What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 191 added, 96 removed, 476 unchanged (38% of the section changed)

4 unchanged sentences

(unaudited and in thousands, except share and per share amounts)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Current assets

53 unchanged sentences

5,000,000 shares authorized;

no shares issued at March 31, 2021, and December 31, 2020

no shares issued at June 30, 2021, and December 31, 2020

Common stock;

1 unchanged sentence

280,000,000 shares authorized;

140,525,055 shares issued at March 31, 2021, and December 31, 2020

140,525,055 shares issued at June 30, 2021, and December 31, 2020

Additional paid-in capital 676,399 682,431

Retained earnings 1,008,046 1,003,490

Treasury stock, at cost, 22,390,481 and 23,412,870 shares at March 31, 2021, and December 31, 2020, respectively

Treasury stock, at cost, 23,040,631 and 23,412,870 shares at June 30, 2021, and December 31, 2020, respectively

( 412,492 ) ( 387,581 )

7 unchanged sentences

(unaudited and in thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Software as a service and platform as a service

18 unchanged sentences

286,245 270,772 567,741 573,540

Operating income (loss) 3,690 ( 11,283 )

Operating income 15,424 29,138 19,114 17,855

Other income (expense)

3 unchanged sentences

2,865 2,954 5,719 5,854

1,434 2,041 52 ( 7,717 )

Total other income (expense) ( 6,961 ) ( 9,147 ) ( 16,964 ) ( 33,176 )

Loss before income taxes ( 6,313 ) ( 35,312 )

Income tax benefit ( 4,368 ) ( 10,885 )

Net loss $ ( 1,945 ) $ ( 24,427 )

Loss per common share

Income (loss) before income taxes 8,463 19,991 2,150 ( 15,321 )

Income tax expense (benefit) 1,962 5,916 ( 2,406 ) ( 4,969 )

Net income (loss) $ 6,501 $ 14,075 $ 4,556 $ ( 10,352 )

Income (loss) per common share

$ 0.06 $ 0.12 $ 0.04 $ ( 0.09 )

7 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited and in thousands)

Three Months Ended March 31,

Net loss $ ( 1,945 ) $ ( 24,427 )

Other comprehensive loss:

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net income (loss) $ 6,501 $ 14,075 $ 4,556 $ ( 10,352 )

Other comprehensive income (loss):

Foreign currency translation adjustments

1,466 ( 582 ) ( 1,650 ) ( 6,751 )

Total other comprehensive loss ( 3,116 ) ( 6,169 )

Comprehensive loss

Total other comprehensive income (loss) 1,466 ( 582 ) ( 1,650 ) ( 6,751 )

Comprehensive income (loss)

$ 7,967 $ 13,493 $ 2,906 $ ( 17,103 )

4 unchanged sentences

(unaudited and in thousands, except share amounts)

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Common Stock Additional

Paid-in Capital Retained Earnings Treasury Stock Accumulated Other

Comprehensive Loss Total

Balance as of March 31, 2021 $ 702 $ 670,018 $ 1,001,545 $ ( 378,987 ) $ ( 95,561 ) $ 1,197,717

Net income — — 6,501 — — 6,501

Other comprehensive income — — — — 1,466 1,466

Stock-based compensation

— 7,720 — — — 7,720

Shares issued and forfeited, net, under stock plans

— ( 1,339 ) — 6,496 — 5,157

Repurchase of 1,000,000 shares of common stock

— — — ( 39,411 ) — ( 39,411 )

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 590 ) — ( 590 )

Balance as of June 30, 2021 $ 702 $ 676,399 $ 1,008,046 $ ( 412,492 ) $ ( 94,095 ) $ 1,178,560

Three Months Ended June 30, 2020

Common Stock Additional

Paid-in Capital Retained Earnings Treasury Stock Accumulated Other

Comprehensive Loss Total

Balance as of March 31, 2020 $ 702 $ 656,723 $ 906,403 $ ( 398,278 ) $ ( 97,752 ) $ 1,067,798

Net income — — 14,075 — — 14,075

Other comprehensive loss

— — — — ( 582 ) ( 582 )

Stock-based compensation

— 7,932 — — — 7,932

Shares issued and forfeited, net, under stock plans

— 2,899 — ( 1,234 ) — 1,665

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 151 ) — ( 151 )

Balance as of June 30, 2020 $ 702 $ 667,554 $ 920,478 $ ( 399,663 ) $ ( 98,334 ) $ 1,090,737

The accompanying notes are an integral part of the condensed consolidated financial statements.

