What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 104 added, 129 removed, 342 unchanged (41% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ACI Worldwide, an innovator in global payments technology, delivers software solutions that power intelligent payments orchestration in real time so banks, merchants, and billers can drive growth, while continuously modernizing their payment infrastructures, simply and securely.

With nearly 50 years of trusted payments expertise, we combine our global footprint with a local presence to offer enhanced payment experiences to stay ahead of constantly changing payment challenges and opportunities.

ACI Worldwide delivers transformative software solutions that power intelligent payments orchestration in real time so banks, merchants, and billers can drive growth, while continuously modernizing their payment infrastructures, simply and securely.

With 50 years of trusted payments expertise, we combine our global footprint with a local presence to offer enhanced payment experiences to stay ahead of constantly changing payment challenges and opportunities.

Our products are sold and supported directly and through distribution networks covering three geographic regions – the Americas, EMEA, and Asia Pacific.

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

Our products and solutions are marketed under the ACI Worldwide brand and used globally by banks of all sizes, central banks, intermediaries, merchants, and billers, such as third-party digital payment processors, payment associations, switch interchanges, and a wide range of transaction-generating endpoints, including ATMs, merchant POS terminals, bank branches, mobile phones, tablets, corporations, and internet commerce sites.

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

Our products and solutions are marketed under the ACI Worldwide brand and used globally by banks of all sizes, central banks, intermediaries, merchants, and billers, such as third-party electronic payment processors, payment associations, switch interchanges, and a wide range of transaction-generating endpoints, including ATMs, merchant POS terminals, bank branches, mobile phones, tablets, corporations, and internet commerce sites.

We derive a majority of our revenues from domestic operations and believe we have large opportunities for growth in international markets, as well as continued expansion domestically in the United States.

3 unchanged sentences

Increasing digital payment transaction volumes .

The adoption of digital payments continues to accelerate, propelled by the digitization of cash, financial inclusion efforts of countries throughout the world, rapid growth of eCommerce, and the adoption of real-time payments enabling more people, governments, and businesses to embrace digital payments.

We leverage the growth in transaction volumes through the licensing of new systems to customers whose older systems cannot handle increased volume, through the sale of capacity upgrades to existing customers, and through the scalability of our platform-based solutions.

Adoption of real-time payments.

Expectations from both consumers and businesses are continuing to drive the payments world to more real-time delivery.

This is bolstered by the new data-rich ISO 20022 messaging format prevalent in account-to-account payments, which is delivering greater value to banks and their customers and has now been rolled out across the world and continues to see adoption with local schemes, such as FedWire, planned for 2025.

We are seeing global players with existing schemes working to expand capacity in anticipation of volume growth and new payment types.

Domestic schemes such as Unified Payments Interface ("UPI") in India and others are being made available to their citizens for cross-border transactions when abroad.

Mature markets, including India, the United Kingdom, Australia, Brazil, Malaysia, Singapore, and Thailand, continue to accelerate innovation, especially in terms of overlay services, driving new transactions.

The United States is driving real-time payments adoption through TCH Real-Time Payments and the FedNow Service.

Asia is one of the most innovative markets for adoption of real-time payment systems.

According to ACI’s Prime Time for Real-Time report, Asia Pacific is the largest regional market, with four of the global top five real-time payment markets by volume.

ACI provides solutions for commercial and central banks across Asia.

Latin American countries are pushing ahead with real-time payments modernization initiatives, looking to replicate Brazil’s success with PIX.

ACI is also providing solutions centrally in Colombia and Peru.

We are seeing success with real-time payments in the Middle East as well, as they have started to renovate their payment systems from legacy payment types to the modern digital and real-time world.

ACI's broad software portfolio, experience, and strategic partnerships with Mastercard, Microsoft, Red Hat, and Mindgate Solutions continue to position us as a leader in real-time payments, helping to drive seamless connectivity, increased security, and end-to-end modernization for organizations throughout the world.

The adoption of digital payments continues to accelerate, driven by the increased adoption of instant payments and other financial inclusion efforts of countries throughout the world, with countries such as India, Brazil, Indonesia, Malaysia, and most recently Colombia, growing dramatically.

Contactless payments adoption for in-person payments was thrust forward in response to the COVID-19 pandemic, and that usage has not abated.

ACI leverages growth in transaction volumes through the licensing of payment technologies to banks and intermediaries seeking to take advantage of that growth, supporting 44 global payment schemes and providing the central infrastructure to 11 central banks directly operating the scheme using ACI software.

