ACIW 10-K & 10-Q changes, risk factors and insider trading
Aci Worldwide, Inc. · Nasdaq · Services-Prepackaged Software · CIK 935036 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We rely on third-party cloud infrastructure and related services to deliver and operate our platform and deliver our solutions, and any disruption, limitation, or change in these cloud services could adversely affect our business, results of operations and financial condition.”
New heading “Our reliance on third parties could adversely affect our operations, compliance, security and reputation.”
New heading “If customers do not adopt our new payment solution, ACI Connetic, as anticipated, our business, results of operations and financial condition could be adversely affected.”
Removed heading “To the extent that we convert some or all of our on-premise licenses from a fixed-term to a subscription model, our future financial results will be affected by the frequency at which our customers adopt our subscription model, which carries with it certain risks.”
Largest changes
“We rely on third parties to operate our business, including with respect to software development and integration, intermediaries and agents that support international sales, external information technology and cloud service providers, and outsourced customer support providers. These relationships introduce performance, financial, compliance, information security, continuity, and concentration risks that are often outside our control. Our oversight, audit rights, and contractual remedies may be limited, and service level commitments or indemnities may not fully compensate for losses. …”see in full comparison
“Our platform and solutions depend on third-party cloud service providers for computing, storage, networking, and data management infrastructure. We currently use Microsoft Azure and Amazon Web Services and may also utilize other cloud providers for hosting, content delivery, analytics, and AI services. These cloud environments are critical to operating our platform and delivering our solutions. …”see in full comparison
As part of our business, we electronically receive, process, store, and transmit information, including personal information and sensitive business information of our customers. Cybersecurity incidents vary in their form and can include the deployment of harmful malware or ransomware, denial-of-services attacks, and other attacks, which may affect business continuity and threaten the availability, confidentiality and integrity of our systems and information. Cybersecurity incidents can also include employee or personnel failures, fraud, phishing or other social engineeringsee in full comparisonattemptsattempts, AI deep fakes, zero-day sophistication, supply chain threats, AI created malware or ransomware, or other methods to cause confidential information, payments, account access or access credentials, or other data to be transmitted to an unintended recipient. Cybersecurity threat actors also may attempt to exploit vulnerabilities in both ACI and cloud provider infrastructure along with vulnerabilities in software including software commonly used by companies in cloud-based services and bundled software. Like many other companies, we detect attempts by threat actors to gain access to our systems and networks on a frequent basis, and the frequency of such attempts could increase in the future. Unauthorized access, use, or disruptions to our data, computer systems or databases or other cybersecurity incidents or similar attacks could result in the theft or publication of confidentialinformationinformation, including intellectual property and consumer information, or the deletion or modification of records or could otherwise cause interruptions in our operations. These concerns about security are increased when we transmit information over the Internet. Security breaches and cybersecurity incidents in connection with the delivery of our products and services, including products and services utilizing the Internet, or well-publicized security breaches, and the trend toward broad consumer and general public notification of such incidents, could significantly harm our business, financial condition, cash flows and/or results of operations. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology protecting our networks and confidential information. Computer viruses have also been distributed and have rapidly spread over the Internet. Computer viruses could infiltrate our systems, disrupting our delivery of services and making our applications unavailable. Any inability to prevent security breaches or computer viruses could also cause existing customers to lose confidence in our systems and terminate their agreements with us, and could inhibit our ability to attract new customers. A cybersecurity incident or failure or disruption relating to our information or systems or that of our third-party business partners, or any failure by us or our third-party business partners to effectively address, enforce and maintain our information technology infrastructure, systems, or security measures may result in substantial harm to our business strategy, results of operations and financial condition, including major disruptions to business operations, loss of intellectual property, release of confidential information, alteration or corruption of data or systems, costs related to remediation or the payment of ransom, and litigation including individual claims or consumer class actions, commercial litigation, administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs and possible prolonged negative publicity. The shift to a remote/hybrid work model has expanded our attack surface, increasing the complexity of securing our information systems and data.
“Adverse or uncertain macroeconomic conditions, including inflation, interest rate volatility, recessionary pressures, reduced consumer spending, banking stress, and foreign currency fluctuations, may lead customers to delay or reduce spending, extend sales and implementation cycles, pressure pricing and renewals, impair collections, increase our operating costs, and limit access to capital. Our global operations also expose us to differing local conditions and exchange‑rate movements that can affect reported results.”see in full comparison
“Geopolitical instability and related government actions (such as sanctions and export controls), can disrupt financial markets and payment networks, depress transaction volumes, restrict cross‑border activity, and increase operational risks. We may be required to suspend or modify services, incur additional compliance and resiliency costs, or experience outages or vendor disruptions. Any of these developments could materially adversely affect our business, results of operations and financial condition.”see in full comparison
see in full comparisonThe crises in eastern EuropeCurrent andthepotentialMiddle Eastconflicts continue tobe achallengetoglobal companies, including us. We currently have one employee in Russia, a dormant customer in Russia, and customers located in the Middle East. The U.S. and other global governments have placed restrictions on how companies may transact with, and provide services or solutionsto,topartiescertainincountries,theseincludingregions, particularly Russia, Belarus and restricted areas in Ukraine. No assurances can be given that additional developments in the impacted regions, and responses thereto from the U.S. and other global governments, would not have a material adverse effect on our business, results of operations and financial condition.Russia.
Full comparison: every changed paragraph (30)
As part of our business, we electronically receive, process, store, and transmit information, including personal information and sensitive business information of our customers. Cybersecurity incidents vary in their form and can include the deployment of harmful malware or ransomware, denial-of-services attacks, and other attacks, which may affect business continuity and threaten the availability, confidentiality and integrity of our systems and information. Cybersecurity incidents can also include employee or personnel failures, fraud, phishing or other social engineering attemptsattempts, AI deep fakes, zero-day sophistication, supply chain threats, AI created malware or ransomware, or other methods to cause confidential information, payments, account access or access credentials, or other data to be transmitted to an unintended recipient. Cybersecurity threat actors also may attempt to exploit vulnerabilities in both ACI and cloud provider infrastructure along with vulnerabilities in software including software commonly used by companies in cloud-based services and bundled software. Like many other companies, we detect attempts by threat actors to gain access to our systems and networks on a frequent basis, and the frequency of such attempts could increase in the future. Unauthorized access, use, or disruptions to our data, computer systems or databases or other cybersecurity incidents or similar attacks could result in the theft or publication of confidential informationinformation, including intellectual property and consumer information, or the deletion or modification of records or could otherwise cause interruptions in our operations. These concerns about security are increased when we transmit information over the Internet. Security breaches and cybersecurity incidents in connection with the delivery of our products and services, including products and services utilizing the Internet, or well-publicized security breaches, and the trend toward broad consumer and general public notification of such incidents, could significantly harm our business, financial condition, cash flows and/or results of operations. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology protecting our networks and confidential information. Computer viruses have also been distributed and have rapidly spread over the Internet. Computer viruses could infiltrate our systems, disrupting our delivery of services and making our applications unavailable. Any inability to prevent security breaches or computer viruses could also cause existing customers to lose confidence in our systems and terminate their agreements with us, and could inhibit our ability to attract new customers. A cybersecurity incident or failure or disruption relating to our information or systems or that of our third-party business partners, or any failure by us or our third-party business partners to effectively address, enforce and maintain our information technology infrastructure, systems, or security measures may result in substantial harm to our business strategy, results of operations and financial condition, including major disruptions to business operations, loss of intellectual property, release of confidential information, alteration or corruption of data or systems, costs related to remediation or the payment of ransom, and litigation including individual claims or consumer class actions, commercial litigation, administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs and possible prolonged negative publicity. The shift to a remote/hybrid work model has expanded our attack surface, increasing the complexity of securing our information systems and data.
We rely on third-party cloud infrastructure and related services to deliver and operate our platform and deliver our solutions, and any disruption, limitation, or change in these cloud services could adversely affect our business, results of operations and financial condition.
