What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-04-30 · 167 added, 93 removed, 487 unchanged (35% of the section changed)

4 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets

53 unchanged sentences

5,000,000 shares authorized;

no shares issued at March 31, 2024, and December 31, 2023

no shares issued at June 30, 2024, and December 31, 2023

Common stock;

1 unchanged sentence

280,000,000 shares authorized;

140,525,055 shares issued at March 31, 2024, and December 31, 2023

140,525,055 shares issued at June 30, 2024, and December 31, 2023

Additional paid-in capital 718,559 712,994

Retained earnings 1,418,103 1,394,967

Treasury stock, at cost, 34,267,073 and 32,447,317 shares at March 31, 2024, and December 31, 2023, respectively

Treasury stock, at cost, 35,664,418 and 32,447,317 shares at June 30, 2024, and December 31, 2023, respectively

( 786,526 ) ( 674,896 )

7 unchanged sentences

(unaudited and in thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Software as a service and platform as a service

19 unchanged sentences

Operating income (loss)

53,701 10,520 63,261 ( 13,832 )

Other income (expense)

3 unchanged sentences

3,953 3,458 7,962 6,963

Total other income (expense) ( 17,026 ) ( 18,782 )

Loss before income taxes

1,156 ( 4,092 ) ( 869 ) ( 7,487 )

Total other income (expense) ( 13,362 ) ( 20,543 ) ( 30,388 ) ( 39,325 )

Income (loss) before income taxes 40,339 ( 10,023 ) 32,873 ( 53,157 )

Income tax expense (benefit) 9,452 ( 3,313 ) 9,737 ( 14,139 )

285 ( 10,826 )

$ ( 7,751 ) $ ( 32,308 )

Loss per common share

$ ( 0.07 ) $ ( 0.30 )

Net income (loss) $ 30,887 $ ( 6,710 ) $ 23,136 $ ( 39,018 )

Income (loss) per common share

$ 0.29 $ ( 0.06 ) $ 0.22 $ ( 0.36 )

Diluted $ 0.29 $ ( 0.06 ) $ 0.22 $ ( 0.36 )

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

2024 2023 2024 2023

Net income (loss) $ 30,887 $ ( 6,710 ) $ 23,136 $ ( 39,018 )

Other comprehensive income (loss):

Foreign currency translation adjustments ( 2,208 ) 2,990 ( 4,612 ) 6,608

( 2,404 ) 3,618

Total other comprehensive income (loss) ( 2,208 ) 2,990 ( 4,612 ) 6,608

Comprehensive loss

Comprehensive income (loss) $ 28,679 $ ( 3,720 ) $ 18,524 $ ( 32,410 )

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)

Three Months Ended June 30, 2024

Common Stock Additional

Paid-in Capital Retained Earnings Treasury Stock Accumulated Other

Comprehensive Loss Total

Balance as of March 31, 2024 $ 702 $ 714,936 $ 1,387,216 $ ( 733,927 ) $ ( 111,874 ) $ 1,257,053

— — 30,887 — — 30,887

Other comprehensive loss

— — — — ( 2,208 ) ( 2,208 )

Stock-based compensation

— 10,720 — — — 10,720

Shares issued and forfeited, net, under stock plans

— ( 7,097 ) — 8,066 — 969

Repurchase of 1,682,787 shares of common stock

— — — ( 57,628 ) — ( 57,628 )

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 3,037 ) — ( 3,037 )

Balance as of June 30, 2024 $ 702 $ 718,559 $ 1,418,103 $ ( 786,526 ) $ ( 114,082 ) $ 1,236,756

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

— — ( 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

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

3 unchanged sentences

(unaudited and in thousands, except share amounts)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Common Stock Additional

3 unchanged sentences

Balance as of December 31, 2023 $ 702 $ 712,994 $ 1,394,967 $ ( 674,896 ) $ ( 109,470 ) $ 1,324,297

Net loss — — ( 7,751 ) — — ( 7,751 )

— — 23,136 — 23,136

Other comprehensive loss

8 unchanged sentences

— — — ( 6,339 ) — ( 6,339 )

Balance as of March 31, 2024 $ 702 $ 714,936 $ 1,387,216 $ ( 733,927 ) $ ( 111,874 ) $ 1,257,053

Three Months Ended March 31, 2023

Balance as of June 30, 2024 $ 702 $ 718,559 $ 1,418,103 $ ( 786,526 ) $ ( 114,082 ) $ 1,236,756

Six Months Ended June 30, 2023

Paid-in Capital

13 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

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

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

Cash flows from operating activities:

$ ( 7,751 ) $ ( 32,308 )

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

Net income (loss) $ 23,136 $ ( 39,018 )

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

48,000 49,884

5 unchanged sentences

18,819 10,715

( 2,067 ) 311

Changes in operating assets and liabilities:

5 unchanged sentences

Deferred revenue

13,907 10,202

Other current and noncurrent assets and liabilities

14 unchanged sentences

Repurchases of common stock

( 119,674 ) —

Proceeds from revolving credit facility

5 unchanged sentences

( 538,448 ) ( 34,081 )

Payments for debt issuance costs

Payments on or proceeds from other debt, net ( 8,669 ) ( 11,830 )

Payments for debt issuance costs ( 5,141 ) ( 2,160 )

Net decrease in settlement assets and liabilities

( 6,151 ) ( 24,087 )

Net cash flows from financing activities

1 unchanged sentence

Effect of exchange rate fluctuations on cash 1,290 5,427

Net increase (decrease) in cash and cash equivalents ( 725 ) 13,560

Net decrease in cash and cash equivalents

( 14,703 ) ( 17,845 )

Cash and cash equivalents, including settlement deposits, beginning of period 238,821 214,672

17 unchanged sentences

All intercompany balances and transactions have been eliminated.

The condensed consolidated financial statements as of March 31, 2024, and for the three months ended March 31, 2024 and 2023, 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, 2024, and for the three and six months ended June 30, 2024 and 2023, 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, 2023, 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, 2023, filed on February 29, 2024.

Results for the three months ended March 31, 2024, are not necessarily indicative of results that may be attained in the future.

Results for the three and six months ended June 30, 2024, 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, 2024 December 31, 2023

Vendor financed licenses $ 13,698 $ 12,702

June 30, 2024 December 31, 2023

Operating lease liabilities $ 9,250 $ 9,348

Accrued interest 9,082 9,172

Vendor financed licenses 8,563 12,702

Other 35,265 51,022

14 unchanged sentences

The Company is entitled to interest earned on the fund balances.

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

The amount of settlement funds as of March 31, 2024, and December 31, 2023, was $ 173.4 million and $ 273.2 million, respectively.

The amount of settlement funds as of June 30, 2024, and December 31, 2023, was $ 202.6 million and $ 273.2 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 $ 394.0 million and $ 398.5 million as of March 31, 2024, and December 31, 2023, respectively.

The fair value of the Company’s 5.750 % Senior Notes due 2026 (“2026 Notes”) was $ 397.9 million and $ 398.5 million as of June 30, 2024, and December 31, 2023, 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, 2024, 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, 2024, 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 $ 18.3 million and $ 18.5 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of March 31, 2024, and December 31, 2023, respectively.

Accordingly, the Company recorded an investment of $ 19.3 million and $ 18.5 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of June 30, 2024, and December 31, 2023, respectively.

Recently Issued Accounting Standards Not Yet Effective

14 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Billed receivables $ 161,552 $ 250,423

5 unchanged sentences

Total receivables, net $ 659,519 $ 766,320

N o customer accounted for more than 10% of the Company’s consolidated receivables balance as of March 31, 2024 and December 31, 2023.

No customer accounted for more than 10% of the Company’s consolidated receivables balance as of June 30, 2024 and December 31, 2023.

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 ( 590 )

Balance, March 31, 2024

Balance, June 30, 2024

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 $ 672.8 million as of March 31, 2024, of which the Company expects to recognize approximately 49 % over the next 12 months and the remainder thereafter.

During the three months ended March 31, 2024 and 2023, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.

As of March 31, 2024, the Company had $ 136.0 million, $ 490.6 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $ 461.9 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended, and up to $ 2.1 million of unused borrowings under Letter of Credit agreements.

Revenue allocated to remaining performance obligations was $ 731.0 million as of June 30, 2024, of which the Company expects to recognize approximately 53 % over the next 12 months and the remainder thereafter.

During the three and six months ended June 30, 2024, and 2023, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.

As of June 30, 2024, the Company had $ 136.0 million, $ 481.3 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $ 462.1 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended, and up to $ 1.9 million of unused borrowings under Letter of Credit agreements.

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

5 unchanged sentences

Amounts repaid under the Revolving Facility may be reborrowed.

Borrowings under the Credit Facilities bear interest at a rate equal to, at borrower's option, either (A) a base rate determined by reference to the highest of (1) the rate of interest per annum publicly announced by Bank of America as its prime rate, (2) the federal funds effective rate plus 0.5 %, (3) term SOFR plus 1 %, and (4) 1 % or (B) term SOFR for applicable interest period relevant to such borrowing, in each case plus an applicable margin.

Borrowings under the Credit Facilities bear interest at a rate equal to, at borrower's option, either (A) a base rate determined by reference to the highest of (1) the rate of interest per annum publicly announced by Bank of America as its prime rate, (2) the federal funds effective rate plus 0.5 %, (3) term Secured Overnight Financing Rate ("SOFR") plus 1 %, and (4) 1 % or (B) term SOFR for applicable interest period relevant to such borrowing, in each case plus an applicable margin.

The applicable margin for borrowings under the Credit Facilities is, based on the calculation of the applicable consolidated total leverage ratio, between 0.5 % to 1.5 % with respect to base rate borrowings and between 1.5 % and 2.5 % with respect to term SOFR rate borrowings.

Interest is due and payable monthly.

The interest rate in effect for the Credit Facility as of March 31, 2024, was 7.43 %.

The interest rate in effect for the Credit Facility as of June 30, 2024, was 7.44 %.

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.

5 unchanged sentences

The Credit Agreement contains customary negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant additional liens, and make certain acquisitions, investments, asset dispositions, and restricted payments.

In addition, the Credit Agreement contains financial covenants that require the Company to maintain, as of the end of any fiscal quarter, (i) a consolidated total net leverage ratio of less than or equal to 4.25 to 1.00, (ii) a consolidated senior secured net leverage ratio of less than or equal to 3.75 to 1.00, and (iii) a minimum consolidated interest coverage ratio of greater than or equal to 3.00 to 1.00, in each case subject to certain exclusions as set forth in the Credit Agreement.

secured net leverage ratio of less than or equal to 3.75 to 1.00, and (iii) a minimum consolidated interest coverage ratio of greater than or equal to 3.00 to 1.00, in each case subject to certain exclusions as set forth in the Credit Agreement.

The Credit Agreement also contains certain customary affirmative covenants and events of default.

3 unchanged sentences

The 2026 Notes will mature on August 15, 2026.

Maturities on debt outstanding as of March 31, 2024, are as follows (in thousands):

Maturities on debt outstanding as of June 30, 2024, are as follows (in thousands):

Fiscal Year Ending December 31,

2 unchanged sentences

Total $ 1,017,250

As of March 31, 2024, and at all times during the period, the Company was in compliance with its financial debt covenants.

As of June 30, 2024, 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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Term loans $ 481,250 $ 519,698

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, 2024, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

As of June 30, 2024, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

As of December 31, 2023, there was no amount outstanding on the overdraft facility.

1 unchanged sentence

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

As of March 31, 2024 and December 31, 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 June 30, 2024, no amount was outstanding on these agreements.

As of December 31, 2023, $ 3.6 million was outstanding on these agreements, all of which was included in other current liabilities in the consolidated balance sheet.

Software and Other Intangible Assets

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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, 2024 and 2023, totaled $ 15.5 million and $ 17.0 million, respectively.

Software for internal use amortization expense recorded during the three months ended June 30, 2024 and 2023, totaled $ 15.8 million and $ 16.0 million, respectively.

Software for internal use amortization expense recorded during the six months ended June 30, 2024 and 2023, totaled $ 31.3 million and $ 33.0 million, respectively.

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

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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

2 unchanged sentences

Total other intangible assets $ 468,057 $ ( 289,456 ) $ 178,601 $ 469,553 $ ( 273,907 ) $ 195,646

Other intangible assets amortization expense recorded during the three months ended March 31, 2024 and 2023, totaled $ 8.5 million and $ 8.4 million, respectively.

Based on capitalized intangible assets as of March 31, 2024, 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, 2024 and 2023, totaled $ 8.2 million and $ 8.5 million, respectively.

Other intangible assets amortization expense recorded during the six months ended June 30, 2024 and 2023, totaled $ 16.7 million and $ 16.9 million, respectively.

Based on capitalized intangible assets as of June 30, 2024, 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, 2024 and 2023, totaled 27,550 and 31,639 , respectively.

Shares issued under the 2017 Employee Stock Purchase Plan during the six months ended June 30, 2024 and 2023, totaled 51,397 and 65,770 , respectively.

Stock Options

7 unchanged sentences

Exercised ( 40,307 ) 18.69

Outstanding as of March 31, 2024 847,999 $ 18.76 1.76 $ 10,040,262

Exercisable as of March 31, 2024 847,999 $ 18.76 1.76 $ 10,040,262

The total intrinsic value of stock options exercised during the three months ended March 31, 2024 and 2023, was $ 0.3 million and less than $ 0.1 million, respectively.

There were no stock options granted during the three months ended March 31, 2024 or 2023.

Outstanding as of June 30, 2024 833,205 $ 18.76 1.52 $ 17,356,237

Exercisable as of June 30, 2024 833,205 $ 18.76 1.52 $ 17,356,237

The total intrinsic value of stock options exercised during the six months ended June 30, 2024 and 2023, was $ 0.6 million and $ 0.8 million, respectively.

There were no stock options granted during the six months ended June 30, 2024 or 2023.

Performance Share Awards

During the three months ended March 31, 2024, pursuant to the Company's 2020 Equity and Incentive Compensation Plan, the Company granted performance share awards with a total shareholder return component ("TSRs").

During the six months ended June 30, 2024, pursuant to the Company's 2020 Equity and Incentive Compensation Plan, the Company granted performance share awards with a total shareholder return component ("TSRs").

These performance share awards are earned, if at all, based upon achievement, over a specified period that must not be less than one year and is typically a three-year performance period.

9 unchanged sentences

Change in payout rate ( 203,945 ) 50.60

Nonvested as of March 31, 2024 1,022,348 $ 35.10

As of March 31, 2024, the TSRs granted in 2021 were earned by the employees.

Nonvested as of June 30, 2024 1,012,411 $ 35.13

In the first quarter of 2024, the TSRs granted in 2021 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, 2024, 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, 2024

The fair value of TSRs granted during the six months ended June 30, 2024 and 2023, 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) 2.7 2.9

2 unchanged sentences

Expected dividend yield — —

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

Restricted Share Units

6 unchanged sentences

Forfeited ( 86,941 ) 27.77

Nonvested as of March 31, 2024 2,493,642 $ 28.84

During the three months ended March 31, 2024, a total of 292,250 RSUs vested.

Nonvested as of June 30, 2024 2,161,032 $ 29.36

During the six months ended June 30, 2024, a total of 624,487 RSUs vested.

The Company withheld 190,072 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

As of March 31, 2024, there was unrecognized compensation expense of $ 65.3 million related to RSUs and $ 25.1 million related to TSRs, which the Company expects to recognize over a weighted average period of 2.5 years and 2.4 years, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended March 31, 2024 and 2023, of $ 8.1 million and $ 5.3 million, respectively, with corresponding tax benefits of $ 1.4 million and $ 0.9 million, respectively.

As of June 30, 2024, there was unrecognized compensation expense of $ 58.0 million related to RSUs and $ 21.9 million related to TSRs, which the Company expects to recognize over a weighted average period of 2.3 years and 2.2 years, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended June 30, 2024 and 2023, of $ 10.7 million and $ 5.4 million, respectively, with corresponding tax benefits of $ 1.7 million and $ 1.0 million, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the six months ended June 30, 2024 and 2023, of $ 18.8 million and $ 10.7 million, respectively, with corresponding tax benefits of $ 3.1 million and $ 2.0 million , respectively.

Common Stock and Treasury Stock

In 2005, the board approved a stock repurchase program authorizing the Company, as market and business conditions warrant, to acquire its common stock and periodically authorize additional funds for the program.

In February 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 repurchased 2,060,433 shares for $ 63.1 million during the three months ended March 31, 2024.

In June 2024, the board approved the repurchase of the Company's common stock of up to $ 400.0 million, in place of the remaining purchase amounts previously authorized.

The Company repurchased 3,743,220 shares for $ 120.7 million during the six months ended June 30, 2024.

Under the program to date, the Company has repurchased 62,664,520 shares for approximately $ 1.1 billion.

As of March 31, 2024, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 109.3 million.

As of June 30, 2024, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 380.3 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 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 (loss) per share (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Weighted average shares outstanding:

2 unchanged sentences

Diluted weighted average shares outstanding 106,166 108,455 106,815 108,306

The diluted loss per share computation excludes 4.4 million and 2.5 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended March 31, 2024 and 2023, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of March 31, 2024, and December 31, 2023, was 106,257,982 and 108,077,738 , respectively.

The diluted earnings (loss) per share computation excludes 1.0 million and 3.7 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended June 30, 2024 and 2023, respectively, as their effect would be anti-dilutive.

The diluted earnings (loss) per share computation excludes 1.7 million and 3.1 million options to purchase shares, RSUs, and contingently issuable shares during the six months ended June 30, 2024 and 2023, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of June 30, 2024, and December 31, 2023, was 104,860,637 and 108,077,738 , respectively.

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

Other, net was $ 2.0 million and $ 3.4 million of expense for the three months ended March 31, 2024 and 2023, respectively.

Other, net was $ 1.2 million of income and $ 4.1 million of expense for the three months ended June 30, 2024 and 2023, respectively.

Other, net was $ 0.9 million and $ 7.5 million of expense for the six months ended June 30, 2024 and 2023, 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

2024 2023 2024 2023

Banks $ 143,649 $ 117,507 $ 249,078 $ 205,547

11 unchanged sentences

Other, net 1,156 ( 4,092 ) ( 869 ) ( 7,487 )

Loss before income taxes

$ ( 7,466 ) $ ( 43,134 )

Income (loss) before income taxes $ 40,339 $ ( 10,023 ) $ 32,873 $ ( 53,157 )

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

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

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Banks Merchants Billers Total

6 unchanged sentences

Total $ 143,649 $ 38,017 $ 191,813 $ 373,479

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Banks Merchants Billers Total

6 unchanged sentences

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

Three Months Ended March 31,

Six Months Ended June 30, 2024

Banks Merchants Billers Total

Primary Solution Categories

Bill Payments $ — $ — $ 366,675 $ 366,675

Merchant Payments — 73,745 — 73,745

Fraud Management 20,694 — — 20,694

Real-Time Payments 51,177 — — 51,177

Issuing and Acquiring 177,207 — — 177,207

Total $ 249,078 $ 73,745 $ 366,675 $ 689,498

Six Months Ended June 30, 2023

Banks Merchants Billers Total

Primary Solution Categories

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

Merchant Payments — 71,289 — 71,289

Fraud Management 21,508 — — 21,508

Real-Time Payments 45,897 — — 45,897

Issuing and Acquiring 138,142 — — 138,142

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

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Software as a service and platform as a service $ 11,709 $ 9,742 $ 22,227 $ 18,991

9 unchanged sentences

Software as a service and platform as a service $ 191,813 $ 169,286 $ 366,675 $ 336,117

License — — — —

Maintenance — 24 — 48

Services — — — —

Total $ 191,813 $ 169,310 $ 366,675 $ 336,165

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

2024 2023 2024 2023

United States $ 229,543 $ 205,199 $ 457,650 $ 406,468

2 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Long-lived Assets

2 unchanged sentences

Total $ 1,922,232 $ 1,979,595

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three months ended March 31, 2024 and 2023.

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, 2024 and 2023.

For the three months ended March 31, 2024, the Company's effective tax rate was negative 4 %.

The Company reported a tax charge on an overall pretax loss, with foreign entities reporting losses of $ 11.1 million.

The effective tax rate for the three months ended March 31, 2024, was negatively impacted by excess tax limitations on stock-based compensation expense.

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.

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three and six months ended June 30, 2024 and 2023.

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, 2024 and 2023.

For the three and six months ended June 30, 2024, the Company's effective tax rate was 23 % and 30 %, respectively.

The Company reported a tax charge on pretax income for both the three and six months ended June 30, 2024, with foreign entities recognizing earnings of $ 51.7 million and $ 40.5 million, respectively.

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.

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.

5 unchanged sentences

Entities operating in countries where Pillar Two has been enacted are required to estimate Pillar Two top-up tax obligations beginning in the first quarter of 2024.

For the three months ended March 31, 2024, the Company did not have material Pillar Two top-up tax obligations impacting the Company’s estimated annual effective tax rate.

For the six months ended June 30, 2024, the Company did not have material Pillar Two top-up tax obligations impacting the Company’s estimated annual effective tax rate.

The Company will continue to evaluate the impact of proposed and enacted legislation as new guidance becomes available.

As of March 31, 2024, and December 31, 2023, the amount of unrecognized tax benefits for uncertain tax positions was $ 20.9 million, excluding related liabilities for interest and penalties of $ 0.5 million.

As of June 30, 2024, and December 31, 2023, the amount of unrecognized tax benefits for uncertain tax positions was $ 20.9 million, excluding related liabilities for interest and penalties of $ 0.5 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 $ 2.2 million, due to the settlement of various audits and the expiration of statutes of limitation.

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

What changed 10-Q

Item 1. Financial Statements