ACI WORLDWIDE, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited and in thousands, except share amounts)

Six Months Ended June 30, 2021

Common Stock Additional

Paid-in Capital

2 unchanged sentences

Balance as of December 31, 2020 $ 702 $ 682,431 $ 1,003,490 $ ( 387,581 ) $ ( 92,445 ) $ 1,206,597

Net loss — — ( 1,945 ) — — ( 1,945 )

Net income — — 4,556 — — 4,556

Other comprehensive loss — — — — ( 1,650 ) ( 1,650 )

3 unchanged sentences

— ( 20,455 ) — 29,296 — 8,841

Repurchase of 1,000,000 shares of common stock

— — — ( 39,411 ) — ( 39,411 )

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 14,796 ) — ( 14,796 )

Balance as of March 31, 2021 $ 702 $ 670,018 $ 1,001,545 $ ( 378,987 ) $ ( 95,561 ) $ 1,197,717

Three Months Ended March 31, 2020

Balance as of June 30, 2021 $ 702 $ 676,399 $ 1,008,046 $ ( 412,492 ) $ ( 94,095 ) $ 1,178,560

Six Months Ended June 30, 2020

Paid-in Capital

15 unchanged sentences

— — — ( 11,124 ) — ( 11,124 )

Balance as of March 31, 2020 $ 702 $ 656,723 $ 906,403 $ ( 398,278 ) $ ( 97,752 ) $ 1,067,798

Balance as of June 30, 2020 $ 702 $ 667,554 $ 920,478 $ ( 399,663 ) $ ( 98,334 ) $ 1,090,737

The accompanying notes are an integral part of the condensed consolidated financial statements.

3 unchanged sentences

(unaudited and in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net loss $ ( 1,945 ) $ ( 24,427 )

Adjustments to reconcile net loss to net cash flows from operating activities:

Net income (loss) $ 4,556 $ ( 10,352 )

Adjustments to reconcile net income (loss) to net cash flows from operating activities:

10,708 11,752

56,278 57,762

Amortization of operating lease right-of-use assets

3 unchanged sentences

Stock-based compensation expense

14,423 14,882

Changes in operating assets and liabilities:

21 unchanged sentences

Repurchases of common stock

( 39,411 ) ( 28,881 )

Proceeds from revolving credit facility

26 unchanged sentences

All intercompany balances and transactions have been eliminated.

The condensed consolidated financial statements as of March 31, 2021, and for the three months ended March 31, 2021 and 2020, are unaudited and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation, in all material respects, of the financial position and operating results for the interim periods.

The condensed consolidated financial statements as of June 30, 2021, and for the three and six months ended June 30, 2021 and 2020, are unaudited and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation, in all material respects, of the financial position and operating results for the interim periods.

The condensed consolidated balance sheet as of December 31, 2020, is derived from the audited financial statements.

The condensed consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2020, filed on February 25, 2021.

Results for the three months ended March 31, 2021, are not necessarily indicative of results that may be attained in the future.

Results for the three and six months ended June 30, 2021, are not necessarily indicative of results that may be attained in the future.

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S.

2 unchanged sentences

Risks and Uncertainties

The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic.

The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict, as the response to the pandemic and available information continues to be evolving.

The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic that began in early 2020.

The COVID-19 pandemic, and the measures imposed by the governments of various countries, states, cities, and other geographic regions to prevent its spread, have negatively impacted global economic and market conditions, including levels of consumer and business spending.

The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict, as vaccination rates vary by geography, new variants spread, and the response to the pandemic and available information continues to be evolving.