Our platform and solutions depend on third-party cloud service providers for computing, storage, networking, and data management infrastructure. We currently use Microsoft Azure and Amazon Web Services and may also utilize other cloud providers for hosting, content delivery, analytics, and AI services. These cloud environments are critical to operating our platform and delivering our solutions. If any of these third-party providers experience interruptions, capacity constraints, cybersecurity incidents, or performance degradation, or if we or our clients encounter technical issues in connecting to their platforms, our platform and solutions could become slow, unreliable, or unavailable. Even temporary outages could harm our reputation, trigger service-level penalties under client contracts, and cause clients to delay renewals or choose our competitors. Because many of the services we use are proprietary to our cloud providers, we may have limited ability to quickly migrate workloads to alternative vendors without incurring substantial costs or service disruption. Our dependence on a small number of cloud vendors also exposes us to risks of pricing increases, changes in service terms, data egress or storage costs, and regional availability limitations. Additionally, cloud service failures can originate not only from the primary vendor but from underlying networks, software updates, or third-party subprocessors integrated into those environments. If our providers fail to maintain adequate security, availability, or compliance certifications, or if regulatory changes restrict cross-border data transfers or cloud usage for certain types of data, we may need to re-architect or relocate infrastructure, resulting in additional expense and operational complexity. Any material disruption, data loss, increase in cost, or limitation in the performance, features, or availability of third-party cloud services could adversely affect our business, results of operations, and reputation.
Our reliance on third parties could adversely affect our operations, compliance, security and reputation.
We rely on third parties to operate our business, including with respect to software development and integration, intermediaries and agents that support international sales, external information technology and cloud service providers, and outsourced customer support providers. These relationships introduce performance, financial, compliance, information security, continuity, and concentration risks that are often outside our control. Our oversight, audit rights, and contractual remedies may be limited, and service level commitments or indemnities may not fully compensate for losses. Failures by our third party partners to perform as expected, maintain adequate internal controls, protect data, meet quality or timeliness standards, or comply with applicable laws and regulations could result in interruptions to critical operations, delays in product delivery, security and privacy incidents, investigations, fines or penalties, adverse contract outcomes, and reputational harm. Replacing or migrating away from a third party can be costly, complex, and time-consuming, and viable alternatives may not be available on acceptable terms or timelines.
Some third parties may also use or integrate AI tools in their development, support, or operational processes. Such use can heighten risks of data leakage or misuse of confidential information, introduce biased or inaccurate outputs, or inadvertently incorporate third-party intellectual property. Limited visibility into a partner’s AI governance, training data, and control frameworks may increase our exposure to compliance, IP, privacy, and reputational risks.
If any key third party were to fail to perform, cease operations, suffer a material disruption, or otherwise not provide services on acceptable terms, we could experience business interruptions, degraded platform or solution performance, increased costs to replace or duplicate services, customer dissatisfaction and churn, and litigation, any of which could materially and adversely affect our business, results of operations and financial condition.
From time to time, we may divest of all or a portion of certain businesses. Divestitures involve risk, including, potential increased expense associated with the divestitures, and potential issues with the acquirers, customers or suppliers of the divested business, or products. Occasionally, we may wind down certain business activities and perform other organizational restructuring projects in an effort to reduce costs and streamline operations. For example, we divested our corporate online banking solutions related assets and liabilities to One Equity Partners on September 1, 2022. Divestiture activities involve risks as they may divert management's attention from our core businesses, increase expenses on a short‑term basis and lead to potential issues with employees or customers. If we do not complete these activities in a timely manner, or do not realize anticipated cost savings, synergies and efficiencies, business disruption occurs during or following such activities, or we incur unanticipated charges, this may negatively impact our business, financial condition, operating results, and cash flows.
During the global COVID-19 pandemic, a significant portion of our workforce worked mostly in a remote environment. While our employees have begun to transition back to the office, this remote environment has continued after the pandemic for some of our workforce in part or in full, and could impact the quality of our corporate culture. Failure to attract, hire, develop, motivate and retain highly qualified and diverse employee talent, or to maintain a corporate culture that fosters innovation, creativity, and teamwork could harm our overall business and results of operations.
To the extent that we convert some or all of our on-premise licenses from a fixed-term to a subscription model, our future financial results will be affected by the frequency at which our customers adopt our subscription model, which carries with it certain risks.
Our on-premise licenses currently have a five-year fixed term model. In the future, we may transition some or all of these licenses to a subscription model. A transition to a subscription model would reflect a significant shift from a fixed-term license. In addition, a subscription model presents a number of risks to us including the following:
•arrangements entered into on a subscription basis generally delay the timing of revenue recognition and can require the incurrence of up-front costs, which may be significant and could make it difficult for investors to understand our results of operations as they compare to prior periods;
•subscription models make it difficult to rapidly increase revenues through additional bookings in any period, as revenues are recognized ratably over the subscription period;
•customers in a subscription arrangement may elect not to renew their contract upon expiration or they may attempt to renegotiate pricing or other contractual terms at the point of (or prior to) renewal on terms that are less favorable to us; and
•there is no assurance that our customers will broadly accept a subscription model for our on-premise licenses.
Recent events in eastern EuropeMacroeconomic and thegeopolitical Middleconditions Eastcould presentadversely challenges and risks to us, and no assurances can be given that current or future developments would not have a material adverse effect onaffect our business, results of operations and financial condition.
Adverse or uncertain macroeconomic conditions, including inflation, interest rate volatility, recessionary pressures, reduced consumer spending, banking stress, and foreign currency fluctuations, may lead customers to delay or reduce spending, extend sales and implementation cycles, pressure pricing and renewals, impair collections, increase our operating costs, and limit access to capital. Our global operations also expose us to differing local conditions and exchange‑rate movements that can affect reported results.
The crises in eastern EuropeCurrent and thepotential Middle Eastconflicts continue to be a challenge to global companies, including us. We currently have one employee in Russia, a dormant customer in Russia, and customers located in the Middle East. The U.S. and other global governments have placed restrictions on how companies may transact with, and provide services or solutions to,to partiescertain incountries, theseincluding regions, particularly Russia, Belarus and restricted areas in Ukraine. No assurances can be given that additional developments in the impacted regions, and responses thereto from the U.S. and other global governments, would not have a material adverse effect on our business, results of operations and financial condition.Russia.
Geopolitical instability and related government actions (such as sanctions and export controls), can disrupt financial markets and payment networks, depress transaction volumes, restrict cross‑border activity, and increase operational risks. We may be required to suspend or modify services, incur additional compliance and resiliency costs, or experience outages or vendor disruptions. Any of these developments could materially adversely affect our business, results of operations and financial condition.
If customers do not adopt our new payment solution, ACI Connetic, as anticipated, our business, results of operations and financial condition could be adversely affected.
We have invested significant resources to design, develop, launch and commercialize ACI Connetic, which is our comprehensive cloud-native payments hub solution. Customer adoption of ACI Connetic depends on our ability to provide compelling functionality and predictable implementation and migration paths from our existing products and solutions. Introducing a new platform presents numerous operational, technical, financial and commercial risks. Unanticipated defects, outages, latency, or other performance shortfalls could harm our reputation for reliability, trigger service credits or other remedies under customer agreements, increase our support and remediation costs, delay sales cycles, and reduce renewals or expansions. Customers may delay or decline adoption if they perceive operational risk, insufficient incremental value, heightened or unnecessary switching costs, or a disruption to their existing user experience. Even where customers elect to adopt ACI Connetic, implementation at a customer may prove to be more difficult, costly or time consuming than originally anticipated. In addition, our competitors may offer their own solutions with features that our customers prefer. Larger or better-capitalized competitors may replicate or outpace our innovations in ACI Connetic, bundle offerings, leverage broader ecosystems, or use pricing and contract terms that make it more difficult for us to retain our current customers or win new business. If a material number of our customers choose not to adopt ACI Connetic or if we are unable to attract sufficient new customers to fuel our growth, our revenue could be adversely affected.
