we primarily sell this to financial institutions, so we're printing bank statements, recurring statements, also to industries like utilities where recurring monthly invoices. With that, we're able to sell payments as well. So on that invoice, there's typically a QR code that takes you directly to the payment page, which we're processing. Another use case here is for cities and counties. Toll roads also we process for some of the largest toll roads in the U.S. Los Angeles County is another great example. We're sending statements for their tickets and fees and fines, and then also processing those payments.
You can see year-over-year great growth here, 36% growth in the first half for printed and mailed, and 45% in electronic document delivery. In early 2025, we launched what started as an internal initiative called Usio One, and that was really to bring these four business lines all together. Historically, whether a lot of these businesses were acquired, and so they ran separately. So we took the initiative to bring everything under one roof, one consolidated sales organization, one customer support organization, one operating platform, and then also took the initiative to cross-sell all of our products. Really the goal was to increase revenue through cross-selling but also take advantage of the operating leverage that we knew we had. Los Angeles County is a great success story of the Usio One initiative. They actually came to us as a disbursement customer.
They wanted to disburse funds to their citizens. Through that relationship, we were able to sell our Output Solutions and payment processing. This is just one of many successes that we've had through Usio One, and as we get further along and we talk about the financials, you also see the operating leverage that has been attained through this initiative. We're really excited about two catalysts that in the next year it really is a game-changer for Usio, one being Usio Ion. Usio Ion is a business banking platform. We acquired the software in November of last year, are currently have four beta customers on the program, but essentially is a single platform that sits on top of all of Usio products. We're really taking the Square and Stripe model in how we settle funds.
Historically, if you're a merchant processing with Usio, we're settling your funds to your outside bank account. With Ion, all funds will be settled into your Usio wallet. From there, you'll have instant access to all of our products. There's also some operating programs in there like expense report management, accounts payable management, and we expect really some of our customers to use Usio Ion as their operating account. More importantly, for Usio, this is a game-changer really in terms of interest income. At any given time right now, we have between $80 million and $100 million in our bank accounts that belongs to our customers that's in some stage of the settlement process. We do earn interest on that, and it's become a core piece of our business model.
Like I said, any time right now, $80 million- $100 million, we believe there's additional $300 million- $500 million of deposits available to us with a full launch of Ion. That flow, that interest revenue goes straight to the bottom line, essentially. It is a huge driver to improving and increasing our profitability. The second catalyst that we're super excited about, we actually launched earlier this month, is our partnership with Harris Computer. Harris is a subsidiary of Constellation Software, a Canadian company, and they primarily service utilities and government agencies. Harris Computer has selected Usio as a preferred payments provider, and essentially opens up opportunity for Usio to process for up to 70,000 utility customers that Harris currently services. Why this is such a massive opportunity for Usio is just an example. We're based in San Antonio, Texas.
The utility in San Antonio is run by the software they use is Harris. They process over $1 billion in payments a year. As I mentioned earlier, that's just one of these 70,000. Last year, Usio processed $8 billion in total. It's a huge needle mover in the scale of what Usio will process. This relationship, obviously payments, but also print and mail for statements. We're super excited about this. Utilities can be slow in their adaptation of change and new software and that kind of thing. So we're aware that this type of implementation can take some time, but we're really excited about this. Here's a little slide on our revenue by business line. For the first half of 2026, we reported $49.1 million in revenue. That was 17% growth over last year.
You can see by business line, we reported growth in all business lines except for card issuing. Like I had mentioned, there are some programs that we are really excited about for that business line as well. Here is a quick highlight slide on our financials. Like I mentioned, 17% growth in revenue over the first half. Adjusted EBITDA, we saw a 65% swing. Positive net income for the first half of the year, a $1 million swing there. Then reporting EPS, a $0.03 improvement over the first half of last year. Our balance sheet is super clean. We have, as of June, $6.4 million in cash. You can see here it is a snapshot in time, but as of June 30th, we had $93.7 million in settlement-related funds that we earn interest on. Small amount of it is a bank loan for equipment at Output Solutions.
We are really excited for the remainder of the year, but also just the next, say, 18- 24 months. We started the year with a 10%-12% revenue growth guidance. After Q2, we raised to 14%-16%. We continue to be conservative in that guidance. As you saw for the first half of the year, we reported 17% growth. We are really focused on continued improving our profits, improving our Adjusted EBITDA, and through that, we are able to do that through our improved operating leverage, the Usio One initiative. As we continue to add these larger deals, these larger clients, whether it is a state or utilities through Harris Computer, we have built the product, we have the technology, and we are able to continue to grow without having to add any substantial SG&A. Like I said, we are excited about the rest of the year.
We are positioned to execute and I think at this point, we are going to open up to questions for the last five minutes. Yes, sir.
Maybe you could talk a little about, sorry, higher ed, you put up and you have one deployed and 23 in the pipeline. Maybe you could talk a little bit about, since that is higher ed, do they have to wait until the summer to bring on more live customers for you? Or how would you expect that pipeline to move for you into deployment over the next, let us call it, 6 to 12 months?
Yeah. This is another industry that's unfortunately moving a little slower than we would like. We're finding with these government and larger customers that these things do take time. We don't really have an actual timeline exactly on when the higher education programs are going to go live. But as far as timing, we're not really going to be dispersing funds in the summer, but it's really on a semester basis how these funds are dispersed. The federal loans are paying for each semester and housing for that semester, and so there's disbursements that occur essentially at every semester.
We talked about these 23 being in the pipeline, but it's actually one of our resellers that are already processing for those other 23, and they're on a different processing platform today. Our resellers already won that business. They're just porting it over to Usio, and we've done our first port and obviously they're pleased, and they're going to start moving the rest. It's not like we have. Those sales have already been made. It's one of those things.
Yeah. I see.
Yes.
Do you disclose your retention rate of the customer that selected PayFac or your overall contracts length?
Yeah. Our PayFac contracts are three to five years. More importantly, they embed our tech into their software. It is not like just a gateway where you get to the point where you are ready to check out, and it is easy to disconnect a gateway. We are totally embedded. A lot of times we are sending out texts, we are sending out emails, whatever feature they want to turn on. We are embedded, but we have become a big income stream for them. PracticeSuite, I think that they got $80,000 from us last month, which was huge money for them. Those relationships are really hard to uncouple. We typically do not lose customers unless it is something to do with M&A activity or that company goes out of business. The big one we lost on prepaid cards that Michael White talked about was Six Flags.
One of our resellers had the contract to put in reverse ATMs, where the kids go into Six Flags, parents like me gave them cash, and they get there and they are like, The cash is no good. So they put their cash into an ATM, and out comes one of Usio's prepaid cards. We had that business that whole year. It was going really, really well. In fact, we had not even implemented all the Six Flags yet, and then Six Flags got bought, and they went with a different vendor at that point. So our reseller lost that business, so we lost that distribution channel. Interesting thing is that reseller is telling us that they think we are going to get it back now because the new vendor has dropped the ball.
Can you maybe start a bit about how you are positioned inside the Harris ecosystem? Just what kind of competition you have amongst other partners in the Harris ecosystem?
Yeah. Well, tell me if you cannot hear me. So Harris, if you know anything about Harris and Constellation, they have numerous entities. Their business model is really acquisition of companies, and they let those companies operate independently. They came to us because they had a frustration with their main existing partner. Then that partner got bought recently, and so they are really concerned. But they have been talking to us for three years. So we have inroads into the utility portion of their business and the government portion of their business right now. So each one of those individual business unit executives have met with us, and they are starting to express interest. The utility market, government market moves very slow.
We are excited about Harris being a catalyst for next year, and it does not take too many implementations of Harris-sized customers to move the needle with Usio. It is a big catalyst for Usio next year. Then you lay that on top of Ion, which we are potentially earning interest income off another $400 million-$500 million daily averages, which drops right to the bottom line. We are excited about those catalysts. Then that is on top of this great growth that we are already experiencing this year.
Quickly, your ACH margins or gross margins, you showed at 70% or something.
Yes.
Some of the 20% margins as a consolidated entity.
Yes.
Where do you see this business in terms of the [inaudible].
If you're modeling today, you need to be in around 24%, 23. Modeling after Ion, some of the models that we've looked at are great. It's expanding margins everywhere. It really depends on what division is winning that quarter.
Right.
Right? In order of margins, ACH is the highest, card issuing is second highest, Output Solutions is third highest, and PayFac being the lowest because we have to book the interchange because we're responsible for paying the card issuer. Yeah. Thanks.
Okay, great. Thank you.