What changed in this filing

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Item 1. Business

2024-02-29 compared with 2023-03-01 · 66 added, 74 removed, 202 unchanged (41% of the section changed)

14 unchanged sentences

Corporate Online Banking Solutions

On September 1, 2022, we sold our corporate online banking solutions related assets and liabilities to One Equity Partners for $100.1 million, including a preliminary net working capital adjustment.

On September 1, 2022, we sold our corporate online banking solutions related assets and liabilities to One Equity Partners for $100.0 million, and a net working capital adjustment.

The sale included employees and customer contracts as well as technology assets and intellectual property.

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We offer these customers scalable solutions that strategically position them to innovate and achieve growth and cost efficiency, while protecting them against fraud.

Our solutions also allow new entrants in the digital marketplace to access innovative payment schemes, such as the U.K.

Our solutions also allow new entrants in the digital marketplace to access innovative payment schemes, such as the U.S.

FedNow and RTP from The Clearing House, the U.K.

Faster Payments New Access Model, Singapore FAST, India Unified Payments Interface ("UPI"), the Payments Network Malaysia ("PayNet"), Real-time Retail Payments Platform ("RPP"), and others.

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Our solutions enable these customers to support a wide range of payment options and provide a convenient consumer payments experience that drives consumer loyalty and increases revenue.

ACI is a global leader in mission-critical, real-time payments software.

Our proven, secure, and scalable software solutions enable corporations, fintechs, and financial disruptors to process and manage digital payments, power omni-commerce payments, present and process bill payments, and manage fraud and risk.

We combine our global footprint with a local presence to drive the real-time digital transformation of payments and commerce.

ACI is a global software company that provides mission-critical, real-time payment solutions to corporations.

Customers use our proven, scalable, and secure solutions to process and manage digital payments, enable omni-commerce payments, present and process bill payments, and manage fraud and risk.

We combine our global footprint with local presence to drive the real-time digital transformation of payments and commerce.

Our strategic solution areas include the following:

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ACI offers comprehensive consumer payment solutions ranging from core payment engines to back-office support that enable banks and intermediaries to compete effectively in today’s real-time, open payments ecosystem.

ACI ® Acquiring ™ is a merchant management system that helps acquirers offer merchants capabilities to deliver digital innovation, handle new payment methods, and maximize margins.

ACI Issuing ™ is a digital payments issuing solution that helps issuers accelerate innovation, give customers new payment offerings and enable channels, services, endpoints, and integrations from a single cloud-based or on-premise solution.

ACI ® Acquiring ™ is a solution that helps merchant acquirers and ATM acquirers process credit, debit, and prepaid card transactions, deliver digital innovation, improve fraud prevention, and reduce interchange fees.

ACI Issuing ™ is a digital payments issuing solution that helps issuers process card transactions, accelerate innovation, give customers new payment offerings, and deliver innovative security, with flexible cloud-based or on-premises deployment.

ACI Enterprise Payments Platform ™ is a market-leading technology that provides payment players global payment processing and orchestration capabilities for all digital payments, including high- and low-value payments, real-time and alternative payments, and cards.

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ACI High Value Real-Time Payments™ is a global payments engine that offers multi-bank, multi-currency, and 24x7 payment processing capabilities, as well as SWIFT messaging with seamless integrations to multiple clearing and settlement mechanisms.

Omni-Commerce and eCommerce Payments

ACI provides real-time, any-to-any payment capabilities globally in both card-present and card-not-present environments.

ACI Omni Commerce ™ offers merchants a scalable, omnichannel payment processing platform with the flexibility to support in-store, online, and mobile payments, protected by advanced P2P encryption, tokenization, and fraud management capabilities.

ACI Secure eCommerce ™ is a holistic platform that combines a powerful payments gateway, sophisticated real-time fraud prevention capabilities, advanced business intelligence tools, and access to an extensive global network of acquirers and alternative payment methods.

Fraud and Risk Management

ACI Fraud Management™ enables merchants, banks, and financial institutions to turn fraud and financial crime prevention into a competitive differentiator with a secure and seamless solution that protects customers’ digital channels and payments anytime, anywhere and maximizes business growth.

ACI Fraud Management for banking is powered by state-of-the-art machine learning and enables financial institutions to fight fraud and money laundering across the enterprise while meeting increasing regulatory and customer demand.

The solution offers flexible deployment, unprecedented transaction processing and contextual risk analysis for authorized and unauthorized transactions.

ACI Fraud Management for merchants is a real-time, cloud-based managed service that uses advanced artificial intelligence (AI), machine learning and behavioral analytics to identify and assess inconsistent and unexpected patterns and behaviors.

The solution automatically advises and alerts enterprises and merchants about potential threats or anomalies.

Bill Payments

Merchant Payments (ACI Payments Orchestration Platform TM )

ACI offers merchants a secure and scalable payments platform with the flexibility to support in-store, online, and mobile payments.

ACI Payments Orchestration Platform is a holistic, intelligent payments platform that orchestrates and optimizes payments by combining a powerful payments gateway with multilayered fraud management, advanced business intelligence tools, and access to an extensive global network of acquirers, third-party providers, and alternative payment methods.

ACI Fraud Management ™ for Merchants, ACI’s multi-layered fraud management solution, supports merchants with a comprehensive, real-time approach to fraud management that uses a combination of patented incremental machine learning, fraud and payments data, predictive and behavioral analytics, positive profiling, customized fraud strategies, expert support, and consortium data to help prevent fraud and reduce the burden of compliance, delivered as a multi-tenant platform, as a service, or deployed in the public cloud or on premises.

It enables customers to protect their payments end to end from the customer check-in to payment and post authorization, enhancing the customer experience.

Payments Intelligence and Risk Management

ACI’s data engine uses powerful analytics to deliver robust and precise real-time decisioning, prevention, and detection capabilities to banks and intermediary customers.

ACI Fraud Management for financial institutions offers banks and intermediaries a comprehensive, real-time approach to fraud management that uses a combination of machine learning, fraud and payments data, and advanced analytics to help prevent fraud and reduce the burden of compliance, delivered as a service, or deployed in the public cloud or on premises.

ACI meets the bill payment needs of corporate customers across myriad industries through a range of electronic bill payment offerings that help companies raise consumer satisfaction while reducing costs.

ACI Speedpay ® is an integrated suite of digital billing, payment, disbursement, and communication services that lowers the cost of presenting and accepting bill payments while delivering industry-leading security.

On Premise, On Demand, or Hybrid Software Delivery Options

Our software solutions are offered to customers through either a traditional term software license arrangement where the software is installed and operated on the customer premises or in a cloud environment, through an on-demand arrangement where the solution is maintained and delivered through the public cloud or ACI's private cloud via our global data centers, or a combination of the two based upon customers' unique needs.

On Premises, On Demand, or Hybrid Software Delivery Options

Our software solutions are offered to our customers through either a traditional term software license arrangement where the software is installed and operated on the customer premises or in a cloud environment, through an on-demand arrangement where the solution is maintained and delivered through the public cloud or ACI's private cloud via our global data centers, or a combination of the two based upon their unique needs.

Solutions delivered through ACI’s on-demand cloud are available in either a single-tenant environment, known as a Software-as-a-Service (“SaaS”) offering, or in a multi-tenant environment, known as a Platform-as-a-Service (“PaaS”) offering.

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We have two major types of third-party product partners:

1) technology partners, or industry leaders with whom we work closely that drive key industry trends and mandates, and 2) business partners, with whom we embed the partners’ technology in ACI products, host the partners’ software in ACI’s cloud as a part of our cloud offerings, or jointly market solutions that include the products of the other company.

1) technology partners, or industry leaders with whom we work closely that drive key industry trends and mandates, and 2) business partners, where we either embed the partners’ technology in ACI products, host the partners’ software in ACI’s cloud as a part of our cloud offerings, or jointly market solutions that include the products of the other company.

Technology partners help us add value to our solutions and stay abreast of current market conditions and industry developments such as standards.

Technology partners include organizations such as Diebold Nixdorf (“Diebold”), NCR Corporation (“NCR”), Visa, Mastercard, and SWIFT.

In addition, ACI has membership in or participates in the relevant committees of several industry associations, such as the International Organization for Standardization (“ISO”), Accredited Standards Committee ("ASC") X9, ATM Industry Association ("ATMIA"), Financial Services, Nexo Standards, U.K.

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Payments Forum, and the PCI Security Standards Council.

These partnerships provide direction as it relates to the specifications that are used in real-time payment standards, by card schemes, and, in some cases, by hardware vendors.

These organizations typically look to ACI as a source of knowledge and experience that can inform their work to create and enhance standards.

The partnerships provide us the opportunity to influence these standards with concepts and ideas that will benefit the market, our customers, and ACI.

These partnerships provide direction as it relates to the specifications that are used by the card schemes, real-time payment standards, and, in some cases, hardware vendors.

These organizations typically look to ACI as a source of knowledge and experience to be shared in conjunction with creating and enhancing their standards.

The benefit to ACI is having the opportunity to influence these standards with concepts and ideas that will benefit the market, our customers, and ACI.

ACI also holds important positions at different payment advisory leader groups worldwide, including advisory board membership with the Faster Payments Council in the U.S., global advisory board membership with the Merchant Risk Council ("MRC"), and a key stakeholder membership with the European Payments Council ("EPC").

Business partner relationships extend our product portfolio, improve our ability to get our solutions to market, and enhance our ability to deliver market-leading solutions.

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The agreements are generally worldwide in scope and have a term of several years.

We have alliances with our technology partners Amazon, HPE, IBM, Microsoft Corporation, and Oracle USA, Inc.

We have alliances with our technology partners Microsoft Corporation, Amazon, Google, HPE, IBM, and Oracle USA, Inc.

(“Oracle”), whose industry-leading hardware, software, and cloud-based infrastructure services are utilized by and in delivery of ACI’s products.

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Our service professionals generally perform the majority of the work associated with implementing and integrating our software solutions.

In addition, we work with a number of trained global and regional systems integration and services partners for staff augmentation and coordinated co-prime delivery where appropriate.

In addition, we work with a limited number of systems integration and services partners such as Accenture, LLC, Cognizant Technology Solutions Corporation, and Stanchion Payments Solution for staff augmentation and coordinated co-prime delivery where appropriate.

Product support services are available to customers after a solution has been installed and are based on the relevant product support category.

An extensive team of support analysts are available to assist customers.

In addition, we provide education services to ACI customers to enhance and improve their understanding of our products.

This learning is made available through the ACI Training Academy, which offers flexible, powerful training in multiple formats:

self-paced eLearning, instructor-led courses and hands-on virtual training.

Our interactive, self-paced eLearning is available on demand via our online learning management system.

ACI instructor-led courses include both theory and practical sessions to allow students to work though real business scenarios and put their newly learned skills to use.

In addition, ACI education services with instructor-led courses include both theory and practical sessions to allow students to work though real business scenarios and put their newly learned skills to use.

This hands-on approach ensures that the knowledge is retained, and the student is more productive upon their return to the workplace.

Some training topics are further supplemented by self-paced eLearning, available to students on demand to support their skills journey.

ACI’s education courses provide students with knowledge at all levels to enhance and improve their understanding of ACI products.

ACI also provides further, more in-depth technical courses that allow students to use practical labs to enhance what they have learned in the classroom.

Training services are frequently a blended part of implementation services, enabling learning to occur in the right phase of the project lifecycle.

Training from ACI Training Academy is available throughout the customer lifecycle to address ongoing or changing business needs.

Depending on the products owned and course selected, training is conducted either at a dedicated education facility at one of ACI’s offices, online, on demand or at the customer site.

The ACI trainers' ability to understand customers' systems means ACI may also provide tailored course materials for individual customers.

Depending on the products purchased, training may be conducted at a dedicated education facility at one of ACI’s offices, online, on demand, or at the customer site.

Customer Support

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• Product documentation

• Hardware operating system compatibility

• User group membership

Premium Customer Support.

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The services available may differ by product and are defined in the customer contract.

We provide new releases of our products on a periodic basis.

New releases of our products, which often contain minor product enhancements, are typically provided at no additional fee for customers under standard customer support agreements.

We periodically provide new product releases, which often contain minor product enhancements, that are typically provided at no additional fee for customers under standard customer support agreements.

Agreements with our customers permit us to charge for substantial product enhancements that are not provided as part of the standard or premium customer support agreement.

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Issuing, Acquiring, and Real-Time Payments

The third-party software competitors for ACI’s Issuing, Acquiring, and Real-Time Payments solutions are Computer Sciences Corporation, Fidelity National Information Service, Inc.

The third-party software competitors for ACI’s Issuing, Acquiring, and Real-Time Payments solutions include Fidelity National Information Service, Inc.

("FIS"), Finastra, Fiserv, Inc.

("Fiserv"), NCR, OpenWay Group, and TSYS (Global Payments), as well as small, regionally-focused companies such as BPC Banking Technologies, CR2, Financial Software and Systems, Form3, HPS, Icon Solution, Lusis Payments Ltd., Opus Software Solutions Private Limited, PayEx Solutions AS, Renovite, RS2, and Volante Technologies.

("Fiserv"), NCR, OpenWay Group, Total System Services, Inc.

(Global Payments), and Volante, as well as small, regionally-focused companies such as BPC Banking Technologies, CR2, Financial Software and Systems, Form3, HPS, Icon Solution, Lusis Payments Ltd., Opus Software Solutions Private Limited, PayEx Solutions AS, Renovite, and RS2.

Primary digital payment processing competitors in this area include global entities such as Atos Origin S.A., Fiserv, Mastercard, SiNSYS, and VISA, as well as regional or country-specific processors.

Omni-Commerce Payments

Competitors for our ACI Omni-Commerce solution come from both third-party software and service providers as well as service organizations run by major banks.

Third-party software and service competitors include Adyen, Aurus, Cybersource (Visa), First Data (Fiserv), FreedomPay, Ingenico Group, Modo Payments, NCR, Square, Inc., VeriFone Systems, Inc., Worldline, and Worldpay Inc.

eCommerce Payments

Competitors for our ACI Secure eCommerce solution come from both third-party software and service providers, as well as service organizations run by major banks.

Third-party software and service competitors include Adyen, Braintree (PayPal), Cybersource (Visa), First Data (Fiserv), GlobalCollect, Ingenico Group, NCR, Square, Inc., Tender Retail Inc., PPRO, StripeVeriFone Systems, Inc., and Worldpay Inc.

Payments Orchestration

Competitors for merchant payments (ACI Payments Orchestration Platform) come from both third-party software and service providers, as well as service organizations run by major banks.

Third-party software and service competitors include Adyen, Cybersource (VISA Acceptance Solutions), Fiserv, Ingenico Group, NCR, Square, Inc., Tender Retail Inc., VeriFone Systems, Inc., Worldpay Inc.

(FIS), and Worldline.

We are also competing in some areas with the traditional orchestration layer providers such as IXOpay, Payoneer, Nuvei, and Spreedly.

Fraud Management

Principal competitors for our ACI Fraud Management solution are Accertify (American Express), BAE Systems, Cybersource (Visa), Fair Isaac Corporation (FICO), Featurespace, Feedzai, FIS, Fiserv, Forter, Fraugster, IBM, Kount, NICE LTD, Actimize LTD, Oracle, Riskified, SAS Institute, Inc., and Signifyd, as well as dozens of smaller companies focused on niches of this segment such as anti-money laundering.

Principal competitors for our ACI Fraud Management solution are Accertify (American Express), BAE Systems, Cybersource (VISA), Fair Isaac Corporation, Featurespace, Feedzai, FIS, Fiserv, Forter, Kount, NCR, NICE LTD, and SAS Institute, Inc., as well as dozens of smaller companies focused on niches of this segment such as device identification and anti-money laundering.

Bill Payments

The principal competitors for our ACI Speedpay solution are Aliaswire Inc., CSG Systems International, Inc., FIS, Fiserv, Invoice Cloud, Inc., Jack Henry & Associates, Inc., Kubra Customer Interaction Management, Nelnet, Inc.

The principal competitors for our ACI Speedpay bill payment solution are Aliaswire Inc., CSG Systems International, Inc., FIS, Fiserv, Invoice Cloud, Inc., Jack Henry & Associates, Inc., Kubra Customer Interaction Management, Nelnet, Inc.

and Affiliates, NIC, Paymentus Corp., PayNearMe, Repay, TouchNet Information Systems, Inc., Transact, and Worldpay Inc.

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Research and Development

Our product development efforts focus on new products and improved versions of existing products.

We facilitate user group meetings to help us determine our product and solution strategy, development plans, and aspects of customer support.

Our product development efforts focus on new products while continuing to increase the functionality of existing products.

To ensure we are building for the market, we facilitate user group meetings to help us determine our product and solution strategy, development plans, and aspects of customer support.

The user groups are generally organized geographically or by product lines.

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Our biller products and solutions are sold in the United States.

As of December 31, 2022, we serve more than 6,000 organizations, including 9 of the top 10 banks worldwide and 80,000+ merchants directly and through payment service providers, as measured by revenue, in 95+ countries on six continents.

As of December 31, 2023, we serve more than 6,000 organizations, including all 10 of the top 10 banks worldwide, as measured by asset size, and 80,000+ merchants directly and through payment service providers, and we have customers in 95+ countries on six continents.

No single customer accounted for more than 10% of our consolidated revenues for the years ended December 31, 2023, 2022, and 2021.

One customer accounted for 10.1% and 13.8% of the Company's consolidated receivables balance as of December 31, 2022 and December 31, 2021, respectively.

No customer accounted for more than 10% of the Company’s consolidated receivables balance as of December 31, 2023.

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

Selling and Implementation

Our products are sold and supported directly and through distribution networks covering three geographic regions – the Americas, Europe/Middle East/Africa ("EMEA") and Asia Pacific.

Each region has its own globally coordinated sales force, supplemented with local independent reseller and/or distributor networks.

Our primary method of distribution is direct sales by employees assigned to specific target customer segments.

We use distributors and referral partners to supplement our direct sales force in countries where it is more efficient and economical to do so.

Headquartered in Coral Gables, Florida, we have sales and services personnel in offices throughout the United States.

We have sales and services personnel in offices throughout the United States.

Outside of the United States, our international subsidiaries sell, support, and service our products and solutions in their local countries.

ACI’s distributors, resellers, and system integration partners are enabled to provide supplemental or complete product implementation and customization services directly to our customers or in a joint delivery model.

Our broad geographic footprint allows us to leverage the business and technical expertise of a global workforce.

We generate a majority of our sales leads through existing relationships with vendors, direct marketing programs, customers and prospects, or through referrals.

We use distributors and referral partners to supplement our direct sales force in countries where it is more efficient and economical to do so.

We distribute the products of other vendors where they complement our existing product lines.

We are typically responsible for the sales and marketing of the vendor’s products, and agreements with these vendors generally provide for revenue sharing based on relative responsibilities.

We are typically responsible for the sales and marketing of the vendors' products, and agreements with these vendors generally provide for revenue sharing based on relative responsibilities.

Proprietary Rights and Licenses

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Periodic information technology examination assessments are performed using FFIEC interagency guidelines to identify potential risks that could adversely affect serviced financial institutions, determine compliance with applicable laws and regulations that affect the services provided to financial institutions and ensure the services we provide to financial institutions do not create systemic risk to the banking system or impact the safe and sound operation of the financial institutions we serve.

In addition, independent

auditors annually review several of our operations to provide reports on internal controls for our clients’ auditors and regulators.

In addition, independent auditors annually review several of our operations to provide reports on internal controls for our clients’ auditors and regulators.

We are also subject to review under state and foreign laws and rules that regulate many of the same activities that are described above, including electronic data processing and back-office services for financial institutions and the use of consumer information.

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ACI Payments, Inc., our EBPP affiliate, is registered as a Money Services Business.

Accordingly, we are subject to the USA Patriot Act and reporting requirements of the Bank Secrecy Act and United States ("U.S.").

Treasury Regulations.

Accordingly, we are subject to the USA Patriot Act and reporting requirements of the Bank Secrecy Act and United States ("U.S.") Treasury Regulations.

These businesses may also be subject to certain state and local licensing requirements.

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Executive Officers of the Registrant

As of March 1, 2023, our executive officers, their ages, and their positions were as follows:

Warsop, III 56 Interim President and Chief Executive Officer

As of February 29, 2024, our executive officers, their ages, and their positions were as follows:

Warsop, III 57 President, Chief Executive Officer, and Director

Behrens 52 Chief Financial Officer

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Debbie Guerra 60 Chief Product Officer

Ram Puppala 53 Chief Technology and Operations Officer

Warsop was appointed Interim President and Chief Executive Officer on November 8, 2022.

Abe Kuruvilla 52 Chief Technology and Operations Officer

Warsop was appointed President and Chief Executive Officer on June 1, 2023.

Warsop joined the ACI Board of Directors in June 2015 and became non-executive Chairman in June 2022.

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He served in various capacities at Electronic Data Systems for 17 years, including President of its Business Process Outsourcing unit in Asia Pacific, Vice President in the United Kingdom, and Vice President of Global Financial Services.

He currently serves as President of the North Florida Chapter of the Juvenile Diabetes Research Foundation.

Behrens serves as Executive Vice President and Chief Financial Officer.

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Behrens holds a Bachelor of Science from the University of Nebraska – Lincoln.

Silva was appointed as Executive Vice President and Chief Revenue Officer on May 6, 2022.

Silva serves as Executive Vice President and Chief Revenue Officer.

Since joining ACI in 2021, Mr.

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He extended his education at INSEAD, the Harvard Business School and the University of Chicago Booth School of Business.

Guerra was appointed as Executive Vice President and Chief Product Officer on July 5, 2022.

Guerra serves as Executive Vice President and Chief Product Officer.

Guerra joined ACI in 2019 and is a seasoned payments industry executive with over three decades of experience spanning payments, fintech, consulting and IT services.

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She was one of the early female graduates of the United States Military Academy at West Point and holds a Bachelor of Science degree in engineering.

Puppala serves as Executive Vice President and Chief Technology Officer.

Kuruvilla was appointed as Executive Vice President and Chief Technology Officer on October 30, 2023.

Prior to joining ACI, Mr.

Puppala served as Chief Digital Officer of Metropolitan Commercial Bank, where he led the digital payment product portfolio.

Prior to that he served as Chief Technology Officer at State Street Global Exchange.

He also served as Chief Information Officer for Technology and Customer Operations at Fiserv Investment Services and as Chief Technology Officer for Fiserv Global Payment Solutions.

Kuruvilla served as Chief Information Officer at CoreLogic, Inc., where he led all aspects of technology strategy, engineering, cyber security, internal systems, and IT operations.

Prior to that he served as Chief Information Officer at Dell Financial Services.

Earlier in his career, Mr.

Puppala held technology leadership roles at FNSTAR, a company he helped found, and E*TRADE Financial Group.

He began his career at Goldman Sachs before becoming a developer at AT&T.

Puppala holds his Bachelor of Engineering, Computer Science and Technology, from the University of Pune and is completing his Executive MBA at the MIT Sloan School of Management.

Kuruvilla held technology leadership roles at De Lage Landen Financial Services, a wholly owned subsidiary of Rabobank.

Kuruvilla holds a bachelor's degree in electrical and computer engineering and a Master of Business Administration from Drexel University.

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-K

Item 1. Business