The introduction of ACI Connetic also creates risks of cannibalization and pricing pressure if our current customers migrate from higher‑priced legacy arrangements to ACI Connetic with different pricing or consumption models. Any shift toward usage‑based or cloud‑delivered services could introduce revenue variability, require new go‑to‑market motions, or necessitate changes to partner programs and channel economics. Additionally, to the extent ACI Connetic incorporates third‑party technologies, cloud infrastructure, data residency options, artificial intelligence or machine learning features, or new compliance tooling, we may be exposed to supplier performance, intellectual property, regulatory, model governance, explainability, and data privacy risks, as well as evolving security standards and threat vectors. Meeting financial services regulatory expectations across multiple jurisdictions is complex and may require incremental investment, controls, certifications, and audits, and any failure or delay could impede adoption or result in penalties or contractual remedies.
If we fail to execute on our ACI Connetic roadmap or if we do not gain a threshold level of market acceptance, we may experience slower than expected growth, lower retention rates, reduced revenue and margins and reputational harm. The timing and magnitude of these effects are subject to uncertainty given the rapid pace of technological change and competition in the payments industry. Even if market adoption of ACI Connetic occurs, it may take longer or cost more than we anticipate and may not generate the revenues we expect, which could materially adversely affect our business, results of operations and financial condition.
In addition, our customers must ensure that our services comply with the government regulations, including the EU GDPR, DORA, and industry standards that apply to their businesses. Federal, state, foreign or industry authorities could adopt laws, rules, or regulations affecting our customers’ businesses that could lead to increased operating costs that may lead to reduced market acceptance. In addition, action by regulatory authorities relating to credit availability, data usage, privacy, or other related regulatory developments could have an adverse effect on our customers and, therefore, could have a material adverse effect on our business, financial condition, and results of operations.
As a provider of services to financial institutions, we may be bound by the same limitations on disclosure of the information we receive from our customers as apply to the financial institutions themselves. The processing of personal data and other types of information subjects us to a number of domestic and international laws that govern and regulate the processing of personal information and other types of protected data. These laws regulate and address a range of issues including data privacy (e.g., restrictions or technological or process requirements regarding the processing of data), cybersecurity (e.g., requirements for the protection of personal information against compromise of the confidentiality, integrity, or availability of personal information), breach notification, and data governance. These laws can vary substantially from jurisdiction to jurisdiction, and are rapidly evolving. We are subject to laws and regulations relating to the collection, use, retention, privacy, protection, security, and transfer of information, including personal information of our employees and customers. These laws and regulations may change or be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible they will be interpreted and applied in ways that will materially and adversely affect our business. These laws and other developments relating to cross-border data transfer could result in increased costs of compliance and limitations on our customers and us. If we fail to comply with applicable laws and regulations, including the EU GDPR, DORA, CCPA, and other laws, we could be exposed to regulatory investigations and actions, lawsuits for breach of contract or to governmental or consumer claims, our customer relationships and reputation could be harmed, and we could be inhibited in our ability to obtain new customers. Compliance with these and new laws could involve substantial expenses and divert resources from other initiatives and projects. More restrictive privacy, data protection and cybersecurity laws adopted in the future could have an adverse impact on our business.
The U.S. Congress, the Organization for Economic Co-operation and Development (the “OECD”) and other government agencies in jurisdictions in which we do business remain focused on the taxation of multinational corporations. Under the OECD Inclusive Framework, over 140 countries have agreed to implement a two-pillar solution to address the challenges posed by the digitalization of the economy. The Pillar Two Framework (“Pillar Two”) introduces a 15% global minimum effective tax rate for certain multinational groups. AlthoughBased on legislation enacted to date and currently available guidance, we have not recorded a material tax liability related to Pillar Two. However, these global minimum tax rules are new and technically complex, and governments continue to issue updates on how they should be interpreted and applied. Differences in how jurisdictions implement the U.S.rules, hasas notwell yetas adoptedfuture Pillarguidance Twofrom intothe law,OECD severalor countriestaxing authorities, could change our tax obligations in whichfuture we operate have enacted tax legislation based on the Pillar Two framework.periods. We continue to evaluate the impact of these legislative changes as additional guidance becomes available. While Pillar Two did not significantly impact us in 2024,2025, uncertainty remains regarding the implementation and impact of these initiatives, which could adversely affect our business or financial results in future years. Furthermore, our implementation of new practices and processes designed to comply with changing tax laws and regulations could require us to make substantial changes to our business practices, allocate additional resources, and increase our costs, which could negatively affect our business, results of operations, and financial condition.
Our credit facility and the indenture governing our 5.750% Senior Notes due 2026 (“2026 Notes”) containcontains customary affirmative and negative covenants for debt of these types that limit our ability to engage in specified types of transactions. If an event of default occurs, the lenders, trustee,lenders or holders of the 2026 Notestrustees will be entitled to take various actions, including, but not limited to, demanding payment for all amounts outstanding. If adverse global economic conditions persist or worsen, we could experience decreased revenues from our operations attributable to reduced demand for our products and services and as a result, we could fail to satisfy the financial and other restrictive covenants to which we are subject under our existing debt, resulting in an event of default. If we are unable to cure the default or obtain a waiver, we will not be able to access our credit facility and there can be no assurance that we would be able to obtain alternative financing. See Note 4,3, Debt, to our Notes to Consolidated Financial Statements in Part IV, Item 15 of this Form 10-K for additional information.
Our level of debt could have adverse consequences for our business, financial condition, operating results and operational flexibility, including the following: (i) the debt level may cause us to have difficulty borrowing money in the future for working capital, capital expenditures, acquisitions or other purposes; (ii) our debt level may limit operational flexibility and our ability to pursue business opportunities and implement certain business strategies; (iii) we use a large portion of our operating cash flow to pay principal and interest on our credit facility and the 2026 Notes,facility, which reduces the amount of money available to finance operations, acquisitions and other business activities; (iv) we have a higher level of debt than some of our competitors or potential competitors, which may cause a competitive disadvantage and may reduce flexibility in responding to changing business and economic conditions, including increased competition and vulnerability to general adverse economic and industry conditions; (v) some of our debt has a variable rate of interest, which exposes us to the risk of increased interest rates; (vi) there are significant maturities on our debt that we may not be able to fulfill or that may be refinanced at higher rates; and (vii) if we fail to satisfy our obligations under our outstanding debt or fail to comply with the financial or other restrictive covenants required under our credit facility and the 2026 Notes,facility, an event of default could result that could cause all of our debt to become due and payable and could permit the lenders under our credit facility to foreclose on the assets securing such debt.
Although the agreements governing our credit facility and our 2026 Notes include restrictions on our ability to incur additional debt, those agreements do not prohibit us from incurring additional debt or pursuing other financing arrangements. As a result, the amount of additional debt and other obligations that we could incur could be substantial. Accordingly, to the extent permitted under our credit agreement or indenture,agreement, we could incur significant additional debt, liabilities or similar obligations in the future. In addition, if we form or acquire any subsidiaries in the future, those subsidiaries also could incur debt or similar liabilities. If new debt or similar liabilities are added to our current debt levels, the related risks that we now face could increase.
A significant percentage of our expenses, particularly personnel and facilities costs, are relatively fixed and based in part on anticipated revenue levelslevels, which can be difficult to predict. A decline in revenues without a corresponding and timely slowdown in expense growth could adversely affect our business. Significant revenue shortfalls in any quarter may cause significant declines in operating results since we may be unable to reduce spending in a timely manner.
