What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-06 · 107 added, 214 removed, 215 unchanged (60% of the section changed)

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The following discussion should be read together with our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and with our financial statements and related notes contained in this Form 10-Q.

Results for the three and nine months ended September 30, 2025, are not necessarily indicative of results that may be attained in the future.

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.

Results for the three months ended March 31, 2026, are not necessarily indicative of results that may be attained in the future.

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;

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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 point-of-sale (“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 point-of-sale (“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.

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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.

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, and 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.

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• 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:

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In the event a significant revision to renewal assumptions is determined to be necessary, prior periods will be adjusted for comparability purposes.

The following table sets forth our 60-month backlog estimate, by reportable segment, as of September 30, 2025, June 30, 2025, March 31, 2025, and December 31, 2024 (in millions).

The following table sets forth our 60-month backlog estimate, by reportable segment, as of March 31, 2026, and December 31, 2025 (in millions).

Dollar amounts reflect foreign currency exchange rates as of each period end.

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We believe this measure provides useful information to investors and others in understanding and evaluating our financial performance.

September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Payment Software $ 3,363 $ 3,372

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Total $ 7,289 $ 7,259

September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Committed $ 2,244 $ 2,304

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The following table presents the condensed consolidated statements of operations, as well as the percentage relationship to total revenues for items included in our condensed consolidated statements of operations (in thousands):

Three Month Period Ended September 30, 2025 Compared to the Three Month Period Ended September 30, 2024

Three Months Ended September 30,

Three Month Period Ended March 31, 2026 Compared to the Three Month Period Ended March 31, 2025

Three Months Ended March 31,

Amount % of Total

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Total other income (expense) (7,066) (2) % (20,187) (154) % 13,121 3 %

(9,584) (2) % 5,724 37 % (15,308) (3) %

Income before income taxes

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$ 38,306 9 % $ (20,564) (35) % $ 58,870 15 %

Total revenue for the three months ended September 30, 2025, increased $30.6 million, or 7%, as compared to the same period in 2024.

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

dollar resulted in a $3.6 million increase in total revenue during the three months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, total revenue for the three months ended September 30, 2025, increased $27.0 million, or 6%, as compared to the same period in 2024.

Total revenue for the three months ended March 31, 2026, increased $31.2 million, or 8%, as compared to the same period in 2025.

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

dollar resulted in a $7.7 million increase in total revenue during the three months ended March 31, 2026, as compared to the same period in 2025.

• Adjusted for the impact of foreign currency, total revenue for the three months ended March 31, 2026, increased $23.5 million, or 6%, as compared to the same period in 2025.

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.

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All fees from SaaS and PaaS arrangements that do not qualify for treatment as a distinct performance obligation, which includes set-up fees, implementation or customization services, and product support services, are included in SaaS and PaaS revenue.

SaaS and PaaS revenue increased $23.5 million, or 11%, during the three months ended September 30, 2025, as compared to the same period in 2024.

SaaS and PaaS revenue increased $24.9 million, or 10%, during the three months ended March 31, 2026, as compared to the same period in 2025.

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

dollar resulted in a $0.8 million increase in SaaS and PaaS revenue during the three months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, SaaS and PaaS revenue for the three months ended September 30, 2025, increased $22.7 million, or 10%, as compared to the same period in 2024.

• The increase was primarily driven by new customer go-lives since September 30, 2024, and higher transaction volumes during the three months ended September 30, 2025, as compared to the same period in 2024.

dollar resulted in a $1.5 million increase in SaaS and PaaS revenue during the three months ended March 31, 2026, as compared to the same period in 2025.

• Adjusted for the impact of foreign currency, SaaS and PaaS revenue for the three months ended March 31, 2026, increased $23.4 million, or 10%, as compared to the same period in 2025.

• The increase was primarily driven by new customer go-lives since March 31, 2025, and higher transaction volumes during the three months ended March 31, 2026, as compared to the same period in 2025.

License Revenue

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The Company recognizes revenue in advance of billings for software license arrangements with extended payment terms and adjusts for the effects of the financing component, if significant.

License revenue increased $4.5 million, or 3%, during the three months ended September 30, 2025, as compared to the same period in 2024.

License revenue increased $3.5 million, or 4%, during the three months ended March 31, 2026, as compared to the same period in 2025.

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

dollar resulted in a $2.1 million increase in license revenue during the three months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, license revenue for the three months ended September 30, 2025, increased $2.4 million, or 2%, as compared to the same period in 2024.

• The increase was driven by license renewal timing as well as the relative size of new license and capacity events during the three months ended September 30, 2025, as compared to the same period in 2024.

dollar resulted in a $3.7 million increase in license revenue during the three months ended March 31, 2026, as compared to the same period in 2025.

• Adjusted for the impact of foreign currency, license revenue for the three months ended March 31, 2026, decreased $0.2 million, as compared to the same period in 2025.

Maintenance Revenue

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

Maintenance revenue increased $3.9 million, or 8%, during the three months ended September 30, 2025, as compared to the same period in 2024.

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 increased $2.3 million, or 5%, during the three months ended March 31, 2026, as compared to the same period in 2025.

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

dollar resulted in a $0.5 million increase in maintenance revenue during the three months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, maintenance revenue for the three months ended September 30, 2025, increased $3.4 million, or 7%, as compared to the same period in 2024.

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

dollar resulted in a $1.5 million increase in maintenance revenue during the three months ended March 31, 2026, as compared to the same period in 2025.

• Adjusted for the impact of foreign currency, maintenance revenue for the three months ended March 31, 2026, increased $0.8 million, or 2%, as compared to the same period in 2025.

Services Revenue

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

Services revenue decreased $1.3 million, or 6%, during the three months ended September 30, 2025, as compared to the same period in 2024.

Services revenue increased $0.5 million, or 2%, during the three months ended March 31, 2026, as compared to the same period in 2025.

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

dollar resulted in a $0.3 million increase in services revenue during the three months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, services revenue for the three months ended September 30, 2025, decreased $1.6 million, or 7%, as compared to the same period in 2024.

• The decrease was primarily driven by the timing and magnitude of project-related work during the three months ended September 30, 2025, as compared to the same period in 2024.

dollar resulted in a $1.0 million increase in services revenue during the three months ended March 31, 2026, as compared to the same period in 2025.

• Adjusted for the impact of foreign currency, services revenue for the three months ended March 31, 2026, decreased $0.5 million, or 2%, as compared to the same period in 2025.

Operating Expenses

Total operating expenses for the three months ended September 30, 2025, increased $25.5 million, or 8%, as compared to the same period in 2024.

• Total operating expenses for the three months ended September 30, 2025, included $1.2 million for cost reduction strategies and $0.1 million of other significant transaction-related expenses during the period, compared to $5.6 million for cost reduction strategies and $0.3 million of other significant transaction-related expenses for the same period in 2024.

Total operating expenses for the three months ended March 31, 2026, increased $32.2 million, or 10%, as compared to the same period in 2025.

• Total operating expenses for the three months ended March 31, 2026, included $5.4 million for cost reduction strategies.

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

dollar resulted in a $1.2 million increase in total operating expenses during the three months ended September 30, 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 three months ended September 30, 2025, increased $28.9 million, or 9%, as compared to the same period in 2024.

dollar resulted in a $4.3 million increase in total operating expenses during the three months ended March 31, 2026, compared to the same period in 2025.

• Adjusted for the impact of cost reduction strategies and foreign currency, total operating expenses for the three months ended March 31, 2026, increased $22.5 million, or 7%, compared to the same period in 2025.

Cost of Revenue

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Such efforts include project management, delivery, product customization and implementation, installation support, consulting, configuration, and on-site support.

Cost of revenue increased $25.8 million, or 13%, during the three months ended September 30, 2025, as compared to the same period in 2024.

Cost of revenue increased $15.1 million, or 7%, during the three months ended March 31, 2026, compared to the same period in 2025.

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

dollar resulted in a $0.4 million increase in cost of revenue during the three months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, cost of revenue for the three months ended September 30, 2025, increased $25.4 million, or 13%, as compared to the same period in 2024.

• The increase was primarily due to higher payment card interchange and personnel and related expenses of $18.2 million and $7.2 million, respectively.

dollar resulted in a $1.6 million increase in cost of revenue during the three months ended March 31, 2026, compared to the same period in 2025.

• Adjusted for the impact of foreign currency, cost of revenue for the three months ended March 31, 2026, increased $13.5 million, or 6%, compared to the same period in 2025.

• The increase was primarily due to higher payment card interchange fees of $15.4 million, partially offset by lower personnel and related expenses of $1.9 million.

Research and Development

Research and development (“R&D”) expenses 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.

R&D expense increased $4.9 million, or 13%, during the three months ended September 30, 2025, as compared to the same period in 2024.

R&D expense increased $5.2 million, or 13%, during the three months ended March 31, 2026, as compared to the same period in 2025.

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

dollar resulted in a $0.3 million increase in R&D expenses during the three months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, R&D expenses for the three months ended September 30, 2025, increased $4.6 million, or 12%, as compared to the same period in 2024.

dollar resulted in a $0.7 million increase in R&D expenses during the three months ended March 31, 2026, compared to the same period in 2025.

• Adjusted for the impact of foreign currency, R&D expenses for the three months ended March 31, 2026, increased $4.5 million, or 11%, compared to the same period in 2025.

• The increase was primarily due to higher personnel and related expenses.

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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 increased $2.0 million, or 7%, during the three months ended September 30, 2025, as compared to the same period in 2024.

• The increase was primarily due to higher personnel and related expenses and advertising and professional fees of $1.3 million and $0.7 million, respectively.

Selling and marketing expense decreased $2.0 million, or 6%, during the three months ended March 31, 2026, as compared to the same period in 2025.

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

dollar resulted in a $1.2 million increase in selling and marketing expense during the three months ended March 31, 2026, as compared to the same period in 2025.

• Adjusted for the impact of foreign currency, selling and marketing expense decreased $3.2 million, or 10%, for the three months ended March 31, 2026, as compared to the same period in 2025.

• The decrease was primarily due to lower personnel and related expenses.

General and Administrative

General and administrative expenses are primarily human resource costs including executive salaries and benefits, personnel administration costs, and the costs of corporate support functions such as legal, administrative, human resources, and finance and accounting.

General and administrative expense increased $0.1 million, during the three months ended September 30, 2025, as compared to the same period in 2024.

• General and administrative expenses for the three months ended September 30, 2025, included $1.2 million for cost reduction strategies and $0.1 million of other significant transaction-related expenses, compared to $1.2 million related to the closure of a facility and $0.3 million of other significant transaction-related expenses in the same period in 2024.

General and administrative expense increased $12.6 million, or 46%, during the three months ended March 31, 2026, as compared to the same period in 2025.

• General and administrative expenses for the three months ended March 31, 2026, included $5.4 million for cost reduction strategies.

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

dollar resulted in a $0.3 million increase in general and administrative expense during the three months ended September 30, 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 for the three months ended September 30, 2025, was flat compared to the same period in 2024.

Depreciation and Amortization

Depreciation and amortization decreased $7.4 million, or 23%, during the three months ended September 30, 2025, as compared to the same period in 2024.

• Depreciation and amortization for the three months ended September 30, 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 expenses for the three months ended September 30, 2025, decreased $3.0 million, or 11%, 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 three months ended September 30, 2025, decreased $3.5 million, or 19%, 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 three months ended September 30, 2025, was flat compared to the same period in 2024.

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

Other, net was $1.6 million of income and $0.8 million of expense for the three months ended September 30, 2025 and 2024, respectively.

See Note 10, Income Taxes, to our unaudited condensed consolidated financial statements in Part I of this Form 10-Q for additional information.

RESULTS OF OPERATIONS

Nine Month Period Ended September 30, 2025 Compared to the Nine Month Period Ended September 30, 2024

Nine Months Ended September 30,

Amount % of Total

Revenue $ Change vs 2024 % Change vs 2024 Amount % of Total

Software as a service and platform as a service $ 755,257 59 % $ 80,759 12 % $ 674,498 59 %

License 303,161 24 % 50,177 20 % 252,984 22 %

Maintenance 150,483 12 % 6,437 4 % 144,046 13 %

Services 69,281 5 % (441) (1) % 69,722 6 %

Total revenues 1,278,182 100 % 136,932 12 % 1,141,250 100 %

Operating expenses:

Cost of revenue 671,316 53 % 79,620 13 % 591,696 52 %

Research and development 122,582 10 % 14,519 13 % 108,063 9 %

Selling and marketing 91,637 7 % 7,645 9 % 83,992 7 %

General and administrative 99,341 8 % 14,399 17 % 84,942 7 %

dollar resulted in a $0.6 million increase in general and administrative expense during the three months ended March 31, 2026, as compared to the same period in 2025.

• Adjusted for the impact of cost reduction strategies and foreign currency, general and administrative expense increased $6.6 million, or 24%, for the three months ended March 31, 2026, as compared to the same period in 2025.

• The increase was primarily due to higher professional and other legal fees of $5.4 million, and personnel and related expenses of $1.2 million.

Depreciation and Amortization

Total operating expenses 1,057,102 84 % 101,699 11 % 955,403 83 %

Operating income

221,080 16 % 35,233 19 % 185,847 17 %

Other income (expense):

Interest expense (44,021) (3) % 11,816 (21) % (55,837) (5) %

Interest income 11,674 1 % (159) (1) % 11,833 1 %

Other, net 18,898 1 % 20,590 1,217 % (1,692) — %

Total other income (expense) (13,449) (1) % 32,247 71 % (45,696) (4) %

Income before income taxes

207,631 15 % 67,480 48 % 140,151 13 %

Income tax expense

45,309 4 % 9,721 27 % 35,588 3 %

$ 162,322 11 % $ 57,759 55 % $ 104,563 10 %

Total revenue for the nine months ended September 30, 2025, increased $136.9 million, or 12%, as compared to the same period in 2024.

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

dollar resulted in a $3.6 million increase in total revenue during the nine months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, total revenue for the nine months ended September 30, 2025, increased $133.3 million, or 12%, as compared to the same period in 2024.

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

SaaS and PaaS revenue increased $80.8 million, or 12%, during the nine months ended September 30, 2025, as compared to the same period in 2024.

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

dollar resulted in $1.4 million increase in SaaS and PaaS revenue during the nine months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, SaaS and PaaS revenue for the nine months ended September 30, 2025, increased $79.4 million, or 12%, as compared to the same period in 2024.

• The increase was primarily driven by new customer go-lives since September 30, 2024, and higher transaction volumes during the nine months ended September 30, 2025, as compared to the same period in 2024.

License Revenue

License revenue increased $50.2 million, or 20%, during the nine months ended September 30, 2025, as compared to the same period in 2024.

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

dollar resulted in a $1.8 million increase in license revenue during the nine months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, license revenue for the nine months ended September 30, 2025, increased $48.4 million, or 19%, as compared to the same period in 2024.

• The increase was driven by the relative size of new license and capacity events during the nine months ended September 30, 2025, as compared to the same period in 2024.

Maintenance Revenue

Maintenance revenue increased $6.4 million, or 4%, during the nine months ended September 30, 2025, as compared to the same period in 2024.

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

Services Revenue

Services revenue decreased $0.4 million, or 1%, during the nine months ended September 30, 2025, as compared to the same period in 2024.

Depreciation and amortization increased $1.3 million, or 5%, during the three months ended March 31, 2026, as compared to the same period in 2025.

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

dollar resulted in a $0.4 million increase in services revenue during the nine months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of foreign currency, services revenue for the nine months ended September 30, 2025, decreased $0.8 million, or 1%, as compared to the same period in 2024.

Operating Expenses

Total operating expenses for the nine months ended September 30, 2025 increased $101.7 million, or 11%, as compared to the same period in 2024.

• Total operating expenses for the nine months ended September 30, 2025, included $6.3 million for cost reduction strategies and $0.5 million of other significant transaction-related expenses, compared to $8.6 million for cost reduction strategies and $1.0 million of other significant transaction-related expenses for the same period in 2024.

• The impact of fluctuations in foreign currencies was not significant to total operating expenses for the nine months ended September 30, 2025, as compared to the same period in 2024.

• Adjusted for the impact of cost reduction strategies and significant transaction-related expenses, total operating expenses for the nine months ended September 30, 2025, increased $104.6 million, or 11%, as compared to the same period in 2024.

Cost of Revenue

Cost of revenue increased $79.6 million, or 13%, during the nine months ended September 30, 2025, as compared to the same period in 2024.

• The increase was primarily due to higher payment card interchange and personnel and related expenses of $63.5 million and $16.1 million, respectively.

Research and Development

R&D expense increased $14.5 million, or 13%, during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to higher personnel and related expenses.

Selling and Marketing

Selling and marketing expense increased $7.6 million, or 9%, during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to higher personnel and related expenses.

General and Administrative

General and administrative expense increased $14.4 million, or 17%, during the nine months ended September 30, 2025, as compared to the same period in 2024.

• General and administrative expenses for the nine months ended September 30, 2025, included $6.3 million for cost reduction strategies and $0.5 million of other significant transaction-related expenses, compared to $4.3 million for cost reduction strategies and $1.0 million of other significant transaction-related expenses during the same period in 2024.

• Adjusted for the impact of cost reduction strategies and significant transaction-related expenses, general and administrative expense for the nine months ended September 30, 2025, increased $12.9 million, or 16%, as compared to the same period in 2024.

• The increase was primarily due to higher personnel and related expenses of $11.3 million, including a $8.4 million increase in stock-based compensation expense, as well as an increase in professional fees of $1.6 million.

Depreciation and Amortization

Depreciation and amortization decreased $14.5 million, or 17%, during the nine months ended September 30, 2025, as compared to the same period in 2024.

• Depreciation and amortization for the nine months ended September 30, 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 expenses for the nine months ended September 30, 2025, decreased $10.1 million, or 12%, 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.

dollar resulted in a $0.2 million increase in depreciation and amortization expense during the three months ended March 31, 2026, as compared to the same period in 2025.

• Adjusted for the impact of foreign currency, depreciation and amortization expense increased $1.1 million, or 4%, for the three months ended March 31, 2026, as compared to the same period in 2025.

Other Income and Expense

Interest expense for the nine months ended September 30, 2025, decreased $11.8 million, or 21%, 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 for the nine months ended September 30, 2025, was flat compared to the same period in 2024.

Interest expense for the three months ended March 31, 2026, decreased $2.5 million, or 17% compared to the same period in 2025, primarily due to lower comparative debt balances 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 three months ended March 31, 2026, decreased $0.5 million, or 11%, as compared to the same period in 2025.

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

During the nine months ended September 30, 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 $18.9 million of income and $1.7 million of expense for the nine months ended September 30, 2025 and 2024, respectively.

During the three months ended March 31, 2025, other, net also included the $25.9 million gain on the sale of the Company's equity method investment.

Other, net was $1.5 million and $23.7 million of income for the three months ended March 31, 2026 and 2025, respectively.

See Note 10, Income Taxes, to our unaudited condensed consolidated financial statements in Part I of this Form 10-Q for additional information.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Payment Software $ 213,461 $ 200,725

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$ 50,424 $ 71,637

Payment Software Segment Adjusted EBITDA increased $1.0 million for the three months ended September 30, 2025, compared to the same period in 2024, due to a $11.9 million increase in revenue primarily related to an increase in license revenues, partially offset by a $10.9 million increase in cash operating expense.

Biller Segment Adjusted EBITDA increased $1.2 million for the three months ended September 30, 2025, compared to the same period in 2024, due to a $18.7 million increase in revenue, partially offset by a $17.5 million increase in cash operating expense primarily for payment card interchange and other processing fees.

Payment Software Segment Adjusted EBITDA increased $44.0 million for the nine months ended September 30, 2025, compared to the same period in 2024, due to a $69.1 million increase in revenue primarily related to an increase in license and capacity revenue, partially offset by a $25.1 million increase in cash operating expense.

Biller Segment Adjusted EBITDA increased $3.7 million for the nine months ended September 30, 2025, compared to the same period in 2024, due to a $67.8 million increase in revenue, partially offset by a $64.1 million increase in cash operating expense primarily for payment card interchange and other processing fees.

Payment Software Segment Adjusted EBITDA increased $6.8 million for the three months ended March 31, 2026, compared to the same period in 2025, due to a $12.7 million increase in revenue, primarily due to an increase in SaaS and PaaS and license revenues, partially offset by a $5.9 million increase in cash operating expense.

Biller Segment Adjusted EBITDA increased $3.1 million for the three months ended March 31, 2026, compared to the same period in 2025, due to a $18.4 million increase in revenue, partially offset by a $15.3 million increase in cash operating expense, primarily payment card interchange and processing fees.

Liquidity and Capital Resources

5 unchanged sentences

Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less.

As of September 30, 2025, we had $199.3 million of cash and cash equivalents, of which $94.4 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 September 30, 2025, 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 September 30, 2025.

As of March 31, 2026, we had $161.8 million of cash and cash equivalents, of which $79.9 million was held by our foreign subsidiaries.

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

The following table sets forth our available liquidity for the dates indicated (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Cash and cash equivalents $ 161,757 $ 196,462

1 unchanged sentence

Total liquidity $ 559,857 $ 594,562

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 decrease in total liquidity is primarily attributable to stock repurchase activity and payments on the Term Loan Facility, partially offset by cash generated from operations.

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

The overdraft facility acts as a secured loan under the terms of the Credit Agreement to provide an additional funding mechanism for timing differences that can occur in the bill payment settlement process.

As of September 30, 2025, the full $75.0 million was available.

As of March 31, 2026, the full $75.0 million was available.

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.

We repurchased 3,073,321 shares for $151.0 million under the program during the nine months ended September 30, 2025.

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 1,549,291 shares for $65.8 million under the program during the three months ended March 31, 2026.

Under the program to date, we have repurchased 68,596,875 shares for approximately $1.4 billion.

As of September 30, 2025, the maximum remaining amount authorized for purchase under the stock repurchase program was approximately $207.1 million.

As of March 31, 2026, the maximum remaining amount authorized for purchase under the stock repurchase program was approximately $390.5 million.

See Note 6, Common Stock and Treasury Stock, to our unaudited condensed consolidated financial statements in Part I of this Form 10-Q for additional information.

On October 31, 2025, the Board of Directors approved $500.0 million for the stock repurchase program in place of the remaining purchase amounts previously authorized.

The following table sets forth summarized cash flow data for the periods indicated (in thousands):

Nine Months Ended

September 30,

Three Months Ended March 31,

Net cash provided by (used by):

5 unchanged sentences

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

Cash flows provided by operating activities were $31.2 million lower for the nine months ended September 30, 2025, compared to 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.

Cash flows provided by operating activities of $64.2 million were $14.0 million lower for the three months ended March 31, 2026, compared to $78.2 million for the same period in 2025.

Operating cash flows for the current quarter decreased primarily due to the timing of customer billings and payments.

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

6 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 first nine months of 2025, we received net proceeds of $46.0 million from the sale of our equity method investment.

In addition, we used cash of $26.4 million to purchase software, property, and equipment, as compared to $31.6 million during the same period in 2024.

During the first three months of 2026, we used cash of $14.5 million to purchase software, property, and equipment, as compared to $8.9 million during the same period in 2025.

In addition, during the first three months of 2025, we received net proceeds of $46.0 million from the sale of our equity method investment.

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 the first nine months of 2025, we repaid $400.0 million for the redemption of the 2026 Notes and $12.0 million of other debt payments.

In addition, we used $150.0 million to repurchase common stock and $23.9 million for the repurchase of stock-based compensation awards for tax withholdings.

We received net proceeds of $170.0 million on the Revolving Credit Facility and $170.6 million on the Incremental Term Loan, used for the redemption of the 2026 Notes.

In addition, we received proceeds of $3.8 million from the exercise of stock options and the issuance of common stock under our 2017 Employee Stock Purchase Plan, as amended, and $6.3 million for settlement assets and liabilities due to processing timing.

During the first nine months of 2024, we repaid a net $47.8 million on the Term Loan under the Amendment, $9.3 million of other debt payments, and $5.1 million of debt issuance costs.

During the first three months of 2026, we used $65.3 million to repurchase common stock and $3.8 million for the repurchase of stock-based compensation awards for tax withholdings.

In addition, we repaid a net $10.6 million on the Incremental Term Loan and $3.5 million of other debt payments.

We received net proceeds of $1.0 million from the exercise of stock options and the issuance of common stock under our 2017 Employee Stock Purchase Plan, as amended, and $18.1 million for settlement assets and liabilities due to processing timing.

During the first three months of 2025, we repaid a net $9.4 million on the Term Loan under the Amendment, $70.0 million on the Revolving Credit Facility, and $4.2 million of other debt payments.

In addition, we used $14.4 million to repurchase common stock and $7.1 million for the repurchase of stock-based compensation awards for tax withholdings.

We received net proceeds of $7.0 million on the Revolving Credit Facility, proceeds of $4.1 million from the exercise of stock options and the issuance of common stock under our 2017 Employee Stock Purchase Plan, as amended, and $17.7 million for settlement assets and liabilities due to processing timing.

We received net proceeds of $1.4 million from the exercise of stock options and the issuance of common stock under our 2017 Employee Stock Purchase Plan, as amended, and $88.3 million for settlement assets and liabilities due to processing timing.

Contractual Obligations and Commercial Commitments

For the nine months ended September 30, 2025, there have been no material changes to the contractual obligations and commercial commitments disclosed in Item 7 of our Form 10-K for the fiscal year ended December 31, 2024, other than as disclosed in Note 3, Debt .

For the three months ended March 31, 2026, there have been no material changes to the contractual obligations and commercial commitments disclosed in Item 7 of our Form 10-K for the fiscal year ended December 31, 2025.

Critical Accounting Estimates

8 unchanged sentences

• Accounting for Income Taxes

During the nine months ended September 30, 2025, there were no significant changes to our critical accounting policies and estimates.

During the three months ended March 31, 2026, there were no significant changes to our critical accounting policies and estimates.

Please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for our fiscal year ended December 31, 2025, for a more complete discussion of our critical accounting policies and estimates.

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 2. Management’s Discussion and Analysis