What changed in this filing

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Item 1. Financial Statements

2022-11-02 compared with 2022-08-04 · 134 added, 108 removed, 558 unchanged (30% of the section changed)

4 unchanged sentences

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets

53 unchanged sentences

5,000,000 shares authorized;

no shares issued at June 30, 2022, and December 31, 2021

no shares issued at September 30, 2022, and December 31, 2021

Common stock;

1 unchanged sentence

280,000,000 shares authorized;

140,525,055 shares issued at June 30, 2022, and December 31, 2021

140,525,055 shares issued at September 30, 2022, and December 31, 2021

Additional paid-in capital 697,763 688,313

Retained earnings 1,183,230 1,131,281

Treasury stock, at cost, 26,229,902 and 24,795,009 shares at June 30, 2022, and December 31, 2021, respectively

Treasury stock, at cost, 27,323,712 and 24,795,009 shares at September 30, 2022, and December 31, 2021, respectively

( 555,753 ) ( 475,972 )

7 unchanged sentences

(unaudited and in thousands, except per share amounts)

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

28 unchanged sentences

Income before income taxes 33,693 18,517 73,604 20,667

Income tax expense (benefit) 4,388 1,962 11,079 ( 2,406 )

Income tax expense 10,576 4,753 21,655 2,347

Net income $ 23,117 $ 13,764 $ 51,949 $ 18,320

11 unchanged sentences

(unaudited and in thousands)

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income $ 23,117 $ 13,764 $ 51,949 $ 18,320

Other comprehensive income (loss):

Other comprehensive loss:

Foreign currency translation adjustments ( 13,459 ) ( 4,223 ) ( 28,179 ) ( 5,873 )

Total other comprehensive income (loss) ( 12,620 ) 1,466 ( 14,720 ) ( 1,650 )

Total other comprehensive loss ( 13,459 ) ( 4,223 ) ( 28,179 ) ( 5,873 )

Comprehensive income $ 9,658 $ 9,541 $ 23,770 $ 12,447

4 unchanged sentences

(unaudited and in thousands, except share amounts)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Common Stock Additional

1 unchanged sentence

Comprehensive Loss Total

Balance as of March 31, 2022 $ 702 $ 685,354 $ 1,146,771 $ ( 506,513 ) $ ( 101,647 ) $ 1,224,667

Balance as of June 30, 2022 $ 702 $ 690,574 $ 1,160,113 $ ( 528,758 ) $ ( 114,267 ) $ 1,208,364

Net income — — 23,117 — — 23,117

8 unchanged sentences

— — — ( 18 ) — ( 18 )

Balance as of June 30, 2022 $ 702 $ 690,574 $ 1,160,113 $ ( 528,758 ) $ ( 114,267 ) $ 1,208,364

Three Months Ended June 30, 2021

Balance as of September 30, 2022 $ 702 $ 697,763 $ 1,183,230 $ ( 555,753 ) $ ( 127,726 ) $ 1,198,216

Three Months Ended September 30, 2021

Common Stock Additional

1 unchanged sentence

Comprehensive Loss Total

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

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

Net income — — 13,764 — — 13,764

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

Other comprehensive loss — — — — ( 4,223 ) ( 4,223 )

Stock-based compensation

2 unchanged sentences

— 278 — 845 — 1,123

Repurchase of 1,000,000 shares of common stock

— — — ( 39,411 ) — ( 39,411 )

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 37 ) — ( 37 )

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

Balance as of September 30, 2021 $ 702 $ 683,044 $ 1,021,810 $ ( 411,684 ) $ ( 98,318 ) $ 1,195,554

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

3 unchanged sentences

(unaudited and in thousands, except share amounts)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Common Stock Additional

13 unchanged sentences

— — — ( 5,820 ) — ( 5,820 )

Balance as of June 30, 2022 $ 702 $ 690,574 $ 1,160,113 $ ( 528,758 ) $ ( 114,267 ) $ 1,208,364

Six Months Ended June 30, 2021

Balance as of September 30, 2022 $ 702 $ 697,763 $ 1,183,230 $ ( 555,753 ) $ ( 127,726 ) $ 1,198,216

Nine Months Ended September 30, 2021

Paid-in Capital

15 unchanged sentences

— — — ( 14,833 ) — ( 14,833 )

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

Balance as of September 30, 2021 $ 702 $ 683,044 $ 1,021,810 $ ( 411,684 ) $ ( 98,318 ) $ 1,195,554

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

3 unchanged sentences

(unaudited and in thousands)

Six Months Ended June 30,

Nine Months Ended

September 30,

Cash flows from operating activities:

9 unchanged sentences

21,884 20,790

Gain on divestiture ( 38,452 ) —

Changes in operating assets and liabilities:

( 14,040 ) 76,754

Accounts payable

3 unchanged sentences

Deferred revenue

( 6,367 ) 10,339

Other current and noncurrent assets and liabilities

7 unchanged sentences

( 18,394 ) ( 20,041 )

Proceeds from divestiture 100,139 —

Net cash flows from investing activities

12 unchanged sentences

Payments on or proceeds from other debt, net ( 10,106 ) ( 10,187 )

Net decrease in settlement assets and liabilities ( 4,575 ) ( 78,081 )

Net increase (decrease) in settlement assets and liabilities 20,084 ( 55,470 )

Net cash flows from financing activities

1 unchanged sentence

Effect of exchange rate fluctuations on cash ( 60 ) 84

Net decrease in cash and cash equivalents ( 8,007 ) ( 100,473 )

Net increase (decrease) in cash and cash equivalents 32,520 ( 82,777 )

Cash and cash equivalents, including settlement deposits, beginning of period 184,142 265,382

17 unchanged sentences

All intercompany balances and transactions have been eliminated.

The condensed consolidated financial statements as of June 30, 2022, and for the three and six months ended June 30, 2022 and 2021, 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 September 30, 2022, and for the three and nine months ended September 30, 2022 and 2021, 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, 2021, 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, 2021, filed on February 24, 2022.

Results for the three and six months ended June 30, 2022, are not necessarily indicative of results that may be attained in the future.

Results for the three and nine months ended September 30, 2022, 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.

GAAP”) requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

These estimates and assumptions are affected by management’s application of accounting policies, as well as uncertainty in the current economic environment due to COVID-19.

These estimates and assumptions are affected by management’s application of accounting policies, as well as uncertainty in the current economic environment.

Actual results could differ from those estimates.

3 unchanged sentences

A summary of the revisions to the previously reported balances are presented in the table below for comparative purposes (in thousands):

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

As reported Revision adjustment As revised

10 unchanged sentences

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Vendor financed licenses $ 12,520 $ 12,521

19 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 June 30, 2022, and December 31, 2021, was $ 227.2 million and $ 272.8 million, respectively.

The amount of settlement funds as of September 30, 2022, and December 31, 2021, was $ 308.7 million and $ 272.8 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 $ 388.0 million and $ 419.0 million as of June 30, 2022, and December 31, 2021, respectively.

The fair value of the Company’s 5.750 % Senior Notes due 2026 (“2026 Notes”) was $ 379.9 million and $ 419.0 million as of September 30, 2022, and December 31, 2021, 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 has identified its operating segments, Banks, Merchants, and Billers, as the reporting units.

As of June 30, 2022, the Company's goodwill balance of $ 1.3 billion was allocated $ 725.9 million to Banks, $ 137.3 million to Merchants, and $ 417.0 million to Billers.

As of September 30, 2022, the Company's goodwill balance of $ 1.2 billion was allocated $ 671.7 million to Banks, $ 137.3 million to Merchants, and $ 417.0 million to Billers.

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

1 unchanged sentence

The calculated fair value was substantially in excess of the current carrying value for all reporting units based upon the October 1, 2021, annual impairment test and there have been no indications of impairment in the subsequent periods.

Changes in the carrying amount of goodwill attributable to each reporting unit during the nine months ended September 30, 2022 were as follows (in thousands):

Banks Merchants Billers Total

Balance, December 31, 2021

$ 725,903 $ 137,289 $ 417,034 $ 1,280,226

Divestiture (1) ( 54,200 ) — — ( 54,200 )

Balance, September 30, 2022

$ 671,703 $ 137,289 $ 417,034 $ 1,226,026

(1) In connection with the divestiture, $ 54.2 million of goodwill from the Banks segment was allocated to the net assets sold.

See Note 3, Divestiture, for further information on the divestiture.

Equity Method Investment

2 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 $ 18.5 million and $ 19.3 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of June 30, 2022, and December 31, 2021, respectively.

Accordingly, the Company recorded an investment of $ 17.3 million and $ 19.3 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of September 30, 2022, and December 31, 2021, respectively.

In accordance with ASC 606, Revenue From Contracts With Customers , revenue is recognized upon transfer of control of promised products and/or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products and services.