With the launch of ACI Connetic, our comprehensive cloud-native payments hub solution available as a SaaS solution, participating in this growth is now accessible to banks of all sizes, significantly increasing ACI’s addressable market for software solutions.

ISO 20022 and enhanced payment standards.

In 2024 and 2025, banks and processors across the globe achieved major milestones with the certification and go-live of ISO 20022 compliance across the major wires networks, including Fedwire, Swift, CHAPS, and CHIPS.

ACI solutions were instrumental in this new initiative, regularly processing more than two-thirds of Fedwire payments traffic and approximately 15% of Swift payments traffic globally.

These go-live events were highly consequential in financial services globally, and with the enhanced data standards described, the financial system stands to be easier to secure and provide much richer analytics.

Adoption of cloud technology .

ACI has recognized the industry's technical inflection point in the transition from traditional on-premises infrastructure to the private and public cloud, and we are supporting our customers' cloud strategies.

Cloud technology innovations allow the financial services ecosystem to remove technical risk from their operations, accelerate innovation and time to market for new revenue-generating solutions for their customers, and accelerate innovation and ensure scalability and resiliency while improving operating economics over time.

As banks and intermediaries, merchants, and billers

seek to transition their systems to make use of cloud technology, our investments and partnerships, as demonstrated by our product enablement and initial optimization onto Microsoft Azure, enable us to leverage those cloud technology benefits today and for the future while preserving ACI's fundamental base of performance, resiliency, and scalability.

Cloud-native solutions running in a multi-tenant SaaS environment also allow ACI to expand our market coverage to smaller institutions, offering scalable solutions which are easy to integrate with but at price points that fit their budgets.

Payments intelligence, fraud, and compliance .

The accelerated adoption of real-time payments, fraudsters leveraging artificial intelligence, and the ramping up of mandates increase the urgency for industry-wide collaboration to mitigate fraud with precision and achieve operational excellence.

As the threat of sophisticated fraud becomes a greater concern for remitting and receiving institutions, consumers are challenged with increased friction to prevent illegitimate access of genuine accounts or funds to protect the consumer trust and confidence, while achieving their strategic objectives.

Regulators are beginning to litigate between consumers and financial institutions on the losses, and between remitting and receiving banks on the accountability.

ACI has recognized the industry’s technical inflection point as financial institutions transition from traditional on‑premises infrastructure to private and public cloud environments, and we are actively supporting our customers’ cloud strategies.

Cloud technology enables the financial services ecosystem to reduce technical risk, accelerate innovation, improve time‑to‑market for new revenue-generating solutions, and enhance scalability, resiliency, and long‑term operating economics.

As banks, intermediaries, merchants, and billers modernize their systems to take advantage of these capabilities, our ongoing investments and partnerships allow us to deliver cloud benefits today while maintaining ACI’s core strengths in performance, resiliency, and scalability.

In addition, cloud‑native, multi‑tenant SaaS solutions expand our reach to smaller institutions by providing scalable, easy‑to‑integrate offerings at accessible price points.

Building on these foundations, ACI Connetic—our fully cloud‑native banking platform launched in 2025—advances this strategy by conforming fully to Cloud Native Computing Foundation principles and by being deployable across public cloud environments such as Microsoft Azure and Amazon Web Services, as well as customers’ private clouds.

Working closely with key hardware and software partners including IBM and Red Hat, we ensure ACI Connetic can operate at scale in public, private, and multi‑cloud deployments, supporting the needs of the largest global banks and processors, particularly in highly regulated markets where concentration risk and data sovereignty considerations drive deployment strategy.

Payments Intelligence and Artificial Intelligence .

The accelerated adoption of real-time payments and new risks associated with AI agents driving new exploits increases the urgency for industry-wide collaboration against fraud.

As the threat of scams becomes a greater concern for remitting and receiving institutions, consumers are challenged with increased friction to prevent account take-over and criminals successfully persuading consumers to push transactions themselves, inadvertently, to mule accounts they have full control of, created with fake or synthetic identity, or simply "borrowed" with or without consent of the legit account holders.

While AI will be used to accelerate vulnerabilities, it can also be used to automate financial protection, including but not limited to recognition of synthetic identities and automated remediation.

Banks and intermediaries, merchants, and billers are pursuing solutions to mitigate their risks while improving their customer experience, protecting their margins, and securing their revenue streams, especially with their new products and offerings.

We continue to evolve our advanced machine learning and network intelligence capabilities to stop criminals and enable frictionless, legitimate business.

