QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
(Address of principal executive offices) | (Zip code) |
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
TABLE OF CONTENTS | ||||||||
Page | ||||||||
Item 1 | ||||||||
March 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Receivables, net of allowances of $ | |||||||||||
Settlement assets | |||||||||||
Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Noncurrent assets | |||||||||||
Accrued receivables, net | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Software, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Deferred income taxes, net | |||||||||||
Other noncurrent assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Settlement liabilities | |||||||||||
Employee compensation | |||||||||||
Current portion of long-term debt | |||||||||||
Deferred revenue | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Noncurrent liabilities | |||||||||||
Deferred revenue | |||||||||||
Long-term debt | |||||||||||
Deferred income taxes, net | |||||||||||
Operating lease liabilities | |||||||||||
Other noncurrent liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity | |||||||||||
Preferred stock; $ | |||||||||||
Common stock; $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenues | |||||||||||
Software as a service and platform as a service | $ | $ | |||||||||
License | |||||||||||
Maintenance | |||||||||||
Services | |||||||||||
Total revenues | |||||||||||
Operating expenses | |||||||||||
Cost of revenue (1) | |||||||||||
Research and development | |||||||||||
Selling and marketing | |||||||||||
General and administrative | |||||||||||
Depreciation and amortization | |||||||||||
Total operating expenses | |||||||||||
Operating income (loss) | ( | ||||||||||
Other income (expense) | |||||||||||
Interest expense | ( | ( | |||||||||
Interest income | |||||||||||
Other, net | ( | ||||||||||
Total other income (expense) | ( | ( | |||||||||
Income (loss) before income taxes | ( | ||||||||||
Income tax expense (benefit) | ( | ||||||||||
Net income (loss) | $ | ( | $ | ||||||||
Income (loss) per common share | |||||||||||
Basic | $ | ( | $ | ||||||||
Diluted | $ | ( | $ | ||||||||
Weighted average common shares outstanding | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net income (loss) | $ | ( | $ | ||||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments | ( | ||||||||||
Total other comprehensive income (loss) | ( | ||||||||||
Comprehensive income (loss) | $ | ( | $ |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||
Balance as of December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Shares issued and forfeited, net, under stock plans | — | ( | — | — | |||||||||||||||||||||||||||||||
Repurchase of stock-based compensation awards for tax withholdings | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance as of March 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Shares issued and forfeited, net, under stock plans | — | ( | — | — | |||||||||||||||||||||||||||||||
Repurchase of | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Repurchase of stock-based compensation awards for tax withholdings | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance as of March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | ( | $ | ||||||||
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Amortization of operating lease right-of-use assets | |||||||||||
Amortization of deferred debt issuance costs | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Stock-based compensation expense | |||||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Receivables | |||||||||||
Accounts payable | ( | ( | |||||||||
Accrued employee compensation | ( | ( | |||||||||
Deferred revenue | |||||||||||
Other current and noncurrent assets and liabilities | ( | ( | |||||||||
Net cash flows from operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Purchases of software and distribution rights | ( | ( | |||||||||
Net cash flows from investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of common stock | |||||||||||
Proceeds from exercises of stock options | |||||||||||
Repurchase of stock-based compensation awards for tax withholdings | ( | ( | |||||||||
Repurchases of common stock | ( | ||||||||||
Proceeds from revolving credit facility | |||||||||||
Repayment of revolving credit facility | ( | ( | |||||||||
Repayment of term portion of credit agreement | ( | ( | |||||||||
Payments on or proceeds from other debt, net | ( | ( | |||||||||
Net decrease in settlement assets and liabilities | ( | ( | |||||||||
Net cash flows from financing activities | ( | ( | |||||||||
Effect of exchange rate fluctuations on cash | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents, including settlement deposits, beginning of period | |||||||||||
Cash and cash equivalents, including settlement deposits, end of period | $ | $ | |||||||||
Reconciliation of cash and cash equivalents to the Consolidated Balance Sheets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Settlement deposits | |||||||||||
Total cash and cash equivalents, including settlement deposits | $ | $ | |||||||||
Supplemental cash flow information | |||||||||||
Income taxes paid | $ | $ | |||||||||
Interest paid | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Operating lease liabilities | $ | $ | |||||||||
Vendor financed licenses | |||||||||||
Accrued interest | |||||||||||
Royalties payable | |||||||||||
Other | |||||||||||
Total other current liabilities | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Billed receivables | $ | $ | |||||||||
Allowance for doubtful accounts | ( | ( | |||||||||
Billed receivables, net | |||||||||||
Current accrued receivables, net | |||||||||||
Long-term accrued receivables, net | |||||||||||
Total accrued receivables, net | |||||||||||
Total receivables, net | $ | $ |
Balance, December 31, 2022 | $ | ||||
Deferral of revenue | |||||
Recognition of deferred revenue | ( | ||||
Foreign currency translation | |||||
Balance, March 31, 2023 | $ |
Fiscal Year Ending December 31, | |||||
Remainder of 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Term loans | $ | $ | |||||||||
Revolving credit facility | |||||||||||
Debt issuance costs | ( | ( | |||||||||
Total debt | |||||||||||
Less: current portion of term loans | |||||||||||
Less: current portion of debt issuance costs | ( | ( | |||||||||
Total long-term debt | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Balance | Gross Carrying Amount | Accumulated Amortization | Net Balance | ||||||||||||||||||||||||||||||
Software for internal use | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Balance | Gross Carrying Amount | Accumulated Amortization | Net Balance | ||||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Trademarks and trade names | ( | ( | |||||||||||||||||||||||||||||||||
Total other intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
Fiscal Year Ending December 31, | Software Amortization | Other Intangible Assets Amortization | ||||||||||||
Remainder of 2023 | $ | $ | ||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
2026 | ||||||||||||||
2027 | ||||||||||||||
Thereafter | ||||||||||||||
Total | $ | $ |
Number of Shares | Weighted Average Exercise Price ($) | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value of In-the-Money Options ($) | ||||||||||||||||||||
Outstanding as of December 31, 2022 | $ | ||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Expired | ( | ||||||||||||||||||||||
Outstanding as of March 31, 2023 | $ | $ | |||||||||||||||||||||
Exercisable as of March 31, 2023 | $ | $ |
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested as of December 31, 2022 | $ | ||||||||||
Forfeited | ( | ||||||||||
Change in payout rate | ( | ||||||||||
Nonvested as of March 31, 2023 | $ |
Three Months Ended March 31, 2022 | ||||||||
Expected life (years) | ||||||||
Risk-free interest rate | % | |||||||
Expected volatility | % | |||||||
Expected dividend yield |
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested as of December 31, 2022 | $ | ||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Nonvested as of March 31, 2023 | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Weighted average shares outstanding: | |||||||||||
Basic weighted average shares outstanding | |||||||||||
Add: Dilutive effect of stock options and RSUs | |||||||||||
Diluted weighted average shares outstanding |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenue | |||||||||||
Banks | $ | $ | |||||||||
Merchants | |||||||||||
Billers | |||||||||||
Total revenue | $ | $ | |||||||||
Segment Adjusted EBITDA | |||||||||||
Banks | $ | $ | |||||||||
Merchants | |||||||||||
Billers | |||||||||||
Depreciation and amortization | ( | ( | |||||||||
Stock-based compensation expense | ( | ( | |||||||||
Corporate and unallocated expenses | ( | ( | |||||||||
Interest, net | ( | ( | |||||||||
Other, net | ( | ||||||||||
Income (loss) before income taxes | $ | ( | $ |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||
Banks | Merchants | Billers | Total | ||||||||||||||||||||
Primary Solution Categories | |||||||||||||||||||||||
Bill Payments | $ | $ | $ | $ | |||||||||||||||||||
Digital Business Banking | |||||||||||||||||||||||
Merchant Payments | |||||||||||||||||||||||
Fraud Management | |||||||||||||||||||||||
Real-Time Payments | |||||||||||||||||||||||
Issuing and Acquiring | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended March 31, 2022 | |||||||||||||||||||||||
Banks | Merchants | Billers | Total | ||||||||||||||||||||
Primary Solution Categories | |||||||||||||||||||||||
Bill Payments | $ | $ | $ | $ | |||||||||||||||||||
Digital Business Banking | |||||||||||||||||||||||
Merchant Payments | |||||||||||||||||||||||
Fraud Management | |||||||||||||||||||||||
Real-Time Payments | |||||||||||||||||||||||
Issuing and Acquiring | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Banks | |||||||||||
Software as a service and platform as a service | $ | $ | |||||||||
License | |||||||||||
Maintenance | |||||||||||
Services | |||||||||||
Total | $ | $ | |||||||||
Merchants | |||||||||||
Software as a service and platform as a service | $ | $ | |||||||||
License | |||||||||||
Maintenance | |||||||||||
Services | |||||||||||
Total | $ | $ | |||||||||
Billers | |||||||||||
Software as a service and platform as a service | $ | $ | |||||||||
License | |||||||||||
Maintenance | |||||||||||
Services | |||||||||||
Total | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenue | |||||||||||
United States | $ | $ | |||||||||
Other | |||||||||||
Total | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Long-lived Assets | |||||||||||
United States | $ | $ | |||||||||
Other | |||||||||||
Total | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Banks | $ | 2,154 | $ | 2,095 | |||||||
Merchants | 821 | 810 | |||||||||
Billers | 3,395 | 3,390 | |||||||||
Total | $ | 6,370 | $ | 6,295 | |||||||
March 31, 2023 | December 31, 2022 | ||||||||||
Committed | $ | 2,266 | $ | 2,338 | |||||||
Renewal | 4,104 | 3,957 | |||||||||
Total | $ | 6,370 | $ | 6,295 |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
Amount | % of Total Revenue | $ Change vs 2021 | % Change vs 2021 | Amount | % of Total Revenue | ||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Software as a service and platform as a service | $ | 204,930 | 71 | % | $ | 10,368 | 5 | % | $ | 194,562 | 60 | % | |||||||||||||||||||||||
License | 18,331 | 6 | % | (41,954) | (70) | % | 60,285 | 19 | % | ||||||||||||||||||||||||||
Maintenance | 50,103 | 17 | % | (1,315) | (3) | % | 51,418 | 16 | % | ||||||||||||||||||||||||||
Services | 16,312 | 6 | % | (503) | (3) | % | 16,815 | 5 | % | ||||||||||||||||||||||||||
Total revenues | 289,676 | 100 | % | (33,404) | (10) | % | 323,080 | 100 | % | ||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Cost of revenue | 178,554 | 62 | % | 12,268 | 7 | % | 166,286 | 51 | % | ||||||||||||||||||||||||||
Research and development | 37,118 | 13 | % | (689) | (2) | % | 37,807 | 12 | % | ||||||||||||||||||||||||||
Selling and marketing | 35,435 | 12 | % | 827 | 2 | % | 34,608 | 11 | % | ||||||||||||||||||||||||||
General and administrative | 31,382 | 11 | % | 5,507 | 21 | % | 25,875 | 8 | % | ||||||||||||||||||||||||||
Depreciation and amortization | 31,539 | 11 | % | 701 | 2 | % | 30,838 | 10 | % | ||||||||||||||||||||||||||
Total operating expenses | 314,028 | 109 | % | 18,614 | 6 | % | 295,414 | 92 | % | ||||||||||||||||||||||||||
Operating income (loss) | (24,352) | (9) | % | (52,018) | (188) | % | 27,666 | 8 | % | ||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||||||||
Interest expense | (18,892) | (7) | % | (7,998) | 73 | % | (10,894) | (3) | % | ||||||||||||||||||||||||||
Interest income | 3,505 | 1 | % | 346 | 11 | % | 3,159 | 1 | % | ||||||||||||||||||||||||||
Other, net | (3,395) | (1) | % | (5,645) | (251) | % | 2,250 | 1 | % | ||||||||||||||||||||||||||
Total other income (expense) | (18,782) | (7) | % | (13,297) | 242 | % | (5,485) | (1) | % | ||||||||||||||||||||||||||
Income (loss) before income taxes | (43,134) | (16) | % | (65,315) | (294) | % | 22,181 | 7 | % | ||||||||||||||||||||||||||
Income tax expense (benefit) | (10,826) | (4) | % | (17,517) | (262) | % | 6,691 | 2 | % | ||||||||||||||||||||||||||
Net income (loss) | $ | (32,308) | (12) | % | $ | (47,798) | (309) | % | $ | 15,490 | 5 | % |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenue | |||||||||||
Banks | $ | 88,040 | $ | 132,198 | |||||||
Merchants | 34,781 | 41,002 | |||||||||
Billers | 166,855 | 149,880 | |||||||||
Total revenue | $ | 289,676 | $ | 323,080 | |||||||
Segment Adjusted EBITDA | |||||||||||
Banks | $ | 24,681 | $ | 64,714 | |||||||
Merchants | 6,544 | 14,713 | |||||||||
Billers | 29,641 | 26,357 | |||||||||
Depreciation and amortization | (31,539) | (31,489) | |||||||||
Stock-based compensation expense | (5,301) | (7,958) | |||||||||
Corporate and unallocated expenses | (48,378) | (38,671) | |||||||||
Interest, net | (15,387) | (7,735) | |||||||||
Other, net | (3,395) | 2,250 | |||||||||
Income (loss) before income taxes | $ | (43,134) | $ | 22,181 |
March 31, 2023 | December 31, 2022 | ||||||||||
Cash and cash equivalents | $ | 142,412 | $ | 124,981 | |||||||
Availability under revolving credit facility | 388,440 | 393,500 | |||||||||
Total liquidity | $ | 530,852 | $ | 518,481 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net cash provided by (used by): | |||||||||||
Operating activities | $ | 40,068 | $ | 28,874 | |||||||
Investing activities | (8,739) | (8,487) | |||||||||
Financing activities | (20,326) | (25,998) |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | |||||||||||||||||||
January 1, 2023 through January 31, 2023 | — | $ | — | — | $ | 9,771,000 | |||||||||||||||||
February 1, 2023 through February 28, 2023 | 7,266 | (1) | 27.16 | — | 200,000,000 | ||||||||||||||||||
March 1, 2023 through March 31, 2023 | 107,226 | (1) | 26.15 | — | 200,000,000 | ||||||||||||||||||
Total | 114,492 | $ | 26.21 | — |
Exhibit No. | Description | ||||||||||
3.01 | (1) | ||||||||||
3.02 | (2) | ||||||||||
4.01 | (3) | Form of Common Stock Certificate (P) | |||||||||
10.01 | (4) | ||||||||||
31.01 | |||||||||||
31.02 | |||||||||||
32.01 | ** | ||||||||||
32.02 | ** | ||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||||||||
101.SCH | XBRL Taxonomy Extension Schema | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | ||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
ACI WORLDWIDE, INC. (Registrant) | ||||||||
Date: May 4, 2023 | By: | /s/ SCOTT W. BEHRENS | ||||||
Scott W. Behrens | ||||||||
Executive Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial Officer) |
Date: May 4, 2023 | /s/ THOMAS W. WARSOP, III | ||||
Thomas W. Warsop, III Interim President, Interim Chief Executive Officer, and Director (Principal Executive Officer) |
Date: May 4, 2023 | /s/ SCOTT W. BEHRENS | ||||
Scott W. Behrens Executive Vice President, Chief Financial Officer, and Chief Accounting Officer (Principal Financial Officer) |
Date: May 4, 2023 | /s/ THOMAS W. WARSOP, III | ||||
Thomas W. Warsop, III Interim President, Interim Chief Executive Officer, and Director (Principal Executive Officer) |
Date: May 4, 2023 | /s/ SCOTT W. BEHRENS | ||||
Scott W. Behrens Executive Vice President, Chief Financial Officer, and Chief Accounting Officer (Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Receivables, allowances | $ 3,179 | $ 3,779 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, shares authorized (in shares) | 280,000,000 | 280,000,000 |
Common stock, shares issued (in shares) | 140,525,055 | 140,525,055 |
Treasury stock, shares (in shares) | 32,202,744 | 32,456,227 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|||
Revenues | ||||
Revenues | $ 289,676 | $ 323,080 | ||
Operating expenses | ||||
Cost of revenue | [1] | 178,554 | 166,286 | |
Research and development | 37,118 | 37,807 | ||
Selling and marketing | 35,435 | 34,608 | ||
General and administrative | 31,382 | 25,875 | ||
Depreciation and amortization | 31,539 | 30,838 | ||
Total operating expenses | 314,028 | 295,414 | ||
Operating income (loss) | (24,352) | 27,666 | ||
Other income (expense) | ||||
Interest expense | (18,892) | (10,894) | ||
Interest income | 3,505 | 3,159 | ||
Other, net | (3,395) | 2,250 | ||
Total other income (expense) | (18,782) | (5,485) | ||
Income (loss) before income taxes | (43,134) | 22,181 | ||
Income tax expense (benefit) | (10,826) | 6,691 | ||
Net income (loss) | $ (32,308) | $ 15,490 | ||
Income (loss) per common share | ||||
Basic (in dollars per share) | $ (0.30) | $ 0.13 | ||
Diluted (in dollars per share) | $ (0.30) | $ 0.13 | ||
Weighted average common shares outstanding | ||||
Basic (in shares) | 108,156 | 115,287 | ||
Diluted (in shares) | 108,156 | 116,098 | ||
Software as a service and platform as a service | ||||
Revenues | ||||
Revenues | $ 204,930 | $ 194,562 | ||
License | ||||
Revenues | ||||
Revenues | 18,331 | 60,285 | ||
Maintenance | ||||
Revenues | ||||
Revenues | 50,103 | 51,418 | ||
Services | ||||
Revenues | ||||
Revenues | $ 16,312 | $ 16,815 | ||
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (32,308) | $ 15,490 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 3,618 | (2,100) |
Total other comprehensive income (loss) | 3,618 | (2,100) |
Comprehensive income (loss) | $ (28,690) | $ 13,390 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
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Statement of Stockholders' Equity [Abstract] | ||
Repurchase of common stock (in shares) | 0 | 1,131,248 |
Condensed Consolidated Financial Statements |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Financial Statements | Condensed Consolidated Financial Statements The unaudited condensed consolidated financial statements include the accounts of ACI Worldwide, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All intercompany balances and transactions have been eliminated. The condensed consolidated financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, are unaudited and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation, in all material respects, of the financial position and operating results for the interim periods. The condensed consolidated balance sheet as of December 31, 2022, is derived from the audited financial statements. The condensed consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022, filed on March 1, 2023. Results for the three months ended March 31, 2023, are not necessarily indicative of results that may be attained in the future. The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are affected by management’s application of accounting policies, as well as uncertainty in the current economic environment. Actual results could differ from those estimates. Other Current Liabilities The components of other current liabilities are included in the following table (in thousands):
Settlement Assets and Liabilities Individuals and businesses settle their obligations to the Company’s various Biller clients using credit or debit cards or via automated clearing house (“ACH”) payments. The Company creates a receivable for the amount due from the credit or debit card processor and an offsetting payable to the client. Upon confirmation that the funds have been received, the Company settles the obligation to the client. Due to timing, in some instances, the Company may (1) receive the funds into bank accounts controlled by and in the Company’s name that are not disbursed to its clients by the end of the day, resulting in a settlement deposit on the Company’s books and (2) disburse funds to its clients in advance of receiving funds from the credit or debit card processor, resulting in a net settlement receivable position. Off Balance Sheet Settlement Accounts The Company also enters into agreements with certain Biller clients to process payment funds on their behalf. When an ACH or automated teller machine network payment transaction is processed, a transaction is initiated to withdraw funds from the designated source account and deposit them into a settlement account, which is a trust account maintained for the benefit of the Company’s clients. A simultaneous transaction is initiated to transfer funds from the settlement account to the intended destination account. These “back to back” transactions are designed to settle at the same time, usually overnight, such that the Company receives the funds from the source at the same time as it sends the funds to their destination. However, due to the transactions being with various financial institutions there may be timing differences that result in float balances. These funds are maintained in accounts for the benefit of the client, which is separate from the Company’s corporate assets. As the Company does not take ownership of the funds, these settlement accounts are not included in the Company’s balance sheet. The Company is entitled to interest earned on the fund balances. The collection of interest on these settlement accounts is considered in the Company’s determination of its fee structure for clients and represents a portion of the payment for services performed by the Company. The amount of settlement funds as of March 31, 2023, and December 31, 2022, was $300.6 million and $328.7 million, respectively. Fair Value The fair value of the Company’s Credit Agreement approximates the carrying value due to the floating interest rate (Level 2 of the fair value hierarchy). The Company measures the fair value of its Senior Notes based on Level 2 inputs, which include quoted market prices and interest rate spreads of similar securities. The fair value of the Company’s 5.750% Senior Notes due 2026 (“2026 Notes”) was $399.0 million and $390.0 million as of March 31, 2023, and December 31, 2022, respectively. The fair values of cash and cash equivalents approximate the carrying values due to the short period of time to maturity (Level 2 of the fair value hierarchy). Goodwill In accordance with the Accounting Standards Codification ("ASC") 350, Intangibles – Goodwill and Other, the Company assesses goodwill for impairment annually during the fourth quarter of its fiscal year using October 1 balances or when there is evidence that events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company evaluates goodwill at the reporting unit level and has identified its operating segments, Banks, Merchants, and Billers, as the reporting units. As of March 31, 2023, the Company's goodwill balance of $1.2 billion was allocated $671.7 million to Banks, $137.3 million to Merchants, and $417.0 million to Billers. Recoverability of goodwill is measured using a discounted cash flow model incorporating discount rates commensurate with the risks involved. Use of a discounted cash flow model is common practice in impairment testing in the absence of available transactional market evidence to determine the fair value. The calculated fair value was substantially in excess of the current carrying value for all reporting units based upon the October 1, 2022, annual impairment test and there have been no indications of impairment in the subsequent periods. Equity Method Investment In July 2019, the Company invested $18.3 million for a 30% non-controlling financial interest in a payment technology and services company in India. The Company accounted for this investment using the equity method in accordance with ASC 323, Investments - Equity Method and Joint Ventures. The Company records its share of earnings and losses in the investment on a one-quarter lag basis. Accordingly, the Company recorded an investment of $18.0 million and $17.9 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of March 31, 2023, and December 31, 2022, respectively.
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue In accordance with ASC 606, Revenue From Contracts With Customers, revenue is recognized upon transfer of control of promised products and/or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products and services. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. See Note 10, Segment Information, for additional information, including disaggregation of revenue based on primary solution category. Total receivables represent amounts billed and amounts earned that are to be billed in the future (i.e., accrued receivables). Included in accrued receivables are services, software as a service ("SaaS"), and platform as a service ("PaaS") revenues earned in the current period but billed in the following period, and amounts due under multi-year software license arrangements with extended payment terms for which the Company has an unconditional right to invoice and receive payment subsequent to invoicing. Total receivables, net is comprised of the following (in thousands):
One customer accounted for 10.5% and 10.1% of the Company's consolidated receivables balance as of March 31, 2023 and December 31, 2022, respectively. Deferred revenue includes amounts due or received from customers for software licenses, maintenance, services, and/or SaaS and PaaS services in advance of recording the related revenue. Changes in deferred revenue were as follows (in thousands):
Revenue allocated to remaining performance obligations represents contracted revenue that will be recognized in future periods, which is comprised of deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. This does not include: •Revenue that will be recognized in future periods from capacity overages that are accounted for as a usage-based royalty. •SaaS and PaaS revenue from variable consideration that will be recognized in accordance with the ‘right to invoice’ practical expedient or meets the allocation objective. Revenue allocated to remaining performance obligations was $651.4 million as of March 31, 2023, of which the Company expects to recognize approximately 50% over the next 12 months and the remainder thereafter. During the three months ended March 31, 2023 and 2022, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.
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Divestiture |
3 Months Ended |
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Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Divestiture Corporate Online Banking Solutions On June 7, 2022, the Company announced a definitive agreement to divest its corporate online banking solutions related assets and liabilities to One Equity Partners ("OEP") for $100.1 million, including preliminary net working capital adjustment. The sale included employees and customer contracts as well as technology assets and intellectual property and closed on September 1, 2022. The Company recognized a gain of $38.5 million on the sale during the year ended December 31, 2022, which is preliminary subject to finalization of post-closing adjustments pursuant to the definitive transaction agreement. The Company and OEP have also entered into a Transition Services Agreement ("TSA"), whereby the Company will continue to perform certain functions on OEP's behalf during a migration period not expected to exceed 18 months. The TSA is meant to reimburse the Company for direct costs in order to provide such functions, which are no longer generating revenue for the Company.
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Debt |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt As of March 31, 2023, the Company had $110.0 million, $578.1 million, and $400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $388.4 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended, and up to $1.6 million of unused borrowings under Letter of Credit agreements. The amount of unused borrowings actually available varies in accordance with the terms of the agreement. Credit Agreement On April 5, 2019, the Company and its wholly-owned subsidiaries, ACI Worldwide Corp. and ACI Payments, Inc. entered into the Second Amended and Restated Credit Agreement (the “Credit Agreement”) with the lenders, and Bank of America, N.A., as administrative agent for the lenders, to amend and restate the Company's existing agreement, as amended, dated February 24, 2017. On May 5, 2022, the Company and Bank of America entered into the LIBOR Transition Amendment (the "Amendment") that replaced the LIBOR reference rate with the Secured Overnight Financing Rate ("SOFR") reference rate. No other terms or conditions of the Credit Agreement were changed as a result of the Amendment. On April 28, 2023, the Company and Bank of America entered into the 2023 Extension Amendment to extend the term of the Credit Facility one year to April 5, 2025. All other terms remained the same. The Credit Agreement consists of (a) a five-year $500.0 million senior secured revolving credit facility (the “Revolving Credit Facility”), which includes sublimits for (1) the issuance of standby letters of credit and (2) swingline loans, (b) a five-year $279.0 million senior secured term loan facility (the "Initial Term Loan") and (c) a five-year $500.0 million Delayed Draw Term Loan (together with the Initial Term Loan, the "Term Loans", and together with the Initial Term Loan and the Revolving Credit Facility, the “Credit Facility”). The Credit Agreement also allows the Company to request optional incremental term loans and increases in the revolving commitment. At the Company’s option, borrowings under the Credit Facility bear interest at an annual rate equal to, either (a) a base rate determined by reference to the highest of (1) the annual interest rate publicly announced by the administrative agent as its Prime Rate, (2) the federal funds effective rate plus 1/2 of 1%, or (3) SOFR rate determined by reference to the costs of funds for U.S. dollar deposits for a one-month interest period, adjusted for certain additional costs, plus 1% or (b) a SOFR rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowings, adjusted for certain additional costs, plus an applicable margin. Based on the calculation of the applicable consolidated total leverage ratio, the applicable margin for borrowings under the Credit Facility is between 0.25% to 1.25% with respect to base rate borrowings and between 1.25% and 2.25% with respect to SOFR rate borrowings. Interest is due and payable monthly. The interest rate in effect for the Credit Facility as of March 31, 2023, was 6.90%. The Company is also required to pay (a) a commitment fee related to the unutilized commitments under the Revolving Credit Facility, payable quarterly in arrears, (b) letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on SOFR rate borrowings under the Revolving Credit Facility on an annual basis, payable quarterly in arrears, and (c) customary fronting fees for the issuance of letters of credit fees and agency fees. Senior Notes On August 21, 2018, the Company completed a $400.0 million offering of the 2026 Notes at an issue price of 100% of the principal amount in a private placement for resale to qualified institutional buyers. The 2026 Notes bear interest at an annual rate of 5.750%, payable semi-annually in arrears on February 15 and August 15 of each year. The 2026 Notes will mature on August 15, 2026. Maturities on debt outstanding as of March 31, 2023, are as follows (in thousands):
As of March 31, 2023, and at all times during the period, the Company was in compliance with its financial debt covenants. Total debt is comprised of the following (in thousands):
Overdraft Facility In 2019, the Company and ACI Payments, Inc. entered in to an uncommitted overdraft facility with Bank of America, N.A. The overdraft facility bears interest at the federal funds effective rate plus 2.25% based on the Company’s average outstanding balance and the frequency in which overdrafts occur. The overdraft facility acts as a secured loan under the terms of the Credit Agreement to provide an additional funding mechanism for timing differences that can occur in the bill payment settlement process. Amounts outstanding on the overdraft facility are included in other current liabilities in the condensed consolidated balance sheet. As of March 31, 2023, there was $75.0 million available and no amount outstanding on the overdraft facility. As of December 31, 2022, there was no amount outstanding on the overdraft facility. Other The Company finances certain multi-year license agreements for internal-use software. Upon execution, these arrangements have been treated as a non-cash investing and financing activity for purposes of the condensed consolidated statements of cash flows. As of March 31, 2023, $7.1 million was outstanding on these agreements, of which $3.6 million and $3.5 million is included in other current liabilities and other noncurrent liabilities, respectively, in the condensed consolidated balance sheet. As of December 31, 2022, $9.3 million was outstanding on these agreements, of which $5.8 million and $3.5 million is included in other current liabilities and other noncurrent liabilities, respectively
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Software and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Software and Other Intangible Assets | Software and Other Intangible Assets The carrying amount and accumulated amortization of the Company's software assets subject to amortization at each balance sheet date are as follows (in thousands):
Amortization of software for internal use is computed using the straight-line method over an estimated useful life of generally to eight years. Software for internal use amortization expense recorded during the three months ended March 31, 2023 and 2022, totaled $17.0 million and $16.7 million, respectively. These software amortization expense amounts are reflected in depreciation and amortization in the condensed consolidated statements of operations. Amortization of software for resale was computed using the greater of (a) the ratio of current gross revenues to the total of current and future gross revenues expected to be derived from the software or (b) the straight-line method over the remaining estimated useful life of generally to ten years. Software for resale amortization expense recorded during the three months ended March 31, 2022 totaled $0.7 million. Software for resale was fully amortized during the year ended December 31, 2022 and, therefore, there was no amortization expense recorded during the three months ended March 31, 2023. The software amortization expense amount was reflected in cost of revenue in the condensed consolidated statements of operations. The carrying amount and accumulated amortization of the Company’s other intangible assets subject to amortization at each balance sheet date are as follows (in thousands):
Other intangible assets amortization expense recorded during the three months ended March 31, 2023 and 2022, totaled $8.4 million and $9.2 million, respectively. Based on capitalized intangible assets as of March 31, 2023, estimated amortization expense amounts in future fiscal years are as follows (in thousands):
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Stock-Based Compensation Plans |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Plans | Stock-Based Compensation Plans Employee Stock Purchase Plan Shares issued under the 2017 Employee Stock Purchase Plan during the three months ended March 31, 2023 and 2022, totaled 31,639 and 31,406, respectively. Stock Options A summary of stock option activity is as follows:
The total intrinsic value of stock options exercised during the three months ended March 31, 2023 and 2022, was less than $0.1 million and $0.9 million, respectively. There were no stock options granted during the three months ended March 31, 2023 or 2022. Total Shareholder Return Awards A summary of nonvested total shareholder return awards ("TSRs") is as follows:
At March 31, 2023, the TSRs granted in 2020 were earned by the employees. However, the performance goals were not met and no shares were issued. The fair value of TSRs granted during the three months ended March 31, 2022, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, Compensation - Stock Compensation, using the following weighted average assumptions:
There were no TSRs granted during the three months ended March 31, 2023. Restricted Share Units A summary of nonvested restricted share unit awards ("RSUs") is as follows:
During the three months ended March 31, 2023, a total of 333,812 RSUs vested. The Company withheld 114,492 of those shares to pay the employees’ portion of the minimum payroll withholding taxes. As of March 31, 2023, there were unrecognized compensation costs of $18.5 million and $10.2 million related to nonvested RSUs and TSRs, respectively, which the Company expects to recognize over weighted average periods of 1.8 years and 1.7 years, respectively. The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended March 31, 2023 and 2022, of $5.3 million and $8.0 million, respectively, with corresponding tax benefits of $0.9 million and $1.1 million, respectively.
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Common Stock and Treasury Stock |
3 Months Ended |
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Mar. 31, 2023 | |
Equity [Abstract] | |
Common Stock and Treasury Stock | Common Stock and Treasury Stock In 2005, the board approved a stock repurchase program authorizing the Company, as market and business conditions warrant, to acquire its common stock and periodically authorize additional funds for the program. On February 24, 2023, the board approved the repurchase of the Company's common stock of up to $200.0 million, in place of the remaining purchase amounts previously authorized. The Company did not repurchase any shares under the program during the three months ended March 31, 2023. Under the program to date, the Company has repurchased 57,981,733 shares for approximately $926.2 million. As of March 31, 2023, the maximum remaining amount authorized for purchase under the stock repurchase program was $200.0 million.
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Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is computed in accordance with ASC 260, Earnings Per Share, based on weighted average outstanding common shares. Diluted earnings (loss) per share is computed based on basic weighted average outstanding common shares adjusted for the dilutive effect of stock options, RSUs, and certain contingently issuable shares for which performance targets have been achieved. The following table reconciles the weighted average share amounts used to compute both basic and diluted earnings (loss) per share (in thousands):
The diluted earnings (loss) per share computation excludes 2.5 million and 1.8 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended March 31, 2023 and 2022, respectively, as their effect would be anti-dilutive. Common stock outstanding as of March 31, 2023, and December 31, 2022, was 108,322,311 and 108,068,828, respectively.
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Other, Net |
3 Months Ended |
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Mar. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Other, Net | Other, NetOther, net is primarily comprised of foreign currency transaction gains and losses. Other, net was $3.4 million of expense and $2.3 million of income for the three months ended March 31, 2023 and 2022, respectively |
Segment Information |
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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):
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):
As discussed in Note 3, Divestiture, the Company divested its corporate online banking solution assets, which were included in the Digital Business Banking solution category.
The following is the Company's revenue by geographic location for the periods indicated (in thousands):
The following is the Company’s long-lived assets by geographic location for the periods indicated (in thousands):
No single customer accounted for more than 10% of the Company’s consolidated revenues during the three months ended March 31, 2023 and 2022. No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the three months ended March 31, 2023 and 2022.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 31, 2023, the Company's effective tax rate was 25%. The Company’s foreign entities reported losses of $7.2 million for the three months ended March 31, 2023. For the three months ended March 31, 2022, the Company's effective tax rate was 30%. The Company's foreign entities reported profits of $30.9 million for the three months ended March 31, 2022. The Company’s effective tax rate could fluctuate on a quarterly basis due to the occurrence of significant and unusual or infrequent items, such as vesting of stock-based compensation or foreign currency gains and losses. The Company’s effective tax rate could also fluctuate due to changes in the valuation of its deferred tax assets or liabilities, or by changes in tax laws, regulations, accounting principles, or interpretations thereof. In addition, the Company is occasionally subject to examination of its income tax returns by tax authorities in the jurisdictions it operates. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. As of March 31, 2023, and December 31, 2022, the amount of unrecognized tax benefits for uncertain tax positions was $26.3 million and $26.4 million, respectively, excluding related liabilities for interest and penalties of $0.6 million as of March 31, 2023, and December 31, 2022. The Company believes it is reasonably possible that the total amount of unrecognized tax benefits will decrease within the next 12 months by approximately $4.6 million, due to the settlement of various audits and the expiration of statutes of limitation.
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings In April 2021, ACH files associated with one of the Company's mortgage servicing customers were inadvertently transmitted into the ACH network during a test of the Company's payment processing system. The Company took immediate corrective action and issued reversing ACH files, restoring affected accounts. The Company was named as a defendant in seven class action lawsuits filed in various federal courts purportedly on behalf of consumers whose mortgage accounts were affected by the inadvertent ACH file transmission. The Company entered into an agreement, which is subject to final court approval and other conditions, to settle these lawsuits for the Company's establishment of a $5.0 million fund out of which payments would be made to class members and the Company's payment of attorneys’ fees and administrative costs, plus additional funds totaling $1.5 million that could be required to be established under certain circumstances. There can be no assurance that the conditions to settlement will be satisfied, in which event the class action litigation could proceed. The inadvertent ACH file transmission also gave rise to investigations by the U.S. Consumer Financial Protection Bureau (the "CFPB") and state attorneys general in 49 states, the District of Columbia, and certain U.S. territories as well as money transmission regulators in 46 states, the District of Columbia, and certain U.S. territories. A lead group of attorneys general and regulatory representatives of nine states have led the state investigations of the matter. The Company has cooperated with the CFPB and state authorities, including furnishing documents and information to them. There can be no assurance that the matters will be resolved without litigation, and the matters could result in the impositions of material penalties and damages as well as burdensome and costly remedies. The Company has asserted claims for insurance coverage with respect to potential losses associated with the inadvertent ACH file transmission. There is no assurance as to the amount of insurance that may be available or its effect on the availability or cost of insurance in the future. The Company is from time to time subject to other claims, litigation and investigations. While we believe that none of the currently pending matters is reasonably likely to have material adverse effect on us, there can be no assurance with respect thereto or future matters.
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Condensed Consolidated Financial Statements (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | The unaudited condensed consolidated financial statements include the accounts of ACI Worldwide, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All intercompany balances and transactions have been eliminated. The condensed consolidated financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, are unaudited and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation, in all material respects, of the financial position and operating results for the interim periods. The condensed consolidated balance sheet as of December 31, 2022, is derived from the audited financial statements. The condensed consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022, filed on March 1, 2023. Results for the three months ended March 31, 2023, are not necessarily indicative of results that may be attained in the future.
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Use of Estimates | The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are affected by management’s application of accounting policies, as well as uncertainty in the current economic environment. Actual results could differ from those estimates. |
Settlement Assets and Liabilities | Settlement Assets and Liabilities Individuals and businesses settle their obligations to the Company’s various Biller clients using credit or debit cards or via automated clearing house (“ACH”) payments. The Company creates a receivable for the amount due from the credit or debit card processor and an offsetting payable to the client. Upon confirmation that the funds have been received, the Company settles the obligation to the client. Due to timing, in some instances, the Company may (1) receive the funds into bank accounts controlled by and in the Company’s name that are not disbursed to its clients by the end of the day, resulting in a settlement deposit on the Company’s books and (2) disburse funds to its clients in advance of receiving funds from the credit or debit card processor, resulting in a net settlement receivable position.
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Off Balance Sheet Settlement Accounts | Off Balance Sheet Settlement Accounts The Company also enters into agreements with certain Biller clients to process payment funds on their behalf. When an ACH or automated teller machine network payment transaction is processed, a transaction is initiated to withdraw funds from the designated source account and deposit them into a settlement account, which is a trust account maintained for the benefit of the Company’s clients. A simultaneous transaction is initiated to transfer funds from the settlement account to the intended destination account. These “back to back” transactions are designed to settle at the same time, usually overnight, such that the Company receives the funds from the source at the same time as it sends the funds to their destination. However, due to the transactions being with various financial institutions there may be timing differences that result in float balances. These funds are maintained in accounts for the benefit of the client, which is separate from the Company’s corporate assets. As the Company does not take ownership of the funds, these settlement accounts are not included in the Company’s balance sheet. The Company is entitled to interest earned on the fund balances. The collection of interest on these settlement accounts is considered in the Company’s determination of its fee structure for clients and represents a portion of the payment for services performed by the Company.
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Fair Value | Fair ValueThe fair value of the Company’s Credit Agreement approximates the carrying value due to the floating interest rate (Level 2 of the fair value hierarchy). The Company measures the fair value of its Senior Notes based on Level 2 inputs, which include quoted market prices and interest rate spreads of similar securities. |
Goodwill | Goodwill In accordance with the Accounting Standards Codification ("ASC") 350, Intangibles – Goodwill and Other, the Company assesses goodwill for impairment annually during the fourth quarter of its fiscal year using October 1 balances or when there is evidence that events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company evaluates goodwill at the reporting unit level and has identified its operating segments, Banks, Merchants, and Billers, as the reporting units. As of March 31, 2023, the Company's goodwill balance of $1.2 billion was allocated $671.7 million to Banks, $137.3 million to Merchants, and $417.0 million to Billers. Recoverability of goodwill is measured using a discounted cash flow model incorporating discount rates commensurate with the risks involved. Use of a discounted cash flow model is common practice in impairment testing in the absence of available transactional market evidence to determine the fair value. The calculated fair value was substantially in excess of the current carrying value for all reporting units based upon the October 1, 2022, annual impairment test and there have been no indications of impairment in the subsequent periods.
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Equity Method Investment | Equity Method Investment In July 2019, the Company invested $18.3 million for a 30% non-controlling financial interest in a payment technology and services company in India. The Company accounted for this investment using the equity method in accordance with ASC 323, Investments - Equity Method and Joint Ventures. The Company records its share of earnings and losses in the investment on a one-quarter lag basis. Accordingly, the Company recorded an investment of $18.0 million and $17.9 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of March 31, 2023, and December 31, 2022, respectively.
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Condensed Consolidated Financial Statements (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Current Liabilities | The components of other current liabilities are included in the following table (in thousands):
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Revenue (Tables) |
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Summary of Total Receivables, Net | Total receivables, net is comprised of the following (in thousands):
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Summary of Changes in Deferred Revenue | Changes in deferred revenue were as follows (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Maturities on Debt Outstanding | Maturities on debt outstanding as of March 31, 2023, are as follows (in thousands):
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Summary of Total Debt | Total debt is comprised of the following (in thousands):
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Software and Other Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Carrying Amount and Accumulated Amortization of Software and Other Intangible Assets | The carrying amount and accumulated amortization of the Company's software assets subject to amortization at each balance sheet date are as follows (in thousands):
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Schedule of Estimated Intangible Asset Amortization Expense in Future Fiscal Years | Based on capitalized intangible assets as of March 31, 2023, estimated amortization expense amounts in future fiscal years are as follows (in thousands):
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Stock-Based Compensation Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of stock option activity is as follows:
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Total Shareholder Return Awards (TSRs) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Nonvested Performance Award Activity | A summary of nonvested total shareholder return awards ("TSRs") is as follows:
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Total Shareholder Return Awards (TSRs) | Monte Carlo Simulation Model | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Grant Date Fair Value Weighted-Average Assumptions, Awards Other Than Options | The fair value of TSRs granted during the three months ended March 31, 2022, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, Compensation - Stock Compensation, using the following weighted average assumptions:
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Restricted Share Units (RSUs) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Nonvested Restricted Share Unit Activity | A summary of nonvested restricted share unit awards ("RSUs") is as follows:
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Earnings (Loss) Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Reconciliation of Weighted Average Share Amounts Used to Compute Both Basic and Diluted Earnings (Loss) Per Share | The following table reconciles the weighted average share amounts used to compute both basic and diluted earnings (loss) per share (in thousands):
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Selected Financial Data by Reportable Segment | The following is selected financial data for the Company’s reportable segments for the periods indicated (in thousands):
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Schedule of Revenue by Primary Solution Category for Reportable Segments | The following is revenue by primary solution category for the Company’s reportable segments for the periods indicated (in thousands):
As discussed in Note 3, Divestiture, the Company divested its corporate online banking solution assets, which were included in the Digital Business Banking solution category.
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Schedule of Revenue by Geographic Location | The following is the Company's revenue by geographic location for the periods indicated (in thousands):
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Schedule of Long-lived Assets by Geographic Location | The following is the Company’s long-lived assets by geographic location for the periods indicated (in thousands):
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Condensed Consolidated Financial Statements - Summary of Other Current Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Current Liabilities | ||
Operating lease liabilities | $ 11,049 | $ 11,218 |
Vendor financed licenses | 9,418 | 13,525 |
Accrued interest | 3,370 | 9,067 |
Royalties payable | 2,696 | 3,726 |
Other | 44,131 | 65,109 |
Total other current liabilities | $ 70,664 | $ 102,645 |
Condensed Consolidated Financial Statements - Additional Information (Details) - USD ($) $ in Thousands |
1 Months Ended | ||
---|---|---|---|
Jul. 31, 2019 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Condensed Financial Statements, Captions [Line Items] | |||
Amount of off balance sheet settlement funds | $ 300,600 | $ 328,700 | |
Goodwill | 1,226,026 | 1,226,026 | |
Banks | |||
Condensed Financial Statements, Captions [Line Items] | |||
Goodwill | 671,700 | ||
Merchants | |||
Condensed Financial Statements, Captions [Line Items] | |||
Goodwill | 137,300 | ||
Billers | |||
Condensed Financial Statements, Captions [Line Items] | |||
Goodwill | 417,000 | ||
India payment technology and services company | |||
Condensed Financial Statements, Captions [Line Items] | |||
Payments to acquire investment interest | $ 18,300 | ||
Percentage of voting interests acquired | 30.00% | ||
Equity method investment, amount recorded | $ 18,000 | 17,900 | |
Level 2 | Senior Notes | 5.750% Senior Notes due 2026 | |||
Condensed Financial Statements, Captions [Line Items] | |||
Stated interest rate (percentage) | 5.75% | ||
Fair value of long-term debt | $ 399,000 | $ 390,000 |
Revenue - Summary of Total Receivables, Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Billed receivables | $ 153,420 | $ 218,611 |
Allowance for doubtful accounts | (3,179) | (3,779) |
Billed receivables, net | 150,241 | 214,832 |
Current accrued receivables, net | 192,524 | 188,949 |
Long-term accrued receivables, net | 270,332 | 297,818 |
Total accrued receivables, net | 462,856 | 486,767 |
Total receivables, net | $ 613,097 | $ 701,599 |
Revenue - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Deferred Revenue Arrangement [Line Items] | ||
Revenue allocated to remaining performance obligations | $ 651.4 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | ||
Deferred Revenue Arrangement [Line Items] | ||
Revenue allocated to remaining performance obligations, percentage to be recognized | 50.00% | |
Timing of revenue to be collected | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||
Deferred Revenue Arrangement [Line Items] | ||
Timing of revenue to be collected | ||
Significant Customer | Revenue Benchmark | Customer Concentration Risk | ||
Deferred Revenue Arrangement [Line Items] | ||
Customer concentration risk, percentage | 10.50% | 10.10% |
Revenue - Summary of Changes in Deferred Revenue (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Change in Contract with Customer, Liability [Roll Forward] | |
Deferred revenue, beginning balance | $ 81,536 |
Deferral of revenue | 31,518 |
Recognition of deferred revenue | (21,465) |
Foreign currency translation | 49 |
Deferred revenue, ending balance | $ 91,638 |
Divestiture (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
Jun. 07, 2022 |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Transition services agreement, migration period | 18 months | ||
Discontinued Operations, Disposed of by Sale | One Equity Partners | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Divestiture consideration received | $ 100.1 | ||
Net after-tax gain sale | $ 38.5 |
Debt - Schedule of Maturities on Long-Term Debt Outstanding (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Remainder of 2023 | $ 55,300 |
2024 | 632,823 |
2025 | 0 |
2026 | 400,000 |
2027 | 0 |
Thereafter | 0 |
Total | $ 1,088,123 |
Debt - Summary of Total Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
Aug. 21, 2018 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Total debt | $ 1,081,381 | $ 1,089,872 | |
Debt issuance costs | (6,742) | (7,857) | |
Less: current portion of term loans | 70,443 | 65,521 | |
Less: current portion of debt issuance costs | (4,332) | (4,385) | |
Total long-term debt | 1,010,938 | 1,024,351 | |
Senior Notes | 5.750% Senior notes, due August 2026 | |||
Debt Instrument [Line Items] | |||
Total debt | 400,000 | 400,000 | |
Stated interest rate (percentage) | 5.75% | ||
Term loans | |||
Debt Instrument [Line Items] | |||
Total debt | 578,123 | 592,729 | |
Less: current portion of term loans | 74,775 | 69,906 | |
Revolving credit facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Total debt | $ 110,000 | $ 105,000 |
Software and Other Intangible Assets - Summary of Carrying Amount and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 220,540 | $ 228,698 |
Software for internal use | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 456,647 | 454,171 |
Accumulated Amortization | (336,846) | (325,062) |
Total | 119,801 | 129,109 |
Total other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 467,413 | 466,427 |
Accumulated Amortization | (246,873) | (237,729) |
Total | 220,540 | 228,698 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 445,631 | 444,749 |
Accumulated Amortization | (227,551) | (219,057) |
Total | 218,080 | 225,692 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 21,782 | 21,678 |
Accumulated Amortization | (19,322) | (18,672) |
Total | $ 2,460 | $ 3,006 |
Software and Other Intangible Assets - Schedule of Estimated Amortization Expense for Future Fiscal Years Based on Capitalized Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 220,540 | $ 228,698 |
Software Amortization | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2023 | 42,140 | |
2024 | 37,988 | |
2025 | 26,088 | |
2026 | 10,522 | |
2027 | 1,696 | |
Thereafter | 1,367 | |
Total | 119,801 | |
Other Intangible Assets Amortization | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2023 | 25,345 | |
2024 | 29,381 | |
2025 | 20,962 | |
2026 | 20,962 | |
2027 | 20,721 | |
Thereafter | 103,169 | |
Total | $ 220,540 |
Stock-Based Compensation Plans - Summary of Nonvested TSRs (Details) - Total Shareholder Return Awards (TSRs) |
3 Months Ended |
---|---|
Mar. 31, 2023
$ / shares
shares
| |
Number of Shares | |
Nonvested, beginning balance (in shares) | shares | 1,011,881 |
Forfeited (in shares) | shares | (38,728) |
Change in payout rate (in shares) | shares | (427,685) |
Nonvested, ending balance (in shares) | shares | 545,468 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 39.21 |
Forfeited (in dollars per share) | $ / shares | 43.99 |
Change in payout rate (in dollars per share) | $ / shares | 30.01 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 46.09 |
Stock-Based Compensation Plans - Summary of Grant Date Fair Value Weighted Average Assumptions - TSRs (Details) - Total Shareholder Return Awards (TSRs) - Monte Carlo Simulation Valuation Model |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life (years) | 3 years 1 month 6 days |
Risk-free interest rate | 1.50% |
Expected volatility | 40.00% |
Expected dividend yield | 0.00% |
Stock-Based Compensation Plans - Summary of Nonvested RSUs (Details) - Restricted Share Units (RSUs) |
3 Months Ended |
---|---|
Mar. 31, 2023
$ / shares
shares
| |
Number of Shares | |
Nonvested, beginning balance (in shares) | shares | 1,184,024 |
Vested (in shares) | shares | (333,812) |
Forfeited (in shares) | shares | (103,379) |
Nonvested, ending balance (in shares) | shares | 746,833 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 30.73 |
Vested (in dollars per share) | $ / shares | 31.10 |
Forfeited (in dollars per share) | $ / shares | 31.75 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 30.43 |
Common Stock and Treasury Stock - Additional Information (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Feb. 24, 2023 |
|
Equity [Abstract] | |||
Amount approved for repurchase | $ 200,000,000 | ||
Shares repurchased (in shares) | 0 | 1,131,248 | |
Repurchase program, shares repurchased to date (in shares) | 57,981,733 | ||
Repurchase program, amount paid for shares repurchased to date | $ 926,200,000 | ||
Maximum remaining amount authorized for purchase | $ 200,000,000 |
Earnings (Loss) Per Share - Reconciliation of Weighted Average Share Amounts Used to Compute Basic and Diluted Earnings (Loss) Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Weighted average shares outstanding: | ||
Basic weighted average shares outstanding (in shares) | 108,156 | 115,287 |
Add: Dilutive effect of stock options and RSUs (in shares) | 0 | 811 |
Diluted weighted average shares outstanding (in shares) | 108,156 | 116,098 |
Earnings (Loss) Per Share - Additional Information (Details) - shares |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from earnings (loss) per share, options to purchase shares and RSUs (in shares) | 2,500,000 | 1,800,000 | |
Common stock outstanding (in shares) | 108,322,311 | 108,068,828 |
Other, Net - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Other Income and Expenses [Abstract] | ||
Other net income (expense) | $ (3,395) | $ 2,250 |
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Segment Reporting Information [Line Items] | ||
Revenues | $ 289,676 | $ 323,080 |
Depreciation and amortization | (31,539) | (31,489) |
Stock-based compensation expense | (5,301) | (7,958) |
Corporate and unallocated expenses | (48,378) | (38,671) |
Interest, net | (15,387) | (7,735) |
Other, net | (3,395) | 2,250 |
Income (loss) before income taxes | (43,134) | 22,181 |
Operating Segments | Banks | ||
Segment Reporting Information [Line Items] | ||
Revenues | 88,040 | 132,198 |
Segment Adjusted EBITDA | 24,681 | 64,714 |
Operating Segments | Merchants | ||
Segment Reporting Information [Line Items] | ||
Revenues | 34,781 | 41,002 |
Segment Adjusted EBITDA | 6,544 | 14,713 |
Operating Segments | Billers | ||
Segment Reporting Information [Line Items] | ||
Revenues | 166,855 | 149,880 |
Segment Adjusted EBITDA | $ 29,641 | $ 26,357 |
Income Taxes - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | |||
Effective tax rate, percentage | 25.00% | 30.00% | |
Foreign entities profit (loss) | $ (7.2) | $ 30.9 | |
Unrecognized tax benefit for uncertain tax positions | 26.3 | $ 26.4 | |
Liabilities for interest and penalties, excluded from unrecognized tax benefits for uncertain tax positions | 0.6 | $ 0.6 | |
Decrease in unrecognized tax benefits due to the settlement of various audits and expiration of statutes of limitations | $ 4.6 |
Commitments and Contingencies (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
lawsuit
| |
Commitments and Contingencies Disclosure [Abstract] | |
Number of class action lawsuits filed | lawsuit | 7 |
Litigation settlement amount | $ 5.0 |
Litigation payments | $ 1.5 |
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