Management's Discussion & Analysis (MD&A)
Largest changes
Paymentssee in full comparisonintelligence, fraud,Intelligence andcompliance.Artificial Intelligence. The accelerated adoption of real-timepayments, fraudsters leveraging artificial intelligence,payments andthenewrampingrisksupassociatedofwithmandatesAIincreaseagents driving new exploits increases the urgency for industry-wide collaborationtoagainstmitigate fraud with precision and achieve operational excellence.fraud. As the threat ofsophisticated fraudscams becomes a greater concern for remitting and receiving institutions, consumers are challenged with increased friction to preventillegitimateaccountaccesstake-over and criminals successfully persuading consumers to push transactions themselves, inadvertently, to mule accounts they have full control of, created with fake or synthetic identity, or simply "borrowed" with or without consent ofgenuinetheaccountslegitoraccountfundsholders. While AI will be used toprotectacceleratethevulnerabilities,consumerittrustcan also be used to automate financial protection, including but not limited to recognition of synthetic identities andconfidence,automatedwhile achieving their strategic objectives. Regulators are beginning to litigate between consumers and financial institutions on the losses, and between remitting and receiving banks on the accountability.remediation. Banks and intermediaries, merchants, and billers are pursuing solutions to mitigate their risks while improving their customer experience, protecting their margins, and securing their revenue streams, especially with their new products and offerings. We continue toevolveseeouropportunities for AI and other advancedmachine learning and network intelligenceanalytics capabilities to stopcriminalsfraudulent behavior and enablefrictionless,frictionlesslegitimatecustomerbusiness. Meanwhile, with payments intelligence, organizations can integrate intelligent services to enhance consumer relationships while achieving precise, real-time fraud and risk mitigation capabilities.experiences.
“Adoption of real-time payments. Expectations from both consumers and businesses are continuing to drive the payments world to more real-time delivery. This is bolstered by the new data-rich ISO 20022 messaging format prevalent in account-to-account payments, which is delivering greater value to banks and their customers and has now been rolled out across the world and continues to see adoption with local schemes, such as FedWire, planned for 2025. We are seeing global players with existing schemes working to expand capacity in anticipation of volume growth and new payment types. …”see in full comparison
“Open banking. Open banking is gaining momentum globally, and while it has been accelerated in Europe by regulations like PSD3, the United States is also seeing significant shifts driven by market demand and technology innovation rather than regulatory mandates. In the United States, the growing adoption of Request to Pay (RTP) offers an alternative to traditional bill payment methods, allowing payers to respond directly to payment requests with flexibility on timing, method, and amount. …”see in full comparison
“Increasing digital payment transaction volumes. The adoption of digital payments continues to accelerate, driven by the increased adoption of instant payments and other financial inclusion efforts of countries throughout the world, with countries such as India, Brazil, Indonesia, Malaysia, and most recently Colombia, growing dramatically. Contactless payments adoption for in-person payments was thrust forward in response to the COVID-19 pandemic, and that usage has not abated. …”see in full comparison
Adoption of cloud technology. ACI has recognized thesee in full comparisonindustry'sindustry’s technical inflection pointinasthefinancial institutions transition from traditionalon-premiseson‑premises infrastructure totheprivate and publiccloud,cloud environments, and we are actively supporting ourcustomers'customers’ cloud strategies. Cloud technologyinnovations allowenables the financial services ecosystem toremovereduce technicalrisk from their operations,risk, accelerateinnovationinnovation,andimprove time ‑to ‑market for new revenue-generatingsolutions for their customers,solutions, andaccelerateenhanceinnovationscalability, resiliency, andensure scalability and resiliency while improvinglong‑term operatingeconomics over time.economics. Asbanks andbanks, intermediaries, merchants, and billersseek to transitionmodernize their systems tomaketakeuseadvantage ofcloudthesetechnology,capabilities, our ongoing investments andpartnerships,partnershipsas demonstrated by our product enablement and initial optimization onto Microsoft Azure, enableallow us toleverage thosedeliver cloudtechnologybenefits todayand for the futurewhilepreservingmaintainingACI'sACI’sfundamentalcorebasestrengthsofin performance, resiliency, and scalability.Cloud-nativeInsolutionsaddition,runningcloud‑native,in a multi-tenantmulti‑tenant SaaSenvironment also allow ACI tosolutions expand ourmarket coveragereach to smallerinstitutions,institutionsofferingbyscalableprovidingsolutions which arescalable, easy‑to‑integrate offerings at accessible price points. Building on these foundations, ACI Connetic—our fully cloud‑native banking platform launched in 2025—advances this strategy by conforming fully tointegrateCloud Native Computing Foundation principles and by being deployable across public cloud environments such as Microsoft Azure and Amazon Web Services, as well as customers’ private clouds. Working closely withbutkey hardware and software partners including IBM and Red Hat, we ensure ACI Connetic can operate atpricescalepointsinthatpublic,fitprivate,theirandbudgets.multi‑cloud deployments, supporting the needs of the largest global banks and processors, particularly in highly regulated markets where concentration risk and data sovereignty considerations drive deployment strategy.
“During 2025, we repaid $400.0 million for the redemption of the 2026 Notes and $20.9 million of other debt payments. In addition, we used $202.6 million to repurchase common stock and $28.2 million for the repurchase of stock-based compensation awards for tax withholdings. We received net proceeds of $130.0 million on the Revolving Credit Facility and $160.0 million on the Incremental Term Loan, used for the redemption of the 2026 Notes. …”see in full comparison
Full comparison: every changed paragraph (72)
ACI Worldwide, an innovator in global payments technology,Worldwide delivers transformative software solutions that power intelligent payments orchestration in real time so banks, merchants, and billers can drive growth, while continuously modernizing their payment infrastructures, simply and securely. With nearly 50 years of trusted payments expertise, we combine our global footprint with a local presence to offer enhanced payment experiences to stay ahead of constantly changing payment challenges and opportunities.
Our products are sold and supported directly and through distribution networks covering three geographic regions – the Americas, EMEA, and Asia Pacific. Each region has its own globally coordinated sales force, supplemented with local independent resellerresellers and/or distributor networks. Our products and solutions are marketed under the ACI Worldwide brand and used globally by banks of all sizes, central banks, intermediaries, merchants, and billers, such as third-party digitalelectronic payment processors, payment associations, switch interchanges, and a wide range of transaction-generating endpoints, including ATMs, merchant POS terminals, bank branches, mobile phones, tablets, corporations, and internet commerce sites.
Increasing digital payment transaction volumes. The adoption of digital payments continues to accelerate, driven by the increased adoption of instant payments and other financial inclusion efforts of countries throughout the world, with countries such as India, Brazil, Indonesia, Malaysia, and most recently Colombia, growing dramatically. Contactless payments adoption for in-person payments was thrust forward in response to the COVID-19 pandemic, and that usage has not abated. ACI leverages growth in transaction volumes through the licensing of payment technologies to banks and intermediaries seeking to take advantage of that growth, supporting 44 global payment schemes and providing the central infrastructure to 11 central banks directly operating the scheme using ACI software. With the launch of ACI Connetic, our comprehensive cloud-native payments hub solution available as a SaaS solution, participating in this growth is now accessible to banks of all sizes, significantly increasing ACI’s addressable market for software solutions.
ISO 20022 and enhanced payment standards. In 2024 and 2025, banks and processors across the globe achieved major milestones with the certification and go-live of ISO 20022 compliance across the major wires networks, including Fedwire, Swift, CHAPS, and CHIPS. ACI solutions were instrumental in this new initiative, regularly processing more than two-thirds of Fedwire payments traffic and approximately 15% of Swift payments traffic globally. These go-live events were highly consequential in financial services globally, and with the enhanced data standards described, the financial system stands to be easier to secure and provide much richer analytics.
Increasing digital payment transaction volumes. The adoption of digital payments continues to accelerate, propelled by the digitization of cash, financial inclusion efforts of countries throughout the world, rapid growth of eCommerce, and the adoption of real-time payments enabling more people, governments, and businesses to embrace digital payments. We leverage the growth in transaction volumes through the licensing of new systems to customers whose older systems cannot handle increased volume, through the sale of capacity upgrades to existing customers, and through the scalability of our platform-based solutions.
Adoption of real-time payments. Expectations from both consumers and businesses are continuing to drive the payments world to more real-time delivery. This is bolstered by the new data-rich ISO 20022 messaging format prevalent in account-to-account payments, which is delivering greater value to banks and their customers and has now been rolled out across the world and continues to see adoption with local schemes, such as FedWire, planned for 2025. We are seeing global players with existing schemes working to expand capacity in anticipation of volume growth and new payment types. Domestic schemes such as Unified Payments Interface ("UPI") in India and others are being made available to their citizens for cross-border transactions when abroad. Mature markets, including India, the United Kingdom, Australia, Brazil, Malaysia, Singapore, and Thailand, continue to accelerate innovation, especially in terms of overlay services, driving new transactions. The United States is driving real-time payments adoption through TCH Real-Time Payments and the FedNow Service. Asia is one of the most innovative markets for adoption of real-time payment systems. According to ACI’s Prime Time for Real-Time report, Asia Pacific is the largest regional market, with four of the global top five real-time payment markets by volume. ACI provides solutions for commercial and central banks across Asia. Latin American countries are pushing ahead with real-time payments modernization initiatives, looking to replicate Brazil’s success with PIX. ACI is also providing solutions centrally in Colombia and Peru. We are seeing success with real-time payments in the Middle East as well, as they have started to renovate their payment systems from legacy payment types to the modern digital and real-time world. ACI's broad software portfolio, experience, and strategic partnerships with Mastercard, Microsoft, Red Hat, and Mindgate Solutions continue to position us as a leader in real-time payments, helping to drive seamless connectivity, increased security, and end-to-end modernization for organizations throughout the world.
Adoption of cloud technology. ACI has recognized the industry'sindustry’s technical inflection point inas thefinancial institutions transition from traditional on-premiseson‑premises infrastructure to the private and public cloud,cloud environments, and we are actively supporting our customers'customers’ cloud strategies. Cloud technology innovations allowenables the financial services ecosystem to removereduce technical risk from their operations,risk, accelerate innovationinnovation, andimprove time ‑to ‑market for new revenue-generating solutions for their customers,solutions, and accelerateenhance innovationscalability, resiliency, and ensure scalability and resiliency while improvinglong‑term operating economics over time.economics. As banks andbanks, intermediaries, merchants, and billers seek to transitionmodernize their systems to maketake useadvantage of cloudthese technology,capabilities, our ongoing investments and partnerships,partnerships as demonstrated by our product enablement and initial optimization onto Microsoft Azure, enableallow us to leverage thosedeliver cloud technology benefits today and for the future while preservingmaintaining ACI'sACI’s fundamentalcore basestrengths ofin performance, resiliency, and scalability. Cloud-nativeIn solutionsaddition, runningcloud‑native, in a multi-tenantmulti‑tenant SaaS environment also allow ACI tosolutions expand our market coveragereach to smaller institutions,institutions offeringby scalableproviding solutions which arescalable, easy‑to‑integrate offerings at accessible price points. Building on these foundations, ACI Connetic—our fully cloud‑native banking platform launched in 2025—advances this strategy by conforming fully to integrateCloud Native Computing Foundation principles and by being deployable across public cloud environments such as Microsoft Azure and Amazon Web Services, as well as customers’ private clouds. Working closely with butkey hardware and software partners including IBM and Red Hat, we ensure ACI Connetic can operate at pricescale pointsin thatpublic, fitprivate, theirand budgets.multi‑cloud deployments, supporting the needs of the largest global banks and processors, particularly in highly regulated markets where concentration risk and data sovereignty considerations drive deployment strategy.
Payments intelligence, fraud,Intelligence and compliance.Artificial Intelligence. The accelerated adoption of real-time payments, fraudsters leveraging artificial intelligence,payments and thenew rampingrisks upassociated ofwith mandatesAI increaseagents driving new exploits increases the urgency for industry-wide collaboration toagainst mitigate fraud with precision and achieve operational excellence.fraud. As the threat of sophisticated fraudscams becomes a greater concern for remitting and receiving institutions, consumers are challenged with increased friction to prevent illegitimateaccount accesstake-over and criminals successfully persuading consumers to push transactions themselves, inadvertently, to mule accounts they have full control of, created with fake or synthetic identity, or simply "borrowed" with or without consent of genuinethe accountslegit oraccount fundsholders. While AI will be used to protectaccelerate thevulnerabilities, consumerit trustcan also be used to automate financial protection, including but not limited to recognition of synthetic identities and confidence,automated while achieving their strategic objectives. Regulators are beginning to litigate between consumers and financial institutions on the losses, and between remitting and receiving banks on the accountability.remediation. Banks and intermediaries, merchants, and billers are pursuing solutions to mitigate their risks while improving their customer experience, protecting their margins, and securing their revenue streams, especially with their new products and offerings. We continue to evolvesee ouropportunities for AI and other advanced machine learning and network intelligenceanalytics capabilities to stop criminalsfraudulent behavior and enable frictionless,frictionless legitimatecustomer business. Meanwhile, with payments intelligence, organizations can integrate intelligent services to enhance consumer relationships while achieving precise, real-time fraud and risk mitigation capabilities.experiences.
The GENIUS Act and stablecoins. With the passage of the 2025 GENIUS Act in the United States, stablecoins gained international attention and prominence. As a leading software provider of solutions to move value around the world, ACI already plays a significant role in enabling stablecoin workflows as fiat currency funds are transferred to and from issuers and stablecoins are minted and burned. We recognize the importance of stablecoins to global value transfer, especially cross-border transfers, and ACI Connetic at its core design is the ideal platform for initiating, managing, and receiving those transfers. As customers are evaluating payment hubs, we expect that ACI Connetic and our strategy for stablecoin support will be well-received in the market.
Omni-commerce. Shoppers are increasingly browsing, buying, and returning items across channels, including in-store, online, and mobile. This trend has led to an increase in contactless payments, click and collect, and curbside collection. Merchants from all industries, including grocers, fuel and convenience stores, are being tasked with delivering seamless experiences that include pay-in-aisle, kiosks, mobile app payments, QR code payments, eCommerce, traditional and mobile POS, buy online pickup in-store (BOPIS), and buy online return in-store (BORIS). We believe there is significant opportunity to provide merchants with the tools to deliver a seamless, secure, personalized experience that creates loyalty and satisfaction, and drives conversion rates while protecting consumer data and preventing fraud.
Open banking. Open banking is gaining momentum globally, and while it has been accelerated in Europe by regulations like PSD3, the United States is also seeing significant shifts driven by market demand and technology innovation rather than regulatory mandates. In the United States, the growing adoption of Request to Pay (RTP) offers an alternative to traditional bill payment methods, allowing payers to respond directly to payment requests with flexibility on timing, method, and amount. This aligns with the broader movement toward real-time payments, supported by platforms like the FedNow® Service and The Clearing House’s RTP network. While the United States doesn't have a regulatory equivalent to PSD3, there's a strong push for open banking solutions that provide greater control and transparency for consumers, and RTP is a key trend within that space. By embracing both RTP and open banking trends in the United States, payment processors and financial institutions can offer more dynamic, flexible payment options, driving innovation and improving customer experience, while staying competitive in a rapidly evolving payments landscape. ACI is in a unique position to deliver service that takes advantage of our real-time payments software, our relationships with banks, merchants, and billers, and global connectivity.
Divestiture
On September 1, 2022, we sold our corporate online banking solutions related assets and liabilities to One Equity Partners ("OEP") for $100.0 million, and a net working capital adjustment. The sale included employees and customer contracts as well as technology assets and intellectual property.
For the year ended December 31, 2022, we recognized a gain of $38.5 million on the sale, which is recorded in other, net in the accompanying consolidated statements of operations. During the year ended December 31, 2023, the Company recognized a loss for the final post-closing adjustment pursuant to the definitive agreement of $0.5 million, which is recorded in other, net in the accompanying consolidated statements of operations.
The Company and OEP had also entered into a Transition Services Agreement ("TSA"), whereby the Company would continue to perform certain functions on OEP's behalf during a migration period which ended in 2024. The TSA was meant to reimburse the Company for direct costs in order to provide such functions, which are no longer generating revenue for the Company.
We have historically included assumed renewals inOur backlog estimates assume renewals based upon automatic renewal provisions in the executed contract and our historic experience with customer renewal rates.
•The impact of certain foreign currencies weakeningstrengthening against the U.S. dollar resulted in a $3.2$8.9 million decreaseincrease in total revenue during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
The Company’s SaaS arrangements allow customers to use certain software solutions (without taking possession of the software) in a multi-tenant or single-tenant cloud environment on a subscription basis. The Company’s PaaS arrangements allow customers to use certain software solutions (without taking possession of the software) in a multi-tenant cloud environment on a subscription or consumption basis. Included in SaaS and PaaS revenue are fees paid by our customers for use of our Biller solutions. Biller-related fees may be paid by our clients or directly by their customers and may be a percentage of the underlying transaction amount, a fixed fee per executed transaction or a monthly fee for each customer enrolled. SaaS and PaaS costs include payment card interchange fees, the amounts payable to banks and payment card processing fees, which are included in cost of revenue in the accompanying consolidated statements of operations. All fees from SaaS and PaaS arrangements that do not qualify for treatment as a distinct performance obligation, which includes set-up fees, implementation or customization services, and product support services, are included in SaaS and PaaS revenue.
•The increase was primarily duedriven toby new customer go-lives since December 31, 2024, and higher transaction volumes during the year ended December 31, 2024,2025, as compared to the same period in 2023, as well as new customer go-lives since December 31, 2023.2024.
•The impact of certain foreign currencies weakeningstrengthening against the U.S. dollar resulted in a $3.0$4.6 million decreaseincrease in license revenue during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•The increase in license revenue was driven by license renewal timing as well as the relative size of new license and capacity events during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
Maintenance revenue decreasedincreased $14.3$10.5 million, or 7%,6%, during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•The impact of foreign currencies weakeningstrengthening against the U.S. dollar resulted in a $0.2$0.9 million decreaseincrease in maintenance revenue during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•Adjusted for the impact of foreign currency, maintenance revenue for the year ended December 31, 2024,2025, decreasedincreased $14.1$9.6 million, or 7%,5%, as compared to the same period in 2023.2024.
•The increase was primarily driven by consumer price index uplifts on contracted maintenance.
•The decrease was primarily driven by customers reducing premium customer support and maintenance on non-strategic products during the year ended December 31, 2024, as compared to the same period in 2023.
Services revenue increaseddecreased $16.1$4.7 million, or 21%,5%, during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•The impact of foreign currencies weakeningstrengthening against the U.S. dollar resulted in a $0.4$0.8 million decreaseincrease in services revenue during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•Adjusted for the impact of foreign currency, services revenue for the year ended December 31, 2024,2025, increaseddecreased $16.5$5.5 million, or 21%,6%, as compared to the same period in 2023.2024.
•The increasedecrease was primarily driven by the timing and magnitude of project-related work during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•Total operating expenses for the year ended December 31, 2024, included $8.6 million for cost reduction strategies and $1.0 million of other significant transaction-related expenses during the period. Total operating expenses for the year ended December 31, 2023, included $21.0 million for cost reduction strategies, $2.6 million of significant transaction-related expenses, $1.8 million for CEO transition, and $2.8 million of European data center migration expenses during the period.
•The impact of foreign currencies weakening against the U.S. dollar resulted in a $1.0 million decrease in total operating expenses for the year ended December 31, 2024, as compared to the same period in 2023.
•AdjustedTotal operating expenses for the impactyear ofended December 31, 2025, included $7.7 million for cost reduction strategies,strategies and $1.2 million of other significant transaction-related expenses,expenses andduring foreignthe currency,period. totalTotal operating expenses for the year ended December 31, 2024, increasedincluded $73.6$8.6 million,million orfor 6%,cost asreduction comparedstrategies toand $1.0 million of other significant transaction-related expenses during the same period in 2023.period.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $2.4 million increase in total operating expenses for the year ended December 31, 2025, as compared to the same period in 2024.
•Adjusted for the impact of cost reduction strategies, significant transaction-related expenses, and foreign currency, total operating expenses for the year ended December 31, 2025, increased $142.0 million, or 11%, as compared to the same period in 2024.
•The impact of foreign currencies weakeningstrengthening against the U.S. dollar resulted in a $0.5$0.7 million decreaseincrease in cost of revenue during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•The increase was primarily due to higher payment card interchange and processing fees and cloud computing fees of $48.2$85.2 million and $8.0 million, respectively.million. The remaining increase was due to higher personnel and related expenses of $16.9$20.0 million, including a $2.8$4.5 million increase in stock-based compensation expense.
•The impact of foreign currencies weakeningstrengthening against the U.S. dollar resulted in a $0.2$0.5 million decreaseincrease in R&D expense during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•The increase was primarily due to higher personnel and related expenses of $7.1 million,expenses, including a $4.2$3.2 million increase in stock-based compensation expense, partially offset by lower cloud computing and professional fees of $1.0 million.expense.
Selling and marketing expense decreasedincreased $14.3$6.7 million, or 11%,6%, during the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $0.5 million increase in selling and marketing expense during the year ended December 31, 2025, as compared to the same period in 2024.
•Adjusted for the impact of foreign currency, selling and marketing expense increased $6.2 million, or 5%, during the year ended December 31, 2025, as compared to the same period in 2024.
•The decreaseincrease was primarily due to lowerhigher personnel and related expensesexpenses, andincluding advertisinga and professional fees of $14.0$3.4 million andincrease $0.3in million,stock-based respectively.compensation expense.
•General and administrative expenses for the year ended December 31, 2024, included $4.3 million for cost reduction strategies and $1.0 million of other significant transaction-related expenses during the period. General and administrative expenses for the year ended December 31, 2023, included $21.0 million for cost reduction strategies, $2.6 million of significant transaction-related expenses, $1.8 million for CEO transition, and $2.8 million of European data center migration expenses during the period.
•The impact of foreign currencies weakening against the U.S. dollar resulted in a $0.3 million decrease in general and administrative expense during the year ended December 31, 2024, as compared to the same period in 2023.
•AdjustedGeneral and administrative expenses for the impactyear ofended December 31, 2025, included $7.7 million for cost reduction strategies,strategies and $1.2 million of other significant transaction-related expenses,expenses andduring foreignthe currency,period. generalGeneral and administrative expense increased $24.4 million, or 28%,expenses for the year ended December 31, 2024, asincluded compared$4.3 tomillion for cost reduction strategies and $1.0 million of other significant transaction-related expenses during the same period in 2023.period.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $0.4 million increase in general and administrative expense during the year ended December 31, 2025, as compared to the same period in 2024.
•Adjusted for the impact of cost reduction strategies, significant transaction-related expenses, and foreign currency, general and administrative expense increased $20.3 million, or 18%, for the year ended December 31, 2025, as compared to the same period in 2024.
•The increase was primarily due to higher personnel and related expenses of $22.2$22.5 million, including a $11.1$18.0 million increase in stock-based compensation expense.expense, Thepartially remainingoffset increaseby wasa due to an increasedecrease in professional and other legal fees of $2.2 million.
•Adjusted for theThe impact of foreign currencies strengthening against the facilityU.S. closure,dollar resulted in a $0.3 million increase in depreciation and amortization decreasedexpense $15.8 million, or 13%, forduring the year ended December 31, 2024,2025, as compared to the same period in 2023.2024.
•Adjusted for the impact of the facility closure and foreign currency, depreciation and amortization decreased $10.0 million, or 9%, for the year ended December 31, 2025, as compared to the same period in 2024.
•The decrease was primarily due to a $10.0 million decrease in depreciation due to prior facilities cost reduction activities and a $5.8 million decrease in amortization for fully amortized software and intangibles acquired through acquisitions.
Interest expense for the year ended December 31, 2024,2025, decreased $6.0$14.6 million, or 8%,20%, as compared to the same period in 2023,2024, primarily due to repaymentslower oncomparative thedebt Termbalances Loan.during 2025 as well as a decrease in interest rates.
Interest income includes the portion of software license fees paid by customers under extended payment terms that is attributed to the significant financing component. Interest income for the year ended December 31, 2024,2025, increaseddecreased $1.7$1.1 million, or 12%,7%, as compared to the same period in 2023.2024.
Other, net is primarily comprised of foreign currency transaction gains and losses. During the year ended December 31, 2025, other, net also included the $25.9 million gain on the sale of the Company's equity method investment and the $1.1 million loss on extinguishment of debt. Other, net was $1.2$19.7 million of income and $8.5$1.2 million of expense for the years ended December 31, 20242025 and 2023,2024, respectively.
The effective tax rates for the years ended December 31, 20242025 and 2023,2024, were approximately 19%26% and 18%,19%, respectively. Our effective tax rates vary from our federal statutory rate due to operating in multiple foreign countries, each with its own tax laws and rates. These foreign tax laws and rates differ from those we apply to the income generated from our domestic operations. Of the foreign jurisdictions in which we operate, our December 31, 2024 and 2023 effective tax rates as of December 31, 2025 and 2024 were mostprimarily impacted by our operations in Ireland and theIndia Unitedfor Kingdom.2025, and Ireland for 2024.
BanksPayment Software Segment Adjusted EBITDA increased $70.0$48.7 million for the year ended December 31, 2024,2025, compared to the same period in 2023,2024, primarily due to a $85.8$74.3 million increase in revenue primarily related to an increase in license revenues, partially offset by a $15.8$25.6 million increase in cash operating expense.
MerchantsBiller Segment Adjusted EBITDA increased $25.2$9.5 million for the year ended December 31, 2024,2025, compared to the same period in 2023,2024, primarily due to a $15.3$91.2 million increase in revenuerevenue, andpartially offset by a $9.9$81.7 million decreaseincrease in cash operating expenses.expense primarily for payment card interchange and other processing fees.
Billers Segment Adjusted EBITDA decreased $11.2 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to a $48.2 million increase in interchange and processing fees, partially offset by a $40.6 million increase in revenue.
For discussion of 20232024 compared to 2022,2023, see Segment Results in Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2023.2024. Beginning in the first quarter of 2025, the Company reported financial performance based on its new operating segments, Payment Software, which merged the previously reported operating segments Banks and Merchants, and maintained Biller.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors disclosed in Item 1A of our Form 10-K for the fiscal year ended December 31, 2025. Additional risks and uncertainties, including risks and uncertainties not presently known to us, or that we currently deem immaterial, could also have an adverse effect on our business, financial condition and/or results of operations.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “RESULTS OF OPERATIONS”
New heading “Six Month Period Ended June 30, 2026 Compared to the Six Month Period Ended June 30, 2025”
New heading “Software as a Service (“SaaS”) and Platform as a Service (“PaaS”) Revenue”
New heading “License Revenue”
New heading “Maintenance Revenue”
New heading “Services Revenue”
New heading “Operating Expenses”
New heading “Cost of Revenue”
New heading “Research and Development”
New heading “Selling and Marketing”
New heading “General and Administrative”
New heading “Depreciation and Amortization”
New heading “Other Income and Expense”
Largest changes
“Six Month Period Ended June 30, 2026 Compared to the Six Month Period Ended June 30, 2025”see in full comparison
“Software as a Service (“SaaS”) and Platform as a Service (“PaaS”) Revenue”see in full comparison
Full comparison: every changed paragraph (125)
The following discussion should be read together with our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and with our financial statements and related notes contained in this Form 10-Q. Results for the three and six months ended MarchJune 31,30, 2026, are not necessarily indicative of results that may be attained in the future.
The following table sets forth our 60-month backlog estimate, by reportable segment, as of June 30, 2026, March 31, 2026, and December 31, 2025 (in millions). Dollar amounts reflect foreign currency exchange rates as of each period end. This is a non-GAAP financial measure being presented to provide comparability across accounting periods. We believe this measure provides useful information to investors and others in understanding and evaluating our financial performance.
Three Month Period Ended MarchJune 31,30, 2026 Compared to the Three Month Period Ended MarchJune 31,30, 2025
Total revenue for the three months ended MarchJune 31,30, 2026, increased $31.2$29.2 million, or 8%,7%, as compared to the same period in 2025.
•The impact of certain foreign currencies strengthening against the U.S. dollar resulted in a $7.7$3.5 million increase in total revenue during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of foreign currency, total revenue for the three months ended MarchJune 31,30, 2026, increased $23.5$25.7 million, or 6%, as compared to the same period in 2025.
SaaS and PaaS revenue increased $24.9$13.5 million, or 10%,5%, during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $1.5$0.3 million increase in SaaS and PaaS revenue during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of foreign currency, SaaS and PaaS revenue for the three months ended MarchJune 31,30, 2026, increased $23.4$13.2 million, or 10%,5%, as compared to the same period in 2025.
•The increase was primarily driven by new customer go-lives since MarchJune 31,30, 2025, and higher transaction volumes during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
License revenue increased $3.5$12.1 million, or 4%,21%, during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $3.7$2.1 million increase in license revenue during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of foreign currency, license revenue for the three months ended MarchJune 31,30, 2026, decreasedincreased $0.2$10.0 million, or 17%, as compared to the same period in 2025.
•The increase was driven by license renewal timing as well as the relative size of new license and capacity events during the three months ended June 30, 2026, as compared to the same period in 2025.
Maintenance revenue increased $2.3$1.1 million, or 5%,2%, during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $1.5$0.4 million increase in maintenance revenue during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of foreign currency, maintenance revenue for the three months ended MarchJune 31,30, 2026, increased $0.8$0.7 million, or 2%,1%, as compared to the same period in 2025.
Services revenue increased $0.5$2.4 million, or 2%,11%, during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $1.0$0.6 million increase in services revenue during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of foreign currency, services revenue for the three months ended MarchJune 31,30, 2026, decreasedincreased $0.5$1.8 million, or 2%,8%, as compared to the same period in 2025.
•The increase was primarily driven by the timing and magnitude of project-related work during the three months ended June 30, 2026, as compared to the same period in 2025.
Total operating expenses for the three months ended MarchJune 31,30, 2026, increased $32.2$19.4 million, or 10%,5%, as compared to the same period in 2025.
•Total operating expenses for the three months ended June 30, 2026, included $0.4 million for cost reduction strategies and $3.1 million of other significant transaction-related expenses during the period, compared to $5.1 million for cost reduction strategies and $0.4 million of other significant transaction-related expenses for the same period in 2025.
•Total operating expenses for the three months ended March 31, 2026, included $5.4 million for cost reduction strategies.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $4.3$1.1 million increase in total operating expenses during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of cost reduction strategiesstrategies, significant transaction-related expenses, and foreign currency, total operating expenses for the three months ended MarchJune 31,30, 2026, increased $22.5$20.3 million, or 7%,6%, as compared to the same period in 2025.
Cost of revenue increased $15.1$14.1 million, or 7%,6%, during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $1.6$0.5 million increase in cost of revenue during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of foreign currency, cost of revenue for the three months ended MarchJune 31,30, 2026, increased $13.5$13.6 million, or 6%, as compared to the same period in 2025.
•The increase was primarily due to higher payment card interchange fees of $15.4$14.6 million, partially offset by lowera decrease in personnel and related expenses of $1.9$1.0 million.
R&D expense increased $5.2$6.8 million, or 13%,17%, during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The increase was primarily due to higher personnel and related expenses, including a $1.3 million increase in stock-based compensation expense.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $0.7 million increase in R&D expenses during the three months ended March 31, 2026, compared to the same period in 2025.
•Adjusted for the impact of foreign currency, R&D expenses for the three months ended March 31, 2026, increased $4.5 million, or 11%, compared to the same period in 2025.
•The increase was primarily due to higher personnel and related expenses.
Selling and marketing expense decreasedincreased $2.0$1.9 million, or 6%, during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $1.2$0.4 million increase in selling and marketing expenseexpenses during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of foreign currency, selling and marketing expense decreased $3.2 million, or 10%,expenses for the three months ended MarchJune 31,30, 2026, increased $1.5 million, or 5%, as compared to the same period in 2025.
•The decreaseincrease was primarily due to lowerhigher personnel and related expenses.expenses and advertising and professional fees of $0.9 million and $0.6 million, respectively.
General and administrative expense increaseddecreased $12.6$3.2 million, or 46%,8%, during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•General and administrative expenses for the three months ended MarchJune 31,30, 2026, included $5.4$0.4 million for cost reduction strategies.strategies and $3.1 million of other significant transaction-related expenses, compared to $5.1 million for cost reduction strategies and $0.4 million of other significant transaction-related expenses in the same period in 2025.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $0.6$0.3 million increase in general and administrative expense during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of cost reduction strategiesstrategies, significant transaction-related expenses, and foreign currency, general and administrative expense increased $6.6 million, or 24%, for the three months ended MarchJune 31,30, 2026, decreased $1.5 million, or 5%, as compared to the same period in 2025.
•The increasedecrease was primarily due to highera decrease in professional and other legal fees of $5.4$2.5 million, andpartially offset by an increase in personnel and related expenses of $1.2$1.0 million.million, including a $0.9 million increase in stock-based compensation expense.
Depreciation and amortization increaseddecreased $1.3$0.2 million, or 5%,1%, during the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025.
•The impact of foreign currencies strengthening against the U.S. dollar resulted in a $0.2 million increase in depreciation and amortization expense during the three months ended March 31, 2026, as compared to the same period in 2025.
•Adjusted for the impact of foreign currency, depreciation and amortization expense increased $1.1 million, or 4%, for the three months ended March 31, 2026, as compared to the same period in 2025.
Interest expense for the three months ended MarchJune 31,30, 2026, decreased $2.5 million, or 17%18%, as compared to the same period in 2025, primarily due to lower comparative debt balances as well as a decrease in interest rates.
Interest income includes the portion of software license fees paid by customers under extended payment terms that is attributed to the significant financing component. Interest income for the three months ended MarchJune 31,30, 2026, decreasedincreased $0.5$1.7 million, or 11%,42%, as compared to the same period in 2025.
Other, net is primarily comprised of foreign currency transaction gains and losses. Other, net was $0.7 million of income and $6.4 million of expense for the three months ended June 30, 2026 and 2025, respectively. During the three months ended MarchJune 31,30, 2025, other, net also included the $25.9$1.1 million gainloss on theextinguishment saleof debt as a result of the Company's equity method investment. Other, net was $1.5 million and $23.7 millionredemption of income for the three months ended March 31, 2026 and 2025, respectively.Notes.
Income Taxes
See Note 10, Income Taxes, to our unaudited condensed consolidated financial statements in Part I of this Form 10-Q for additional information.
RESULTS OF OPERATIONS
The following table presents the condensed consolidated statements of operations, as well as the percentage relationship to total revenues for items included in our condensed consolidated statements of operations (in thousands):
Six Month Period Ended June 30, 2026 Compared to the Six Month Period Ended June 30, 2025
Revenues
Total revenue for the six months ended June 30, 2026, increased $60.3 million, or 8%, as compared to the same period in 2025.
•The impact of certain foreign currencies strengthening against the U.S. dollar resulted in a $11.1 million increase in total revenue during the six months ended June 30, 2026, as compared to the same period in 2025.
•Adjusted for the impact of foreign currency, total revenue for the six months ended June 30, 2026, increased $49.2 million, or 6%, as compared to the same period in 2025.
Software as a Service (“SaaS”) and Platform as a Service (“PaaS”) Revenue
SaaS and PaaS revenue increased $38.4 million, or 8%, during the six months ended June 30, 2026, as compared to the same period in 2025.
ACIW insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-24 | Leibrock Robert William |
Disposition to issuer | 3,176 | $49.62 | $157.6K |
| 2026-09-06 | Leibrock Robert William |
Disposition to issuer | 1,905 | $52.95 | $100.9K |
| 2026-09-06 | Shultz Ronald Craig |
Disposition to issuer | 724 | $52.95 | $38.3K |
| 2026-09-06 | Litch Erich J |
Disposition to issuer | 963 | $52.95 | $51.0K |
| 2026-09-04 | Shultz Ronald Craig |
Disposition to issuer | 765 | $52.95 | $40.5K |
| 2026-09-04 | Shultz Ronald Craig |
Disposition to issuer | 385 | $52.95 | $20.4K |
| 2026-09-04 | Litch Erich J |
Disposition to issuer | 667 | $52.95 | $35.3K |
| 2026-09-04 | Litch Erich J |
Disposition to issuer | 136 | $52.95 | $7.2K |
| 2026-06-24 | Leibrock Robert William |
Disposition to issuer | 2,454 | $46.39 | $113.8K |
| 2026-06-06 | Shultz Ronald Craig |
Disposition to issuer | 739 | $42.80 | $31.6K |
| 2026-06-06 | Litch Erich J |
Disposition to issuer | 1,003 | $42.80 | $42.9K |
| 2026-06-06 | Leibrock Robert William |
Disposition to issuer | 1,289 | $42.80 | $55.2K |
| 2026-06-04 | Shultz Ronald Craig |
Disposition to issuer | 760 | $42.36 | $32.2K |
| 2026-06-04 | Shultz Ronald Craig |
Disposition to issuer | 383 | $42.36 | $16.2K |
| 2026-06-04 | Litch Erich J |
Disposition to issuer | 133 | $42.36 | $5.6K |
| 2026-06-04 | Litch Erich J |
Disposition to issuer | 654 | $42.36 | $27.7K |
| 2026-06-02 | Sanchez Adalio T |
Grant/award | 5,720 | — | — |
| 2026-06-02 | Debeers Kimberly A. |
Grant/award | 5,720 | — | — |
| 2026-06-02 | Ford Todd R |
Grant/award | 5,720 | — | — |
| 2026-06-02 | Lamouche Didier R |
Grant/award | 5,720 | — | — |
| 2026-06-02 | Benitez Juan Ii |
Grant/award | 5,720 | — | — |
| 2026-06-02 | Mccallum Katrinka |
Grant/award | 5,720 | — | — |
| 2026-06-02 | Zabaneh Samir Michael |
Grant/award | 5,720 | — | — |
| 2026-06-02 | Harman Mary P |
Grant/award | 5,720 | — | — |
| 2026-06-01 | Warsop Thomas W Iii |
Disposition to issuer | 8,075 | $45.03 | $363.6K |
| 2026-05-11 | Shultz Ronald Craig |
Disposition to issuer | 366 | $42.36 | $15.5K |
| 2026-05-11 | Shultz Ronald Craig |
Disposition to issuer | 732 | $42.36 | $31.0K |
| 2026-04-13 | Shultz Ronald Craig |
Disposition to issuer | 6,837 | $41.24 | $282.0K |
| 2026-04-13 | Shultz Ronald Craig |
Grant/award | 13,894 | — | — |
| 2026-04-13 | Warsop Thomas W Iii |
Grant/award | 176,755 | — | — |
| 2026-04-13 | Warsop Thomas W Iii |
Disposition to issuer | 69,552 | $41.24 | $2.9M |
Well-known investors holding ACIW (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 612,982 | $30.6M | 0.01% | Added 20% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 441,204 | $22.2M | 0.01% | Added 789% |
| Millennium Management (Israel Englander) | 2026-06-30 | 244,164 | $12.3M | 0.01% | Added 701% |
| Renaissance Technologies | 2026-06-30 | 177,933 | $8.9M | 0.01% | Reduced 49% |
| D. E. Shaw & Co. | 2026-06-30 | 113,185 | $5.7M | 0.0% | Reduced 61% |
| Two Sigma Investments | 2026-06-30 | 75,310 | $3.8M | 0.0% | Reduced 88% |
| Bridgewater Associates | 2026-06-30 | 19,035 | $957.3K | 0.0% | New position |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 13,134 | $660.5K | 0.0% | Reduced 54% |