Meanwhile, with payments intelligence, organizations can integrate intelligent services to enhance consumer relationships while achieving precise, real-time fraud and risk mitigation capabilities.

Omni-commerce.

Shoppers are increasingly browsing, buying, and returning items across channels, including in-store, online, and mobile.

This trend has led to an increase in contactless payments, click and collect, and curbside collection.

Merchants from all industries, including grocers, fuel and convenience stores, are being tasked with delivering seamless experiences that include pay-in-aisle, kiosks, mobile app payments, QR code payments, eCommerce, traditional and mobile POS, buy online pickup in-store (BOPIS), and buy online return in-store (BORIS).

We believe there is significant opportunity to provide merchants with the tools to deliver a seamless, secure, personalized experience that creates loyalty and satisfaction, and drives conversion rates while protecting consumer data and preventing fraud.

Open banking .

Open banking is gaining momentum globally, and while it has been accelerated in Europe by regulations like PSD3, the United States is also seeing significant shifts driven by market demand and technology innovation rather than regulatory mandates.

In the United States, the growing adoption of Request to Pay (RTP) offers an alternative to traditional bill payment methods, allowing payers to respond directly to payment requests with flexibility on timing, method, and amount.

This aligns with the broader movement toward real-time payments, supported by platforms like the FedNow ® Service and The Clearing House’s RTP network.

While the United States doesn't have a regulatory equivalent to PSD3, there's a strong push for open banking solutions that provide greater control and transparency for consumers, and RTP is a key trend within that space.

By embracing both RTP and open banking trends in the United States, payment processors and financial institutions can offer more dynamic, flexible payment options, driving innovation and improving customer experience, while staying competitive in a rapidly evolving payments landscape.

ACI is in a unique position to deliver service that takes advantage of our real-time payments software, our relationships with banks, merchants, and billers, and global connectivity.

We continue to see opportunities for AI and other advanced analytics capabilities to stop fraudulent behavior and enable frictionless customer experiences.

The GENIUS Act and stablecoins.

With the passage of the 2025 GENIUS Act in the United States, stablecoins gained international attention and prominence.

As a leading software provider of solutions to move value around the world, ACI already plays a significant role in enabling stablecoin workflows as fiat currency funds are transferred to and from issuers and stablecoins are minted and burned.

We recognize the importance of stablecoins to global value transfer, especially cross-border transfers, and ACI Connetic at its core design is the ideal platform for initiating, managing, and receiving those transfers.

As customers are evaluating payment hubs, we expect that ACI Connetic and our strategy for stablecoin support will be well-received in the market.

Several other factors related to our business may have a significant impact on our operating results from year to year.

8 unchanged sentences

As part of our acquisition strategy, we seek acquisition candidates that are strategic, capable of being integrated into our operating environment, and accretive to our financial performance.

On September 1, 2022, we sold our 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.

For the year ended December 31, 2022, we recognized a gain of $38.5 million on the sale, which is recorded in other, net in the accompanying 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 in the accompanying consolidated statements of operations.

The Company and OEP had 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.

Backlog is comprised of:

1 unchanged sentence

• Renewal Backlog, which includes estimated future revenues from assumed contract renewals to the extent we believe recognition of the related revenue will occur within the corresponding backlog period.

We have historically included assumed renewals in backlog estimates based upon automatic renewal provisions in the executed contract and our historic experience with customer renewal rates.

Our backlog estimates assume renewals based upon automatic renewal provisions in the executed contract and our historic experience with customer renewal rates.

Our 60-month backlog estimates are derived using the following key assumptions:

25 unchanged sentences

2025 December 31,

Banks $ 2,368 $ 2,291 $ 2,230 $ 2,235 $ 2,261

Merchants 734 757 740 741 754

Billers 3,604 3,395 3,398 3,505 3,505

Payment Software

$ 3,372 $ 3,351 $ 3,333 $ 3,142 $ 3,102

3,887 3,752 3,712 3,597 3,604

$ 7,259 $ 7,103 $ 7,045 $ 6,739 $ 6,706

2025 September 30,

15 unchanged sentences

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Revenue $ Change

Revenue $ Change vs 2024 % Change vs 2024 Amount

Software as a service and platform as a service

22 unchanged sentences

Interest income 14,874 1 % (1,052) (7) % 15,926 1 %

Other, net (1,181) — % 7,329 (86) % (8,510) (1) %

Other, net 19,729 1 % 20,910 n/a (1,181) — %

Total other income (expense) (23,244) (1) % 34,482 60 % (57,726) (4) %

3 unchanged sentences

Total revenue for the year ended December 31, 2025, increased $165.5 million, or 10%, as compared to the same period in 2024.

