What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-08 compared with 2024-11-07 · 165 added, 224 removed, 445 unchanged (47% of the section changed)

4 unchanged sentences

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current assets

53 unchanged sentences

5,000,000 shares authorized;

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

no shares issued at March 31, 2025, and December 31, 2024

Common stock;

1 unchanged sentence

280,000,000 shares authorized;

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

140,525,055 shares issued at March 31, 2025, and December 31, 2024

Additional paid-in capital 735,751 731,927

Retained earnings 1,656,955 1,598,085

Treasury stock, at cost, 35,654,240 and 32,447,317 shares at September 30, 2024, and December 31, 2023, respectively

Treasury stock, at cost, 35,251,782 and 35,270,142 shares at March 31, 2025, and December 31, 2024, respectively

( 797,214 ) ( 784,914 )

7 unchanged sentences

(unaudited and in thousands, except per share amounts)

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Software as a service and platform as a service

19 unchanged sentences

Operating income

122,586 61,924 185,847 48,092

Other income (expense)

3 unchanged sentences

23,740 ( 2,025 )

( 823 ) 1,084 ( 1,692 ) ( 6,403 )

Total other income (expense) 13,121 ( 17,026 )

Income (loss) before income taxes

Income tax expense (benefit) 25,851 8,752 35,588 ( 5,387 )

71,637 ( 7,466 )

Income tax expense

Net income (loss)

$ 58,870 $ ( 7,751 )

Income (loss) per common share

$ 0.56 $ ( 0.07 )

Diluted $ 0.77 $ 0.35 $ 0.98 $ ( 0.01 )

$ 0.55 $ ( 0.07 )

Weighted average common shares outstanding

7 unchanged sentences

(unaudited and in thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net income (loss)

$ 58,870 $ ( 7,751 )

Other comprehensive income (loss):

Foreign currency translation adjustments

7,879 ( 2,404 )

Total other comprehensive income (loss) 7,879 ( 2,404 )

Comprehensive income (loss)

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

ACI WORLDWIDE, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited and in thousands, except share amounts)

Three Months Ended September 30, 2024

Common Stock Additional

Paid-in Capital Retained Earnings Treasury Stock Accumulated Other

Comprehensive Loss Total

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

$ 66,749 $ ( 10,155 )

Other comprehensive income

— — — — 9,109 9,109

Stock-based compensation

— 11,346 — — — 11,346

Shares issued and forfeited, net, under stock plans

— ( 4,181 ) — 6,109 — 1,928

Repurchase of 203,317 shares of common stock

— — — ( 7,976 ) — ( 7,976 )

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 2,960 ) — ( 2,960 )

Balance as of September 30, 2024 $ 702 $ 725,724 $ 1,499,530 $ ( 791,353 ) $ ( 104,973 ) $ 1,329,630

Three Months Ended September 30, 2023

Common Stock Additional

Paid-in Capital Retained Earnings Treasury Stock Accumulated Other

Comprehensive Loss Total

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

— — 37,911 — — 37,911

Other comprehensive loss

— — — — ( 6,310 ) ( 6,310 )

Stock-based compensation

— 6,822 — — — 6,822

Shares issued and forfeited, net, under stock plans

— ( 2,412 ) — 3,381 — 969

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 883 ) — ( 883 )

Balance as of September 30, 2023 $ 702 $ 708,506 $ 1,272,351 $ ( 653,162 ) $ ( 117,362 ) $ 1,211,035

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

3 unchanged sentences

(unaudited and in thousands, except share amounts)

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Common Stock Additional

14 unchanged sentences

— — — ( 7,070 ) — ( 7,070 )

Balance as of September 30, 2024 $ 702 $ 725,724 $ 1,499,530 $ ( 791,353 ) $ ( 104,973 ) $ 1,329,630

Nine Months Ended September 30, 2023

Balance as of March 31, 2025 $ 702 $ 735,751 $ 1,656,955 $ ( 797,214 ) $ ( 113,594 ) $ 1,482,600

Three Months Ended March 31, 2024

Paid-in Capital

5 unchanged sentences

— — ( 7,751 ) — — ( 7,751 )

Other comprehensive income

Other comprehensive loss

— — — — ( 2,404 ) ( 2,404 )

3 unchanged sentences

— ( 6,157 ) — 7,336 — 1,179

Repurchase of 2,060,433 shares of common stock

— — — ( 63,065 ) — ( 63,065 )

Repurchase of stock-based compensation awards for tax withholdings

— — — ( 3,302 ) — ( 3,302 )

Balance as of September 30, 2023 $ 702 $ 708,506 $ 1,272,351 $ ( 653,162 ) $ ( 117,362 ) $ 1,211,035

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

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

3 unchanged sentences

(unaudited and in thousands)

Nine Months Ended

September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net income (loss)

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

$ 58,870 $ ( 7,751 )

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

20,829 23,978

4 unchanged sentences

Stock-based compensation expense

Gain on sale of equity investment

( 718 ) ( 1,311 )

Changes in operating assets and liabilities:

41,640 127,269

Accounts payable

3 unchanged sentences

Deferred revenue

( 4,648 ) 13,907

Other current and noncurrent assets and liabilities

6 unchanged sentences

Purchases of software and distribution rights ( 6,759 ) ( 14,582 )

( 23,178 ) ( 22,571 )

Proceeds from sale of equity investment

Net cash flows from investing activities

7 unchanged sentences

Proceeds from revolving credit facility

184,000 75,000

Repayment of revolving credit facility

3 unchanged sentences

( 9,375 ) ( 529,073 )

Payments on or proceeds from other debt, net ( 9,299 ) ( 12,473 )

Payments for debt issuance costs

Payments on or proceeds from other debt, net ( 4,217 ) ( 2,694 )

Net increase (decrease) in settlement assets and liabilities

3 unchanged sentences

Effect of exchange rate fluctuations on cash 1,791 2,314

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents 101,753 ( 725 )

Cash and cash equivalents, including settlement deposits, beginning of period 265,018 238,821

17 unchanged sentences

All intercompany balances and transactions have been eliminated.

The condensed consolidated financial statements as of September 30, 2024, and for the three and nine months ended September 30, 2024 and 2023, are unaudited and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation, in all material respects, of the financial position and operating results for the interim periods.

The condensed consolidated financial statements as of March 31, 2025, and for the three months ended March 31, 2025 and 2024, are unaudited and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation, in all material respects, of the financial position and operating results for the interim periods.

The condensed consolidated balance sheet as of December 31, 2024, is derived from the audited financial statements.

The condensed consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2024, filed on February 27, 2025.

Results for the three and nine months ended September 30, 2024, are not necessarily indicative of results that may be attained in the future.

Results for the three months ended March 31, 2025, are not necessarily indicative of results that may be attained in the future.

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S.

4 unchanged sentences

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

September 30, 2024 December 31, 2023

Operating lease liabilities $ 8,960 $ 9,348

March 31, 2025 December 31, 2024

Vendor financed licenses $ 12,717 $ 14,462

Operating lease liabilities 8,402 9,265

Income taxes payable 8,006 3,284

Accrued interest 3,020 8,810

15 unchanged sentences

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

The collection of interest on these settlement accounts is considered in the Company’s determination of its fee structure for clients and represents a portion of the payment for services performed by the Company.

The amount of settlement funds as of September 30, 2024, and December 31, 2023, was $ 315.5 million and $ 273.2 million, respectively.

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 March 31, 2025, and December 31, 2024, was $ 224.1 million and $ 267.0 million, respectively.

The fair value of the Company’s Credit Agreement approximates the carrying value due to the floating interest rate (Level 2 of the fair value hierarchy).

The Company measures the fair value of its Senior Notes based on Level 2 inputs, which include quoted market prices and interest rate spreads of similar securities.

The fair value of the Company’s 5.750 % Senior Notes due 2026 (“2026 Notes”) was $ 399.6 million and $ 398.5 million as of September 30, 2024, and December 31, 2023, respectively.

The fair value of the Company’s 5.750 % Senior Notes due 2026 (“2026 Notes”) was $ 401.7 million and $ 399.2 million as of March 31, 2025, and December 31, 2024, 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).

In accordance with the Accounting Standards Codification ("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 and has identified its operating segments, Banks, Merchants, and Billers, as the reporting units.

As of September 30, 2024, the Company's goodwill balance of $ 1.2 billion was allocated $ 671.7 million to Banks, $ 137.3 million to Merchants, and $ 417.0 million to Billers.

The Company evaluates goodwill at the reporting unit level, and as discussed in Note 9, Segment Information, during the three months ended March 31, 2025, it realigned Banks and Merchants under a single general manager leading Payment Software.

This change also resulted in a change in reporting units - combining Banks and Merchants into Payment Software, while maintaining Biller.

As of March 31, 2025, the Company's goodwill balance of $ 1.2 billion was allocated $ 809.0 million to Payment Software and $ 417.0 million to Biller.

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

3 unchanged sentences

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 $ 19.6 million and $ 18.5 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of September 30, 2024, and December 31, 2023, respectively.

The Company accounted for this investment using the equity method in accordance with ASC 323, Investments - Equity Method and Joint Ventures, and recorded its share of earnings and losses in the investment on a one-quarter lag basis.

The Company had recorded an investment of $ 18.6 million, included in other noncurrent asset s in the condensed consolidated balance sheet as of December 31, 2024.

In March 2025, the Company sold its 30 % interest for $ 46.0 million.

The Company recognized a gain on the sale of $ 25.9 million, which is recorded in other, net in the condensed consolidated statements of operations.

Recently Issued Accounting Standards Not Yet Effective

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024, and early application is permitted.

The Company is currently assessing the impact the adoption of ASU 2023-07 will have on its segment reporting 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 December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

1 unchanged sentence

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 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.

ASU 2023-09 is effective for our annual period beginning after December 15, 2024.

ASU 2023-09 is expected to impact our income tax disclosures beginning with the consolidated financial statements included in the annual report on Form 10-K for the fiscal year ended December 31, 2025, but is not expected to have an impact on the Company's financial position, results of operations or cash flows.

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.

4 unchanged sentences

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Billed receivables $ 169,631 $ 198,486

Allowance for credit losses

( 1,936 ) ( 4,295 )

Allowance for doubtful accounts ( 1,725 ) ( 1,758 )

Billed receivables, net 167,906 196,728

3 unchanged sentences

Total receivables, net $ 739,850 $ 774,478

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

N o customer accounted for more than 10% of the Company’s consolidated receivables balance as of March 31, 2025 and December 31, 2024.

Deferred revenue includes amounts due or received from customers for software licenses, maintenance, services, and/or SaaS and PaaS services in advance of recording the related revenue.

4 unchanged sentences

Foreign currency translation 589

Balance, September 30, 2024

Balance, March 31, 2025

Revenue allocated to remaining performance obligations represents contracted revenue that will be recognized in future periods, which is comprised of deferred revenue and amounts that will be invoiced and recognized as revenue in future periods.

2 unchanged sentences

• SaaS and PaaS revenue from variable consideration that will be recognized in accordance with the ‘right to invoice’ practical expedient or meets the allocation objective.

Revenue allocated to remaining performance obligations was $ 659.2 million as of September 30, 2024, of which the Company expects to recognize approximately 51 % over the next 12 months and the remainder thereafter.

During the three and nine months ended September 30, 2024, revenue recognized by the Company from performance obligations satisfied in previous periods was no t significant.

During the three and nine months ended September 30, 2023, revenue recognized by the Company from performance obligations satisfied in previous periods was $ 23.3 million and $ 43.7 million, respectively.

As of September 30, 2024, the Company had $ 131.0 million, $ 471.9 million, and $ 400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $ 467.1 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended, and up to $ 1.9 million of unused borrowings under Letter of Credit agreements.

Revenue allocated to remaining performance obligations was $ 661.4 million as of March 31, 2025, of which the Company expects to recognize approximately 51 % over the next 12 months and the remainder thereafter.

During the three months ended March 31, 2025, revenue recognized by the Company from performance obligations satisfied in previous periods was $ 19.6 million.

As of March 31, 2025, the Company had $ 453.1 million, and $ 400.0 million outstanding under its Term Loans and Senior Notes, respectively.

There was no amount outstanding under the Revolving Credit Facility, with up to $ 598.1 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended, and up to $ 1.9 million of unused borrowings under Letter of Credit agreements.

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

8 unchanged sentences

Interest is due and payable monthly.

The interest rate in effect for the Credit Facility as of September 30, 2024, was 6.70 %.

The Company is also required to pay (a) a commitment fee related to the unutilized commitments under the Revolving Credit Facility, payable quarterly in arrears, (b) letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on SOFR rate borrowings under the Revolving Credit Facility on an annual basis, payable quarterly in arrears, and (c) customary fronting fees for the issuance of letters of credit fees and agency fees.

The interest rate in effect for the Credit Facility as of March 31, 2025, was 6.17 %.

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.

10 unchanged sentences

The 2026 Notes will mature on August 15, 2026.

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

Maturities on debt outstanding as of March 31, 2025, are as follows (in thousands):

Fiscal Year Ending December 31,

Remainder of 2025 $ 28,125

Thereafter 443,500

Total $ 853,125

As of September 30, 2024, and at all times during the period, the Company was in compliance with its financial debt covenants.

As of March 31, 2025, 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):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Term loans $ 453,125 $ 462,500

13 unchanged sentences

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

As of September 30, 2024 and December 31, 2023, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

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 condensed consolidated statements of cash flows.

As of September 30, 2024, no amount was outstanding on these agreements.

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

As of March 31, 2025 and December 31, 2024, there was $ 75.0 million available and no amount outstanding on the overdraft facility.

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):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

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

1 unchanged sentence

Amortization of software for internal use is computed using the straight-line method over an estimated useful life of generally three to eight years .

Software for internal use amortization expense recorded during the three months ended September 30, 2024 and 2023, totaled $ 16.6 million and $ 16.3 million, respectively.

Software for internal use amortization expense recorded during the nine months ended September 30, 2024 and 2023, totaled $ 47.9 million and $ 49.3 million, respectively.

Software for internal use amortization expense recorded during the three months ended March 31, 2025 and 2024, totaled $ 15.6 million and $ 15.5 million, respectively.

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

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

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

Customer relationships $ 447,001 $ ( 286,285 ) $ 160,716 $ 444,385 $ ( 279,008 ) $ 165,377

Trademarks and trade names 22,065 ( 22,065 ) — 21,899 ( 21,079 ) 820

Total other intangible assets $ 472,463 $ ( 300,153 ) $ 172,310 $ 469,553 $ ( 273,907 ) $ 195,646

Other intangible assets amortization expense recorded during the three months ended September 30, 2024 and 2023, totaled $ 7.1 million and $ 8.5 million, respectively.

Other intangible assets amortization expense recorded during the nine months ended September 30, 2024 and 2023, totaled $ 23.8 million and $ 25.4 million, respectively.

Based on capitalized intangible assets as of September 30, 2024, estimated amortization expense amounts in future fiscal years are as follows (in thousands):

Other intangible assets amortization expense recorded during the three months ended March 31, 2025 and 2024, totaled $ 5.2 million and $ 8.5 million, respectively.

Based on capitalized intangible assets as of March 31, 2025, estimated amortization expense amounts in future fiscal years are as follows (in thousands):

Fiscal Year Ending December 31, Software Amortization Other Intangible Assets Amortization

8 unchanged sentences

Employee Stock Purchase Plan

Shares issued under the 2017 Employee Stock Purchase Plan during the nine months ended September 30, 2024 and 2023, totaled 71,181 and 101,565 , respectively.

Shares issued under the 2017 Employee Stock Purchase Plan during the three months ended March 31, 2025 and 2024, totaled 17,412 and 27,550 , respectively.

Stock Options

7 unchanged sentences

Exercised ( 32,518 ) 17.89

Outstanding as of September 30, 2024 768,561 $ 18.78 1.31 $ 24,689,894

Exercisable as of September 30, 2024 768,561 $ 18.78 1.31 $ 24,689,894

The total intrinsic value of stock options exercised during the nine months ended September 30, 2024 and 2023, was $ 2.4 million and $ 0.9 million, respectively.

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

Outstanding as of March 31, 2025 506,752 $ 18.69 1.25 $ 18,251,161

Exercisable as of March 31, 2025 506,752 $ 18.69 1.25 $ 18,251,161

The total intrinsic value of stock options exercised during the three months ended March 31, 2025 and 2024, was $ 1.2 million and $ 0.3 million, respectively.

There were no stock options granted during the three months ended March 31, 2025 or 2024.

Performance Share Awards

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

During the three months ended March 31, 2025, pursuant to the Company's 2020 Equity and Incentive Compensation Plan, the Company granted performance share awards with a total shareholder return component ("TSRs").

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

8 unchanged sentences

Forfeited ( 19,415 ) 39.54

Change in payout rate ( 203,945 ) 50.60

Nonvested as of September 30, 2024 960,156 $ 35.22

In the first quarter of 2024, the TSRs granted in 2021 were earned by the employees.

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

The fair value of TSRs granted during the nine months ended September 30, 2024 and 2023, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, Compensation - Stock Compensation , using the following weighted average assumptions:

Nine months ended September 30,

Nonvested as of March 31, 2025 1,392,807 $ 43.26

The fair value of TSRs granted during the three months ended March 31, 2025 and 2024, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, Compensation - Stock Compensation , using the following weighted average assumptions:

Three Months Ended March 31,

Expected life (years) 2.3 2.7

10 unchanged sentences

Forfeited ( 54,138 ) 34.87

Nonvested as of September 30, 2024 1,954,230 $ 29.72

During the nine months ended September 30, 2024, a total of 815,772 RSUs vested.

Nonvested as of March 31, 2025 2,180,947 $ 39.24

During the three months ended March 31, 2025, a total of 362,138 RSUs vested.

The Company withheld 128,772 of those shares to pay the employees’ portion of the minimum payroll withholding taxes.

As of September 30, 2024, there was unrecognized compensation expense of $ 50.7 million related to RSUs and $ 22.8 million related to TSRs, which the Company expects to recognize over a weighted average period of 2.1 years and 2.0 years, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended September 30, 2024 and 2023, of $ 11.3 million and $ 6.8 million, respectively, with corresponding tax benefits of $ 1.9 million and $ 1.2 million, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the nine months ended September 30, 2024 and 2023, of $ 30.2 million and $ 17.5 million, respectively, with corresponding tax benefits of $ 5.0 million and $ 3.2 million , respectively.

As of March 31, 2025, there was unrecognized compensation expense of $ 80.3 million related to RSUs and $ 37.9 million related to TSRs, which the Company expects to recognize over a weighted average period of 2.4 years and 1.9 years, respectively.

The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended March 31, 2025 and 2024, of $ 11.6 million and $ 8.1 million, respectively, with corresponding tax benefits of $ 1.8 million and $ 1.4 million, respectively.

Common Stock and Treasury Stock

1 unchanged sentence

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 $ 128.7 million during the nine months ended September 30, 2024.

The Company repurchased 264,936 shares for $ 14.4 million during the three months ended March 31, 2025.

Under the program to date, the Company has repurchased 63,132,773 shares for approximately $ 1.1 billion.

As of September 30, 2024, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 372.3 million.

As of March 31, 2025, the maximum remaining amount authorized for purchase under the stock repurchase program was $ 358.1 million.

Subsequent to March 31, 2025, the Company has repurchased additional shares under the repurchase program.

Earnings (Loss) Per Share

2 unchanged sentences

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Weighted average shares outstanding:

Basic weighted average shares outstanding 105,350 106,799

Dilutive effect of stock options and RSUs 1,248 266 901 —

Dilutive effect of stock options, RSUs, and contingently issuable shares

Diluted weighted average shares outstanding 106,827 106,799

The diluted earnings (loss) per share computation excludes 1.0 million and 2.0 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended September 30, 2024 and 2023, respectively, as their effect would be anti-dilutive.

The diluted earnings (loss) per share computation excludes 1.2 million and 3.2 million options to purchase shares, RSUs, and contingently issuable shares during the nine months ended September 30, 2024 and 2023, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of September 30, 2024, and December 31, 2023, was 104,870,815 and 108,077,738 , respectively.

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

Other, net was $ 0.8 million of expense and $ 1.1 million of income for the three months ended September 30, 2024 and 2023, respectively.

Other, net was $ 1.7 million and $ 6.4 million of expense for the nine months ended September 30, 2024 and 2023, respectively.

The diluted earnings (loss) per share computation excludes 1.4 million and 4.4 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended March 31, 2025 and 2024, respectively, as their effect would be anti-dilutive.

Common stock outstanding as of March 31, 2025, and December 31, 2024, was 105,273,273 and 105,254,913 , respectively.

Other, net is primarily comprised of foreign currency transaction gains and losses and, for the three months ended March 31, 2025, the $ 25.9 million gain on the sale of the Company's equity method investment.

Other, net was $ 23.7 million of income and $ 2.0 million of expense for the three months ended March 31, 2025 and 2024, respectively.

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").

In 2025, the Company made a change in organizational structure to align with its strategic direction.

As a result of this change, the Company reassessed its segment reporting structure due to changes in leadership structure and how the Company's chief operating decision maker ("CODM") assesses the Company's performance and allocates resources.

Beginning in the first quarter of 2025, the Company reports financial performance based on its new operating segments, Payment Software, which includes bank and merchant customers, and Biller.

The Company continues to use Segment Adjusted EBITDA as a measure of segment profitability.

The Company’s Chief Executive Officer is also the chief operating decision maker.

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.

ACI provides payment solutions to large and mid-size banks globally for retail banking, real time, digital, and other payment services.

Payment Software.

Payment Software drives payments orchestration for banks and merchants.

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.

ACI’s support of merchants globally includes Tier 1 and Tier 2 merchants, online-only merchants and the payment service providers, independent selling organizations, value-added resellers, and acquirers who service them.

These customers operate in a variety of verticals, including general merchandise, grocery, hospitality, dining, transportation, and others.

The Company's solutions provide merchants with a secure, omni-channel payments platform that gives them independence from third-party payment providers.

They also offer secure solutions to online-only merchants that provide consumers with a convenient and seamless way to shop.

Within the billers segment, ACI provides electronic bill presentment and payment (“EBPP”) services to companies operating in the consumer finance, insurance, healthcare, higher education, utility, government, and mortgage categories.

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.

Within the Biller 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.

Revenue is attributed to the reportable segments based upon customer.

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 and product.

Expenses are attributed to the reportable segments in one of three methods:

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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, and, therefore, Segment Adjusted EBITDA is presented in conformity with ASC 280, Segment Reporting.

Segment Adjusted EBITDA is defined as earnings (loss) from operations before interest, income tax expense (benefit), depreciation and amortization (“EBITDA”) adjusted to exclude net other income (expense).

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.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

Three Months Ended March 31, 2025

Payment Software Biller Total

Revenue $ 200,725 $ 193,840 $ 394,565

Interchange (a)

— 130,828 130,828

Banks $ 222,031 $ 155,684 $ 471,109 $ 361,231

Merchants 50,120 36,267 123,865 107,556

Billers 179,601 171,064 546,276 507,229

Total revenue $ 451,752 $ 363,015 $ 1,141,250 $ 976,016

Global technology and innovation (b)

64,667 13,236 77,903

Other segment items (c)

29,497 18,881 48,378

Segment Adjusted EBITDA $ 106,561 $ 30,895 $ 137,456

Banks $ 153,944 $ 91,010 $ 274,794 $ 167,313

Merchants 26,711 10,296 52,737 26,751

Billers 30,920 39,186 99,092 100,056

Reconciliation of income before income taxes

Depreciation and amortization ( 23,985 )

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Other, net 23,740

Income (loss) before income taxes $ 107,278 $ 46,663 $ 140,151 $ ( 6,494 )

Income before income taxes

Three Months Ended March 31, 2024

Payment Software Biller Total

$ 141,157 $ 174,862 $ 316,019

Interchange (a)

— 112,394 112,394

Global technology and innovation (b)

60,432 11,983 72,415

Other segment items (c)

28,436 19,748 48,184

Segment Adjusted EBITDA $ 52,289 $ 30,737 $ 83,026

Reconciliation of loss before income taxes

Depreciation and amortization ( 27,609 )

Stock-based compensation expense ( 8,099 )

Corporate and unallocated expenses ( 37,758 )

Interest, net ( 15,001 )

Other, net ( 2,025 )

Loss before income taxes

(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.

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

Three Months Ended September 30, 2024

Banks Merchants Billers Total

Primary Solution Categories

Bill Payments $ — $ — $ 179,601 $ 179,601

Merchant Payments — 50,120 — 50,120

Fraud Management 18,451 — — 18,451

Real-Time Payments 45,376 — — 45,376

Issuing and Acquiring 158,204 — — 158,204

Total $ 222,031 $ 50,120 $ 179,601 $ 451,752

Three Months Ended September 30, 2023

Banks Merchants Billers Total

Primary Solution Categories

Bill Payments $ — $ — $ 171,064 $ 171,064

Merchant Payments — 36,267 — 36,267

Fraud Management 16,543 — — 16,543

Real-Time Payments 26,374 — — 26,374

Issuing and Acquiring 112,767 — — 112,767

Total $ 155,684 $ 36,267 $ 171,064 $ 363,015

Nine Months Ended September 30, 2024

Banks Merchants Billers Total

Three Months Ended March 31, 2025

Payment Software Biller Total

Primary Solution Categories

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Total $ 200,725 $ 193,840 $ 394,565

Nine Months Ended September 30, 2023

Banks Merchants Billers Total

Three Months Ended March 31, 2024

Payment Software Biller Total

Primary Solution Categories

5 unchanged sentences

Total $ 141,157 $ 174,862 $ 316,019

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Software as a service and platform as a service $ 11,697 $ 10,167 $ 33,924 $ 29,158

License 143,338 77,779 235,357 136,980

Maintenance 43,916 48,084 133,215 142,050

Services 23,080 19,654 68,613 53,043

Total $ 222,031 $ 155,684 $ 471,109 $ 361,231

Three Months Ended March 31,

Payment Software

Software as a service and platform as a service $ 43,243 $ 40,870

4 unchanged sentences

Software as a service and platform as a service $ 193,840 $ 174,862

License — — — —

Maintenance — 24 — 72

Services — — — —

Total $ 193,840 $ 174,862

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Three Months Ended March 31,

United States $ 236,754 $ 228,107

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Long-lived Assets

2 unchanged sentences

Total $ 1,917,881 $ 1,961,758

No single customer accounted for more than 10% of the Company's consolidated revenue during the three and nine months ended September 30, 2024 and 2023.

The United Kingdom accounted for 12.0 % of the Company's consolidated revenues during the three months ended September 30, 2024.

No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the three months ended September 30, 2023 and nine months ended September 30, 2024 and 2023.

For the three and nine months ended September 30, 2024, the Company's effective tax rate was 24 % and 25 %, respectively.

The Company reported a tax charge on pretax income for both the three and nine months ended September 30, 2024, with foreign entities recognizing earnings of $ 107.6 million and $ 148.1 million, respectively.

For the three and nine months ended September 30, 2023, the Company's effective tax rate was 19 % and 83 %, respectively.

The Company reported a tax charge on pretax income for the three months ended September 30, 2023 and a tax benefit on pretax loss for the nine months ended September 30, 2023, with foreign entities recognizing earnings of $ 47.9 million and $ 64.9 million, respectively.

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three months ended March 31, 2025 and 2024.

No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the three months ended March 31, 2025 and 2024.

For the three months ended March 31, 2025, the Company's effective tax rate was 18 %.

The Company reported a tax charge on pretax income, with foreign entities recognizing earnings of $ 80.2 million.

The effective tax rate for the three months ended March 31, 2025, was positively impacted by excess tax deductions on stock-based compensation expense.

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

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

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

The Company’s effective tax rate could fluctuate on a quarterly basis due to the occurrence of significant and unusual or infrequent items, such as vesting of stock-based compensation or foreign currency gains and losses.

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The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes.

The Organization for Economic Co-operation and Development Inclusive Framework on Base Erosion and Profit Shifting released Pillar Two Model Rules (“Pillar Two”) for a global minimum tax.

Many countries have enacted certain aspects of the Pillar Two framework with effective dates in 2024.

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

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

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

As of September 30, 2024, and December 31, 2023, the amount of unrecognized tax benefits for uncertain tax positions was $ 21.0 million and $ 20.9 million, respectively, excluding related liabilities for interest and penalties of $ 0.4 million and $ 0.5 million, respectively.

As of March 31, 2025, and December 31, 2024, the amount of unrecognized tax benefits for uncertain tax positions was $ 21.1 million and $ 21.0 million, respectively, excluding related liabilities for interest and penalties of $ 0.4 million.

The Company believes it is reasonably possible that the total amount of unrecognized tax benefits will decrease within the next 12 months by approximately $ 0.8 million, due to the settlement of various audits and the expiration of statutes of limitation.

Commitments and Contingencies

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 will be 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.

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

What changed 10-Q

Item 1. Financial Statements