4 unchanged sentences

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Billed receivables $ 137,498 $ 162,479

5 unchanged sentences

Total receivables, net $ 550,586 $ 596,569

One customer accounted for 12.4 % and 13.8 % of the Company's consolidated receivables balance as of June 30, 2022 and December 31, 2021.

One customer accounted for 12.7 % and 13.8 % of the Company's consolidated receivables balance as of September 30, 2022 and December 31, 2021.

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.

3 unchanged sentences

Recognition of deferred revenue ( 95,593 )

Divestiture ( 21,581 )

Foreign currency translation ( 6,690 )

Balance, June 30, 2022

Balance, September 30, 2022

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 $ 749.6 million as of June 30, 2022, of which the Company expects to recognize approximately 46 % over the next 12 months and the remainder thereafter.

During the three and six months ended June 30, 2022 and 2021, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.

Revenue allocated to remaining performance obligations was $ 682.0 million as of September 30, 2022, of which the Company expects to recognize approximately 51 % over the next 12 months and the remainder thereafter.

During the three and nine months ended September 30, 2022 and 2021, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.

Corporate Online Banking Solutions

On June 7, 2022, the Company announced a definitive agreement to divest its corporate online banking solutions related assets and liabilities to One Equity Partners ("OEP") for $ 100.0 million.

The sale includes employees and customer contracts as well as technology assets and intellectual property and is expected to close during the three months ending September 30, 2022.

On June 7, 2022, the Company announced a definitive agreement to divest its corporate online banking solutions related assets and liabilities to One Equity Partners ("OEP") for $ 100.1 million, including preliminary net working capital adjustment.

The sale included employees and customer contracts as well as technology assets and intellectual property and closed on September 1, 2022.

For the three and nine months ended September 30, 2022, the Company recognized a gain of $ 38.5 million on the sale, which is recorded in other, net in the accompanying condensed consolidated statements of operations.

This gain is preliminary subject to finalization of post-closing adjustments pursuant to the definitive transaction agreement.

The Company and OEP have also entered into a Transition Services Agreement ("TSA"), whereby the Company will continue to perform certain functions on OEP's behalf during a migration period not expected to exceed 18 months.

The TSA is meant to reimburse the Company for direct costs in order to provide such functions, which are no longer generating revenue for the Company.

As of June 30, 2022, the Company had $ 40.0 million, $ 656.9 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loans, 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.

As of September 30, 2022, the Company had $ 10.0 million, $ 607.3 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $ 488.5 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.

13 unchanged sentences

Interest is due and payable monthly.

The interest rate in effect for the Credit Facility as of June 30, 2022, was 3.37 %.

The interest rate in effect for the Credit Facility as of September 30, 2022, was 4.88 %.

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 SOFR 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.

2 unchanged sentences

The 2026 Notes will mature on August 15, 2026.

Maturities on debt outstanding as of June 30, 2022, are as follows (in thousands):

Maturities on debt outstanding as of September 30, 2022, are as follows (in thousands):

Fiscal Year Ending December 31,

1 unchanged sentence

Total $ 1,017,336

As of June 30, 2022, and at all times during the period, the Company was in compliance with its financial debt covenants.

As of September 30, 2022, 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):

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Term loans $ 607,336 $ 678,160

13 unchanged sentences

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

As of June 30, 2022, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

As of September 30, 2022, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

As of December 31, 2021, 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.

During the six months ended June 30, 2022, the Company financed certain multi-year license agreements for internal-use software for $ 10.7 million, with annual payments through April 2024.

As of June 30, 2022, $ 9.5 million was outstanding on these and other license agreements previously entered into, of which $ 5.9 million and $ 3.6 million is included in other current liabilities and other noncurrent liabilities, respectively, in the condensed consolidated balance sheet.

During the nine months ended September 30, 2022, the Company financed certain multi-year license agreements for internal-use software for $ 10.7 million, with annual payments through April 2024.

As of September 30, 2022, $ 9.3 million was outstanding on these and other license agreements previously entered into, of which $ 5.8 million and $ 3.5 million is included in other current liabilities and other noncurrent liabilities, respectively, in the condensed consolidated balance sheet.

As of December 31, 2021, $ 2.9 million was outstanding on these agreements, all of which is included in other current liabilities in the condensed consolidated balance sheet.

1 unchanged sentence

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):

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

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

3 unchanged sentences

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 June 30, 2022 and 2021, totaled $ 17.1 million and $ 17.4 million, respectively.

Software for internal use amortization expense recorded during the six months ended June 30, 2022 and 2021, totaled $ 33.8 million and $ 34.3 million, respectively.

Software for internal use amortization expense recorded during the three months ended September 30, 2022 and 2021, totaled $ 17.3 million and $ 17.5 million, respectively.

Software for internal use amortization expense recorded during the nine months ended September 30, 2022 and 2021, totaled $ 51.1 million and $ 51.8 million, respectively.

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

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 June 30, 2021 totaled $ 1.4 million.

There was no software for resale amortization expense recorded during the three months ended June 30, 2022.

Software for resale amortization expense recorded during the six months ended June 30, 2022 and 2021, totaled $ 0.7 million and $ 3.4 million, respectively.

Software for resale amortization expense recorded during the three months ended September 30, 2021 totaled $ 1.5 million.

There was no software for resale amortization expense recorded during the three months ended September 30, 2022.

Software for resale amortization expense recorded during the nine months ended September 30, 2022 and 2021, totaled $ 0.7 million and $ 4.9 million, respectively.

These software amortization expense amounts are reflected in cost of revenue 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):

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

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

2 unchanged sentences

Total other intangible assets $ 479,969 $ ( 244,916 ) $ 235,053 $ 531,801 $ ( 248,797 ) $ 283,004

Other intangible assets amortization expense recorded during the three months ended June 30, 2022 and 2021, totaled $ 9.1 million and $ 9.2 million, respectively.

Other intangible assets amortization expense recorded during the six months ended June 30, 2022 and 2021, totaled $ 18.3 million and $ 18.5 million, respectively.

Based on capitalized intangible assets as of June 30, 2022, estimated amortization expense amounts in future fiscal years are as follows (in thousands):

Other intangible assets amortization expense recorded during the three months ended September 30, 2022 and 2021, totaled $ 8.8 million and $ 9.3 million, respectively.

Other intangible assets amortization expense recorded during the nine months ended September 30, 2022 and 2021, totaled $ 27.1 million and $ 27.8 million, respectively.

Based on capitalized intangible assets as of September 30, 2022, 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 six months ended June 30, 2022 and 2021, totaled 70,242 and 55,486 , respectively.

Shares issued under the 2017 Employee Stock Purchase Plan during the nine months ended September 30, 2022 and 2021, totaled 108,149 and 86,877 , respectively.

Stock Options

7 unchanged sentences

Exercised ( 98,723 ) 18.14

Outstanding as of June 30, 2022 1,562,916 $ 18.44 2.59 $ 11,639,158

Exercisable as of June 30, 2022 1,562,916 $ 18.44 2.59 $ 11,639,158

The total intrinsic value of stock options exercised during the six months ended June 30, 2022 and 2021, was $ 1.1 million and $ 7.6 million, respectively.

There were no stock options granted during the six months ended June 30, 2022 or 2021.

Outstanding as of September 30, 2022 1,541,596 $ 18.44 2.37 $ 3,796,359

Exercisable as of September 30, 2022 1,541,596 $ 18.44 2.37 $ 3,796,359

The total intrinsic value of stock options exercised during the nine months ended September 30, 2022 and 2021, was $ 1.1 million and $ 7.8 million, respectively.

There were no stock options granted during the nine months ended September 30, 2022 or 2021.

Total Shareholder Return Awards

7 unchanged sentences

Change in payout rate ( 114,355 ) 45.92

Nonvested as of June 30, 2022 1,214,598 $ 39.78

During the six months ended June 30, 2022, a total of 212,210 TSRs awards granted in fiscal 2019 vested and achieved a payout rate of 65 % 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 September 30, 2022 1,154,197 $ 39.79

During the nine months ended September 30, 2022, a total of 212,210 TSRs granted in fiscal 2019 vested and achieved a payout rate of 65 % 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 47,612 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

The fair value of TSRs granted during the six months ended June 30, 2022 and 2021, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, Compensation - Stock Compensation , using the following weighted average assumptions:

Six months ended June 30,

The fair value of TSRs granted during the nine months ended September 30, 2022 and 2021, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, Compensation - Stock Compensation , using the following weighted average assumptions:

Nine Months Ended

September 30,

Expected life (years) 3.1 2.8

10 unchanged sentences

Forfeited ( 193,932 ) 32.63

Nonvested as of June 30, 2022 1,138,703 $ 32.62

During the six months ended June 30, 2022, a total of 440,275 RSUs vested.

Nonvested as of September 30, 2022 1,381,113 $ 31.09

During the nine months ended September 30, 2022, a total of 442,882 RSUs vested.

The Company withheld 132,707 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

As of June 30, 2022, there were unrecognized compensation costs of $ 31.3 million and $ 28.6 million related to nonvested RSUs and TSRs, respectively, which the Company expects to recognize over a weighted average period of 2.2 years.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended June 30, 2022 and 2021, of $ 6.8 million and $ 7.7 million, respectively, with corresponding tax benefits of $ 0.9 million and $ 1.2 million, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the six months ended June 30, 2022 and 2021, of $ 14.8 million and $ 14.4 million, respectively, with corresponding tax benefits of $ 2.1 million and $ 2.2 million, respectively.

As of September 30, 2022, there were unrecognized compensation costs of $ 33.0 million and $ 23.4 million related to nonvested RSUs and TSRs, respectively, which the Company expects to recognize over weighted average periods of 2.1 years and 2.0 years, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended September 30, 2022 and 2021, of $ 7.1 million and $ 6.4 million, respectively, with corresponding tax bene fits of $ 1.0 million and $ 0.9 million, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the nine months ended September 30, 2022 and 2021, of $ 21.9 million and $ 20.8 million, respectively, with corresponding tax benefits of $ 3.0 million and $ 3.1 million, respectively.

Common Stock and Treasury Stock

1 unchanged sentence

In December 2021, the board approved the repurchase of the Company's common stock of up to $ 250.0 million, in place of the remaining purchase amounts previously authorized.

The Company repurchased 2,055,488 shares for $ 62.7 million during the six months ended June 30, 2022.

The Company repurchased 3,210,313 shares for $ 90.9 million during the nine months ended September 30, 2022.

Under the program to date, the Company has repurchased 52,567,808 shares for approximately $ 810.6 million.

As of June 30, 2022, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 153.6 million.

As of September 30, 2022, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 125.4 million.

Earnings Per Share

2 unchanged sentences

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

3 unchanged sentences

Diluted weighted average shares outstanding 114,348 118,540 115,211 118,817

The diluted earnings per share computation excludes 2.2 million and 1.3 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended June 30, 2022 and 2021, respectively, as their effect would be anti-dilutive.

The diluted earnings per share computation excludes 2.0 million and 1.4 million options to purchase shares, RSUs, and contingently issuable shares during the six months ended June 30, 2022 and 2021, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of June 30, 2022, and December 31, 2021, was 114,295,153 and 115,730,046 , respectively.

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

Other, net was $ 2.0 million and $ 1.4 million of income for the three months ended June 30, 2022 and 2021, respectively.

Other, net was $ 4.3 million and $ 0.1 million of income for the six months ended June 30, 2022 and 2021, respectively.

The diluted earnings per share computation excludes 2.0 million and 1.6 million RSUs and contingently issuable shares during the three months ended September 30, 2022 and 2021, respectively, as their effect would be anti-dilutive.

The diluted earnings per share computation excludes 2.0 million and 1.5 million RSUs and contingently issuable shares during the nine months ended September 30, 2022 and 2021, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of September 30, 2022, and December 31, 2021, was 113,201,343 and 115,730,046 , respectively.

Other, net is primarily comprised of foreign currency transaction gains and losses and, for the three and nine months ended September 30, 2022, the $ 38.5 million gain on divestiture.

Other, net was $ 41.5 million of income and $ 1.1 million of expense for the three months ended September 30, 2022 and 2021, respectively.

Other, net was $ 45.8 million of income and $ 1.0 million of expense for the nine months ended September 30, 2022 and 2021, respectively.

Segment Information

22 unchanged sentences

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

15 unchanged sentences

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Banks Merchants Billers Total

7 unchanged sentences

Total $ 117,439 $ 35,609 $ 153,543 $ 306,591

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Banks Merchants Billers Total

7 unchanged sentences

Total $ 131,744 $ 38,989 $ 146,181 $ 316,914

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Banks Merchants Billers Total

7 unchanged sentences

Total $ 391,583 $ 113,145 $ 465,368 $ 970,096

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Banks Merchants Billers Total

7 unchanged sentences

Total $ 341,712 $ 115,083 $ 446,974 $ 903,769

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

15 unchanged sentences

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

3 unchanged sentences

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Long-lived Assets

2 unchanged sentences

Total $ 1,996,724 $ 2,170,529

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three and six months ended June 30, 2022 and 2021.

No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the six months ended June 30, 2022 and 2021.

For the three and six months ended June 30, 2022, the Company's effective tax rate was 25 % and 28 %, respectively.

The Company reported tax expense on pretax income for both the three and six months ended June 30, 2022, with foreign entities recognizing earnings of $ 27.4 million and $ 58.3 million, respectively.

The effective tax rate for the three and six months ended June 30, 2022, was negatively impacted by excess tax expense on equity-based compensation.

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.

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three and nine months ended September 30, 2022 and 2021.

No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the three and nine months ended September 30, 2022 and 2021.

For the three and nine months ended September 30, 2022, the Company's effective tax rate was 31 % and 29 %, respectively.

The Company reported tax expense on pretax income for both the three and nine months ended September 30, 2022, with foreign entities recognizing earnings of $ 28.7 million and $ 87.0 million, respectively.

The effective tax rate for the three and nine months ended September 30, 2022, was negatively impacted by excess tax expense on equity-based compensation and state income tax expense on domestic earnings.

For the three and nine months ended September 30, 2021, the Company's effective tax rate was 26 % and 11 %, respectively.

The Company reported tax expense on pretax income for both the three and nine months ended September 30, 2021, with foreign entities recognizing earnings of $ 18.1 million and $ 27.7 million, respectively.

The effective tax rate for the three months ended September 30, 2021, was negatively impacted by excess tax expense on equity-based compensation.

The effective tax rate for the nine months ended September 30, 2021, was positively impacted by excess tax benefits on equity-based compensation.

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 June 30, 2022, and December 31, 2021, the amount of unrecognized tax benefits for uncertain tax positions was $ 24.1 million and $ 24.5 million, respectively, excluding related liabilities for interest and penalties of $ 1.0 million and $ 1.1 million as of June 30, 2022, and December 31, 2021, respectively.

As of September 30, 2022, and December 31, 2021, the amount of unrecognized tax benefits for uncertain tax positions was $ 23.9 million and $ 24.5 million, respectively, excluding related liabilities for interest and penalties of $ 1.0 million and $ 1.1 million as of September 30, 2022, and December 31, 2021, 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 $ 6.0 million, due to the settlement of various audits and the expiration of statutes of limitation.

3 unchanged sentences

Reversal ACH files were promptly issued, restoring affected accounts.

Consumer Financial Protection Bureau and various state regulatory agencies contacted the Company about this incident and the Company has furnished information to these authorities and is cooperating in their investigations.

These investigations could result in material fines, penalties, and statutory damages as well as burdensome and costly injunctive remedies.

In addition, the Company has been named as a defendant in seven class action lawsuits filed in various federal courts purportedly on behalf of consumers whose mortgage accounts were affected by the inadvertent ACH file transmission.

The complaints vary, but generally allege violations of federal and state statutes and claim that the Company is obligated to pay statutory and other damages to class members.

The Company has entered into an agreement to settle all of these lawsuits.

The agreement, which is subject to court approval and other conditions, involves the establishment of (i) a $ 5.0 million fund out of which payments would be made to class members and for attorneys’ fees and administrative costs, plus (ii) additional funds totaling $ 1.5 million that could be required to be established in certain circumstances.

Consumer Financial Protection Bureau and various state regulatory agencies and attorneys general commenced investigations of this incident.

The Company is cooperating with these authorities, including voluntarily furnishing information to them, and seeking to resolve these matters.

There can be no assurance that the matters will be resolved without litigation, and the matters could result in material fines, penalties, and statutory damages as well as burdensome and costly injunctive remedies.

Separately, the Company was named as a defendant in seven class action lawsuits filed in various federal courts purportedly on behalf of consumers whose mortgage accounts were affected by the inadvertent ACH file transmission.

The Company entered into an agreement, which is subject to court approval and other conditions, to settle these lawsuits for the Company's establishment of a $ 5.0 million fund out of which payments would be made to class members and the Company's payment of attorneys’ fees and administrative costs, plus additional funds totaling $ 1.5 million that could be required to be established in certain circumstances.

There can be no assurance that the conditions to settlement will be satisfied.

The Company has asserted claims for insurance coverage with respect to potential losses associated with this matter.

There can be no assurance as to the amount of insurance that may be available.

The Company has asserted claims for insurance coverage with respect to potential losses associated with these matters.

There is no assurance as to the amount of insurance that may be available.

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