The Company has experienced changes in volumes for certain Merchant and Biller customers and has received limited requests for extended payment terms under existing contracts.

Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it could cause a local and/or global economic recession.

Such economic disruption could have a material adverse effect on our business as our customers curtail and reduce capital and overall spending.

Policymakers around the globe have responded with fiscal policy actions to support the economy as a whole.

The magnitude and overall effectiveness of these actions remains uncertain.

Continuing economic disruptions could have a material adverse effect on our business as our customers curtail and reduce capital and overall spending.

The severity of the impact of the COVID-19 pandemic on the Company's business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company's customers, all of which are uncertain and cannot be predicted.

3 unchanged sentences

The components of other current liabilities are included in the following table (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Vendor financed licenses $ 10,216 $ 12,901

4 unchanged sentences

Total other current liabilities $ 65,794 $ 81,612

The Company’s operating leases are included in operating lease right-of-use assets, other current liabilities, and operating lease liabilities.

During the six months ended June 30, 2021, the new corporate headquarters operating lease commenced.

In recognition of this lease, an operating lease right of use asset of $ 12.9 million and an operating lease liability of $ 15.2 million was incurred.

These amounts are included within operating lease right-of-use assets and other current liabilities and operating lease liabilities in the condensed consolidated balance sheet as of June 30, 2021.

Settlement Assets and Liabilities

13 unchanged sentences

The collection of interest on these settlement accounts is considered in the Company’s determination of its fee structure for clients and represents a portion of the payment for services performed by the Company.

The amount of settlement funds as of March 31, 2021, and December 31, 2020, was $ 174.0 million and $ 246.8 million, respectively.

The amount of settlement funds as of June 30, 2021, and December 31, 2020, was $ 208.3 million and $ 246.8 million, respectively.

The fair value of the Company’s Credit Agreement approximates the carrying value due to the floating interest rate (Level 2 of the fair value hierarchy).

The Company measures the fair value of its Senior Notes based on Level 2 inputs, which include quoted market prices and interest rate spreads of similar securities.

The fair value of the Company’s 5.750 % Senior Notes due 2026 (“2026 Notes”) was $ 424.0 million and $ 424.5 million as of March 31, 2021, and December 31, 2020, respectively.

The fair value of the Company’s 5.750 % Senior Notes due 2026 (“2026 Notes”) was $ 419.5 million and $ 424.5 million as of June 30, 2021, and December 31, 2020, respectively.

The fair values of cash and cash equivalents approximate the carrying values due to the short period of time to maturity (Level 2 of the fair value hierarchy).

1 unchanged sentence

The Company evaluates goodwill at the reporting unit level and had previously identified ACI On Demand and ACI On Premise, the operating segments at the time, as the reporting units.

As of March 31, 2021, the Company's goodwill balance of $ 1.3 billion was allocated to these two reporting units, with $ 554.3 million allocated to ACI On Demand and $ 725.9 million allocated to ACI On Premise.

As of June 30, 2021, the Company's goodwill balance of $ 1.3 billion was allocated to these two reporting units, with $ 554.3 million allocated to ACI On Demand and $ 725.9 million allocated to ACI On Premise.

Recoverability of goodwill is measured using a discounted cash flow valuation model incorporating discount rates commensurate with the risks involved.

2 unchanged sentences

Given the adverse economic and market conditions caused by the COVID-19 pandemic, the Company considered a variety of qualitative factors to determine if an additional quantitative impairment test was required subsequent to our annual impairment test.

Based on a variety of factors, including the excess of the fair value over the carrying amount in the most recent impairment test, we determined that an additional quantitative impairment test was not required.

on a variety of factors, including the excess of the fair value over the carrying amount in the most recent impairment test, we determined that an additional quantitative impairment test was not required.

As discussed in Note 9, Segment Information , during the first quarter of 2021, the Company made a change in organizational structure to better align with its strategic direction.

5 unchanged sentences

The Company records its share of earnings and losses in the investment on a one-quarter lag basis.

Accordingly, the Company recorded an investment of $ 18.8 million and $ 19.3 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of March 31, 2021, and December 31, 2020, respectively.

Accordingly, the Company recorded an investment of $ 19.4 million and $ 19.3 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of June 30, 2021, and December 31, 2020, respectively.

New Accounting Standards Recently Adopted

10 unchanged sentences

Total receivables, net is comprised of the following (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Billed receivables $ 142,264 $ 179,177

5 unchanged sentences

Total receivables, net $ 479,750 $ 558,651

No customer accounted for more than 10% of the Company’s consolidated receivables balance as of March 31, 2021, or December 31, 2020.

No customer accounted for more than 10% of the Company’s consolidated receivables balance as of June 30, 2021, or December 31, 2020.

Deferred revenue includes amounts due or received from customers for software licenses, maintenance, services, and/or SaaS and PaaS services in advance of recording the related revenue.

4 unchanged sentences

Foreign currency translation 14

Balance, March 31, 2021

Balance, June 30, 2021

Revenue allocated to remaining performance obligations represents contracted revenue that will be recognized in future periods, which is comprised of deferred revenue and amounts that will be invoiced and recognized as revenue in future periods.

2 unchanged sentences

• SaaS and PaaS revenue from variable consideration that will be recognized in accordance with the ‘right to invoice’ practical expedient or meets the allocation objective.

Revenue allocated to remaining performance obligations was $ 802.7 million as of March 31, 2021, of which the Company expects to recognize approximately 51 % over the next 12 months and the remainder thereafter.

During the three months ended March 31, 2021 and 2020, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.

As of March 31, 2021, the Company had $ 40.0 million, $ 707.4 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loan, and Senior Notes, respectively, with up to $ 458.5 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended, and up to $ 1.5 million of unused borrowings under the Letter of Credit agreement.

Revenue allocated to remaining performance obligations was $ 804.2 million as of June 30, 2021, of which the Company expects to recognize approximately 53 % over the next 12 months and the remainder thereafter.

During the three and six months ended June 30, 2021 and 2020, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.

As of June 30, 2021, the Company had $ 25.0 million, $ 697.6 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $ 473.5 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended, and up to $ 1.5 million of unused borrowings under the Letter of Credit agreement.

The amount of unused borrowings actually available varies in accordance with the terms of the agreement.

11 unchanged sentences

Interest is due and payable monthly.

The interest rate in effect for the Credit Facility as of March 31, 2021, was 2.11 %.

The interest rate in effect for the Credit Facility as of June 30, 2021, was 2.10 %.

The Company is also required to pay (a) a commitment fee related to the unutilized commitments under the Revolving Credit Facility, payable quarterly in arrears, (b) letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on LIBOR rate borrowings under the Revolving Credit Facility on an annual basis, payable quarterly in arrears, and (c) customary fronting fees for the issuance of letters of credit fees and agency fees.

9 unchanged sentences

The 2026 Notes will mature on August 15, 2026.

Maturities on debt outstanding as of March 31, 2021, are as follows (in thousands):

Maturities on debt outstanding as of June 30, 2021, are as follows (in thousands):

Fiscal Year Ending December 31,

2 unchanged sentences

Total $ 1,122,635

As of March 31, 2021, and at all times during the period, the Company was in compliance with its financial debt covenants.

As of June 30, 2021, and at all times during the period, the Company was in compliance with its financial debt covenants.

Total debt is comprised of the following (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Term loans $ 697,635 $ 717,110

13 unchanged sentences

Amounts outstanding on the overdraft facility are included in other current liabilities in the condensed consolidated balance sheet.

As of March 31, 2021, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

As of June 30, 2021, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

As of December 31, 2020, there was no amount outstanding on the overdraft facility.

1 unchanged sentence

Upon execution, these arrangements have been treated as a non-cash investing and financing activity for purposes of the condensed consolidated statements of cash flows.

As of March 31, 2021, and December 31, 2020, $ 7.8 million was outstanding on these agreements, of which $ 5.6 million and $ 2.2 million is included in other current liabilities and other noncurrent liabilities, respectively, in the condensed consolidated balance sheet.

As of June 30, 2021, $ 4.6 million was outstanding on these agreements, of which $ 2.4 million and $ 2.2 million are included in other current liabilities and other noncurrent liabilities, respectively, in the condensed consolidated balance sheet.

As of December 31, 2020, $ 7.8 million was outstanding on these agreements, of which $ 5.6 million and $ 2.2 million are included in other current liabilities and other noncurrent liabilities, respectively, in the condensed consolidated balance sheet.

Software and Other Intangible Assets

The carrying amount and accumulated amortization of the Company's software assets subject to amortization at each balance sheet date are as follows (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Gross Carrying Amount Accumulated Amortization Net Balance Gross Carrying Amount Accumulated Amortization Net Balance

3 unchanged sentences

Amortization of software for resale is computed using the greater of (a) the ratio of current gross revenues to the total of current and future gross revenues expected to be derived from the software or (b) the straight-line method over the remaining estimated useful life of generally five to ten years .

Software for resale amortization expense recorded during the three months ended March 31, 2021 and 2020, totaled $ 2.0 million and $ 1.9 million, respectively.

Software for resale amortization expense recorded during the three months ended June 30, 2021 and 2020, totaled $ 1.4 million and $ 2.1 million, respectively.

Software for resale amortization expense recorded during the six months ended June 30, 2021 and 2020, totaled $ 3.4 million and $ 4.0 million, respectively.

These software amortization expense amounts are reflected in cost of revenue in the condensed consolidated statements of operations.

Amortization of software for internal use is computed using the straight-line method over an estimated useful life of generally three to eight years .

Software for internal use amortization expense recorded during the three months ended March 31, 2021 and 2020, totaled $ 16.9 million and $ 16.7 million, respectively.

Software for internal use amortization expense recorded during the three months ended June 30, 2021 and 2020, totaled $ 17.4 million and $ 18.5 million, respectively.

Software for internal use amortization expense recorded during the six months ended June 30, 2021 and 2020, totaled $ 34.3 million and $ 35.2 million, respectively.

These software amortization expense amounts are reflected in depreciation and amortization in the condensed consolidated statements of operations.

The carrying amount and accumulated amortization of the Company’s other intangible assets subject to amortization at each balance sheet date are as follows (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Gross Carrying Amount Accumulated Amortization Net Balance Gross Carrying Amount Accumulated Amortization Net Balance

2 unchanged sentences

Total other intangible assets $ 535,759 $ ( 232,608 ) $ 303,151 $ 536,504 $ ( 214,521 ) $ 321,983

Other intangible assets amortization expense recorded during both the three months ended March 31, 2021 and 2020, totaled $ 9.3 million.

Based on capitalized intangible assets as of March 31, 2021, estimated amortization expense amounts in future fiscal years are as follows (in thousands):

Other intangible assets amortization expense recorded during both the three months ended June 30, 2021 and 2020, totaled $ 9.2 million.

Other intangible assets amortization expense recorded during both the six months ended June 30, 2021 and 2020, totaled $ 18.5 million.

Based on capitalized intangible assets as of June 30, 2021, estimated amortization expense amounts in future fiscal years are as follows (in thousands):

Fiscal Year Ending December 31, Software Amortization Other Intangible Assets Amortization

8 unchanged sentences

Employee Stock Purchase Plan

Shares issued under the 2017 Employee Stock Purchase Plan during the three months ended March 31, 2021 and 2020, totaled 27,117 and 31,794 , respectively.

Shares issued under the 2017 Employee Stock Purchase Plan during the six months ended June 30, 2021 and 2020, totaled 55,486 and 72,228 , respectively.

Stock Options

7 unchanged sentences

Exercised ( 369,103 ) 19.09

Outstanding as of March 31, 2021 2,042,226 $ 17.77 3.93 $ 41,422,807

Exercisable as of March 31, 2021 2,042,226 $ 17.77 3.93 $ 41,422,807

The total intrinsic value of stock options exercised during the three months ended March 31, 2021 and 2020, was $ 3.1 million and $ 0.3 million, respectively.

There were no stock options granted during the three months ended March 31, 2021 or 2020.

Outstanding as of June 30, 2021 1,817,408 $ 17.63 3.57 $ 35,460,553

Exercisable as of June 30, 2021 1,817,408 $ 17.63 3.57 $ 35,460,553

The total intrinsic value of stock options exercised during the six months ended June 30, 2021 and 2020, was $ 7.6 million and $ 10.5 million, respectively.

There were no stock options granted during the six months ended June 30, 2021 or 2020.

Long-term Incentive Program Performance Share Awards

During the three months ended March 31, 2021, the Company modified the performance target for the remaining outstanding long-term incentive program performance shares ("LTIP performance shares") in consideration of the impact of the COVID-19 pandemic, resulting in additional stock-based compensation expense of approximately $ 0.4 million.

During the three months ended March 31, 2021, a total of 10,457 LTIP performance shares vested.

During the six months ended June 30, 2021, the Company modified the performance target for the remaining outstanding long-term incentive program performance shares ("LTIP performance shares") in consideration of the impact of the COVID-19 pandemic, resulting in additional stock-based compensation expense of approximately $ 0.4 million.

During the six months ended June 30, 2021, a total of 10,457 LTIP performance shares vested.

The Company withheld 4,527 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

8 unchanged sentences

Change in payout rate 391,294 31.31

Nonvested as of March 31, 2021 1,314,346 $ 40.07

During the three months ended March 31, 2021, a total of 782,588 TSRs awards granted in fiscal 2018 vested and achieved a payout rate of 200 % based on the Company's total shareholder return as compared to a group of peer companies over a three-year performance period.

Nonvested as of June 30, 2021 1,260,232 $ 40.11

During the six months ended June 30, 2021, a total of 782,588 TSRs awards granted in fiscal 2018 vested and achieved a payout rate of 200 % based on the Company's total shareholder return as compared to a group of peer companies over a three-year performance period.

The Company withheld 205,373 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

The fair value of TSRs granted during the three months ended March 31, 2021 and 2020, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, using the following weighted average assumptions:

Three Months Ended March 31,

The fair value of TSRs granted during the six months ended June 30, 2021 and 2020, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, using the following weighted average assumptions:

Six Months Ended June 30,

Expected life (years) 2.8 2.8

10 unchanged sentences

Forfeited ( 149,623 ) 29.38

Nonvested as of March 31, 2021 1,103,575 $ 32.84

During the three months ended March 31, 2021, a total of 406,542 RSUs vested.

Nonvested as of June 30, 2021 1,028,429 $ 33.59

During the six months ended June 30, 2021, a total of 518,350 RSUs vested.

The Company withheld 153,845 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

As of March 31, 2021, there were unrecognized compensation costs of $ 32.4 million and $ 32.3 million related to nonvested RSUs and TSRs, respectively, which the Company expects to recognize over weighted average periods of 2.4 years.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended March 31, 2021 and 2020, of $ 6.7 million and $ 7.0 million, respectively, with corresponding tax benefits of $ 1.0 million and $ 1.4 million, respectively.

As of June 30, 2021, there were unrecognized compensation costs of $ 29.9 million and $ 26.7 million related to nonvested RSUs and TSRs, respectively, which the Company expects to recognize over weighted average periods of 2.1 years and 2.2 years.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended June 30, 2021 and 2020, of $ 7.7 million and $ 7.9 million, respectively, with corresponding tax benefits of $ 1.2 million and $ 1.4 million, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the six months ended June 30, 2021 and 2020, of $ 14.4 million and $ 14.9 million, respectively, with corresponding tax benefits of $ 2.2 million and $ 2.8 million, respectively.

Common Stock and Treasury Stock

1 unchanged sentence

In February 2018, the board approved the repurchase of the Company's common stock of up to $ 200.0 million, in place of the remaining purchase amounts previously authorized.

There were no shares repurchased during the three months ended March 31, 2021.

The Company repurchased 1,000,000 shares for $ 39.4 million during the six months ended June 30, 2021.

Under the program to date, the Company has repurchased 47,357,495 shares for approximately $ 651.7 million.

As of March 31, 2021, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 112.1 million.

Loss Per Share

Basic loss per share is computed in accordance with ASC 260, Earnings Per Share , based on weighted average outstanding common shares.

Diluted loss per share is computed based on basic weighted average outstanding common shares adjusted for the dilutive effect of stock options, RSUs, and certain contingently issuable shares for which performance targets have been achieved.

The following table reconciles the weighted average share amounts used to compute both basic and diluted loss per share (in thousands):

Three Months Ended March 31,

As of June 30, 2021, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 72.7 million.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed in accordance with ASC 260, Earnings Per Share , based on weighted average outstanding common shares.

Diluted earnings (loss) per share is computed based on basic weighted average outstanding common shares adjusted for the dilutive effect of stock options, RSUs, and certain contingently issuable shares for which performance targets have been achieved.

The following table reconciles the weighted average share amounts used to compute both basic and diluted earnings (loss) per share (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Weighted average shares outstanding:

2 unchanged sentences

Diluted weighted average shares outstanding 119,010 117,264 118,958 116,019

The diluted loss per share computation excludes 4.5 million and 6.7 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended March 31, 2021 and 2020, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of March 31, 2021, and December 31, 2020, was 118,134,574 and 117,112,185 , respectively.

The diluted earnings per share computation excludes 1.3 million and 1.8 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended June 30, 2021 and 2020, respectively, as their effect would be anti-dilutive.

The diluted earnings (loss) per share computation excludes 1.4 million and 6.1 million options to purchase shares, RSUs, and contingently issuable shares during the six months ended June 30, 2021 and 2020, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of June 30, 2021, and December 31, 2020, was 117,484,424 and 117,112,185 , respectively.

Other, net is primarily comprised of foreign currency transaction gains and losses.

Other, net was $ 1.4 million and $ 9.8 million of expense for the three months ended March 31, 2021 and 2020, respectively.

Other, net was $ 1.4 million and $ 2.0 million of income for the three months ended June 30, 2021 and 2020, respectively.

Other, net was $ 0.1 million of income and $ 7.7 million of expense for the six months ended June 30, 2021 and 2020, respectively.

Segment Information

24 unchanged sentences

The following is selected financial data for the Company’s reportable segments for the periods indicated (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Banks $ 114,051 $ 125,386 $ 209,968 $ 231,207

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Other, net 1,434 2,041 52 ( 7,717 )

Loss before income taxes $ ( 6,313 ) $ ( 35,312 )

Income (loss) before income taxes $ 8,463 $ 19,991 $ 2,150 $ ( 15,321 )

Assets are not allocated to segments, and the Company’s CODM does not evaluate operating segments using discrete asset information.

The following is revenue by primary solution category for the Company’s reportable segments for the periods indicated (in thousands):

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Banks Merchants Billers Total

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Total $ 114,051 $ 37,424 $ 150,194 $ 301,669

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Banks Merchants Billers Total

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Total $ 125,386 $ 37,314 $ 137,210 $ 299,910

Six Months Ended June 30, 2021

Banks Merchants Billers Total

Primary Solution Categories

Bill Payments $ — $ — $ 300,793 $ 300,793

Digital Business Banking 30,792 — — 30,792

Merchant Payments — 76,094 — 76,094

Fraud Management 16,681 — — 16,681

Real-Time Payments 30,896 — — 30,896

Issuing and Acquiring 131,599 — — 131,599

Total $ 209,968 $ 76,094 $ 300,793 $ 586,855

Six Months Ended June 30, 2020

Banks Merchants Billers Total

Primary Solution Categories

Bill Payments $ — $ — $ 291,079 $ 291,079

Digital Business Banking 30,884 — — 30,884

Merchant Payments — 69,109 — 69,109

Fraud Management 13,670 — — 13,670

Real-Time Payments 44,162 — — 44,162

Issuing and Acquiring 142,491 — — 142,491

Total $ 231,207 $ 69,109 $ 291,079 $ 591,395

The following is revenue by the Company's reportable segments for the periods indicated (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Software as a service and platform as a service $ 14,482 $ 13,710 $ 28,761 $ 27,155

License 33,913 47,642 51,931 74,738

Maintenance 49,132 48,530 97,262 97,642

Services 16,524 15,504 32,014 31,672

Total $ 114,051 $ 125,386 $ 209,968 $ 231,207

Software as a service and platform as a service $ 31,732 $ 29,739 $ 62,775 $ 55,549

License 814 2,494 3,904 3,433

Maintenance 3,943 4,133 8,095 8,221

Services 935 948 1,320 1,906

Total $ 37,424 $ 37,314 $ 76,094 $ 69,109

Software as a service and platform as a service $ 150,114 $ 137,124 $ 300,538 $ 290,819

License — — 94 94

Maintenance 80 86 161 166

Services — — — —

Total $ 150,194 $ 137,210 $ 300,793 $ 291,079

The following is the Company's revenue by geographic location for the periods indicated (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

United States $ 195,830 $ 207,381 $ 387,807 $ 412,174

2 unchanged sentences

The following is the Company’s long-lived assets by geographic location for the periods indicated (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Long-lived Assets

2 unchanged sentences

Total $ 2,125,093 $ 2,174,513

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three months ended March 31, 2021 and 2020.

No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the three months ended March 31, 2021 and 2020.

For the three months ended March 31, 2021, the Company's effective tax rate was 69 %.

The Company reported a tax benefit on an overall pretax loss, with foreign entities reporting losses of $ 0.6 million.

The effective tax rate for the three months ended March 31, 2021, was positively impacted by excess tax benefits on stock-based compensation.

For the three months ended March 31, 2020, the Company's effective tax rate was 31 %.

The Company reported a tax benefit on overall pretax loss, with foreign entities reporting losses of $ 14.4 million.

The effective tax rate for the three months ended March 31, 2020, was positively impacted by excess tax benefits on stock-based compensation and state income tax benefits on a domestic loss.

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three and six months ended June 30, 2021 and 2020.

No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the three and six months ended June 30, 2021 and 2020.

For the three and six months ended June 30, 2021, the Company's effective tax rate was 23 % and ( 112 )%, respectively.

The Company reported tax expense on pretax income for the three months ended June 30, 2021, and a tax benefit on pretax income for the six months ended June 30, 2021, with foreign entities recognizing earnings of $ 10.2 million and $ 9.6 million, respectively.

The effective tax rate for the three and six months ended June 30, 2021, was positively impacted by excess tax benefits on equity-based compensation.

For the three and six months ended June 30, 2020, the Company's effective tax rate was 30 % and 32 %, respectively.

The Company reported tax expense on pretax income for the three months ended June 30, 2020 and a tax benefit on a pretax loss for the six months ended June 30, 2020, with foreign entities recognizing earnings of $ 10.7 million and losses of $ 3.7 million, respectively.

The effective tax rate for the three months ended June 30, 2020, was negatively impacted by state income tax charges on a domestic profit.

The effective tax rate for the six months ended June 30, 2020, was positively impacted by excess tax benefits on equity-based compensation and state income tax benefits on a domestic loss.

The Company’s effective tax rate could fluctuate on a quarterly basis due to the occurrence of significant and unusual or infrequent items, such as vesting of stock-based compensation or foreign currency gains and losses.

2 unchanged sentences

The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes.

As of March 31, 2021, and December 31, 2020, the amount of unrecognized tax benefits for uncertain tax positions was $ 24.7 million and $ 24.3 million, respectively, excluding related liabilities for interest and penalties of $ 1.2 million as of March 31, 2021, and December 31, 2020.

As of June 30, 2021, and December 31, 2020, the amount of unrecognized tax benefits for uncertain tax positions was $ 24.6 million and $ 24.3 million, respectively, excluding related liabilities for interest and penalties of $ 1.3 million and $ 1.2 million as of June 30, 2021, and December 31, 2020, respectively.

The Company believes it is reasonably possible that the total amount of unrecognized tax benefits will decrease within the next 12 months by approximately $ 3.6 million, due to the settlement of various audits and the expiration of statutes of limitation.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements