ACI WORLDWIDE, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report, December 31, 2024. In connection with our evaluation of disclosure controls and procedures, we have concluded that our disclosure controls and procedures are effective as of December 31, 2024. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with U.S. GAAP. Under the supervision of, and with the participation of our Chief Executive Officer and Chief Financial Officer, management assessed the effectiveness of internal control over financial reporting as of December 31, 2024. Management based its assessment on criteria established in “Internal Control Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of December 31, 2024, has been audited by Deloitte & Touche, LLP, an independent registered public accounting firm, and Deloitte & Touche, LLP has issued an attestation report on our internal control over financial reporting. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 45 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of ACI Worldwide, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of ACI Worldwide, Inc. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 27, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Omaha, Nebraska February 27, 2025 46 Table of Contents ITEM 9B. OTHER INFORMATION Rule 10b5-1 Plans None of the Company’s directors or officers adopted , modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended December 31, 2024. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE The information under the heading “Executive Officers of the Registrant” in Part 1, Item 1 of this Form 10-K is incorporated herein by reference. The other information required by this Item 10 is incorporated by reference from our Proxy Statement for the Annual Meeting of Stockholders to be held on or about June 3, 2025 (the “2025 Proxy Statement“), under the sections entitled “Proposal 1 – Election of Directors,” “Information Regarding Security Ownership – Section 16(a) Beneficial Ownership Reporting Compliance,” "Corporate Governance – Code of Business Conduct and Ethics,” and “Corporate Governance – Board Committees.” ITEM 11. EXECUTIVE COMPENSATION Information included in the sections entitled “Director Compensation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation,” and “Compensation Committee Interlocks and Insider Participation” in our 2025 Proxy Statement is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information included in the sections entitled “Information Regarding Security Ownership” in our 2025 Proxy Statement is incorporated herein by reference. Information included in the section entitled “Equity Compensation Plan Information” in our 2025 Proxy Statement is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE Information included in the section entitled “Certain Relationships and Related Transactions” in our 2025 Proxy Statement is incorporated herein by reference. Information included in the sections entitled “Director Independence” and “Board Committees and Committee Meetings” in the “Corporate Governance” section of our 2025 Proxy Statement is incorporated by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information included in the sections entitled “Independent Registered Public Accounting Firm Fees” and “Pre-Approval of Audit and Non-Audit Services” under “Proposal 2 – Ratification of Appointment of the Company’s Independent Registered Public Accounting Firm” in our 2025 Proxy Statement is incorporated herein by reference. 47 Table of Contents PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES Documents filed as part of this annual report on Form 10-K: (1) Financial Statements. The following index lists consolidated financial statements and notes thereto filed as part of this annual report on Form 10-K: Page Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP (PCAOB ID No. 34 ) 49 Consolidated Balance Sheets as of December 31, 202 4 and 202 3 51 Consolidated Statements of Operations for each of the three years in the period ended December 31, 202 4 52 Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 202 4 53 Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 202 4 54 Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 202 4 55 Notes to Consolidated Financial Statements 56 (2) Financial Statement Schedules. All schedules have been omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto. (3) Exhibits. A list of exhibits filed or furnished with this report on Form 10-K (or incorporated by reference to exhibits previously filed by ACI) is provided in the accompanying Exhibit Index. 48 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of ACI Worldwide, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of ACI Worldwide, Inc. and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition - Software License Arrangements - Refer to Note 2 to the financial statements The Company recognizes revenue upon transfer of control of promised products and/or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. The Company’s software license arrangements provide the customer with the right to use functional intellectual property (as it exists at the point in time at which the license is granted) for the duration of the contract term. Implementation, support, and other services are typically considered distinct performance obligations when sold with a software license. 49 Table of Contents Significant judgment is exercised by the Company in determining revenue recognition for these customer arrangements, and includes the following: • Determination of the term of a software license arrangement when early termination rights are provided to the customer. • Determination of whether products and/or services are considered distinct performance obligations that should be accounted for separately. • Determination of whether the financing component in a software licensing arrangement is significant and, if so, the discount rate used in calculating the significant financing component. • Assessment of whether the extension of payment terms in a software licensing arrangement results in variable consideration and, if so, the amount to be included in the transaction price. • Determination of the standalone selling price for each performance obligation, the amount allocated to each performance obligation and whether it depicts the amount that the Company expects to be entitled to in exchange for the related product and/or service. As the selling prices of the Company’s software licenses are highly variable, the Company estimates standalone selling price of its software licenses using the residual approach when the software license is sold with other services and observable standalone selling prices exist for the other services. Given these factors, the related audit effort in evaluating management’s judgments in determining revenue recognition for software license arrangements was extensive and required a high degree of auditor judgment. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company’s accounting for software license arrangements included the following, among others: • We tested the effectiveness of controls over the review of software license arrangements, including, among others, the determination of the contract term, identification of performance obligations, determination of significant financing component, estimation of variable consideration, and determination of standalone selling prices, including those controls over the determination that software license pricing is highly variable. • We selected a sample of software license arrangements and performed the following, among others: • Obtained contract source documents for each selection, including separate contracts or agreements that should be combined with the selected arrangement, and other documents that were part of the arrangement. • Tested management’s determination of the contract term, identification of performance obligations, determination of significant financing component, estimation of variable consideration, and determination of standalone selling prices. • Evaluated the reasonableness of the methodology and estimates used by management and the appropriateness of its revenue recognition conclusions for these key judgment areas. • Tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements. • We evaluated management’s determination that software license pricing is highly variable by obtaining management’s highly variable analysis and performing the following: • Testing the completeness of management’s analysis by tracing a selection of known data points from contracts into the highly variable analysis. • Testing the accuracy of management’s analysis by selecting a sample of contracts from the highly variable analysis, obtaining the contract and price detail, and evaluating whether discounts were appropriately included in the analysis. • Testing the mathematical accuracy of management’s calculation. /s/ Deloitte & Touche LLP Omaha, Nebraska February 27, 2025 We have served as the Company’s auditor since 2009. 50 Table of Contents ACI WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) December 31, 2024 2023 ASSETS Current assets Cash and cash equivalents $ 216,394 $ 164,239 Receivables, net of allowances of $ 1,758 and $ 4,295 , respectively 414,399 452,337 Settlement assets 318,871 723,039 Prepaid expenses 29,218 31,479 Other current assets 11,940 35,551 Total current assets 990,822 1,406,645 Noncurrent assets Accrued receivables, net 360,079 313,983 Property and equipment, net 35,069 37,856 Operating lease right-of-use assets 28,864 34,338 Software, net 92,893 108,418 Goodwill 1,226,026 1,226,026 Intangible assets, net 165,377 195,646 Deferred income taxes, net 72,713 58,499 Other noncurrent assets 53,450 63,328 TOTAL ASSETS $ 3,025,293 $ 3,444,739 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 45,422 $ 45,964 Settlement liabilities 317,484 721,164 Employee compensation 55,567 53,892 Current portion of long-term debt 34,928 74,405 Deferred revenue 75,419 59,580 Other current liabilities 73,808 82,244 Total current liabilities 602,628 1,037,249 Noncurrent liabilities Deferred revenue 19,304 24,780 Long-term debt 889,649 963,599 Deferred income taxes, net 39,920 40,735 Operating lease liabilities 22,592 29,074 Other noncurrent liabilities 26,873 25,005 Total liabilities 1,600,966 2,120,442 Commitments and contingencies (Note 13) Stockholders’ equity Preferred stock; $ 0.01 par value; 5,000,000 shares authorized; no shares issued at December 31, 2024 and 2023 — — Common stock; $ 0.005 par value; 280,000,000 shares authorized; 140,525,055 shares issued at December 31, 2024 and 2023 702 702 Additional paid-in capital 731,927 712,994 Retained earnings 1,598,085 1,394,967 Treasury stock, at cost, 35,270,142 and 32,447,317 shares at December 31, 2024 and 2023, respectively ( 784,914 ) ( 674,896 ) Accumulated other comprehensive loss ( 121,473 ) ( 109,470 ) Total stockholders’ equity 1,424,327 1,324,297 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,025,293 $ 3,444,739 The accompanying notes are an integral part of the consolidated financial statements. 51 Table of Contents ACI WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Years Ended December 31, 2024 2023 2022 Revenues Software as a service and platform as a service $ 897,979 $ 849,147 $ 802,880 License 412,306 321,224 348,134 Maintenance 190,763 205,068 200,045 Services 93,240 77,140 70,842 Total revenues 1,594,288 1,452,579 1,421,901 Operating expenses Cost of revenue (1) 791,783 719,211 696,071 Research and development 146,677 140,758 146,311 Selling and marketing 118,352 132,639 134,812 General and administrative 118,379 117,190 114,194 Depreciation and amortization 110,962 122,373 126,678 Total operating expenses 1,286,153 1,232,171 1,218,066 Operating income 308,135 220,408 203,835 Other income (expense) Interest expense ( 72,471 ) ( 78,486 ) ( 53,193 ) Interest income 15,926 14,215 12,547 Other, net ( 1,181 ) ( 8,510 ) 43,446 Total other income (expense) ( 57,726 ) ( 72,781 ) 2,800 Income before income taxes 250,409 147,627 206,635 Income tax expense 47,291 26,118 64,458 Net income $ 203,118 $ 121,509 $ 142,177 Income per common share Basic $ 1.93 $ 1.12 $ 1.25 Diluted $ 1.91 $ 1.12 $ 1.24 Weighted average common shares outstanding Basic 105,491 108,497 113,700 Diluted 106,493 108,857 114,238 (1) The cost of revenue excludes charges for depreciation and amortization. The accompanying notes are an integral part of the consolidated financial statements. 52 Table of Contents ACI WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) Years Ended December 31, 2024 2023 2022 Net income $ 203,118 $ 121,509 $ 142,177 Other comprehensive income (loss): Foreign currency translation adjustments ( 12,003 ) 8,190 ( 18,113 ) Total other comprehensive income (loss) ( 12,003 ) 8,190 ( 18,113 ) Comprehensive income $ 191,115 $ 129,699 $ 124,064 The accompanying notes are an integral part of the consolidated financial statements. 53 Table of Contents ACI WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Balance as of December 31, 2021 $ 702 $ 688,313 $ 1,131,281 $ ( 475,972 ) $ ( 99,547 ) $ 1,244,777 Net income — — 142,177 — — 142,177 Other comprehensive loss — — — — ( 18,113 ) ( 18,113 ) Stock-based compensation — 29,753 — — — 29,753 Shares issued and forfeited, net, under stock plans — ( 15,608 ) — 23,721 — 8,113 Repurchase of 8,624,238 shares of common stock — — — ( 206,537 ) — ( 206,537 ) Repurchase of stock-based compensation awards for tax withholdings — — — ( 6,983 ) — ( 6,983 ) Balance as of December 31, 2022 702 702,458 1,273,458 ( 665,771 ) ( 117,660 ) 1,193,187 Net income — — 121,509 — — 121,509 Other comprehensive income — — — — 8,190 8,190 Stock-based compensation — 24,547 — — — 24,547 Shares issued and forfeited, net, under stock plans — ( 14,011 ) — 23,611 — 9,600 Repurchase of 939,567 shares of common stock — — — ( 27,587 ) — ( 27,587 ) Repurchase of stock-based compensation awards for tax withholdings — — — ( 5,149 ) — ( 5,149 ) Balance as of December 31, 2023 702 712,994 1,394,967 ( 674,896 ) ( 109,470 ) 1,324,297 Net income — — 203,118 — — 203,118 Other comprehensive loss — — — — ( 12,003 ) ( 12,003 ) Stock-based compensation — 41,281 — — — 41,281 Shares issued and forfeited, net, under stock plans — ( 22,348 ) — 31,547 — 9,199 Repurchase of 3,946,537 shares of common stock — — — ( 128,454 ) — ( 128,454 ) Repurchase of stock-based compensation awards for tax withholdings — — — ( 13,111 ) — ( 13,111 ) Balance as of December 31, 2024 $ 702 $ 731,927 $ 1,598,085 $ ( 784,914 ) $ ( 121,473 ) $ 1,424,327 The accompanying notes are an integral part of the consolidated financial statements. 54 Table of Contents ACI WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net income $ 203,118 $ 121,509 $ 142,177 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation 18,161 23,739 23,181 Amortization 92,801 98,634 104,147 Amortization of operating lease right-of-use assets 9,706 11,620 11,036 Amortization of deferred debt issuance costs 2,912 4,323 4,561 Deferred income taxes ( 13,130 ) ( 4,085 ) 1,603 Stock-based compensation expense 41,281 24,547 29,753 Gain on divestiture — — ( 38,452 ) Other 1,920 1,921 3,028 Changes in operating assets and liabilities, net of impact of divestiture: Receivables ( 23,583 ) ( 62,998 ) ( 132,194 ) Accounts payable ( 268 ) ( 3,775 ) 7,730 Accrued employee compensation 2,887 8,146 ( 3,161 ) Deferred revenue 11,886 2,705 ( 2,977 ) Other current and noncurrent assets and liabilities 11,057 ( 57,769 ) ( 7,051 ) Net cash flows from operating activities 358,748 168,517 143,381 Cash flows from investing activities: Purchases of property and equipment ( 15,402 ) ( 8,924 ) ( 13,103 ) Purchases of software and distribution rights ( 29,649 ) ( 28,853 ) ( 26,790 ) Proceeds from divestiture — — 100,139 Net cash flows from investing activities ( 45,051 ) ( 37,777 ) 60,246 Cash flows from financing activities: Proceeds from issuance of common stock 2,918 2,819 3,581 Proceeds from exercises of stock options 6,329 6,726 4,584 Repurchase of stock-based compensation awards for tax withholdings ( 13,111 ) ( 5,149 ) ( 6,983 ) Repurchase of common stock ( 127,670 ) ( 27,587 ) ( 206,537 ) Proceeds from revolving credit facility 184,000 134,000 180,000 Repayments of revolving credit facility ( 238,000 ) ( 115,000 ) ( 75,000 ) Proceeds from term portion of credit agreement 500,000 — — Repayments of term portion of credit agreement ( 557,198 ) ( 73,031 ) ( 85,431 ) Payments on other debt, net ( 14,854 ) ( 16,766 ) ( 12,123 ) Payments for debt issuance costs ( 5,141 ) ( 2,160 ) — Net increase (decrease) in settlement assets and liabilities ( 25,470 ) ( 15,404 ) 26,849 Net cash flows from financing activities ( 288,197 ) ( 111,552 ) ( 171,060 ) Effect of exchange rate fluctuations on cash 697 4,961 ( 2,037 ) Net increase in cash and cash equivalents 26,197 24,149 30,530 Cash and cash equivalents, including settlement deposits, beginning of period 238,821 214,672 184,142 Cash and cash equivalents, including settlement deposits, end of period $ 265,018 $ 238,821 $ 214,672 Reconciliation of cash and cash equivalents to the Consolidated Balance Sheets Cash and cash equivalents $ 216,394 $ 164,239 $ 124,981 Settlement deposits 48,624 74,582 89,691 Total cash and cash equivalents, including settlement deposits $ 265,018 $ 238,821 $ 214,672 Supplemental cash flow information Income taxes paid, net $ 47,914 $ 65,441 $ 43,553 Interest paid $ 70,201 $ 73,543 $ 48,526 The accompanying notes are an integral part of the consolidated financial statements. 55 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Business and Summary of Significant Accounting Policies Nature of Business ACI Worldwide, Inc., a Delaware corporation, and its subsidiaries (collectively referred to as “ACI” or the “Company”) develop, market, install, and support a broad line of software products and services primarily focused on facilitating electronic payments. In addition to its own products, the Company distributes or acts as a sales agent for software developed by third parties. These products and services are used principally by banks and intermediaries, merchants, and billers, both in domestic and international markets. Consolidated Financial Statements The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Capital Stock The Company’s outstanding capital stock consists of a single class of common stock. Each share of common stock is entitled to one vote for each matter subject to a stockholder’s vote and to dividends, if and when declared by the board of directors (the “board”). Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are affected by management’s application of accounting policies, as well as uncertainty in the current economic environment. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s cash and cash equivalents includes holdings in checking, savings, money market, and overnight sweep accounts, all of which have daily maturities, as well as time deposits with maturities of three months or less at the date of purchase. Other Current Liabilities Other current liabilities include the following (in thousands): December 31, 2024 2023 Vendor financed licenses $ 14,462 $ 12,702 Operating lease liabilities 9,265 9,348 Accrued interest 8,810 9,172 Other 41,271 51,022 Total other current liabilities $ 73,808 $ 82,244 Settlement Assets and Liabilities Individuals and businesses settle their obligations to the Company’s various Biller clients using credit or debit cards or via automated clearing house (“ACH”) payments. The Company creates a receivable for the amount due from the credit or debit card processor and an offsetting payable to the client. Upon confirmation that the funds have been received, the Company settles the obligation to the client. Due to timing, in some instances, the Company may (1) receive the funds into bank accounts controlled by and in the Company’s name that are not disbursed to its clients by the end of the day, resulting in a settlement deposit on the Company’s books and (2) disburse funds to its clients in advance of receiving funds from the credit or debit card processor, resulting in a net settlement receivable position. 56 Table of Contents Off Balance Sheet Settlement Accounts The Company also enters into agreements with certain Biller clients to process payment funds on their behalf. When an ACH or automated teller machine network payment transaction is processed, a transaction is initiated to withdraw funds from the designated source account and deposit them into a settlement account, which is a trust account maintained for the benefit of the Company’s clients. A simultaneous transaction is initiated to transfer funds from the settlement account to the intended destination account. These “back to back” transactions are designed to settle at the same time, usually overnight, such that the Company receives the funds from the source at the same time as it sends the funds to their destination. However, due to the transactions being with various financial institutions there may be timing differences that result in float balances. These funds are maintained in accounts for the benefit of the client which is separate from the Company’s corporate assets. As the Company does not take ownership of the funds, these settlement accounts are not included in the Company’s balance sheet. 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 Company. The amount of settlement funds as of December 31, 2024 and 2023, were $ 267.0 million and $ 273.2 million, respectively. Property and Equipment Property and equipment are stated at cost. Depreciation of these assets is generally computed using the straight-line method over their estimated useful lives based on asset class. As of December 31, 2024 and 2023, net property and equipment consisted of the following (in thousands): December 31, Useful Lives 2024 2023 Computer and office equipment 3 - 5 years $ 116,398 $ 118,805 Leasehold improvements Lesser of useful life of improvement or remaining life of lease 26,316 32,660 Building and improvements 7 - 30 years 15,985 14,492 Furniture and fixtures 7 years 8,820 8,803 Land Non-depreciable 1,185 1,185 Property and equipment, gross 168,704 175,945 Less: accumulated depreciation ( 133,635 ) ( 138,089 ) Property and equipment, net $ 35,069 $ 37,856 Software Software may be for internal use or for resale. Costs related to certain software, which is for resale, are capitalized in accordance with Accounting Standards Codification (“ASC”) 985-20, Costs of Software to be Sold, Leased, or Marketed , when the resulting product reaches technological feasibility. The Company generally determines technological feasibility when it has a detailed program design that takes product function, feature and technical requirements to their most detailed, logical form and is ready for coding. The Company does not typically capitalize costs related to software for resale as technological feasibility generally coincides with general availability of the software. The Company capitalizes the costs of software developed or obtained for internal use in accordance with ASC 350-40, Internal Use Software . The Company expenses all costs incurred during the preliminary project stage of its development and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred during the application development stage include purchased software licenses, implementation costs, consulting costs, and payroll-related costs for projects that qualify for capitalization. All other costs, primarily related to maintenance and minor software fixes, are expensed as incurred. Amortization of software for resale is determined on a product-by-product basis and begins when the product is available for licensing to customers. The annual amortization is computed using the greater of (a) the ratio of current gross revenues to the total of current and future gross revenues expected to be derived from the software or (b) the straight-line method over the remaining estimated useful life of generally five to ten years , including the period being reported on. Due to competitive pressures, it may be possible that the estimates of future gross revenue or remaining estimated useful life of the software will be reduced significantly. As a result, the carrying amount of the software may be reduced accordingly. Amortization of internal-use software is generally computed using the straight-line method over estimated useful lives of three to eight years . 57 Table of Contents Fair Value ASC 820, Fair Value Measurements and Disclosures , (“ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: • Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. • Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. 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 $ 399.2 million and $ 398.5 million as of December 31, 2024 and 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). Goodwill and Other Intangibles In accordance with ASC 350, Intangibles – Goodwill and Other , the Company assesses goodwill for impairment annually during the fourth quarter of its fiscal year using October 1 balances or when there is evidence that events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company evaluates goodwill at the reporting unit level using the discounted cash flow valuation model and allocates goodwill to these reporting units using a relative fair value approach. During this assessment, management relies on a number of factors, including operating results, business plans, and anticipated future cash flows. The Company has identified its reportable segments, Banks, Merchants, and Billers, as the reporting units. As of December 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. The key assumptions used in the discounted cash flow valuation model include discount rates, growth rates, cash flow projections, and terminal value rates. Discount rates, growth rates, and cash flow projections are the most sensitive and susceptible to change, as they require significant management judgment. Discount rates are determined by using a weighted average cost of capital (“WACC”). The WACC considers market and industry data as well as company-specific risk factors. Operational management, considering industry and company-specific historical and projected data, develops growth rates and cash flow projections for each reporting unit. Terminal value rate determination follows common methodology of capturing the present value of perpetual cash flow estimates beyond the last projected period, assuming a constant WACC and low, long-term growth rates. If, as per the quantitative test, the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is recognized for the difference, limited to the amount of goodwill recognized for the reporting unit. The calculated fair value substantially exceeded the current carrying value for all reporting units for all periods. Other intangible assets, which include customer relationships and trademarks and trade names, are amortized using the straight-line method over periods ranging from four to 20 years. The Company reviews its other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. 58 Table of Contents Equity Method Investment In July 2019, the Company invested $ 18.3 million for a 30 % non-controlling financial interest in a payment technology and services company in India. The Company accounted for this investment using the equity method in accordance with ASC 323, Investments - Equity Method and Joint Ventures . 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 $ 18.6 million and $ 18.5 million, which is included in other noncurrent assets in the consolidated balance sheet as of December 31, 2024 and 2023, respectively. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset group may not be recoverable. An impairment loss is recorded if the sum of the future cash flows expected to result from the use of the asset (undiscounted and without interest charges) is less than the carrying amount of the asset. The amount of the impairment charge is measured based upon the fair value of the asset group. Treasury Stock The Company accounts for shares of its common stock that are repurchased without intent to retire as treasury stock. Such shares are recorded at cost and reflected separately on the consolidated balance sheets as a reduction of stockholders’ equity. The Company issues shares of treasury stock upon exercise of stock options, issuance of restricted share units, payment of earned performance shares, and for issuance of common stock pursuant to the Company’s employee stock purchase plan. For purposes of determining the cost of the treasury shares re-issued, the Company uses the average cost method. Stock-Based Compensation Plans In accordance with ASC 718, Compensation – Stock Compensation, ("ASC 718") the Company recognizes stock-based compensation expense for awards that are probable of vesting on a straight-line basis over the requisite service period of the award, which is generally the vesting term. Stock-based compensation expense is recorded in operating expenses depending on where the respective individual’s compensation is recorded. To determine the grant date fair value of total shareholder return awards (“TSRs”), a Monte Carlo simulation model was used. The assumptions utilized in the Monte Carlo simulation models, as well as the description of the plans the stock-based awards are granted under, are described in further detail in Note 6, Stock-Based Compensation Plans . Translation of Foreign Currencies The Company’s foreign subsidiaries typically use the local currency of the countries in which they are located as their functional currency. Their assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the average exchange rates during the period. Translation gains and losses are reflected in the consolidated financial statements as a component of accumulated other comprehensive income (loss). Transaction gains and losses, including those related to intercompany accounts, that are not considered to be of a long-term investment nature are included in the determination of net income. Transaction gains and losses, including those related to intercompany accounts, that are considered to be of a long-term investment nature are reflected in the consolidated financial statements as a component of accumulated other comprehensive income (loss). Income Taxes The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company periodically assesses its tax exposures and establishes, or adjusts, estimated unrecognized tax benefits for probable assessments by taxing authorities, including the Internal Revenue Service, and various foreign and state authorities. Such unrecognized tax benefits represent the estimated provision for income taxes expected to ultimately be paid. Recently Issued Accounting Standards Not Yet Effective In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this update will require disclosure of more disaggregated information about a reporting entity's effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and early application is permitted for annual 59 Table of Contents financial statements that have not yet been issued or made available for issuance. The Company is currently assessing the impact the adoption of ASU 2023-09 will have on its income tax disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update will require entities to provide disaggregated disclosures of specific expense categories underlying certain income statement expense line items on an annual and interim basis. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and early application is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently assessing the impact that the adoption of ASU 2024-03 will have on its financial statement footnote disclosures. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. The Company adopted ASU 2023-07 during the year ended December 31, 2024. See Note 10, Segment Information, in the accompanying notes to the consolidated financial statements. 2. Revenue Revenue Recognition 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 be entitled to in exchange for those products and services. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Contract Combination. The Company may execute more than one contract or agreement with a single customer at or near the same time. The separate contracts or agreements may be viewed as one combined arrangement or separate agreements for revenue recognition purposes. In order to reach appropriate conclusions regarding whether such agreements should be combined, the Company evaluates whether the agreements were negotiated as a package with a single commercial objective, whether the amount of consideration to be paid in one agreement depends on the price and/or performance of another agreement, or whether the product(s) or services promised in the agreements represent a single performance obligation. The conclusions reached can impact the allocation of the transaction price to each performance obligation and the timing of revenue recognition related to those arrangements. Software as a Service (“SaaS”) and Platform as a Service (“PaaS”) Arrangements. The Company’s SaaS-based and PaaS-based arrangements, including implementation, support and other services, represent a single promise to provide continuous access (i.e. a stand-ready performance obligation) to its software solutions and their processing capabilities in the form of a service through one of the Company’s data centers. As each day of providing access to the software solution(s) is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided, the Company’s single promise under its SaaS-based and PaaS-based arrangements is comprised of a series of distinct service periods. The Company’s SaaS-based and PaaS-based arrangements may include fixed consideration, variable consideration, or a combination of the two. Fixed consideration is recognized over the term of the arrangement or longer if the fixed consideration relates to a material right. A material right would be a separate performance obligation. The Company estimates the stand-alone selling price for a material right by reference to the services expected to be provided and the corresponding expected consideration. Variable consideration in these arrangements is typically a function of transaction volume or another usage-based measure. Depending upon the structure of a particular arrangement, the Company: (1) allocates the variable amount to each distinct service period within the series and recognizes revenue as each distinct service period is performed, (2) estimates total variable consideration at contract inception (giving consideration to any constraints that may apply and updating the estimates as new information becomes available) and recognizes the total transaction price over the period to which it relates, or (3) applies the ‘right to invoice’ practical expedient and recognizes revenue based on the amount invoiced to the customer during the period. License Arrangements. The Company’s software license arrangements provide the customer with the right to use functional intellectual property (as it exists at the point in time at which the license is granted) for the duration of the contract term. Implementation, support, and other services are typically considered distinct performance obligations when sold with a software license. Payment terms for the Company’s software license arrangements generally include fixed license and capacity fees that are payable up front or over time. These arrangements may also include incremental usage-based fees that are payable when the 60 Table of Contents customer exceeds its contracted license capacity limits. The Company accounts for capacity overages as a usage-based royalty that is recognized when the usage occurs. When a software license arrangement contains payment terms that are extended beyond one year, a significant financing component may exist. The significant financing component is calculated as the difference between the stated value and present value of the software license fees and is recognized as interest income over the extended payment period. The total fixed software license fee net of the significant financing component is recognized as revenue at the point in time when the software is transferred to the customer. For those software license arrangements that include customer-specific acceptance provisions, such provisions are generally presumed to be substantive and the Company does not recognize revenue until the earlier of the receipt of a written customer acceptance, objective demonstration that the delivered product meets the customer-specific acceptance criteria, or the expiration of the acceptance period. The Company recognizes revenues on such arrangements upon the earlier of receipt of written acceptance or the first production use of the software by the customer. For software license arrangements in which the Company acts as a distributor of another company’s product, and in certain circumstances, modifies or enhances the product, revenues are recorded on a gross basis. These include arrangements in which the Company takes control of the products and is responsible for providing the product or service. For software license arrangements in which the Company acts as a sales agent for another company’s product, revenues are recorded on a net basis. These include arrangements in which the Company does not take control of products and is not responsible for providing the product or service. For software license arrangements in which the Company utilizes a third-party distributor or sales agent, the Company recognizes revenue upon transfer of control of the software license(s) to the third-party distributor or sales agent. The Company’s software license arrangements typically provide the customer with a standard 90 -day assurance-type warranty. These warranties do not represent an additional performance obligation as services beyond assuring that the software license complies with agreed-upon specifications are not provided. Software license arrangements typically include an initial post contract customer support (maintenance or “PCS”) term of one year with subsequent renewals for additional years within the initial license period. The Company’s promise to those customers who elect to purchase PCS represents a stand-ready performance obligation that is distinct from the license performance obligation and recognized over the PCS term. The Company also provides various professional services to customers with software licenses. These include project management, software implementation, and software modification services. Revenues from arrangements to provide professional services are generally distinct from the other promises in the contract(s) and are recognized as the related services are performed. Consideration received under these arrangements is either fixed fee or on a time-and-materials basis, which represents variable consideration that must be estimated using the most likely amount based on the range of hours expected to be incurred in providing the services. The Company estimates the stand-alone selling price (“SSP”) for maintenance and professional services based on observable stand-alone sales. The Company applies the residual approach to estimate the SSP for software licenses. Refer to Note 10, Segment Information , for further details, including disaggregation of revenue based on primary solution category and geographic location. Significant Judgments The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information. The Company also applies judgment in determining the term of an arrangement when early termination rights are provided to the customer. The Company’s software license arrangements with its customers often include multiple promises to transfer licensed software products and services. Determining whether the products and/or services are distinct performance obligations that should be accounted for separately may require significant judgment. 61 Table of Contents The Company’s SaaS and PaaS arrangements may include variable consideration in the form of usage-based fees. If the arrangement that includes variable consideration in the form of usage-based fees does not meet the allocation exception for variable consideration, the Company estimates the amount of variable consideration at the outset of the arrangement using either the expected value or most likely amount method, depending on the specifics of each arrangement. These estimates are constrained to the extent that it is probable that a significant reversal of incremental revenue will not occur and are updated each reporting period as additional information becomes available. Judgment is used in determining: (1) whether the financing component in a software license agreement is significant and, if so, (2) the discount rate used in calculating the significant financing component. The Company assesses the significance of the financing component based on the ratio of license fees paid over time to total license fees. If determined to be significant, the financing component is calculated using a rate that discounts the license fees to the cash selling price. Judgment is also used in assessing whether the extension of payment terms in a software license arrangement results in variable consideration and, if so, the amount to be included in the transaction price. The Company applies the portfolio approach to estimate the amount of variable consideration in these arrangements using the most likely amount method that is based on the Company’s historical collection experience under similar arrangements. Significant judgment is required to determine the SSP for each performance obligation, the amount allocated to each performance obligation and whether it depicts the amount that the Company expects to be entitled to in exchange for the related product and/or service. As the selling prices of the Company’s software licenses are highly variable, the Company estimates SSP of its software licenses using the residual approach when the software license is sold with other services and observable SSPs exist for the other services. The Company uses a range of amounts to estimate SSP for maintenance and services. These ranges are based on stand-alone sales and vary based on the type of service and geographic region. If the SSP of a performance obligation is not directly observable, the Company will maximize observable inputs to determine its SSP. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records an accrued receivable when revenue is recognized prior to invoicing and the Company’s right to consideration only requires the passage of time, or deferred revenue when revenue is recognized subsequent to invoicing. Total receivables represent amounts billed and amounts earned that are to be billed in the future (i.e. accrued receivables). Included in accrued receivables are services and SaaS and PaaS revenues earned in the current period but billed in the following period and amounts due under multi-year software license arrangements with extended payment terms for which the Company has an unconditional right to invoice and receive payment subsequent to invoicing. Total receivables, net is comprised of the following (in thousands): December 31, 2024 2023 Billed receivables $ 198,486 $ 250,423 Allowance for doubtful accounts ( 1,758 ) ( 4,295 ) Billed receivables, net 196,728 246,128 Current accrued receivables, net 217,671 206,209 Long-term accrued receivables, net 360,079 313,983 Total accrued receivables, net 577,750 520,192 Total receivables, net $ 774,478 $ 766,320 No customer accounted for more than 10% of the Company’s consolidated receivables balance as of December 31, 2024 and December 31, 2023. The Company maintains an allowance for doubtful accounts for expected future credit losses that is calculated based on historical experience, current economic trends, and expectations of near term economic trends. The Company regularly monitors its credit risk exposures in consolidated receivables. 62 Table of Contents The following reflects activity in the Company’s allowance for doubtful accounts receivable for the periods indicated (in thousands): Years Ended December 31, 2024 2023 2022 Balance, beginning of period $ ( 4,295 ) $ ( 3,779 ) $ ( 2,861 ) Provision increase ( 325 ) ( 526 ) ( 1,496 ) Amounts written off, net of recoveries 2,839 43 389 Foreign currency translation adjustments and other 23 ( 33 ) 189 Balance, end of period $ ( 1,758 ) $ ( 4,295 ) $ ( 3,779 ) Provision increases recorded in general and administrative expense during the years ended December 31, 2024, December 31, 2023, and 2022, reflect adjustments in the allowance for doubtful accounts based upon collection experience, net of collection of customer-specific receivables that were previously reserved for as doubtful of collection. 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. Changes in deferred revenue were as follows (in thousands): Balance, December 31, 2022 $ 81,536 Deferral of revenue 119,741 Recognition of deferred revenue ( 117,420 ) Foreign currency translation 503 Balance, December 31, 2023 84,360 Deferral of revenue 141,811 Recognition of deferred revenue ( 129,483 ) Foreign currency translation ( 1,965 ) Balance, December 31, 2024 $ 94,723 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. This does not include: • Revenue that will be recognized in future periods from capacity overages that are accounted for as a usage-based royalty. • 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 $ 731.7 million as of December 31, 2024, of which the Company expects to recognize approximately 51 % over the next 12 months and the remainder thereafter. During the year ended December 31, 2024, the revenue recognized by the Company from performance obligations satisfied in previous periods was $ 35.2 million. 63 Table of Contents Costs to Obtain and Fulfill a Contract The Company accounts for costs to obtain and fulfill its contracts in accordance with ASC 340-40. The Company capitalizes certain of its sales commissions that meet the definition of incremental costs of obtaining a contract and for which the amortization period is greater than one year . The costs associated with those sales commissions are capitalized during the period in which the Company becomes obligated to pay the commissions and are amortized over the period in which the related products or services are transferred to the customer. As of December 31, 2024 and 2023, $ 2.0 million and $ 3.3 million of these costs are included in other current assets, respectively, and $ 9.9 million and $ 13.9 million of these costs are included in other noncurrent assets, respectively, on the consolidated balance sheets. During both of the years ended December 31, 2024 and 2023, the Company recognized $ 8.7 million of sales commission expense related to the amortization of these costs, which is included in selling and marketing expense on the consolidated statements of operations. The Company capitalizes costs incurred to fulfill its contracts that: (1) relate directly to the arrangement, (2) are expected to generate resources that will be used to satisfy the Company’s performance obligation under the arrangement, and (3) are expected to be recovered through revenue generated under the arrangement. Contract fulfillment costs are expensed as the Company transfers the related services to the customer. As of December 31, 2024 and 2023, less than $ 0.1 million of these costs are included in other current assets, and $ 9.4 million and $ 9.7 million of these costs are included in other noncurrent assets, respectively, on the consolidated balance sheets. The amounts capitalized primarily relate to direct costs that enhance resources under the Company’s SaaS and PaaS arrangements. During both of the years ended December 31, 2024 and 2023, the Company recognized $ 3.6 million of expense related to the amortization of these costs, which is included in cost of revenue on the consolidated statements of operations. 3. Divestiture Corporate Online Banking Solutions On June 7, 2022, the Company announced a definitive agreement to divest its corporate online banking solutions related assets and liabilities to One Equity Partners ("OEP") for $ 100.0 million, and 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. For the year ended December 31, 2022, the Company recognized a gain of $ 38.5 million on the sale, which is recorded in other, net on the consolidated statements of operations. During the year ended December 31, 2023 , the Company recognized a loss for the final post-closing adjustment pursuant to the definitive agreement of $ 0.5 million, which is recorded in other, net on the consolidated statements of operations. The Company and OEP also entered into a Transition Services Agreement ("TSA"), whereby the Company would continue to perform certain functions on OEP's behalf during a migration period, which ended in 2024. The TSA was meant to reimburse the Company for direct costs in order to provide such functions, which are no longer generating revenue for the Company . 4. Debt As of December 31, 2024, the Company had $ 70.0 million, $ 462.5 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $ 528.1 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 the Letter of Credit agreements. The amount of unused borrowings actually available varies in accordance with the terms of the agreement. Credit Agreement On February 26, 2024, ACI Worldwide, Inc. (the "Company") entered into a Refinance Amendment (the "Amendment") to the Second Amended and Restated Credit Agreement, dated as of April 5, 2019 (as amended, restated, supplemented or otherwise modified from time to time, including by the Amendment, the “Credit Agreement”) among the Company, the subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, Bank of America, N.A., as administrative agent and a lender, BofA Securities, Inc., PNC Capital Markets LLC, Wells Fargo Securities, LLC, and TD Securities (USA) LLC, as Joint Lead Arrangers and Joint Bookrunners, and the other financial institutions party thereto. 64 The Amendment (i) provides a senior secured term loan facility (the “Term Loan Facility”) in an aggregate principal amount of $ 500 million, (ii) provides a senior secured revolving credit facility (the “Revolving Loan Facility” and together with the Term Loan Facility, the “Credit Facilities”) of up to $ 600 million, and (iii) extends the maturity date of the Facilities to February 26, 2029 (the “Maturity Date”), provided that if any of the Company’s 5.750 % Senior Notes due 2026 are outstanding on the date that is 91 days before the maturity thereof (the “Springing Maturity Date”), and the Company does not have sufficient liquidity as of such date, the Maturity Date will be the Springing Maturity Date. The Revolving Loan Facility includes a $ 35 million sublimit for the issuance of standby letters of credit and a $ 20 million sublimit for swingline loans. 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 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 December 31, 2024, was 6.21 %. The Company is also required to pay customary fees under the Credit Facilities, including (a) a commitment fee related to the unutilized commitments under the Revolving Credit Facility, (b) letter of credit fees including fronting fees and commissions on the maximum amount available to be drawn under all outstanding letters of credit, and (c) agency fees. The Company’s subsidiaries, ACI Worldwide Corp. and ACI Payments, Inc. are co-borrowers under the Credit Agreement. The obligations of the borrowers under the Credit Facilities and the obligations of the Company and its subsidiaries under cash management arrangements entered into with lenders under the Credit Facilities (or affiliates thereof) are jointly and severally guaranteed by the Company and all of its existing and future material domestic subsidiaries, subject to certain exclusions. The obligations of the borrowers in respect of the Credit Facilities are secured by first-priority security interests in substantially all assets of the borrowers, including 100 % of the capital stock of each domestic subsidiary of the borrower and 65 % of the voting capital stock of each foreign subsidiary that is directly owned by a borrower, in each case subject to certain exclusions set forth in the Credit Agreement. 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. Letters of Credit From time to time the Company enters into standby letters of credit under the terms of the Credit Agreement. These letters of credit typically have one-year terms and may include auto-renewal terms without notice of intent to terminate the agreement. As of December 31, 2024, the Company had two letter of credit agreements outstanding for a total of $ 1.9 million. The letters of credit reduce the maximum available borrowings under the Revolving Credit Facility to $ 598.1 million. Upon expiration of the letters of credit, maximum borrowings would return to $ 600.0 million. 65 Senior Notes On August 21, 2018, the Company completed a $ 400.0 million offering of the 2026 Notes at an issue price of 100 % of the principal amount in a private placement for resale to qualified institutional buyers. The 2026 Notes bear interest at an annual rate of 5.750 %, payable semi-annually in arrears on February 15 and August 15 of each year, which commenced on February 15, 2019. The 2026 Notes will mature on August 15, 2026. Maturities on debt outstanding at December 31, 2024, are as follows (in thousands): Fiscal Year Ending December 31, 2025 $ 37,500 2026 437,500 2027 37,500 2028 37,500 2029 382,500 Thereafter — Total $ 932,500 The Revolving Credit Facility and 2026 Notes do not amortize. The Term Loans do amortize, with principal payable in consecutive quarterly installments. The Credit Agreement and 2026 Notes contain certain customary affirmative covenants and negative covenants that, among other things, limit or restrict, subject to certain exceptions, the incurrence of liens, indebtedness of subsidiaries, mergers, advances, investments, acquisitions, transactions with affiliates, change in nature of business, and the sale of the assets. In addition, the Credit Agreement and 2026 Notes contain certain customary mandatory prepayment provisions. As specified in the Credit Agreement and 2026 Notes agreement, if certain events occur and continue, the Company may be required to repay all amounts outstanding under the Credit Facility and 2026 Notes. As of December 31, 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): December 31, 2024 2023 Term loans $ 462,500 $ 519,698 Revolving credit facility 70,000 124,000 5.750 % Senior Notes, due August 2026 400,000 400,000 Debt issuance costs ( 7,923 ) ( 5,694 ) Total debt 924,577 1,038,004 Less: current portion of term loans 37,500 77,900 Less: current portion of debt issuance costs ( 2,572 ) ( 3,495 ) Total long-term debt $ 889,649 $ 963,599 Overdraft Facility In 2019, the Company and ACI Payments, Inc. entered in to an uncommitted overdraft facility with Bank of America, N.A. The overdraft facility bears interest at the federal funds effective rate plus 2.25 % based on the Company’s average outstanding balance and the frequency in which overdrafts occur. The overdraft facility acts as a secured loan under the terms of the Credit Agreement to provide an additional funding mechanism for timing differences that can occur in the bill payment settlement process. Amounts outstanding on the overdraft facility are included in other current liabilities in the consolidated balance sheet. As of December 31, 2024 and 2023, there was $ 75.0 million available and no amount outstanding on the overdraft facility. 66 Other The Company finances certain multi-year license agreements for internal-use software. Upon execution, these arrangements are treated as a non-cash investing and financing activity for purposes of the consolidated statements of cash flows. During the year ended December 31, 2022, the Company financed certain multi-year license agreements for internal-use software for $ 10.7 million, with annual payments through April 2024. As of December 31, 2024, there was no amount outstanding under these and other license agreements previously entered into. As of December 31, 2023, $ 3.6 million was outstanding under these and other license agreements previously entered into, all of which is included in other current liabilities in the consolidated balance sheet. 5. 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): December 31, 2024 December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Balance Gross Carrying Amount Accumulated Amortization Net Balance Software for internal use $ 488,257 $ ( 395,364 ) $ 92,893 $ 469,325 $ ( 360,907 ) $ 108,418 Software for internal use amortization expense recorded during the years ended December 31, 2024, 2023, and 2022, totaled $ 63.3 million, $ 64.8 million, and $ 68.0 million, respectively. These software amortization expense amounts are reflected in depreciation and amortization in the consolidated statements of operations. Software for resale amortization expense recorded during the year ended December 31, 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 years ended December 31, 2024 and 2023. The software amortization expense amount is 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): December 31, 2024 December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Balance Gross Carrying Amount Accumulated Amortization Net Balance Customer relationships $ 444,385 $ ( 279,008 ) $ 165,377 $ 447,654 $ ( 252,828 ) $ 194,826 Trademarks and trade names 21,685 ( 21,685 ) — 21,899 ( 21,079 ) 820 Total other intangible assets $ 466,070 $ ( 300,693 ) $ 165,377 $ 469,553 $ ( 273,907 ) $ 195,646 Other intangible assets amortization expense recorded during the years ended December 31, 2024, 2023, and 2022, totaled $ 29.5 million, $ 33.8 million, and $ 35.5 million, respectively. Based on capitalized intangible assets as of December 31, 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 2025 $ 51,962 $ 20,902 2026 28,520 20,902 2027 9,962 20,645 2028 2,177 18,248 2029 272 17,630 Thereafter — 67,050 Total $ 92,893 $ 165,377 67 6. Stock-Based Compensation Plans Employee Stock Purchase Plan On April 6, 2017, the board approved the 2017 Employee Stock Purchase Plan (“2017 ESPP”), which was approved by shareholders at the 2017 Annual Shareholder meeting. The 2017 ESPP provides employees with an opportunity to purchase shares of the Company’s common stock. Under the Company’s 2017 ESPP, a total of 3,000,000 shares of the Company’s common stock have been reserved for issuance to eligible employees. Participating employees are permitted to designate up to the lesser of $ 25,000 or 10 % of their annual base compensation for the purchase of common stock under the ESPP. Purchases under the ESPP are made one calendar month after the end of each fiscal quarter. The price for shares of common stock purchased under the ESPP is 85 % of the stock’s fair market value on the last business day of the three-month participation period. Additionally, the discount offered pursuant to the Company’s ESPP discussed above is 15 %, which exceeds the 5% non-compensatory guideline in ASC 718 and exceeds the Company’s estimated cost of raising capital. Consequently, the entire 15 % discount to employees is deemed to be compensatory for purposes of calculating expense using a fair value method. Compensation expense related to the ESPP was approximately $ 0.5 million for both the years ended December 31, 2024 and 2023, and $ 0.6 million for the year ended December 31, 2022. Stock Incentive Plans – Active Plans 2020 Equity and Incentive Compensation Plan On June 9, 2020, upon recommendation of the board, stockholders approved the ACI Worldwide, Inc. 2020 Equity and Incentive Compensation Plan (the “2020 Plan”). The 2020 Plan authorizes the board to provide for equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, dividend equivalents, and certain other awards, including those denominated or payable in, or otherwise based on, the Company’s common stock ("awards"). The purpose of the 2020 Plan is to provide incentives and rewards for service and/or performance by providing awards to non-employee directors, officers, other employees, and certain consultants and other service providers of the Company and its subsidiaries. Following the approval of the 2020 Plan, the 2016 Equity and Performance Incentive Plan (the “2016 Incentive Plan”) was terminated. Termination of the 2016 Incentive Plan did not affect any equity awards outstanding under the 2016 Incentive Plan. Subject to adjustment and share counting rules as described in the 2020 Plan, a total of 6,658,754 shares of common stock are available for awards granted under the 2020 Plan. Shares underlying certain awards under the 2020 Plan, the Company’s 2005 Equity and Performance Incentive Plan (the "2005 Incentive Plan"), and the 2016 Incentive Plan (each including as amended or amended and restated) that are cancelled or forfeited, expire, are settled for cash, or are unearned after June 9, 2020, will again be available under the 2020 Plan. The board generally will be able to amend the 2020 Plan, subject to stockholder approval in certain circumstances, as described in the 2020 Plan. 2016 Equity and Performance Incentive Plan The Company's 2016 Incentive Plan provided for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, performance awards, and other awards. The 2016 Incentive Plan was adopted by the stockholders on June 14, 2016. Following the adoption of the 2016 Incentive Plan, the 2005 Incentive Plan was terminated. Subject to adjustment in certain circumstances, the maximum number of shares of common stock that was issued or transferred in connection with awards granted under the 2016 Incentive Plan was the sum of (i) 8,000,000 shares of common stock and (ii) any shares of common stock that were represented by options previously granted under the 2005 Incentive Plan which were subsequently forfeited, expired, or cancelled without delivery of common stock or which resulted in the forfeiture or relinquishment of common stock back to the Company. 2005 Equity and Performance Incentive Plan The Company's 2005 Incentive Plan, as amended, under which shares of the Company’s common stock were reserved for issuance to eligible employees or non-employee directors of the Company. The 2005 Incentive Plan provided for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, performance awards, and other awards. The maximum number of shares of the Company’s common stock that was issued or transferred in connection with awards granted under the 2005 Incentive Plan was the sum of (i) 23,250,000 shares and (ii) any shares represented by outstanding options that had been granted under designated terminated stock option plans that were subsequently forfeited, expired, or are cancelled without delivery of the Company’s common stock. 68 Stock Options Stock options granted pursuant to the Company's incentive plans were granted at an exercise price not less than the market value per share of the Company’s common stock on the date of grant. The term of the outstanding options may not exceed ten years nor be less than one year . Vesting of options is determined by the compensation committee of the board and the administrator of the respective plan and can vary based upon the individual award agreements. In addition, outstanding options do not have dividend equivalent rights associated with them. A summary of stock option activity is as follows: Number of Shares Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value of In-the-Money Options ($) Outstanding, December 31, 2023 873,512 $ 18.76 Exercised ( 334,242 ) 18.93 Outstanding, December 31, 2024 539,270 $ 18.65 1.46 $ 17,938,517 Exercisable, December 31, 2024 539,270 $ 18.65 1.46 $ 17,938,517 The Company did not grant stock options during the years ended December 31, 2024, 2023, and 2022. The total intrinsic value of stock options exercised during the years ended December 31, 2024, 2023, and 2022, was $ 10.9 million, $ 2.1 million, and $ 2.9 million, respectively. Performance Share Awards During the years ended December 31, 2024, 2023, and 2022, pursuant to the 2020 Plan, the Company granted performance share awards with a total shareholder return component ("TSRs"). For 2024 and 2023, these performance share awards are earned, if at all, based upon achievement, over a specific period that must not be less than one year and is typically a three-year performance period. The awards have operating performance goals that include (i) adjusted EBITDA metrics and (ii) revenue growth rates 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. For 2022, the Company granted performance share awards that are earned, if at all, based upon the Company’s total shareholder return as compared to a group of peer companies over a three-year performance period. The award payout can range from 0 % to 200 %. To determine the grant date fair value of the TSRs, a Monte Carlo simulation model is used. The Company recognizes compensation expense for the TSRs over the performance period based on the grant date fair value. 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 TSRs is as follows: Number of Shares Weighted Average Grant Date Fair Value Nonvested as of December 31, 2023 673,126 $ 40.73 Granted 561,471 34.00 Forfeited ( 78,171 ) 33.96 Change in payout rate ( 203,945 ) 50.60 Nonvested as of December 31, 2024 952,481 $ 35.21 During the year ended December 31, 2024, the TSRs granted in 2021 were earned by the employees. However, the performance goals were not met and no shares were issued. 69 The fair value of TSRs granted during the years ended December 31, 2024, 2023, and 2022, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, using the following weighted-average assumptions: Years Ended December 31, 2024 2023 2022 Expected life (years) 2.7 2.9 3.1 Risk-free interest rate 4.4 % 3.6 % 1.5 % Volatility 36.8 % 37.1 % 40.0 % Expected dividend yield — — — Restricted Share Units During the years ended December 31, 2024, 2023, and 2022, pursuant to the 2020 Plan, the Company granted restricted share unit awards (“RSUs”). RSUs generally have requisite service periods of three years and may vest 100 % upon the three-year anniversary or in equal increments quarterly or annually. RSUs granted to the board vest one year from grant or as of the next annual shareholders meeting, whichever is earlier. Under each arrangement, RSUs are issued without direct cost to the recipient on the vesting date. The Company estimates the fair value of the RSUs based upon the market price of the Company’s stock on the date of grant. The Company recognizes compensation expense for RSUs on a straight-line basis over the requisite service period. A summary of nonvested RSUs is as follows: Number of Shares Weighted Average Grant Date Fair Value Nonvested as of December 31, 2023 1,574,883 $ 26.81 Granted 1,348,681 32.46 Vested ( 1,020,408 ) 28.68 Forfeited ( 175,632 ) 28.47 Nonvested as of December 31, 2024 1,727,524 $ 29.95 During the year ended December 31, 2024, a total of 1,020,408 RSUs vested. The Company withheld 320,009 of those shares to pay the employees’ portion of the minimum payroll withholding taxes. As of December 31, 2024, there was unrecognized compensation expense of $ 43.1 million related to RSUs and $ 20.0 million related to TSRs, which the Company expects to recognize over a weighted average period of 1.9 years and 1.8 years, respectively. The Company recorded stock-based compensation expense recognized under ASC 718 during the years ended December 31, 2024, 2023, and 2022, of $ 41.3 million, $ 24.5 million, and $ 29.8 million, respectively, with corresponding tax benefits of $ 6.7 million, $ 4.5 million, and $ 4.5 million, respectively. 7. 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 authorizes additional funds for the program. 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 3,946,537 shares for $ 128.5 million under the program for the year ended December 31, 2024. Under the program to date, the Company has repurchased 62,867,837 shares for approximately $ 1.1 billion. As of December 31, 2024, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 372.5 million. 70 In 2006, the Company began to issue shares of treasury stock upon exercise of stock options, payment of earned performance shares (LTIP performance shares and TSRs), vesting of RSUs, and for issuances of common stock pursuant to the Company’s ESPP. Treasury shares issued by award type are as follows: Years Ended December 31, 2024 2023 2022 Stock options 334,242 343,093 406,230 TSRs — — 212,210 RSUs 1,020,408 666,026 534,759 ESPP 89,071 140,992 145,909 Total treasury shares issued 1,443,721 1,150,111 1,299,108 8. Earnings Per Share Basic earnings per share is computed in accordance with ASC 260, Earnings per Share, based on weighted average outstanding common shares. Diluted earnings 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 per share (in thousands): Years Ended December 31, 2024 2023 2022 Weighted average shares outstanding: Basic weighted average shares outstanding 105,491 108,497 113,700 Add: Dilutive effect of stock options, RSUs, and contingently issuable shares 1,002 360 538 Diluted weighted average shares outstanding 106,493 108,857 114,238 The diluted earnings per share computation excludes 1.1 million, 1.3 million, and 1.9 million options to purchase shares, RSUs, and contingently issuable shares during the years ended December 31, 2024, 2023, and 2022, respectively, as their effect would be anti-dilutive. Common stock outstanding as of December 31, 2024 and 2023, was 105,254,913 and 108,077,738 , respectively. 9 . Other, Net Other, net is primarily comprised of foreign currency transaction gains and losses and, for the year ended December 31, 2022, the $ 38.5 million gain on the divestiture. Other, net was $ 1.2 million of expense, $ 8.5 million of expense, and $ 43.4 million of income for the years ended December 31, 2024, 2023, and 2022, respectively. 10. Segment Information The Company reports financial performance based on its operating segments, Banks, Merchants, and Billers, and analyzes Segment Adjusted EBITDA as a measure of segment profitability. The Company’s Chief Executive Officer is also the chief operating decision maker ("CODM"). The CODM, together with other senior management personnel, focus their review on consolidated financial information and the allocation of resources based on operating results, including revenues and Segment Adjusted EBITDA, for each segment, separate from corporate operations. No operating segments have been aggregated to form the reportable segments. Banks. ACI provides payment solutions to large and mid-size banks globally for retail banking, digital, and other payment services. These solutions transform banks’ complex payment environments to speed time to market, reduce costs, and deliver a consistent experience to customers across channels while enabling them to prevent and rapidly react to fraudulent activity. In addition, they enable banks to meet the requirements of different real-time payments schemes and to quickly create differentiated products to meet consumer, business, and merchant demands. 71 Merchants. ACI’s support of merchants globally includes Tier 1 and Tier 2 merchants (in-store and online), payment service providers, independent selling organizations, value-added resellers, and acquirers who service them. These customers operate in a variety of verticals, including general retail, grocery, hospitality, dining, travel and ticketing, fuel, telecommunications, and others. The Company's solutions provide merchants with a secure, omnichannel payments platform that gives them flexibility and independence. The Company also offers secure solutions to online-only merchants that provide consumers with a convenient and seamless way to shop. Billers. Within the billers segment, ACI provides electronic bill presentment and payment services to companies operating in the consumer finance, insurance, healthcare, higher education, utility, government, mortgage, subscription provider, and telecommunications categories. The 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 also provides fraud abuse protection to its biller customers leveraging its proven AI, human, and data capabilities. Revenue is attributed to the reportable segments based upon customer. Expenses are attributed to the reportable segments in one of three methods: (1) direct costs of the segment, (2) labor costs that can be attributed based upon time tracking for individual projects, or (3) costs that are allocated. Allocated costs are generally marketing and sales related activities. Segment Adjusted EBITDA is the measure reported to the CODM for purposes of making decisions on allocating resources and assessing the performance of the Company’s segments, including budget and forecast-to-actual variances, and, therefore, Segment Adjusted EBITDA is presented in conformity with ASC 280, Segment Reporting . Segment Adjusted EBITDA is defined as earnings from operations before interest, income tax expense (benefit), depreciation and amortization (“EBITDA”) adjusted to exclude net other income (expense). Corporate and unallocated expenses includes global facilities and information technology costs and long-term product roadmap expenses in addition to corporate overhead costs that are not allocated to reportable segments. The overhead costs relate to human resources, finance, legal, accounting, and merger and acquisition activity. These costs along with depreciation and amortization and stock-based compensation are not considered when management evaluates segment performance. 72 The following is selected financial data for the Company’s reportable segments for the periods indicated (in thousands): Year Ended December 31, 2024 Banks Merchants Billers Total Revenues $ 701,860 $ 165,910 $ 726,518 $ 1,594,288 Less: Interchange (a) — — 469,358 469,358 Global technology and innovation (b) 187,440 58,157 49,502 295,099 Other segment items (c) 88,901 38,205 76,471 203,577 Segment Adjusted EBITDA $ 425,519 $ 69,548 $ 131,187 $ 626,254 Reconciliation of income before income taxes Depreciation and amortization ( 110,962 ) Stock-based compensation expense ( 41,281 ) Corporate and unallocated expenses ( 165,876 ) Interest, net ( 56,545 ) Other, net ( 1,181 ) Income before income taxes $ 250,409 Year Ended December 31, 2023 Banks Merchants Billers Total Revenues $ 616,051 $ 150,616 $ 685,912 $ 1,452,579 Less: Interchange (a) — — 421,133 421,133 Global technology and innovation (b) 172,387 59,393 45,012 276,792 Other segment items (c) 88,175 46,878 77,424 212,477 Segment Adjusted EBITDA $ 355,489 $ 44,345 $ 142,343 $ 542,177 Reconciliation of income before income taxes Depreciation and amortization ( 122,373 ) Stock-based compensation expense ( 24,547 ) Corporate and unallocated expenses ( 174,849 ) Interest, net ( 64,271 ) Other, net ( 8,510 ) Income before income taxes $ 147,627 73 Year Ended December 31, 2022 Banks Merchants Billers Total Revenues $ 638,585 $ 153,905 $ 629,411 $ 1,421,901 Less: Interchange (a) — — 406,610 406,610 Global technology and innovation (b) 177,379 54,531 39,621 271,531 Other segment items (c) 90,189 50,345 75,809 216,343 Segment Adjusted EBITDA $ 371,017 $ 49,029 $ 107,371 $ 527,417 Reconciliation of income before income taxes Depreciation and amortization ( 127,328 ) Stock-based compensation expense ( 29,753 ) Corporate and unallocated expenses ( 166,501 ) Interest, net ( 40,646 ) Other, net 43,446 Income before income taxes $ 206,635 (a) Interchange – Interchange costs include all payment card interchange fees, amounts payable to banks, and payment card processing fees associated with providing services to Biller customers. (b) Global Technology & Innovation – (“GTI”) costs include the costs of maintaining software products, as well as the costs required to deliver, install, and support software at customer sites. It also includes maintenance costs, which are the efforts associated with providing the customer with upgrades, 24-hour help desk, post go-live (remote) support, and production-type support for software that was previously installed at a customer location. GTI includes costs to provide SaaS and PaaS services including our data center operations. Service costs including human resource and other incidental costs such as travel and training required for both pre go-live and post go-live support. Such efforts include project management, delivery, product customization and implementation, installation support, consulting, configuration, and on-site support. GTI also includes research and development expenses which are primarily human resource costs related to the creation of new products, improvements made to existing products, as well as compatibility with new operating system releases and generations of hardware. (c) Other segment items – other includes selling and marketing, product management, third-party royalties and other cost of goods sold excluding interchange. Selling and marketing costs, which are the costs related to selling our products to current and prospective customers as well as the costs related to promoting the Company, its products and the research efforts required to measure customers’ future needs and satisfaction levels. Selling costs are primarily the human resource and travel costs related to the effort expended to license our products and services to current and potential clients within defined territories and/or industries as well as the management of the overall relationship with customer accounts. Selling costs also include the costs associated with assisting distributors in their efforts to sell our products and services in their respective local markets. Product management costs are primarily the human resource costs related to developing and documenting our product requirements. Assets are not allocated to segments, and the Company’s CODM does not evaluate operating segments using discrete asset information. 74 The following is revenue by primary solution category for the Company’s reportable segments for the periods indicated (in thousands): Year Ended December 31, 2024 Banks Merchants Billers Total Primary Solution Categories Bill Payments $ — $ — $ 726,518 $ 726,518 Merchant Payments — 165,910 — 165,910 Fraud Management 52,412 — — 52,412 Real-Time Payments 126,740 — — 126,740 Issuing and Acquiring 522,708 — — 522,708 Total $ 701,860 $ 165,910 $ 726,518 $ 1,594,288 Year Ended December 31, 2023 Banks Merchants Billers Total Primary Solution Categories Bill Payments $ — $ — $ 685,912 $ 685,912 Digital Business Banking 2,792 — — 2,792 Merchant Payments — 150,616 — 150,616 Fraud Management 63,503 — — 63,503 Real-Time Payments 128,957 — — 128,957 Issuing and Acquiring 420,799 — — 420,799 Total $ 616,051 $ 150,616 $ 685,912 $ 1,452,579 Year Ended December 31, 2022 Banks Merchants Billers Total Primary Solution Categories Bill Payments $ — $ — $ 629,411 $ 629,411 Digital Business Banking 35,504 — — 35,504 Merchant Payments — 153,905 — 153,905 Fraud Management 47,421 — — 47,421 Real-Time Payments 104,777 — — 104,777 Issuing and Acquiring 450,883 — — 450,883 Total $ 638,585 $ 153,905 $ 629,411 $ 1,421,901 As discussed in Note 3, Divestiture, in 2022 the Company divested its corporate online banking solution assets, which were included in the Digital Business Banking solution category. 75 The following is revenue by the Company's reportable segments for the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Banks Software as a service and platform as a service $ 45,020 $ 39,803 $ 48,932 License 388,291 311,549 336,028 Maintenance 176,797 189,650 184,017 Services 91,752 75,049 69,608 Total $ 701,860 $ 616,051 $ 638,585 Merchants Software as a service and platform as a service $ 126,441 $ 123,528 $ 124,631 License 24,015 9,675 12,106 Maintenance 13,966 15,322 15,934 Services 1,488 2,091 1,234 Total $ 165,910 $ 150,616 $ 153,905 Billers Software as a service and platform as a service $ 726,518 $ 685,816 $ 629,317 License — — — Maintenance — 96 94 Services — — — Total $ 726,518 $ 685,912 $ 629,411 The following is the Company's revenue by geographic location for the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Revenue United States $ 931,051 $ 887,168 $ 851,712 Other 663,237 565,411 570,189 Total $ 1,594,288 $ 1,452,579 $ 1,421,901 The following is the Company’s long-lived assets by geographic location for the periods indicated (in thousands): December 31, 2024 2023 Long-lived Assets United States $ 1,169,965 $ 1,216,158 Other 791,793 763,437 Total $ 1,961,758 $ 1,979,595 No single customer accounted for more than 10% of the Company’s consolidated revenues during the years ended December 31, 2024, 2023, and 2022. No other country outside the United States accounted for more than 10% of the Company’s consolidated revenues during the years ended December 31, 2024, 2023, and 2022. 76 11. Income Taxes For financial reporting purposes, income (loss) before income taxes includes the following components (in thousands): Years Ended December 31, 2024 2023 2022 United States $ 32,443 $ ( 8,342 ) $ ( 11,751 ) Foreign 217,966 155,969 218,386 Total $ 250,409 $ 147,627 $ 206,635 The expense (benefit) for income taxes consists of the following (in thousands): Years Ended December 31, 2024 2023 2022 Federal Current $ 10,062 $ ( 3,490 ) $ 7,064 Deferred ( 12,919 ) ( 6,306 ) ( 353 ) Total ( 2,857 ) ( 9,796 ) 6,711 State Current 3,069 ( 2,327 ) 7,993 Deferred ( 2,390 ) 797 ( 3,500 ) Total 679 ( 1,530 ) 4,493 Foreign Current 47,290 36,020 47,798 Deferred 2,179 1,424 5,456 Total 49,469 37,444 53,254 Total $ 47,291 $ 26,118 $ 64,458 Differences between the income tax expense computed at the statutory federal income tax rate and per the consolidated statements of operations are summarized as follows (in thousands): Years Ended December 31, 2024 2023 2022 Tax expense at federal rate of 21% $ 52,586 $ 31,002 $ 43,393 State income taxes, net of federal benefit 1,558 1,744 2,351 Change in valuation allowance 342 1,588 71 Foreign tax rate differential ( 8,081 ) ( 7,658 ) ( 12,949 ) Unrecognized tax benefit increase (decrease) 223 ( 5,726 ) 2,039 Tax effect of foreign operations 5,911 10,350 15,336 Tax benefit of research & development ( 5,492 ) ( 5,104 ) ( 3,365 ) Performance-based compensation ( 424 ) 3,004 2,266 Tax effect of divestiture — ( 2,900 ) 14,522 Other 668 ( 182 ) 794 Income tax provision $ 47,291 $ 26,118 $ 64,458 The countries having the greatest impact on the tax rate adjustment line shown in the above table as “Foreign tax rate differential” for the three years reported are Ireland and the United Kingdom. 77 The deferred tax assets and liabilities result from differences in the timing of the recognition of certain income and expense items for tax and financial accounting purposes. The sources of these differences at each balance sheet date are as follows (in thousands): December 31, 2024 2023 Deferred income tax assets: Net operating loss carryforwards $ 13,636 $ 15,409 Tax credits 23,242 23,197 Compensation 16,527 15,478 Deferred revenue 11,273 9,873 Operating lease 6,796 8,297 Capitalized research and development 20,102 16,903 Deferred interest 27,807 17,822 Other 2,455 951 Gross deferred income tax assets 121,838 107,930 Less: valuation allowance ( 13,310 ) ( 12,963 ) Net deferred income tax assets $ 108,528 $ 94,967 Deferred income tax liabilities: Depreciation and amortization $ ( 30,957 ) $ ( 31,741 ) Operating lease right-of-use asset ( 6,079 ) ( 7,303 ) Unbilled revenue ( 7,938 ) ( 5,407 ) Withholding tax liability ( 30,761 ) ( 32,752 ) Total deferred income tax liabilities ( 75,735 ) ( 77,203 ) Net deferred income taxes $ 32,793 $ 17,764 Deferred income taxes / liabilities included in the balance sheet are: Deferred income tax asset – noncurrent $ 72,713 $ 58,499 Deferred income tax liability – noncurrent ( 39,920 ) ( 40,735 ) Net deferred income taxes $ 32,793 $ 17,764 In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers projected future taxable income, carryback opportunities, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, the Company believes it is more likely than not that it will realize the benefits of these deductible differences, net of the valuation allowances recorded. At December 31, 2024, valuation allowances recorded primarily related to net operating losses, foreign tax credit carryforwards, and future interest deductions. At December 31, 2024, the Company had domestic federal tax net operating losses (“NOLs”) of $ 42.8 million, of which $ 2.9 million may be utilized over an indefinite life, with the remainder beginning to expire in 2025. The Company had deferred tax assets equal to $ 0.7 million related to domestic state tax NOLs which will begin to expire in 2025. The Company did not have any valuation allowance against the federal tax NOLs but had provided a $ 0.4 million valuation allowance against the deferred tax asset associated with the state NOLs. The Company had foreign tax NOLs of $ 14.5 million, of which $ 14.4 million may be utilized over an indefinite life, with the remainder expiring over the next five years . The Company did not have any valuation allowance against the deferred tax asset associated with the foreign NOLs. 78 The Company had U.S. foreign tax credit carryforwards at December 31, 2024, of $ 2.7 million, for which a $ 2.7 million valuation allowance had been provided. The U.S. foreign tax credits will begin to expire in 2028. The Company had foreign tax credit carryforwards in other foreign jurisdictions at December 31, 2024, of $ 3.9 million, of which $ 0.7 million may be utilized over an indefinite life, with the remainder expiring over the next seven years . The Company had provided a $ 0.7 million valuation allowance against the tax benefit associated with these foreign credits. The Company also had domestic federal general business tax credit carryforwards at December 31, 2024, of $ 26.6 million, which will expire in 2037 and state general business tax credit carryforwards of $ 0.4 million, which will begin to expire in 2026. The Company did not provide deferred taxes on $ 45.7 million of unremitted earnings of its Indian subsidiaries that are considered permanently reinvested. The company did not estimate the deferred tax liability on these earnings as such estimation is not practicable to determine or is immaterial to the financial statements. As of December 31, 2024, deferred taxes for non-United States withholding and other taxes were provided on $ 31.5 million of unremitted earnings of non-United States subsidiaries that may be remitted to the United States. As of December 31, 2024 and 2023, the Company recorded a deferred tax liability of $ 1.0 million and $ 0.6 million, respectively, related to these non-United States earnings that may be remitted. As of December 31, 2024 and 2023, the Company had a German interest deduction carryforward of $ 9.0 million and $ 8.5 million, respectively, for which a full valuation allowance had been provided. The deferred interest deduction has an indefinite life. The unrecognized tax benefit at December 31, 2024 and 2023, was $ 21.0 million and $ 20.9 million, respectively, of which $ 10.7 million and $ 10.5 million, respectively, are included in other noncurrent liabilities in the consolidated balance sheets. Of the total unrecognized tax benefit amounts at December 31, 2024 and 2023, $ 20.4 million and $ 20.1 million, respectively, represent the net unrecognized tax benefits that, if recognized, would favorably impact the effective income tax rate in the respective years. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 is as follows (in thousands): 2024 2023 2022 Balance of unrecognized tax benefits at beginning of year $ 20,889 $ 26,408 $ 24,510 Increases for tax positions of prior years 1,159 1,568 2,349 Decreases for tax positions of prior years ( 1,080 ) ( 6,560 ) ( 3,659 ) Increases for tax positions established for the current period 2,418 3,941 9,320 Decreases for settlements with taxing authorities ( 141 ) ( 532 ) ( 63 ) Reductions resulting from lapse of applicable statute of limitation ( 2,190 ) ( 4,005 ) ( 5,833 ) Adjustment resulting from foreign currency translation ( 28 ) 69 ( 216 ) Balance of unrecognized tax benefits at end of year $ 21,027 $ 20,889 $ 26,408 The Company files income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions, and many foreign jurisdictions. The United States, Ireland, and the United Kingdom are the main taxing jurisdictions in which the Company operates. The years open for audit vary depending on the tax jurisdiction. In the United States, the Company’s federal tax return for years following 2020 are open for audit. In the foreign jurisdictions, the tax returns open for audit generally vary by jurisdiction between 2005 and 2023. The Company is currently under audit by the U.S. Internal Revenue Service for the year ended December 31, 2021. The Company’s Indian income tax returns covering fiscal years ended March 31, 2005, 2014, 2016 and 2020 through 2023 are under audit by the Indian tax authority. Other foreign subsidiaries could face challenges from various foreign tax authorities. It is not certain that the local authorities will accept the Company’s tax positions. The Company believes its tax positions comply with applicable tax law and intends to vigorously defend its positions. However, differing positions on certain issues could be upheld by tax authorities, which could adversely affect the Company’s financial condition and results of operations. 79 The Company believes it is reasonably possible that the total amount of unrecognized tax benefits will decrease within the next 12 months by approximately $ 0.8 million due to the settlement of various audits and the expiration of statutes of limitations. The Company accrues interest related to uncertain tax positions in interest expense or interest income and recognizes penalties related to uncertain tax positions in other income or other expense. As of December 31, 2024 and 2023, $ 0.4 million and $ 0.5 million, respectively, is accrued for the payment of interest and penalties related to income tax liabilities. The aggregate amount of interest and penalties expense (benefit) recorded in the statements of operations for the years ended December 31, 2024, 2023, and 2022, was $( 0.1 ) million, $( 0.1 ) million, and $( 0.5 ) million, respectively. 12 . Leases The Company has operating leases primarily for corporate offices and data centers. Excluding office leases, leases with an initial term of 12-months or less that do not include an option to purchase the underlying asset are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term. The Company’s leases typically include certain renewal options to extend the leases for up to 25 years, some of which include options to terminate the leases within one year . The exercise of lease renewal options is at the Company’s sole discretion. The Company combines lease and non-lease components of its leases and currently has no leases with options to purchase the leased property. Payments of maintenance and property tax costs paid by the Company are accounted for as variable lease cost, which are expensed as incurred. The Company has entered into an assignment and assumption of lease agreement with a third-party for one of its corporate offices. The third-party is responsible for making payments directly to the landlord and the related lease's initial term expires on September 30, 2031. During an initial period ending April 30, 2025, the Company is required to make a base rent contribution of less than $ 0.1 million per month to the third-party, with the third-party responsible for the entirety of the lease payments after that date. The components of lease cost are as follows (in thousands): Years Ended December 31, 2024 2023 2022 Operating lease cost $ 11,053 $ 13,074 $ 12,506 Variable lease cost 1,266 2,663 2,771 Sublease income ( 359 ) — — Total lease cost $ 11,960 $ 15,737 $ 15,277 Supplemental cash flow information related to leases is as follows (in thousands): Years Ended December 31, 2024 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 10,678 $ 14,039 $ 14,020 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 4,875 $ 6,359 $ 7,693 Non-cash sublease payments Operating leases $ 602 $ — $ — Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate): 80 December 31, 2024 2023 Assets: Operating lease right-of-use assets $ 28,864 $ 34,338 Liabilities: Other current liabilities $ 9,265 $ 9,348 Operating lease liabilities 22,592 29,074 Total operating lease liabilities $ 31,857 $ 38,422 Weighted average remaining operating lease term (years) 4.71 5.31 Weighted average operating lease discount rate 3.76 % 3.47 % The Company uses its incremental borrowing rate as the discount rate. As the Company enters into operating leases in multiple jurisdictions and denominated in currencies other than the U.S. dollar, judgment is used to determine the Company’s incremental borrowing rate including (1) conversion of its subordinated borrowing rate (using published yield curves) to an unsubordinated and collateralized rate, (2) adjusting the rate to align with the term of each lease, and (3) adjusting the rate to incorporate the effects of the currency in which the lease is denominated. Maturities on lease liabilities as of December 31, 2024, are as follows (in thousands): Fiscal Year Ending December 31, 2025 $ 10,213 2026 6,974 2027 5,662 2028 4,889 2029 2,547 Thereafter 3,885 Total lease payments 34,170 Less: imputed interest 2,313 Total lease liability $ 31,857 13. Commitments and Contingencies In accordance with ASC 460, Guarantees , the Company recognizes the fair value for guarantee and indemnification arrangements it issues or modifies if these arrangements are within the scope of the interpretation. In addition, the Company must continue to monitor the conditions that are subject to the guarantees and indemnifications, as required under the previously existing generally accepted accounting principles, to identify if a loss has occurred. If the Company determines it is probable a loss has occurred, then any estimable loss would be recognized under those guarantees and indemnifications. Under its customer agreements, the Company may agree to indemnify, defend, and hold harmless its customers from and against certain losses, damages, and costs arising from claims alleging that the use of its software infringes the intellectual property of a third-party. Historically, the Company has not been required to pay material amounts in connection with claims asserted under these provisions, and accordingly, the Company has not recorded a liability relating to such provisions. Under its customer agreements, the Company also may represent and warrant to customers that its software will operate substantially in conformance with its documentation, and that the services the Company performs will be performed in a workmanlike manner by personnel reasonably qualified by experience and expertise to perform their assigned tasks. Historically, only minimal costs have been incurred relating to the satisfaction of warranty claims. In addition, from time to time, the Company may guarantee the performance of a contract on behalf of one or more of its subsidiaries, or a subsidiary may guarantee the performance of a contract on behalf of another subsidiary. Other guarantees include promises to indemnify, defend, and hold harmless the Company’s executive officers, directors, and certain other key officers. The Company’s certificate of incorporation provides that it will indemnify and advance expenses to its directors and officers to the maximum extent permitted by Delaware law. The indemnification covers any expenses and liabilities reasonably incurred by a person, by reason of the fact that such person is, was, or has agreed to be a director or 81 officer, in connection with the investigation, defense, and settlement of any threatened, pending, or completed action, suit, proceeding, or claim. The Company’s certificate of incorporation authorizes the use of indemnification agreements, and the Company enters into such agreements with its directors and certain officers from time to time. These indemnification agreements typically provide for a broader scope of the Company’s obligation to indemnify the directors and officers than set forth in the certificate of incorporation. The Company’s contractual indemnification obligations under these agreements are in addition to the respective directors’ and officers’ rights under the certificate of incorporation or under Delaware law. Legal Proceedings In April 2021, ACH files associated with one of the Company's mortgage servicing customers were inadvertently transmitted into the ACH network during a test of the Company's payment processing system. The Company took immediate corrective action and issued reversing ACH files, restoring affected accounts. The Company’s customer commenced an action for damages as a result of this event. The Company settled with the customer for the amount of $ 1.8 million, which was funded by insurance carriers. Funds received from or expected to be received from insurance carriers are generally subject to the respective carriers' reservation of rights. The Company is from time to time subject to other claims, litigation, and investigations. While the Company believes that none of the currently pending matters is reasonably likely to have a material adverse effect on it, there can be no assurance with respect thereto or future matters. 14. Employee Benefit Plans The Company offers various defined contribution plans for our U.S. and non-U.S. employees. Total defined contribution plan expense was $ 13.2 million, $ 12.8 million, and $ 13.4 million during the years ended December 31, 2024, 2023, and 2022, respectively. ACI 401(k) Plan The ACI 401(k) Plan is a defined contribution plan covering all domestic employees of the Company. Participants may contribute up to 75 % of their annual eligible compensation up to a maximum of $ 23,000 (for employees who are under the age of 50 on December 31, 2024) or a maximum of $ 30,500 (for employees aged 50 or older on December 31, 2024). The Company matches 100 % of the first 4 % of eligible participant contributions and 50 % of the next 4 % of eligible participant contributions, not to exceed $ 6,000 per employee annually. Effective January 1, 2024, employees are eligible for the Company match immediately. Employees hired January 1, 2024, and after have a one year vesting schedule for the match. Company contributions charged to expense were $ 6.2 million, $ 5.0 million, and $ 6.2 million during the years ended December 31, 2024, 2023, and 2022, respectively. ACI Worldwide EMEA Group Personal Pension Scheme The ACI Worldwide EMEA Group Personal Pension Scheme is a defined contribution plan covering substantially all ACI Worldwide (EMEA) Limited (“ACI-EMEA”) employees. For those ACI-EMEA employees who elect to participate in the plan, the Company contributes a minimum of 8.5 % of eligible compensation to the plan for employees employed at December 1, 2000 or from 7 % to 10 % of eligible compensation for employees employed subsequent to December 1, 2000. ACI-EMEA contributions charged to expense were $ 1.7 million during both the years ended December 31, 2024 and 2023, and $ 1.6 million during the year ended December 31, 2022. 82 EXHIBIT INDEX Exhibit No. Description 3.01 (1) 2013 Amended and Restated Certificate of Incorporation of the Company 3.02 (2) Amended and Restated Bylaws of the Company 4.01 (3) Form of Common Stock Certificate (P) 4.02 (4) Indenture, dated as of August 21, 2018, among ACI Worldwide, Inc., the guarantors listed therein, and Wilmington Trust, National Association, as trustee 4.03 Form of 5.750% Senior Notes due 2026 (Included as Exhibit A to Exhibit 4.02) 4.04 Description of Securities 10.01 (5)* ACI Worldwide, Inc. 2017 Employee Stock Purchase Plan 10.02 (6)* ACI Worldwide, Inc. 2005 Equity and Performance Incentive Plan, as amended 10.03 (7)* Form of Indemnification Agreement between the Company and certain officers, including executive officers 10.04 (8)* ACI Worldwide, Inc. 2013 Executive Management Incentive Compensation Plan 10.05 (9)* Amended and Restated Deferred Compensation Plan 10.06 (10) Second Amended and Restated Credit Agreement, dated as of April 5, 2019, among ACI Worldwide, Inc., its affiliates that are a party thereto, Bank of America, N.A. and the lenders that are a party thereto 10.07 (11) Extension Agreement, dated as of April 28, 2023, among ACI Worldwide, Inc., ACI Worldwide Corp., ACI Payments, Inc. and Bank of America, N.A., as administrative agent for the lenders 10.08 (12) Refinancing Amendment, dated as of February 26, 2024, among ACI Worldwide, Inc., ACI Worldwide Corp., ACI Payments, Inc. and Bank of America, N.A., as administrative agent for the lenders 10.09 (13) ACI Worldwide, Inc. 2016 Equity and Performance Incentive Plan 10.10 (14)* Form of 2016 Restricted Share Unit Award Agreement for the Company’s 2016 Equity and Performance Incentive Plan 10.11 (15)* Form of 2016 Performance Share Award Agreement (rTSR Performance Share Awards) 10.12 (16)* Form of Change in Control Employment Agreement between ACI Worldwide, Inc. and certain officers, including executive officers 10.13 (17)* Form of 2015 Nonqualified Stock Option Agreement - Employee for the Company's 2005 Equity and Performance Incentive Plan, as amended 10.14 (18)* Form of 2016 Nonqualified Stock Option Agreement for the Company’s 2016 Equity and Performance Incentive Plan, as amended 10.15 (19)* ACI Worldwide, Inc. 2020 Equity and Incentive Compensation Plan, as amended and restated effective June 1, 2023 10.16 (20)* Form of Restricted Share Unit Award Agreement for the Company's 2020 Equity and Incentive Compensation Plan 10.17 (21)* Form of Performance Share Award Agreement for the Company's 2020 Equity and Incentive Compensation Plan 10.18 (22)* Form of Director Restricted Share Unit Award Agreement for the Company's 2020 Equity and Incentive Compensation Plan 10.19 (23)* Form of Severance Agreement between ACI Worldwide, Inc. and Thomas Warsop 10.20 (24)* Form of Change In Control Employment Agreement between ACI Worldwide, Inc. and Thomas Warsop 19.00 Trading Policy 21.01 Subsidiaries of the Registrant (filed herewith) 23.01 Consent of Independent Registered Public Accounting Firm (filed herewith) – Deloitte & Touche LLP 31.01 Certification of Chief Executive Officer pursuant to S.E.C. Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) 31.02 Certification of Chief Financial Officer pursuant to S.E.C. Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) 32.01 ** Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) 32.02 ** Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) 83 97.10 Clawback Policy 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation Linkbase 101.LAB XBRL Taxonomy Extension Label Linkbase 101.PRE XBRL Taxonomy Extension Presentation Linkbase 101.DEF XBRL Taxonomy Extension Definition Linkbase 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) (1) Incorporated herein by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K filed August 17, 2017. (2) Incorporated herein by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K/A filed April 1, 2022. (3) Incorporated herein by reference to Exhibit 4.01 to the registrant’s Registration Statement No. 33-88292 on Form S-1. (4) Incorporated herein by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed August 21, 2018. (5) Incorporated herein by reference to Annex A to the registrant’s Proxy Statement filed on April 27, 2017. (6) Incorporated herein by reference to Exhibit 10.07 to the registrant’s quarterly report on Form 10-Q for the period ended June 30, 2014. (7) Incorporated herein by reference to Exhibit 10.10 to the registrant’s annual report on Form 10-K for the year ended December 31, 2009. (8) Incorporated herein by reference to Annex A to the registrant’s Proxy Statement for its 2013 Annual Meeting (File No. 000-25346) filed on April 29, 2013. (9) Incorporated herein by reference to Exhibit 4.3 to the registrant’s Registration Statement No. 333-169293 on Form S-8 filed September 9, 2010 (10) Incorporated herein by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed April 11, 2019. (11) Incorporated herein by reference to Exhibit 10.1 to the registrant's current report on Form 8-K filed May 4, 2023. (12) Incorporated herein by reference to Exhibit 10.01 to the registrant's quarterly report on Form 10-Q for the period ended March 31, 2024. (13) Incorporated herein by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed June 20, 2016. (14) Incorporated herein by reference to Exhibit 10.26 to the registrant’s annual report on Form 10-K for the year ended December 31, 2017. (15) Incorporated herein by reference to Exhibit 10.4 to the registrant’s current report on Form 8-K filed March 8, 2019. (16) Incorporated herein by reference to Exhibit 10.2 to the registrant’s current report on Form 8-K filed February 20, 2020. (17) Incorporated herein by reference to Exhibit 10.03 to the registrant's quarterly report on Form 10-Q for the period ended March 31, 2020. (18) Incorporated herein by reference to Exhibit 10.04 to the registrant's quarterly report on Form 10-Q for the period ended March 31, 2020. (19) Incorporated herein by reference to reference to Appendix B to the registrant's Proxy Statement filed April 18, 2023. (20) Incorporated herein by reference to Exhibit 10.06 to the registrant’s quarterly report on Form 10-Q for the period ended June 30, 2023. (21) Incorporated herein by reference to Exhibit 10.07 to the registrant’s quarterly report on Form 10-Q for the period ended June 30, 2023. (22) Incorporated herein by reference to Exhibit 10.05 to the registrant's quarterly report on Form 10-Q for the period ended June 30, 2023. (23) Incorporated herein by reference to Exhibit 10.1 to the registrant's current report on Form 8-K filed May 31, 2023. (24) Incorporated herein by reference to Exhibit 10.2 to the registrant's current report on Form 8-K filed May 31, 2023. __________________ * Denotes exhibit that constitutes a management contract, or compensatory plan or arrangement. ** This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference. 84 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ACI WORLDWIDE, INC. (Registrant) Date: February 27, 2025 By: /s/ THOMAS W. WARSOP, III Thomas W. Warsop, III President, Chief Executive Officer, and Director (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date / S / THOMAS W. WARSOP, III President, Chief Executive Officer, and Director (Principal Executive Officer) February 27, 2025 Thomas W. Warsop, III / S / SCOTT W. BEHRENS Executive Vice President, Chief Financial Officer, and Chief Accounting Officer (Principal Financial Officer) February 27, 2025 Scott W. Behrens / S / ADALIO T. SANCHEZ Chairman of the Board and Director February 27, 2025 Adalio T. Sanchez / S / JUAN BENITEZ Director February 27, 2025 Juan Benitez / S / JANET O. ESTEP Director February 27, 2025 Janet O. Estep / S / MARY HARMAN Director February 27, 2025 Mary Harman / S / KATRINKA MCCALLUM Director February 27, 2025 Katrinka McCallum / S / CHARLES E. PETERS, JR Director February 27, 2025 Charles E. Peters, JR / S / SAMIR ZABANEH Director February 27, 2025 Samir Zabaneh 85