• The impact of certain foreign currencies weakening against the U.S.

dollar resulted in a $3.2 million decrease in total revenue during the year ended December 31, 2024, as compared to the same period in 2023.

• The impact of certain foreign currencies strengthening against the U.S.

dollar resulted in a $8.9 million increase in total revenue during the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, total revenue for the year ended December 31, 2025, increased $156.6 million, or 10%, as compared to the same period in 2024.

Software as a Service (“SaaS”) and Platform as a Service (“PaaS”) Revenue

The Company’s SaaS arrangements allow customers to use certain software solutions (without taking possession of the software) in a single-tenant cloud environment on a subscription basis.

The Company’s SaaS arrangements allow customers to use certain software solutions (without taking possession of the software) in a multi-tenant or single-tenant cloud environment on a subscription basis.

The Company’s PaaS arrangements allow customers to use certain software solutions (without taking possession of the software) in a multi-tenant cloud environment on a subscription or consumption basis.

7 unchanged sentences

• Adjusted for the impact of foreign currency, SaaS and PaaS revenue for the year ended December 31, 2025, increased $107.9 million, or 12%, as compared to the same period in 2024.

• The increase was primarily due to higher transaction volumes during the year ended December 31, 2024, as compared to the same period in 2023, as well as new customer go-lives since December 31, 2023.

• The increase was primarily driven by new customer go-lives since December 31, 2024, and higher transaction volumes during the year ended December 31, 2025, as compared to the same period in 2024.

License Revenue

9 unchanged sentences

License revenue increased $49.2 million, or 12%, during the year ended December 31, 2025, as compared to the same period in 2024.

• The impact of certain foreign currencies weakening against the U.S.

dollar resulted in a $3.0 million decrease in license revenue during the year ended December 31, 2024, as compared to the same period in 2023.

• The impact of certain foreign currencies strengthening against the U.S.

dollar resulted in a $4.6 million increase in license revenue during the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, license revenue for the year ended December 31, 2025, increased $44.6 million, or 11%, as compared to the same period in 2024.

• The increase in license revenue was driven by license renewal timing as well as the relative size of new license and capacity events during the year ended December 31, 2024, as compared to the same period in 2023.

• The increase in license revenue was driven by the relative size of new license and capacity events during the year ended December 31, 2025, as compared to the same period in 2024.

Maintenance Revenue

Maintenance revenue includes standard and premium customer support and any post contract support fees received from customers for the provision of product support services.

Maintenance revenue decreased $14.3 million, or 7%, during the year ended December 31, 2024, as compared to the same period in 2023.

• The impact of foreign currencies weakening against the U.S.

dollar resulted in a $0.2 million decrease in maintenance revenue during the year ended December 31, 2024, as compared to the same period in 2023.

• Adjusted for the impact of foreign currency, maintenance revenue for the year ended December 31, 2024, decreased $14.1 million, or 7%, as compared to the same period in 2023.

• The decrease was primarily driven by customers reducing premium customer support and maintenance on non-strategic products during the year ended December 31, 2024, as compared to the same period in 2023.

Maintenance revenue increased $10.5 million, or 6%, during the year ended December 31, 2025, as compared to the same period in 2024.

• The impact of foreign currencies strengthening against the U.S.

dollar resulted in a $0.9 million increase in maintenance revenue during the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, maintenance revenue for the year ended December 31, 2025, increased $9.6 million, or 5%, as compared to the same period in 2024.

• The increase was primarily driven by consumer price index uplifts on contracted maintenance.

Services Revenue

3 unchanged sentences

These services include new customer implementations as well as existing customer migrations to new products or new releases of existing products.

Services revenue increased $16.1 million, or 21%, during the year ended December 31, 2024, as compared to the same period in 2023.

• The impact of foreign currencies weakening against the U.S.

dollar resulted in a $0.4 million decrease in services revenue during the year ended December 31, 2024, as compared to the same period in 2023.

• Adjusted for the impact of foreign currency, services revenue for the year ended December 31, 2024, increased $16.5 million, or 21%, as compared to the same period in 2023.

• The increase was primarily driven by the timing and magnitude of project-related work during the year ended December 31, 2024, as compared to the same period in 2023.

Services revenue decreased $4.7 million, or 5%, during the year ended December 31, 2025, as compared to the same period in 2024.

• The impact of foreign currencies strengthening against the U.S.

dollar resulted in a $0.8 million increase in services revenue during the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, services revenue for the year ended December 31, 2025, decreased $5.5 million, or 6%, as compared to the same period in 2024.

• The decrease was primarily driven by the timing and magnitude of project-related work during the year ended December 31, 2025, as compared to the same period in 2024.

Operating Expenses

1 unchanged sentence

• Total operating expenses for the year ended December 31, 2025, included $7.7 million for cost reduction strategies and $1.2 million of other significant transaction-related expenses during the period.

Total operating expenses for the year ended December 31, 2023, included $21.0 million for cost reduction strategies, $2.6 million of significant transaction-related expenses, $1.8 million for CEO transition, and $2.8 million of European data center migration expenses during the period.

• The impact of foreign currencies weakening against the U.S.

dollar resulted in a $1.0 million decrease in total operating expenses for the year ended December 31, 2024, as compared to the same period in 2023.

Total operating expenses for the year ended December 31, 2024, included $8.6 million for cost reduction strategies and $1.0 million of other significant transaction-related expenses during the period.

• The impact of foreign currencies strengthening against the U.S.

dollar resulted in a $2.4 million increase in total operating expenses for the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of cost reduction strategies, significant transaction-related expenses, and foreign currency, total operating expenses for the year ended December 31, 2025, increased $142.0 million, or 11%, as compared to the same period in 2024.

6 unchanged sentences

Cost of revenue increased $105.9 million, or 13%, during the year ended December 31, 2025, as compared to the same period in 2024.

• The impact of foreign currencies weakening against the U.S.

dollar resulted in a $0.5 million decrease in cost of revenue during the year ended December 31, 2024, as compared to the same period in 2023.

• The impact of foreign currencies strengthening against the U.S.

dollar resulted in a $0.7 million increase in cost of revenue during the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, cost of revenue increased $105.2 million, or 13%, for the year ended December 31, 2025, as compared to the same period in 2024.

• The increase was primarily due to higher payment card interchange and processing fees and cloud computing fees of $48.2 million and $8.0 million, respectively.

• The increase was primarily due to higher payment card interchange and processing fees of $85.2 million.

The remaining increase was due to higher personnel and related expenses of $20.0 million, including a $4.5 million increase in stock-based compensation expense.

2 unchanged sentences

R&D expense increased $20.9 million, or 14%, during the year ended December 31, 2025, as compared to the same period in 2024.

• The impact of foreign currencies weakening against the U.S.

dollar resulted in a $0.2 million decrease in R&D expense during the year ended December 31, 2024, as compared to the same period in 2023.

• The impact of foreign currencies strengthening against the U.S.

dollar resulted in a $0.5 million increase in R&D expense during the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, R&D expense increased $20.4 million, or 14%, during the year ended December 31, 2025, as compared to the same period in 2024.

• The increase was primarily due to higher personnel and related expenses of $7.1 million, including a $4.2 million increase in stock-based compensation expense, partially offset by lower cloud computing and professional fees of $1.0 million.

• The increase was primarily due to higher personnel and related expenses, including a $3.2 million increase in stock-based compensation expense.

Selling and Marketing

3 unchanged sentences

Marketing costs include costs incurred to promote the Company and its products, perform or acquire market research to help the Company better understand impending changes in customer demand for and of our products, and the costs associated with measuring customers’ opinions toward the Company, our products and personnel.

Selling and marketing expense decreased $14.3 million, or 11%, during the year ended December 31, 2024, as compared to the same period in 2023.

• The decrease was primarily due to lower personnel and related expenses and advertising and professional fees of $14.0 million and $0.3 million, respectively.

Selling and marketing expense increased $6.7 million, or 6%, during the year ended December 31, 2025, as compared to the same period in 2024.

• The impact of foreign currencies strengthening against the U.S.

dollar resulted in a $0.5 million increase in selling and marketing expense during the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, selling and marketing expense increased $6.2 million, or 5%, during the year ended December 31, 2025, as compared to the same period in 2024.

• The increase was primarily due to higher personnel and related expenses, including a $3.4 million increase in stock-based compensation expense.

General and Administrative

2 unchanged sentences

• General and administrative expenses for the year ended December 31, 2025, included $7.7 million for cost reduction strategies and $1.2 million of other significant transaction-related expenses during the period.

General and administrative expenses for the year ended December 31, 2023, included $21.0 million for cost reduction strategies, $2.6 million of significant transaction-related expenses, $1.8 million for CEO transition, and $2.8 million of European data center migration expenses during the period.

• The impact of foreign currencies weakening against the U.S.

dollar resulted in a $0.3 million decrease in general and administrative expense during the year ended December 31, 2024, as compared to the same period in 2023.

General and administrative expenses for the year ended December 31, 2024, included $4.3 million for cost reduction strategies and $1.0 million of other significant transaction-related expenses during the period.

• The impact of foreign currencies strengthening against the U.S.

dollar resulted in a $0.4 million increase in general and administrative expense during the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of cost reduction strategies, significant transaction-related expenses, and foreign currency, general and administrative expense increased $20.3 million, or 18%, for the year ended December 31, 2025, as compared to the same period in 2024.

• The increase was primarily due to higher personnel and related expenses of $22.2 million, including a $11.1 million increase in stock-based compensation expense.

The remaining increase was due to an increase in professional and other legal fees of $2.2 million.

• The increase was primarily due to higher personnel and related expenses of $22.5 million, including a $18.0 million increase in stock-based compensation expense, partially offset by a decrease in professional and other legal fees of $2.2 million.

Depreciation and Amortization

1 unchanged sentence

• Depreciation and amortization for the year ended December 31, 2024, included $4.4 million of accelerated depreciation related to the closure of a facility.

• Adjusted for the impact of the facility closure, depreciation and amortization decreased $15.8 million, or 13%, for the year ended December 31, 2024, as compared to the same period in 2023.

• The decrease was primarily due to a $10.0 million decrease in depreciation due to prior facilities cost reduction activities and a $5.8 million decrease in amortization for fully amortized software and intangibles acquired through acquisitions.

• The impact of foreign currencies strengthening against the U.S.

dollar resulted in a $0.3 million increase in depreciation and amortization expense during the year ended December 31, 2025, as compared to the same period in 2024.

• Adjusted for the impact of the facility closure and foreign currency, depreciation and amortization decreased $10.0 million, or 9%, for the year ended December 31, 2025, as compared to the same period in 2024.

• The decrease was primarily due to a decrease in amortization for fully amortized intangibles acquired through acquisitions.

Other Income and Expense

Interest expense for the year ended December 31, 2024, decreased $6.0 million, or 8%, as compared to the same period in 2023, primarily due to repayments on the Term Loan.

Interest expense for the year ended December 31, 2025, decreased $14.6 million, or 20%, as compared to the same period in 2024, primarily due to lower comparative debt balances during 2025 as well as a decrease in interest rates.

Interest income includes the portion of software license fees paid by customers under extended payment terms that is attributed to the significant financing component.

Interest income for the year ended December 31, 2024, increased $1.7 million, or 12%, as compared to the same period in 2023.

Interest income for the year ended December 31, 2025, decreased $1.1 million, or 7%, as compared to the same period in 2024.

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

Other, net was $1.2 million and $8.5 million of expense for the years ended December 31, 2024 and 2023, respectively.

During the year ended December 31, 2025, other, net also included the $25.9 million gain on the sale of the Company's equity method investment and the $1.1 million loss on extinguishment of debt.

Other, net was $19.7 million of income and $1.2 million of expense for the years ended December 31, 2025 and 2024, respectively.

The effective tax rates for the years ended December 31, 2025 and 2024, were approximately 26% and 19%, respectively.

Our effective tax rates vary from our federal statutory rate due to operating in multiple foreign countries, each with its own tax laws and rates.

These foreign tax laws and rates differ from those we apply to the income generated from our domestic operations.

Of the foreign jurisdictions in which we operate, our December 31, 2024 and 2023 effective tax rates were most impacted by our operations in Ireland and the United Kingdom.

Of the foreign jurisdictions in which we operate, our effective tax rates as of December 31, 2025 and 2024 were primarily impacted by operations in Ireland and India for 2025, and Ireland for 2024.

Refer to Note 10, Income Taxes , to our Notes to Consolidated Financial Statements in Part IV, Item 15 of this Form 10-K for additional information.

5 unchanged sentences

Years Ended December 31,

Banks $ 701,860 $ 616,051

Merchants 165,910 150,616

Billers 726,518 685,912

Payment Software

$ 942,053 $ 867,770

817,729 726,518

Total revenue

1 unchanged sentence

Segment Adjusted EBITDA

Banks $ 425,519 $ 355,489

Merchants 69,548 44,345

Billers 131,187 142,343

Payment Software

$ 543,721 $ 495,067

140,732 131,187

Depreciation and amortization

8 unchanged sentences

Income before income taxes $ 306,670 $ 250,409

Banks Segment Adjusted EBITDA increased $70.0 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to a $85.8 million increase in revenue primarily related to an increase in license revenues, partially offset by a $15.8 million increase in cash operating expense.

Merchants Segment Adjusted EBITDA increased $25.2 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to a $15.3 million increase in revenue and a $9.9 million decrease in cash operating expenses.

Billers Segment Adjusted EBITDA decreased $11.2 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to a $48.2 million increase in interchange and processing fees, partially offset by a $40.6 million increase in revenue.

Payment Software Segment Adjusted EBITDA increased $48.7 million for the year ended December 31, 2025, compared to the same period in 2024, primarily due to a $74.3 million increase in revenue primarily related to an increase in license revenues, partially offset by a $25.6 million increase in cash operating expense.

Biller Segment Adjusted EBITDA increased $9.5 million for the year ended December 31, 2025, compared to the same period in 2024, primarily due to a $91.2 million increase in revenue, partially offset by a $81.7 million increase in cash operating expense primarily for payment card interchange and other processing fees.

Prior Year Results

For discussion of 2024 compared to 2023, see Segment Results in Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2024.

Beginning in the first quarter of 2025, the Company reported financial performance based on its new operating segments, Payment Software, which merged the previously reported operating segments Banks and Merchants, and maintained Biller.

Liquidity and Capital Resources

6 unchanged sentences

As of December 31, 2025, we had $196.5 million of cash and cash equivalents, of which $96.8 million was held by our foreign subsidiaries.

If these funds were needed for our operations in the United States, we may potentially be required to accrue and pay foreign and U.S.

state income taxes to repatriate these funds.

As of December 31, 2024, only the earnings from our Indian foreign subsidiaries are indefinitely reinvested.

We are also permanently reinvested in the outside book/tax basis differences related to foreign subsidiaries.

These outside basis differences could reverse through the sale of foreign subsidiaries, as well as various other events, none of which are considered probable as of December 31, 2024.

The Company has recognized deferred income taxes for local country income and withholding taxes that could be incurred on distributions of certain non-U.S.

earnings in foreign subsidiaries, as these earnings are not intended to be indefinitely reinvested.

Available Liquidity

6 unchanged sentences

$ 594,562 $ 744,494

The increase in total liquidity is primarily attributable to the $100.0 million increase in the maximum amount available under the revolving credit facility and cash flows generated from operations.

The decrease in total liquidity is primarily due to increased borrowings on the revolving credit facility used to redeem the Company's outstanding 2026 Notes.

The Company and ACI Payments, Inc., a wholly owned subsidiary, maintain a $75.0 million uncommitted overdraft facility with Bank of America, N.A.

1 unchanged sentence

As of December 31, 2025, the full $75.0 million was available.

On February 26, 2024, we 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”) with ACI Worldwide Corp and ACI Payments, Inc.

as co-borrowers, the lenders, and Bank of America N.A, as administrative agent and lender.

The Amendment, among other things, (i) provides a senior secured term loan facility in an aggregate principal amount of $500 million, (ii) provides a senior secured revolving credit facility in an aggregate principal amount of $600 million, and (iii) extends the maturity date of the Facilities to February 26, 2029.

The proceeds of the borrowings under the Amendment, together with cash on hand, were used to refinance all outstanding borrowings and replace all existing revolving commitments under the Credit Agreement immediately prior to the date of the Amendment and will be used to provide ongoing working capital and for other general corporate purposes.

Stock Repurchase Program

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.

In October 2025, the Board approved the repurchase of the Company's common stock of up to $500.0 million in place of the remaining purchase amounts previously authorized.

We repurchased 4,179,747 shares for $203.8 million under our stock repurchase program during the year ended December 31, 2025.

16 unchanged sentences

Our primary uses of operating cash flows include employee expenditures, taxes, interest payments, and leased facilities.

Cash flows provided by operating activities was $358.7 million for the year ended December 31, 2024, an increase of 113% compared to $168.5 million for the same period in 2023.

This increase is attributed to improved profitability and corresponding cash flows primarily from customer receipt collections and lower income tax payments, partially offset by working capital use.

Cash flows provided by operating activities were $322.8 million for the year ended December 31, 2025, compared to $358.7 million for the same period in 2024.

Operating cash flows for the current year decreased primarily due to lower customer receipt collections as a result of lower invoiced amounts at the prior year-end and higher income taxes paid, partially offset by improved profitability.

Our cash flow from operating activities can fluctuate from period to period due to several factors, including:

1 unchanged sentence

collections, which will lag the quarters with higher billings;

the timing and amounts of interest due to interest rate fluctuations and semi-annual Senior Notes interest payments;

the timing and amounts of interest due to interest rate fluctuations;

income tax and other payments;

2 unchanged sentences

The changes in cash flows from investing activities primarily relate to the timing of our purchases and investments in capital and other assets, including strategic acquisitions, that support our growth.

During the year ended December 31, 2024, we used cash of $45.1 million to purchase software, property, and equipment, as compared to $37.8 million during the same period in 2023.

During the year ended December 31, 2025, we received net proceeds of $46.0 million from the sale of our equity method investment.

We used cash of $33.4 million to purchase software, property, and equipment, as compared to $45.1 million during the same period in 2024.

Cash Flows from Financing Activities

The changes in cash flows from financing activities primarily relate to borrowings and repayments related to our debt instruments and other debt, stock repurchases, and net proceeds related to employee stock programs.

During 2025, we repaid $400.0 million for the redemption of the 2026 Notes and $20.9 million of other debt payments.

In addition, we used $202.6 million to repurchase common stock and $28.2 million for the repurchase of stock-based compensation awards for tax withholdings.

We received net proceeds of $130.0 million on the Revolving Credit Facility and $160.0 million on the Incremental Term Loan, used for the redemption of the 2026 Notes.

In addition, we received proceeds of $11.3 million from the exercise of stock options and the issuance of common stock under our 2017 Employee Stock Purchase Plan, as amended, and $14.0 million for settlement assets and liabilities due to processing timing.

During 2024, we repaid a net $57.2 million on the Term Loan under the Amendment, $54.0 million on the Revolving Credit Facility, $14.9 million of other debt payments, and $5.1 million of debt issuance costs.

1 unchanged sentence

We received proceeds of $9.2 million from the exercise of stock options and the issuance of common stock under our 2017 Employee Stock Purchase Plan, as amended.

During 2023, we repaid $73.0 million on the Term Loans, $16.8 million of other debt payments, and $2.2 million of debt issuance costs.

In addition, we used $27.6 million to repurchase common stock, $5.1 million for the repurchase of stock-based compensation awards for tax withholdings, and $15.4 million for settlement assets and liabilities due to processing timing.

We received net proceeds of $19.0 million on the Revolving Credit Facility and proceeds of $9.5 million from the exercise of stock options and the issuance of common stock under our 2017 Employee Stock Purchase Plan, as amended.

Prior Year Results

3 unchanged sentences

• principal payments related to our Credit Agreement that are included in our consolidated balance sheet and the related periodic interest payments;

• semi-annual interest payments on our 2026 Notes and the ultimate principal payment that is included in our consolidated balance sheet;

• scheduled payments related to liabilities for certain multi-year license agreements for internal-use software that are included in our consolidated balance sheet;

54 unchanged sentences

In accordance with ASC 350, Intangibles – Goodwill and Other, we assess goodwill for impairment annually during the fourth quarter of our 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.

We evaluate goodwill at the reporting unit level and have identified our reportable segments, Banks, Merchants, and Billers, as our reporting units.

We evaluate goodwill at the reporting unit level and have identified our reportable segments, Payment Software and Billers, as our reporting units.

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

23 unchanged sentences

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

For 2022, performance share awards granted 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.

13 unchanged sentences

As part of our process of determining current tax liability, we exercise judgment in evaluating positions we have taken in our tax returns.

We periodically assess our tax exposures and establish, or adjust, estimated unrecognized benefits for probable assessments by taxing authorities, including the

Internal Revenue Service, and various foreign and state authorities.

We periodically assess our tax exposures and establish, or adjust, estimated unrecognized 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.

It is possible that either domestic or foreign taxing authorities could challenge those judgments or positions and draw conclusions that would cause us to incur tax liabilities in excess of, or realize benefits less than, those currently recorded.

It is possible that either domestic or foreign taxing authorities could

challenge those judgments or positions and draw conclusions that would cause us to incur tax liabilities in excess of, or realize benefits less than, those currently recorded.

In addition, changes in the geographical mix or estimated amount of annual pretax income could impact our overall effective tax rate.

5 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis