XML 28 R18.htm IDEA: XBRL DOCUMENT v3.22.2.2
Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information Segment Information
The Company reports financial performance based on its operating segments, Banks, Merchants, and Billers, and analyzes Segment Adjusted EBITDA as a measure of segment profitability.

The Company’s Chief Executive Officer is also the chief operating decision maker ("CODM"). The CODM, together with other senior management personnel, focus their review on consolidated financial information and the allocation of resources based on operating results, including revenues and Segment Adjusted EBITDA, for each segment, separate from Corporate operations. No operating segments have been aggregated to form the reportable segments.

Banks. ACI provides payment solutions to large and mid-size banks globally for retail banking, real time, digital, and other payment services. These solutions transform banks’ complex payment environments to speed time to market, reduce costs, and deliver a consistent experience to customers across channels while enabling them to prevent and rapidly react to fraudulent activity. In addition, they enable banks to meet the requirements of different real-time payments schemes and to quickly create differentiated products to meet consumer, business, and merchant demands.

Merchants. ACI’s support of merchants globally includes Tier 1 and Tier 2 merchants, online-only merchants and the payment service providers, independent selling organizations, value-added resellers, and acquirers who service them. These customers operate in a variety of verticals, including general merchandise, grocery, hospitality, dining, transportation, and others. The Company's solutions provide merchants with a secure, omni-channel payments platform that gives them independence from third-party payment providers. They also offer secure solutions to online-only merchants that provide consumers with a convenient and seamless way to shop.

Billers. Within the billers segment, ACI provides electronic bill presentment and payment (“EBPP”) services to companies operating in the consumer finance, insurance, healthcare, higher education, utility, government, and mortgage categories. The solutions enable these customers to support a wide range of payment options and provide a convenient consumer payments experience that drives consumer loyalty and increases revenue.

Revenue is attributed to the reportable segments based upon the customer. Expenses are attributed to the reportable segments in one of three methods: (1) direct costs of the segment, (2) labor costs that can be attributed based upon time tracking for individual projects, or (3) costs that are allocated. Allocated costs are generally marketing and sales related activities.

Segment Adjusted EBITDA is the measure reported to the CODM for purposes of making decisions on allocating resources and assessing the performance of the Company’s segments, and, therefore, Segment Adjusted EBITDA is presented in conformity with ASC 280, Segment Reporting. Segment Adjusted EBITDA is defined as earnings (loss) from operations before interest, income tax expense (benefit), depreciation and amortization (“EBITDA”) adjusted to exclude net other income (expense).

Corporate and unallocated expenses includes global facilities and information technology costs and long-term product roadmap expenses in addition to corporate overhead costs that are not allocated to reportable segments. The overhead costs relate to human resources, finance, legal, accounting, and merger and acquisition activity. These costs along with depreciation and amortization and stock-based compensation are not considered when management evaluates segment performance.
The following is selected financial data for the Company’s reportable segments for the periods indicated (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Revenue
Banks$117,439 $131,744 $391,583 $341,712 
Merchants35,609 38,989 113,145 115,083 
Billers153,543 146,181 465,368 446,974 
Total revenue$306,591 $316,914 $970,096 $903,769 
Segment Adjusted EBITDA
Banks$49,793 $67,602 $184,667 $159,262 
Merchants9,781 14,221 32,243 41,987 
Billers26,348 31,969 81,029 100,593 
Depreciation and amortization(32,140)(33,380)(95,869)(100,366)
Stock-based compensation expense(7,126)(6,367)(21,884)(20,790)
Corporate and unallocated expenses(43,167)(46,066)(124,574)(133,593)
Interest, net(11,341)(8,374)(27,809)(25,390)
Other, net41,545 (1,088)45,801 (1,036)
Income before income taxes$33,693 $18,517 $73,604 $20,667 

Assets are not allocated to segments, and the Company’s CODM does not evaluate operating segments using discrete asset information.
The following is revenue by primary solution category for the Company’s reportable segments for the periods indicated (in thousands):
Three Months Ended September 30, 2022
BanksMerchantsBillersTotal
Primary Solution Categories
Bill Payments$— $— $153,543 $153,543 
Digital Business Banking9,001 — — 9,001 
Merchant Payments— 35,609 — 35,609 
Fraud Management14,840 — — 14,840 
Real-Time Payments24,904 — — 24,904 
Issuing and Acquiring68,694 — — 68,694 
Total$117,439 $35,609 $153,543 $306,591 
Three Months Ended September 30, 2021
BanksMerchantsBillersTotal
Primary Solution Categories
Bill Payments$— $— $146,181 $146,181 
Digital Business Banking16,527 — — 16,527 
Merchant Payments— 38,989 — 38,989 
Fraud Management6,882 — — 6,882 
Real-Time Payments27,638 — — 27,638 
Issuing and Acquiring80,697 — — 80,697 
Total$131,744 $38,989 $146,181 $316,914 
Nine Months Ended September 30, 2022
BanksMerchantsBillersTotal
Primary Solution Categories
Bill Payments$— $— $465,368 $465,368 
Digital Business Banking34,586 — — 34,586 
Merchant Payments— 113,145 — 113,145 
Fraud Management30,169 — — 30,169 
Real-Time Payments71,043 — — 71,043 
Issuing and Acquiring255,785 — — 255,785 
Total$391,583 $113,145 $465,368 $970,096 
Nine Months Ended September 30, 2021
BanksMerchantsBillersTotal
Primary Solution Categories
Bill Payments$— $— $446,974 $446,974 
Digital Business Banking47,319 — — 47,319 
Merchant Payments— 115,083 — 115,083 
Fraud Management23,563 — — 23,563 
Real-Time Payments58,534 — — 58,534 
Issuing and Acquiring212,296 — — 212,296 
Total$341,712 $115,083 $446,974 $903,769 
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Banks
Software as a service and platform as a service$12,394 $14,794 $40,331 $43,555 
License42,188 51,062 159,569 102,993 
Maintenance44,896 48,829 138,983 146,091 
Services17,961 17,059 52,700 49,073 
Total$117,439 $131,744 $391,583 $341,712 
Merchants
Software as a service and platform as a service$29,626 $30,561 $91,451 $93,336 
License1,473 3,392 8,691 7,296 
Maintenance4,244 4,610 12,090 12,705 
Services266 426 913 1,746 
Total$35,609 $38,989 $113,145 $115,083 
Billers
Software as a service and platform as a service$153,520 $146,101 $465,298 $446,639 
License— — — 94 
Maintenance23 80 70 241 
Services— — — — 
Total$153,543 $146,181 $465,368 $446,974 

The following is the Company's revenue by geographic location for the periods indicated (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Revenue
United States$195,571 $199,195 $604,345 $587,002 
Other111,020 117,719 365,751 316,767 
Total$306,591 $316,914 $970,096 $903,769 

The following is the Company’s long-lived assets by geographic location for the periods indicated (in thousands):
September 30, 2022December 31, 2021
Long-lived Assets
United States$1,284,306 $1,425,391 
Other712,418 745,138 
Total$1,996,724 $2,170,529 

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three and nine months ended September 30, 2022 and 2021. No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the three and nine months ended September 30, 2022 and 2021.