diff --git a/iterableapi/src/main/java/com/iterable/iterableapi/IterablePushNotificationUtil.java b/iterableapi/src/main/java/com/iterable/iterableapi/IterablePushNotificationUtil.java
index 0aa1e5d17..138d77450 100644
--- a/iterableapi/src/main/java/com/iterable/iterableapi/IterablePushNotificationUtil.java
+++ b/iterableapi/src/main/java/com/iterable/iterableapi/IterablePushNotificationUtil.java
@@ -18,7 +18,12 @@ static boolean processPendingAction(Context context) {
         boolean handled = false;
         if (pendingAction != null) {
             handled = executeAction(context, pendingAction);
-            pendingAction = null;
+            // Only clear pending action if it was handled.
+            // This allows the action to be processed later when SDK is fully initialized
+            // (e.g., when customActionHandler becomes available after initialize() is called).
+            if (handled) {
+                pendingAction = null;
+            }
         }
         return handled;
     }
@@ -38,6 +43,13 @@ static void handlePushAction(Context context, Intent intent) {
             IterableLogger.e(TAG, "handlePushAction: extras == null, can't handle push action");
             return;
         }
+
+        // Store the application context if not already set, so custom actions can be
+        // processed even when the SDK hasn't been fully initialized (e.g., openApp=false)
+        if (IterableApi.sharedInstance._applicationContext == null && context != null) {
+            IterableApi.sharedInstance._applicationContext = context.getApplicationContext();
+        }
+
         IterableNotificationData notificationData = new IterableNotificationData(intent.getExtras());
         String actionIdentifier = intent.getStringExtra(IterableConstants.ITERABLE_DATA_ACTION_IDENTIFIER);
         IterableAction action = null;
diff --git a/iterableapi/src/test/java/com/iterable/iterableapi/IterablePushActionReceiverTest.java b/iterableapi/src/test/java/com/iterable/iterableapi/IterablePushActionReceiverTest.java
index 82a6f20ed..b58a0c97f 100644
--- a/iterableapi/src/test/java/com/iterable/iterableapi/IterablePushActionReceiverTest.java
+++ b/iterableapi/src/test/java/com/iterable/iterableapi/IterablePushActionReceiverTest.java
@@ -159,5 +159,59 @@ public void testLegacyDeepLinkPayload() throws Exception {
         assertEquals("https://example.com", capturedAction.getValue().getData());
     }
 
+    @Test
+    public void testBackgroundCustomActionWithNonInitializedSDK() throws Exception {
+        // Reset to simulate SDK not being initialized
+        IterableTestUtils.resetIterableApi();
+
+        // Verify context is initially null
+        assertNull(IterableApi.sharedInstance._applicationContext);
+
+        IterablePushActionReceiver iterablePushActionReceiver = new IterablePushActionReceiver();
+        Intent intent = new Intent(IterableConstants.ACTION_PUSH_ACTION);
+        intent.putExtra(IterableConstants.ITERABLE_DATA_ACTION_IDENTIFIER, "remindMeButton");
+        intent.putExtra(IterableConstants.ITERABLE_DATA_KEY, IterableTestUtils.getResourceString("push_payload_background_custom_action.json"));
+
+        // Receive push action when SDK is not initialized
+        iterablePushActionReceiver.onReceive(ApplicationProvider.getApplicationContext(), intent);
+
+        // Verify that context was stored even without SDK initialization
+        assertNotNull(IterableApi.sharedInstance._applicationContext);
+
+        // Verify that the main app activity was NOT launched (openApp=false)
+        Application application = ApplicationProvider.getApplicationContext();
+        Intent activityIntent = shadowOf(application).peekNextStartedActivity();
+        assertNull(activityIntent);
+    }
+
+    @Test
+    public void testBackgroundCustomActionProcessedAfterSDKInit() throws Exception {
+        // Reset to simulate SDK not being initialized
+        IterableTestUtils.resetIterableApi();
+
+        IterablePushActionReceiver iterablePushActionReceiver = new IterablePushActionReceiver();
+        Intent intent = new Intent(IterableConstants.ACTION_PUSH_ACTION);
+        intent.putExtra(IterableConstants.ITERABLE_DATA_ACTION_IDENTIFIER, "remindMeButton");
+        intent.putExtra(IterableConstants.ITERABLE_DATA_KEY, IterableTestUtils.getResourceString("push_payload_background_custom_action.json"));
+
+        // Receive push action when SDK is not initialized (action won't be handled)
+        iterablePushActionReceiver.onReceive(ApplicationProvider.getApplicationContext(), intent);
+
+        // Now initialize SDK with a custom action handler
+        stubAnyRequestReturningStatusCode(server, 200, "{}");
+        final boolean[] handlerCalled = {false};
+        IterableTestUtils.createIterableApiNew(builder ->
+            builder.setCustomActionHandler((action, actionContext) -> {
+                handlerCalled[0] = true;
+                assertEquals("snoozeReminder", action.getType());
+                return true;
+            })
+        );
+
+        // Verify that the custom action handler was called during initialization
+        // (processPendingAction is called in initialize())
+        assertEquals(true, handlerCalled[0]);
+    }
+
 
 }
diff --git a/iterableapi/src/test/resources/push_payload_background_custom_action.json b/iterableapi/src/test/resources/push_payload_background_custom_action.json
new file mode 100644
index 000000000..6cdfeb62f
--- /dev/null
+++ b/iterableapi/src/test/resources/push_payload_background_custom_action.json
@@ -0,0 +1,20 @@
+{
+  "campaignId": 5678,
+  "templateId": 8765,
+  "messageId": "background123456",
+  "isGhostPush": false,
+  "actionButtons": [
+    {
+      "identifier": "remindMeButton",
+      "title": "Remind me in 15 minutes",
+      "openApp": false,
+      "action": {
+        "type": "snoozeReminder",
+        "data": "{\"delay\":15}"
+      }
+    }
+  ],
+  "defaultAction": {
+    "type": null
+  }
+}