What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 170 added, 88 removed, 489 unchanged (35% of the section changed)

4 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Current assets

53 unchanged sentences

5,000,000 shares authorized;

no shares issued at March 31, 2023, and December 31, 2022

no shares issued at June 30, 2023, and December 31, 2022

Common stock;

1 unchanged sentence

280,000,000 shares authorized;

140,525,055 shares issued at March 31, 2023, and December 31, 2022

140,525,055 shares issued at June 30, 2023, and December 31, 2022

Additional paid-in capital 704,096 702,458

Retained earnings 1,234,440 1,273,458

Treasury stock, at cost, 32,202,744 and 32,456,227 shares at March 31, 2023, and December 31, 2022, respectively

Treasury stock, at cost, 31,929,614 and 32,456,227 shares at June 30, 2023, and December 31, 2022, respectively

( 655,660 ) ( 665,771 )

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,

2023 2022 2023 2022

Software as a service and platform as a service

24 unchanged sentences

3,458 3,051 6,963 6,210

( 4,092 ) 2,006 ( 7,487 ) 4,256

Total other income (expense) ( 20,543 ) ( 6,727 ) ( 39,325 ) ( 12,212 )

4 unchanged sentences

$ ( 0.06 ) $ 0.12 $ ( 0.36 ) $ 0.25

$ ( 0.30 ) $ 0.13

Diluted $ ( 0.06 ) $ 0.12 $ ( 0.36 ) $ 0.25

Weighted average common shares outstanding

7 unchanged sentences

(unaudited and in thousands)

Three Months Ended March 31,

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

2023 2022 2023 2022

Net income (loss) $ ( 6,710 ) $ 13,342 $ ( 39,018 ) $ 28,832

1 unchanged sentence

Foreign currency translation adjustments 2,990 ( 12,620 ) 6,608 ( 14,720 )

3,618 ( 2,100 )

Total other comprehensive income (loss) 2,990 ( 12,620 ) 6,608 ( 14,720 )

5 unchanged sentences

(unaudited and in thousands, except share amounts)

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Common Stock Additional

Paid-in Capital Retained Earnings Treasury Stock Accumulated Other

Comprehensive Loss Total

Balance as of March 31, 2023 $ 702 $ 701,040 $ 1,241,150 $ ( 661,223 ) $ ( 114,042 ) $ 1,167,627

Net loss — — ( 6,710 ) — — ( 6,710 )

Other comprehensive income — — — — 2,990 2,990

Stock-based compensation

— 5,414 — — — 5,414

Shares issued and forfeited, net, under stock plans

— ( 2,358 ) — 5,882 — 3,524

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 319 ) — ( 319 )

Balance as of June 30, 2023 $ 702 $ 704,096 $ 1,234,440 $ ( 655,660 ) $ ( 111,052 ) $ 1,172,526

Three Months Ended June 30, 2022

Common Stock Additional

Paid-in Capital Retained Earnings Treasury Stock Accumulated Other

Comprehensive Loss Total

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

Net income — — 13,342 — — 13,342

Other comprehensive loss — — — — ( 12,620 ) ( 12,620 )

Stock-based compensation

— 6,800 — — — 6,800

Shares issued and forfeited, net, under stock plans

— ( 1,580 ) — 2,867 — 1,287

Repurchase of 924,240 shares of common stock

— — — ( 24,847 ) — ( 24,847 )

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 265 ) — ( 265 )

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

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, 2023

Common Stock Additional

Paid-in Capital

10 unchanged sentences

— — — ( 3,320 ) — ( 3,320 )

Balance as of March 31, 2023 $ 702 $ 701,040 $ 1,241,150 $ ( 661,223 ) $ ( 114,042 ) $ 1,167,627

Three Months Ended March 31, 2022

Balance as of June 30, 2023 $ 702 $ 704,096 $ 1,234,440 $ ( 655,660 ) $ ( 111,052 ) $ 1,172,526

Six Months Ended June 30, 2022

Paid-in Capital

15 unchanged sentences

— — — ( 5,802 ) — ( 5,802 )

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

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:

2 unchanged sentences

13,091 11,008

49,884 52,721

Amortization of operating lease right-of-use assets

3 unchanged sentences

Stock-based compensation expense

10,715 14,758

Changes in operating assets and liabilities:

81,856 ( 14,040 )

Accounts payable

26 unchanged sentences

Payments on or proceeds from other debt, net ( 11,830 ) ( 9,369 )

Payments for debt issuance costs ( 2,160 ) —

Net decrease in settlement assets and liabilities ( 24,087 ) ( 4,575 )

2 unchanged sentences

Effect of exchange rate fluctuations on cash 5,427 ( 1,062 )

Net increase (decrease) in cash and cash equivalents 13,560 ( 8,075 )

Net decrease in cash and cash equivalents ( 17,845 ) ( 8,007 )

Cash and cash equivalents, including settlement deposits, beginning of period 214,672 184,142

17 unchanged sentences

All intercompany balances and transactions have been eliminated.

The condensed consolidated financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, 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, 2023, and for the three and six months ended June 30, 2023 and 2022, 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, 2022, 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, 2022, filed on March 1, 2023.

Results for the three months ended March 31, 2023, are not necessarily indicative of results that may be attained in the future.

Results for the three and six months ended June 30, 2023, 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.

4 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Operating lease liabilities $ 10,317 $ 11,218

20 unchanged sentences

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, 2023, and December 31, 2022, was $ 300.6 million and $ 328.7 million, respectively.

The amount of settlement funds as of June 30, 2023, and December 31, 2022, was $ 317.0 million and $ 328.7 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 $ 399.0 million and $ 390.0 million as of March 31, 2023, and December 31, 2022, respectively.

The fair value of the Company’s 5.750 % Senior Notes due 2026 (“2026 Notes”) was $ 392.0 million and $ 390.0 million as of June 30, 2023, and December 31, 2022, 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 March 31, 2023, 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.

As of June 30, 2023, 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.

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 $ 18.0 million and $ 17.9 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of March 31, 2023, and December 31, 2022, respectively.

Accordingly, the Company recorded an investment of $ 18.8 million and $ 17.9 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of June 30, 2023, and December 31, 2022, 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):

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Billed receivables $ 161,656 $ 218,611

5 unchanged sentences

Total receivables, net $ 619,145 $ 701,599

One customer accounted for 10.5 % and 10.1 % of the Company's consolidated receivables balance as of March 31, 2023 and December 31, 2022, respectively.

No customer accounted for more than 10% of the Company’s consolidated receivables balance as of June 30, 2023.

One customer accounted for 10.1 % of the Company's consolidated receivables balance as of December 31, 2022.

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 ( 185 )

Balance, March 31, 2023

Balance, June 30, 2023

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 $ 651.4 million as of March 31, 2023, of which the Company expects to recognize approximately 50 % over the next 12 months and the remainder thereafter.

During the three months ended March 31, 2023 and 2022, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.

Revenue allocated to remaining performance obligations was $ 684.0 million as of June 30, 2023, of which the Company expects to recognize approximately 50 % over the next 12 months and the remainder thereafter.

During the three and six months ended June 30, 2023 and 2022, 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 $ 100.1 million, including preliminary net working capital adjustment.

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, including a 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.

The Company recognized a gain of $ 38.5 million on the sale during the year ended December 31, 2022, which is preliminary subject to finalization of post-closing adjustments pursuant to the definitive transaction agreement.

The Company recognized a gain of $ 38.5 million on the sale during the three months ended September 30, 2022.

During the three months ended June 30, 2023, the Company recognized a loss for the final post-closing adjustment pursuant to the definitive agreement of $ 0.5 million.

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 March 31, 2023, the Company had $ 110.0 million, $ 578.1 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $ 388.4 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended, and up to $ 1.6 million of unused borrowings under Letter of Credit agreements.

As of June 30, 2023, the Company had $ 115.0 million, $ 558.6 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $ 383.5 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.

14 unchanged sentences

Interest is due and payable monthly.

The interest rate in effect for the Credit Facility as of March 31, 2023, was 6.90 %.

The interest rate in effect for the Credit Facility as of June 30, 2023, was 7.20 %.

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 March 31, 2023, are as follows (in thousands):

Maturities on debt outstanding as of June 30, 2023, are as follows (in thousands):

Fiscal Year Ending December 31,

1 unchanged sentence

Total $ 1,073,648

As of March 31, 2023, and at all times during the period, the Company was in compliance with its financial debt covenants.

As of June 30, 2023, 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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Term loans $ 558,648 $ 592,729

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, 2023, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

As of June 30, 2023, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

As of December 31, 2022, 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, 2023, $ 7.1 million was outstanding on these agreements, of which $ 3.6 million and $ 3.5 million is included in other current liabilities and other noncurrent liabilities, respectively, in the condensed consolidated balance sheet.

As of June 30, 2023, $ 3.6 million was outstanding on these agreements, all of which is included in other current liabilities in the condensed consolidated balance sheet.

As of December 31, 2022, $ 9.3 million was outstanding on these agreements, of which $ 5.8 million and $ 3.5 million is included in other current liabilities and other noncurrent liabilities, respectively .

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):

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

1 unchanged sentence

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, 2023 and 2022, totaled $ 17.0 million and $ 16.7 million, respectively.

Software for internal use amortization expense recorded during the three months ended June 30, 2023 and 2022, totaled $ 16.0 million and $ 17.1 million, respectively.

Software for internal use amortization expense recorded during the six months ended June 30, 2023 and 2022, totaled $ 33.0 million and $ 33.8 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 was 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, 2022 totaled $ 0.7 million.

Software for resale was fully amortized during the year ended December 31, 2022 and, therefore, there was no amortization expense recorded during the three months ended March 31, 2023.

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

Software for resale was fully amortized during the first quarter of 2022 and, therefore, there was no amortization expense recorded during the three months ended June 30, 2022, or the three and six months ended June 30, 2023.

The software amortization expense amount was 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):

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

2 unchanged sentences

Total other intangible assets $ 468,316 $ ( 256,056 ) $ 212,260 $ 466,427 $ ( 237,729 ) $ 228,698

Other intangible assets amortization expense recorded during the three months ended March 31, 2023 and 2022, totaled $ 8.4 million and $ 9.2 million, respectively.

Based on capitalized intangible assets as of March 31, 2023, estimated amortization expense amounts in future fiscal years are as follows (in thousands):

Other intangible assets amortization expense recorded during the three months ended June 30, 2023 and 2022, totaled $ 8.5 million and $ 9.1 million, respectively.

Other intangible assets amortization expense recorded during the six months ended June 30, 2023 and 2022, totaled $ 16.9 million and $ 18.3 million, respectively.

Based on capitalized intangible assets as of June 30, 2023, 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, 2023 and 2022, totaled 31,639 and 31,406 , respectively.

Shares issued under the 2017 Employee Stock Purchase Plan during the six months ended June 30, 2023 and 2022, totaled 65,770 and 70,242 , respectively.

Stock Options

8 unchanged sentences

Expired ( 4,614 ) 19.63

Outstanding as of March 31, 2023 1,211,613 $ 19.01 2.46 $ 9,658,883

Exercisable as of March 31, 2023 1,211,613 $ 19.01 2.46 $ 9,658,883

The total intrinsic value of stock options exercised during the three months ended March 31, 2023 and 2022, was less than $ 0.1 million and $ 0.9 million, respectively.

There were no stock options granted during the three months ended March 31, 2023 or 2022.

Total Shareholder Return Awards

Outstanding as of June 30, 2023 1,066,406 $ 18.98 2.20 $ 8,530,772

Exercisable as of June 30, 2023 1,066,406 $ 18.98 2.20 $ 8,530,772

The total intrinsic value of stock options exercised during the six months ended June 30, 2023 and 2022, was $ 0.8 million and $ 1.1 million, respectively.

There were no stock options granted during the six months ended June 30, 2023 or 2022.

Performance Share Awards

During the six months ended June 30, 2023, pursuant to the Company's 2020 Equity and Incentive Compensation Plan, the Company granted performance share awards with a total shareholder return multiplier.

These performance awards are earned based upon achievement, over a specified period that must not be less than one year and is typically a three-year performance period, of performance goals related to (i) net revenue growth and (ii) net adjusted EBITDA margin over the performance period as determined by the Company with a TSR multiplier up to plus or minus 20 %.

Up to 200 % of the performance shares could be earned upon achievement of the performance goals, including the multiplier.

On a quarterly basis, management evaluates the probability that the threshold performance goals will be achieved, if at all, and the anticipated level of attainment to determine the amount of compensation expense to record in the consolidated financial statements.

A summary of nonvested total shareholder return awards ("TSRs") is as follows:

2 unchanged sentences

Nonvested as of December 31, 2022 1,011,881 $ 39.21

Granted 233,404 26.94

Forfeited ( 112,661 ) 41.08

Change in payout rate ( 427,685 ) 30.01

Nonvested as of March 31, 2023 545,468 $ 46.09

At March 31, 2023, the TSRs granted in 2020 were earned by the employees.

Nonvested as of June 30, 2023 704,939 $ 40.43

As of June 30, 2023, the TSRs granted in 2020 were earned by the employees.

However, the performance goals were not met and no shares were issued.

The fair value of TSRs granted during the three months ended March 31, 2022, 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:

Three Months Ended March 31, 2022

The fair value of TSRs granted during the six months ended June 30, 2023 and 2022, 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,

Expected life (years) 2.9 3.1

2 unchanged sentences

Expected dividend yield — —

There were no TSRs granted during the three months ended March 31, 2023.

Restricted Share Units

3 unchanged sentences

Nonvested as of December 31, 2022 1,184,024 $ 30.73

Granted 1,453,429 24.76

Vested ( 438,542 ) 30.08

Forfeited ( 273,607 ) 29.24

Nonvested as of March 31, 2023 746,833 $ 30.43

During the three months ended March 31, 2023, a total of 333,812 RSUs vested.

Nonvested as of June 30, 2023 1,925,304 $ 26.59

During the six months ended June 30, 2023, a total of 438,542 RSUs vested.

The Company withheld 127,898 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

As of March 31, 2023, there were unrecognized compensation costs of $ 18.5 million and $ 10.2 million related to nonvested RSUs and TSRs, respectively, which the Company expects to recognize over weighted average periods of 1.8 years and 1.7 years, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended March 31, 2023 and 2022, of $ 5.3 million and $ 8.0 million, respectively, with corresponding tax benefits of $ 0.9 million and $ 1.1 million, respectively.

As of June 30, 2023, there were unrecognized compensation costs of $ 45.5 million and $ 12.6 million related to nonvested RSUs and TSRs, respectively, which the Company expects to recognize over weighted average periods of 2.5 years and 2.0 years, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended June 30, 2023 and 2022, of $ 5.4 million and $ 6.8 million, respectively, with corresponding tax benefits of $ 1.0 million and $ 0.9 million, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the six months ended June 30, 2023 and 2022, of $ 10.7 million and $ 14.8 million, respectively, with corresponding tax benefits of $ 2.0 million and $ 2.1 million, respectively.

Common Stock and Treasury Stock

1 unchanged sentence

On February 24, 2023, 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.

The Company did no t repurchase any shares under the program during the three months ended March 31, 2023.

The Company did no t repurchase any shares under the program during the six months ended June 30, 2023.

Under the program to date, the Company has repurchased 57,981,733 shares for approximately $ 926.2 million.

As of March 31, 2023, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 200.0 million.

As of June 30, 2023, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 200.0 million.

Earnings (Loss) Per Share

1 unchanged sentence

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 March 31,

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,

2023 2022 2023 2022

Weighted average shares outstanding:

2 unchanged sentences

Diluted weighted average shares outstanding 108,455 115,205 108,306 115,649

The diluted earnings (loss) per share computation excludes 2.5 million and 1.8 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended March 31, 2023 and 2022, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of March 31, 2023, and December 31, 2022, was 108,322,311 and 108,068,828 , respectively.

The diluted earnings (loss) per share computation excludes 3.7 million and 2.2 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended June 30, 2023 and 2022, respectively, as their effect would be anti-dilutive.

The diluted earnings (loss) per share computation excludes 3.1 million and 2.0 million options to purchase shares, RSUs, and contingently issuable shares during the six months ended June 30, 2023 and 2022, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of June 30, 2023, and December 31, 2022, was 108,595,441 and 108,068,828 , respectively.

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

Other, net was $ 3.4 million of expense and $ 2.3 million of income for the three months ended March 31, 2023 and 2022, respectively .

Other, net was $ 4.1 million of expense and $ 2.0 million of income for the three months ended June 30, 2023 and 2022, respectively.

Other, net was $ 7.5 million of expense and $ 4.3 million of income for the six months ended June 30, 2023 and 2022, 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 March 31,

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

2023 2022 2023 2022

Banks $ 117,507 $ 141,946 $ 205,547 $ 274,144

14 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 March 31, 2023

Three Months Ended June 30, 2023

Banks Merchants Billers Total

7 unchanged sentences

Total $ 117,507 $ 36,508 $ 169,310 $ 323,325

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Banks Merchants Billers Total

7 unchanged sentences

Total $ 141,946 $ 36,534 $ 161,945 $ 340,425

As discussed in Note 3, Divestiture , the Company divested its corporate online banking solution assets, which were included in the Digital Business Banking solution category.

Three Months Ended March 31,

Six Months Ended June 30, 2023

Banks Merchants Billers Total

Primary Solution Categories

Bill Payments $ — $ — $ 336,165 $ 336,165

Digital Business Banking 1,591 — — 1,591

Merchant Payments — 71,289 — 71,289

Fraud Management 21,508 — — 21,508

Real-Time Payments 45,897 — — 45,897

Issuing and Acquiring 136,551 — — 136,551

Total $ 205,547 $ 71,289 $ 336,165 $ 613,001

Six Months Ended June 30, 2022

Banks Merchants Billers Total

Primary Solution Categories

Bill Payments $ — $ — $ 311,825 $ 311,825

Digital Business Banking 25,585 — — 25,585

Merchant Payments — 77,536 — 77,536

Fraud Management 15,329 — — 15,329

Real-Time Payments 46,139 — — 46,139

Issuing and Acquiring 187,091 — — 187,091

Total $ 274,144 $ 77,536 $ 311,825 $ 663,505

As discussed in Note 3, Divestiture , the Company divested its corporate online banking solution assets, which were included in

the Digital Business Banking solution category.

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

2023 2022 2023 2022

Software as a service and platform as a service $ 9,742 $ 13,985 $ 18,991 $ 27,937

9 unchanged sentences

Software as a service and platform as a service $ 169,286 $ 161,935 $ 336,117 $ 311,778

License — — — —

Maintenance 24 10 48 47

Services — — — —

Total $ 169,310 $ 161,945 $ 336,165 $ 311,825

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,

2023 2022 2023 2022

United States $ 205,199 $ 209,459 $ 406,468 $ 408,774

2 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Long-lived Assets

2 unchanged sentences

Total $ 1,965,986 $ 2,041,352

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three months ended March 31, 2023 and 2022.

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, 2023 and 2022.

For the three months ended March 31, 2023, the Company's effective tax rate was 25 %.

The Company’s foreign entities reported losses of $ 7.2 million for the three months ended March 31, 2023.

For the three months ended March 31, 2022, the Company's effective tax rate was 30 %.

The Company's foreign entities reported profits of $ 30.9 million for the three months ended March 31, 2022.

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three and six months ended June 30, 2023 and 2022.

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, 2023 and 2022.

For the three and six months ended June 30, 2023, the Company's effective tax rate was 33 % and 27 %, respectively.

The Company reported tax benefit on pretax loss for both the three and six months ended June 30, 2023, with foreign entities recognizing earnings of $ 24.3 million and $ 17.1 million, respectively.

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 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, 2023, and December 31, 2022, the amount of unrecognized tax benefits for uncertain tax positions was $ 26.3 million and $ 26.4 million, respectively, excluding related liabilities for interest and penalties of $ 0.6 million as of March 31, 2023, and December 31, 2022.

As of June 30, 2023, and December 31, 2022, the amount of unrecognized tax benefits for uncertain tax positions was $ 26.4 million, excluding related liabilities for interest and penalties of $ 0.6 million.

The Company believes it is reasonably possible that the total amount of unrecognized tax benefits will decrease within the next 12 months by approximately $ 4.6 million, due to the settlement of various audits and the expiration of statutes of limitation.

4 unchanged sentences

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 final 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 under certain circumstances.

There can be no assurance that the conditions to settlement will be satisfied, in which event the class action litigation could proceed.

The Company settled these lawsuits by establishing a $ 5.0 million fund out of which payments will be made to class members and for attorneys’ fees and administrative costs.

Additional funds totaling $ 1.5 million could be required to be established under certain circumstances.

The inadvertent ACH file transmission also gave rise to investigations by the U.S.

Consumer Financial Protection Bureau (the "CFPB") and state attorneys general in 49 states, the District of Columbia, and certain U.S.

territories as well as money transmission regulators in 46 states, the District of Columbia, and certain U.S.

A lead group of attorneys general and regulatory representatives of nine states have led the state investigations of the matter.

The Company has cooperated with the CFPB and state authorities, including furnishing documents and information to them.

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

The Company has asserted claims for insurance coverage with respect to potential losses associated with the inadvertent ACH file transmission.

There is no assurance as to the amount of insurance that may be available or its effect on the availability or cost of insurance in the future.

Consumer Financial Protection Bureau (the "CFPB") and state attorneys general in all 50 states, the District of Columbia, and certain U.S.

territories as well as money transmission regulators in most of those jurisdictions.

The Company settled the CFPB investigation for $ 25.0 million plus various undertakings.

The Company is proceeding to document agreements in principle to settle with the state money transmission regulators and attorneys general for a total of $ 20.0 million plus various undertakings.

The Company believes that the CPFB and state undertakings will not adversely affect it.

The Company expects that insurance will fund substantially all of the settlement payments and costs, including lawyers’ fees, subject to the retained limits and other terms of the applicable policies.

The Company recorded the payable to the CFPB and a receivable from its insurance carriers, which are included in other current liabilities and other current assets, respectively, in the accompanying condensed consolidated balance sheet as of June 30, 2023, for the $ 25.0 million settlement.

Payment was made to the CFPB and funds received from the insurance carriers subsequent to quarter-end.

Funds for the potential state and money transmission regulator settlements have been deposited into an escrow account at a bank by the insurance carriers to be disbursed on finalization of the settlement.

The Company is from time to time subject to other claims, litigation and investigations.

While we believe that none of the currently pending matters is reasonably likely to have material adverse effect on us, there can be no assurance with respect thereto or future matters.

While the Company believes that none of the currently pending matters is reasonably likely to have material adverse effect on it, there can be no assurance with respect thereto or future matters.

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