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 | ||||||||
June 30, 2020 | December 31, 2019 | ||||||||||
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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income (loss) | $ | $ | $ | ( | $ | ( | |||||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | ( | |||||||||||||||||||
Total other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive income (loss) | $ | $ | $ | ( | $ | ( |
Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Shares issued and forfeited, net, under stock plans | — | — | ( | — | |||||||||||||||||||||||||||||||
Repurchase of stock-based compensation awards for tax withholdings | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||
Balance as of March 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Shares issued and forfeited, net, under stock plans | — | ( | — | — | |||||||||||||||||||||||||||||||
Repurchase of stock-based compensation awards for tax withholdings | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
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 June 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
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 June 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ |
Six Months Ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net 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, net of impact of acquisitions: | |||||||||||
Receivables | |||||||||||
Accounts payable | |||||||||||
Accrued employee compensation | ( | ||||||||||
Current income taxes | ( | ( | |||||||||
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 | ( | ( | |||||||||
Acquisition of businesses, net of cash acquired | ( | ||||||||||
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 | ( | ( | |||||||||
Proceeds from term portion of credit agreement | |||||||||||
Repayment of term portion of credit agreement | ( | ( | |||||||||
Payments for debt issuance costs | ( | ||||||||||
Payments on or proceeds from other debt, net | ( | ( | |||||||||
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, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ | |||||||||
Supplemental cash flow information | |||||||||||
Income taxes paid | $ | $ | |||||||||
Interest paid | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||
Operating lease liabilities | $ | $ | |||||||||
Vendor financed licenses | |||||||||||
Royalties payable | |||||||||||
Accrued interest | |||||||||||
Other | |||||||||||
Total other current liabilities | $ | $ |
ACI On Demand | ACI On Premise | Total | ||||||||||||||||||
Gross Balance, prior to December 31, 2019 | $ | $ | $ | |||||||||||||||||
Total impairment prior to December 31, 2019 | ( | ( | ||||||||||||||||||
Balance, December 31, 2019 | ||||||||||||||||||||
Goodwill from acquisitions (1) | ( | ( | ||||||||||||||||||
Balance, June 30, 2020 | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||
Billed receivables | $ | $ | |||||||||
Allowance for doubtful accounts | ( | ( | |||||||||
Billed receivables, net | |||||||||||
Accrued receivables | |||||||||||
Significant financing component | ( | ( | |||||||||
Total accrued receivables, net | |||||||||||
Less: current accrued receivables | |||||||||||
Less: current significant financing component | ( | ( | |||||||||
Total long-term accrued receivables, net | |||||||||||
Total receivables, net | $ | $ |
Balance, December 31, 2019 | $ | ||||
Deferral of revenue | |||||
Recognition of deferred revenue | ( | ||||
Foreign currency translation | ( | ||||
Balance, June 30, 2020 | $ |
Amount | Weighted Average Useful Lives | |||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | |||||||||||||
Receivables, net of allowances | ||||||||||||||
Settlement assets | ||||||||||||||
Prepaid expenses | ||||||||||||||
Other current assets | ||||||||||||||
Total current assets acquired | ||||||||||||||
Noncurrent assets: | ||||||||||||||
Goodwill | ||||||||||||||
Software | ||||||||||||||
Customer relationships | ||||||||||||||
Trademarks | ||||||||||||||
Other noncurrent assets | ||||||||||||||
Total assets acquired | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | ||||||||||||||
Settlement liabilities | ||||||||||||||
Employee compensation | ||||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities acquired | ||||||||||||||
Noncurrent liabilities: | ||||||||||||||
Other noncurrent liabilities | ||||||||||||||
Total liabilities acquired | ||||||||||||||
Net assets acquired | $ |
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||||||
Pro forma revenue | $ | $ | |||||||||
Pro forma net income (loss) | $ | $ | ( | ||||||||
Pro forma income (loss) per share: | |||||||||||
Basic | $ | $ | ( | ||||||||
Diluted | $ | $ | ( |
Fiscal Year Ending December 31, | |||||
Remainder of 2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total | $ |
June 30, 2020 | December 31, 2019 | ||||||||||
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 | $ | $ |
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, 2019 | $ | ||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Expired | ( | ||||||||||||||||||||||
Outstanding as of June 30, 2020 | $ | $ | |||||||||||||||||||||
Exercisable as of June 30, 2020 | $ | $ |
Number of Shares at Expected Attainment | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested as of December 31, 2019 | $ | ||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Change in attainment | |||||||||||
Nonvested as of June 30, 2020 | $ |
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested as of December 31, 2019 | $ | ||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Nonvested as of June 30, 2020 | $ |
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested as of December 31, 2019 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Change in payout rate | ( | ||||||||||
Nonvested as of June 30, 2020 | $ |
Six Months Ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
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, 2019 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Nonvested as of June 30, 2020 | $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Balance | Gross Carrying Amount | Accumulated Amortization | Net Balance | ||||||||||||||||||||||||||||||
Software for resale | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Software for internal use | ( | ( | |||||||||||||||||||||||||||||||||
Total software | $ | $ | ( | $ | $ | $ | ( | $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
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 2020 | $ | $ | ||||||||||||
2021 | ||||||||||||||
2022 | ||||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
Thereafter | ||||||||||||||
Total | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
ACI On Demand | $ | $ | $ | $ | |||||||||||||||||||
ACI On Premise | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Segment Adjusted EBITDA | |||||||||||||||||||||||
ACI On Demand | $ | $ | $ | $ | |||||||||||||||||||
ACI On Premise | |||||||||||||||||||||||
Depreciation and amortization | ( | ( | ( | ( | |||||||||||||||||||
Stock-based compensation expense | ( | ( | ( | ( | |||||||||||||||||||
Corporate and unallocated expenses | ( | ( | ( | ( | |||||||||||||||||||
Interest, net | ( | ( | ( | ( | |||||||||||||||||||
Other, net | ( | ( | |||||||||||||||||||||
Income (loss) before income taxes | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
ACI On Demand | $ | $ | $ | $ | |||||||||||||||||||
ACI On Premise | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||
ACI On Demand | $ | $ | $ | $ | |||||||||||||||||||
ACI On Premise | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||
ACI On Demand | ACI On Premise | Total | ACI On Demand | ACI On Premise | Total | ||||||||||||||||||||||||||||||
Primary Geographic Markets | |||||||||||||||||||||||||||||||||||
Americas - United States | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Americas - Other | |||||||||||||||||||||||||||||||||||
EMEA | |||||||||||||||||||||||||||||||||||
Asia Pacific | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Primary Solution Categories | |||||||||||||||||||||||||||||||||||
Bill Payments | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Digital Channels | |||||||||||||||||||||||||||||||||||
Merchant Payments | |||||||||||||||||||||||||||||||||||
Payments Intelligence | |||||||||||||||||||||||||||||||||||
Real-Time Payments | |||||||||||||||||||||||||||||||||||
Retail Payments | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||
ACI On Demand | ACI On Premise | Total | ACI On Demand | ACI On Premise | Total | ||||||||||||||||||||||||||||||
Primary Geographic Markets | |||||||||||||||||||||||||||||||||||
Americas - United States | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Americas - Other | |||||||||||||||||||||||||||||||||||
EMEA | |||||||||||||||||||||||||||||||||||
Asia Pacific | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Primary Solution Categories | |||||||||||||||||||||||||||||||||||
Bill Payments | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Digital Channels | |||||||||||||||||||||||||||||||||||
Merchant Payments | |||||||||||||||||||||||||||||||||||
Payments Intelligence | |||||||||||||||||||||||||||||||||||
Real-Time Payments | |||||||||||||||||||||||||||||||||||
Retail Payments | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||
Long-lived Assets | |||||||||||
United States | $ | $ | |||||||||
Other | |||||||||||
Total | $ | $ |
June 30, 2020 | March 31, 2020 | December 31, 2019 | |||||||||||||||
ACI On Demand | $ | 3,863 | $ | 3,781 | $ | 3,855 | |||||||||||
ACI On Premise | 1,976 | 1,933 | 1,977 | ||||||||||||||
Total | $ | 5,839 | $ | 5,714 | $ | 5,832 | |||||||||||
June 30, 2020 | March 31, 2020 | December 31, 2019 | |||||||||||||||
Committed | $ | 2,140 | $ | 2,095 | $ | 2,168 | |||||||||||
Renewal | 3,699 | 3,619 | 3,664 | ||||||||||||||
Total | $ | 5,839 | $ | 5,714 | $ | 5,832 |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Amount | % of Total Revenue | $ Change vs 2019 | % Change vs 2019 | Amount | % of Total Revenue | ||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Software as a service and platform as a service | $ | 180,573 | 60 | % | $ | 8,074 | 5 | % | $ | 172,499 | 58 | % | |||||||||||||||||||||||
License | 50,136 | 17 | % | (2,405) | (5) | % | 52,541 | 18 | % | ||||||||||||||||||||||||||
Maintenance | 52,749 | 18 | % | 827 | 2 | % | 51,922 | 17 | % | ||||||||||||||||||||||||||
Services | 16,452 | 5 | % | (4,204) | (20) | % | 20,656 | 7 | % | ||||||||||||||||||||||||||
Total revenues | 299,910 | 100 | % | 2,292 | 1 | % | 297,618 | 100 | % | ||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Cost of revenue | 147,346 | 49 | % | (7,894) | (5) | % | 155,240 | 52 | % | ||||||||||||||||||||||||||
Research and development | 35,578 | 12 | % | (3,657) | (9) | % | 39,235 | 13 | % | ||||||||||||||||||||||||||
Selling and marketing | 24,455 | 8 | % | (8,507) | (26) | % | 32,962 | 11 | % | ||||||||||||||||||||||||||
General and administrative | 29,758 | 10 | % | (19,561) | (40) | % | 49,319 | 17 | % | ||||||||||||||||||||||||||
Depreciation and amortization | 33,635 | 11 | % | 6,891 | 26 | % | 26,744 | 9 | % | ||||||||||||||||||||||||||
Total operating expenses | 270,772 | 90 | % | (32,728) | (11) | % | 303,500 | 102 | % | ||||||||||||||||||||||||||
Operating income (loss) | 29,138 | 10 | % | 35,020 | (595) | % | (5,882) | (2) | % | ||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||||||||
Interest expense | (14,142) | (5) | % | 1,181 | (8) | % | (15,323) | (5) | % | ||||||||||||||||||||||||||
Interest income | 2,954 | 1 | % | (43) | (1) | % | 2,997 | 1 | % | ||||||||||||||||||||||||||
Other, net | 2,041 | 1 | % | 639 | 46 | % | 1,402 | — | % | ||||||||||||||||||||||||||
Total other income (expense) | (9,147) | (3) | % | 1,777 | (16) | % | (10,924) | (4) | % | ||||||||||||||||||||||||||
Income (loss) before income taxes | 19,991 | 7 | % | 36,797 | (219) | % | (16,806) | (6) | % | ||||||||||||||||||||||||||
Income tax expense (benefit) | 5,916 | 2 | % | 28,447 | (126) | % | (22,531) | (8) | % | ||||||||||||||||||||||||||
Net income | $ | 14,075 | 5 | % | $ | 8,350 | 146 | % | $ | 5,725 | 2 | % |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Amount | % of Total Revenue | $ Change vs 2019 | % Change vs 2019 | Amount | % of Total Revenue | ||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Software as a service and platform as a service | $ | 373,523 | 63 | % | $ | 92,467 | 33 | % | $ | 281,056 | 56 | % | |||||||||||||||||||||||
License | 78,265 | 13 | % | 4,646 | 6 | % | 73,619 | 15 | % | ||||||||||||||||||||||||||
Maintenance | 106,029 | 18 | % | (1,004) | (1) | % | 107,033 | 21 | % | ||||||||||||||||||||||||||
Services | 33,578 | 6 | % | (8,187) | (20) | % | 41,765 | 8 | % | ||||||||||||||||||||||||||
Total revenues | 591,395 | 100 | % | 87,922 | 17 | % | 503,473 | 100 | % | ||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Cost of revenue | 313,183 | 53 | % | 43,002 | 16 | % | 270,181 | 54 | % | ||||||||||||||||||||||||||
Research and development | 74,602 | 13 | % | (827) | (1) | % | 75,429 | 15 | % | ||||||||||||||||||||||||||
Selling and marketing | 54,538 | 9 | % | (7,854) | (13) | % | 62,392 | 12 | % | ||||||||||||||||||||||||||
General and administrative | 65,684 | 11 | % | (15,152) | (19) | % | 80,836 | 16 | % | ||||||||||||||||||||||||||
Depreciation and amortization | 65,533 | 11 | % | 16,923 | 35 | % | 48,610 | 10 | % | ||||||||||||||||||||||||||
Total operating expenses | 573,540 | 97 | % | 36,092 | 7 | % | 537,448 | 107 | % | ||||||||||||||||||||||||||
Operating income (loss) | 17,855 | 3 | % | 51,830 | (153) | % | (33,975) | (7) | % | ||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||||||||
Interest expense | (31,313) | (5) | % | (4,376) | 16 | % | (26,937) | (5) | % | ||||||||||||||||||||||||||
Interest income | 5,854 | 1 | % | (176) | (3) | % | 6,030 | 1 | % | ||||||||||||||||||||||||||
Other, net | (7,717) | -1 | % | (7,207) | 1,413 | % | (510) | — | % | ||||||||||||||||||||||||||
Total other income (expense) | (33,176) | (5) | % | (11,759) | 55 | % | (21,417) | (4) | % | ||||||||||||||||||||||||||
Loss before income taxes | (15,321) | (2) | % | 40,071 | (72) | % | (55,392) | (11) | % | ||||||||||||||||||||||||||
Income tax benefit | (4,969) | (1) | % | 30,185 | (86) | % | (35,154) | (7) | % | ||||||||||||||||||||||||||
Net loss | $ | (10,352) | (1) | % | $ | 9,886 | (49) | % | $ | (20,238) | (4) | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
ACI On Demand | $ | 180,573 | $ | 172,499 | $ | 373,523 | $ | 282,347 | |||||||||||||||
ACI On Premise | 119,337 | 125,119 | 217,872 | 221,126 | |||||||||||||||||||
Total revenue | $ | 299,910 | $ | 297,618 | $ | 591,395 | $ | 503,473 | |||||||||||||||
Segment Adjusted EBITDA | |||||||||||||||||||||||
ACI On Demand | $ | 33,071 | $ | 17,340 | $ | 56,192 | $ | 17,078 | |||||||||||||||
ACI On Premise | 59,093 | 57,069 | 90,002 | 85,337 | |||||||||||||||||||
Depreciation and amortization | (35,692) | (29,778) | (69,514) | (54,630) | |||||||||||||||||||
Stock-based compensation expense | (7,932) | (14,372) | (14,882) | (20,957) | |||||||||||||||||||
Corporate and unallocated expenses | (19,402) | (36,141) | (43,943) | (60,803) | |||||||||||||||||||
Interest, net | (11,188) | (12,326) | (25,459) | (20,907) | |||||||||||||||||||
Other, net | 2,041 | 1,402 | (7,717) | (510) | |||||||||||||||||||
Income (loss) before income taxes | $ | 19,991 | $ | (16,806) | $ | (15,321) | $ | (55,392) | |||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
ACI On Demand | $ | 10,852 | $ | 8,489 | $ | 20,184 | $ | 16,051 | |||||||||||||||
ACI On Premise | 3,431 | 3,019 | 6,537 | 6,049 | |||||||||||||||||||
Corporate | 21,409 | 18,270 | 42,793 | 32,530 | |||||||||||||||||||
Total depreciation and amortization | $ | 35,692 | $ | 29,778 | $ | 69,514 | $ | 54,630 | |||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||
ACI On Demand | $ | 2,273 | $ | 2,214 | $ | 4,299 | $ | 4,165 | |||||||||||||||
ACI On Premise | 2,279 | 2,051 | 4,309 | 4,007 | |||||||||||||||||||
Corporate | 3,380 | 10,107 | 6,274 | 12,785 | |||||||||||||||||||
Total stock-based compensation expense | $ | 7,932 | $ | 14,372 | $ | 14,882 | $ | 20,957 |
June 30, 2020 | December 31, 2019 | ||||||||||
Cash and cash equivalents | $ | 129,223 | $ | 121,398 | |||||||
Availability under revolving credit facility | 300,000 | 261,000 | |||||||||
Total liquidity | $ | 429,223 | $ | 382,398 |
Six Months Ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
Net cash provided by (used by): | |||||||||||
Operating activities | $ | 125,529 | $ | 56,865 | |||||||
Investing activities | (25,672) | (779,761) | |||||||||
Financing activities | (100,150) | 714,655 |
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 | |||||||||||||||||||
April 1, 2020 through April 30, 2020 | — | $ | — | — | $ | 112,088,000 | |||||||||||||||||
May 1, 2020 through May 31, 2020 | — | — | — | 112,088,000 | |||||||||||||||||||
June 1, 2020 through June 30, 2020 | 715,154 | (1) | 29.05 | — | 112,088,000 | ||||||||||||||||||
Total | 715,154 | $ | 29.05 | — |
Exhibit No. | Description | ||||||||||
3.01 | (1) | ||||||||||
3.02 | (2) | ||||||||||
4.01 | (3) | Form of Common Stock Certificate (P) | |||||||||
10.01 | (4)* | ||||||||||
10.02 | (5)* | ||||||||||
10.03 | (6)* | ||||||||||
10.04 | (7)* | ||||||||||
10.05 | (8)* | ||||||||||
10.06 | * | ||||||||||
10.07 | * | ||||||||||
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: August 6, 2020 | By: | /s/ SCOTT W. BEHRENS | ||||||
Scott W. Behrens | ||||||||
Executive Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial Officer) |
Date: August 6, 2020 | /s/ ODILON ALMEIDA | ||||
Odilon Almeida President, Chief Executive Officer, and Director (Principal Executive Officer) |
Date: August 6, 2020 | /s/ SCOTT W. BEHRENS | ||||
Scott W. Behrens Executive Vice President, Chief Financial Officer, and Chief Accounting Officer (Principal Financial Officer) |
Date: August 6, 2020 | /s/ ODILON ALMEIDA | ||||
Odilon Almeida President, Chief Executive Officer, and Director (Principal Executive Officer) |
Date: August 6, 2020 | /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 |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Receivables, allowances | $ 3,661 | $ 5,149 |
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) | 24,158,059 | 24,538,703 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||
Revenues | ||||||
Total revenues | $ 299,910 | $ 297,618 | $ 591,395 | $ 503,473 | ||
Operating expenses | ||||||
Cost of revenue | [1] | 147,346 | 155,240 | 313,183 | 270,181 | |
Research and development | 35,578 | 39,235 | 74,602 | 75,429 | ||
Selling and marketing | 24,455 | 32,962 | 54,538 | 62,392 | ||
General and administrative | 29,758 | 49,319 | 65,684 | 80,836 | ||
Depreciation and amortization | 33,635 | 26,744 | 65,533 | 48,610 | ||
Total operating expenses | 270,772 | 303,500 | 573,540 | 537,448 | ||
Operating income (loss) | 29,138 | (5,882) | 17,855 | (33,975) | ||
Other income (expense) | ||||||
Interest expense | (14,142) | (15,323) | (31,313) | (26,937) | ||
Interest income | 2,954 | 2,997 | 5,854 | 6,030 | ||
Other, net | 2,041 | 1,402 | (7,717) | (510) | ||
Total other income (expense) | (9,147) | (10,924) | (33,176) | (21,417) | ||
Income (loss) before income taxes | 19,991 | (16,806) | (15,321) | (55,392) | ||
Income tax expense (benefit) | 5,916 | (22,531) | (4,969) | (35,154) | ||
Net income (loss) | $ 14,075 | $ 5,725 | $ (10,352) | $ (20,238) | ||
Income (loss) per common share | ||||||
Basic (in dollars per share) | $ 0.12 | $ 0.05 | $ (0.09) | $ (0.17) | ||
Diluted (in dollars per share) | $ 0.12 | $ 0.05 | $ (0.09) | $ (0.17) | ||
Weighted average common shares outstanding | ||||||
Basic (in shares) | 116,033 | 116,586 | 116,019 | 116,287 | ||
Diluted (in shares) | 117,264 | 118,786 | 116,019 | 116,287 | ||
Software as a service and platform as a service | ||||||
Revenues | ||||||
Total revenues | $ 180,573 | $ 172,499 | $ 373,523 | $ 281,056 | ||
License | ||||||
Revenues | ||||||
Total revenues | 50,136 | 52,541 | 78,265 | 73,619 | ||
Maintenance | ||||||
Revenues | ||||||
Total revenues | 52,749 | 51,922 | 106,029 | 107,033 | ||
Services | ||||||
Revenues | ||||||
Total revenues | $ 16,452 | $ 20,656 | $ 33,578 | $ 41,765 | ||
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 14,075 | $ 5,725 | $ (10,352) | $ (20,238) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (582) | (1,730) | (6,751) | (409) |
Total other comprehensive loss | (582) | (1,730) | (6,751) | (409) |
Comprehensive income (loss) | $ 13,493 | $ 3,995 | $ (17,103) | $ (20,647) |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares |
6 Months Ended | 187 Months Ended | |
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
|
Statement of Stockholders' Equity [Abstract] | |||
Repurchase of common stock (in shares) | 1,000,000 | 23,802 | 46,357,495 |
Condensed Consolidated Financial Statements |
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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 June 30, 2020, and for the three and six months ended June 30, 2020 and 2019, 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, 2019, 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, 2019, filed on February 27, 2020. Results for the three and six months ended June 30, 2020, 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. Actual results could differ from those estimates. Risks and Uncertainties The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict, as the response to the pandemic and available information continues to be evolving. The Company has experienced changes in volumes for certain Merchant and Biller customers and has received limited requests for extended payment terms under existing contracts. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it could cause a local and/or global economic recession. Such economic disruption could have a material adverse effect on our business as our customers curtail and reduce capital and overall spending. Policymakers around the globe have responded with fiscal policy actions to support the economy as a whole. The magnitude and overall effectiveness of these actions remains uncertain. The severity of the impact of the COVID-19 pandemic on the Company's business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company's customers, all of which are uncertain and cannot be predicted. The Company's future results of operations and liquidity could be adversely impacted by delays in payments of outstanding receivable amounts beyond normal payment terms, uncertain demand, and the impact of any initiatives or programs that the Company may undertake to address financial and operations challenges faced by its customers. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company's financial condition, liquidity, or results of operations is uncertain. 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 June 30, 2020, and December 31, 2019, was $165.9 million and $274.0 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 $416.7 million and $432.0 million as of June 30, 2020, and December 31, 2019, 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 reportable segments, ACI On Demand and ACI On Premise, as the reporting units. Changes in the carrying amount of goodwill attributable to each reporting unit during the six months ended June 30, 2020, were as follows (in thousands):
(1)Goodwill from acquisitions relates to adjustments in the goodwill recorded for the acquisition of E Commerce Group Products, Inc. ("ECG"), along with ECG's subsidiary, Speedpay, Inc. (collectively referred to as "Speedpay") and Walletron, Inc. ("Walletron"), as discussed in Note 3, Acquisition. Recoverability of goodwill is measured using a discounted cash flow valuation 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, 2019, annual impairment test. Given the adverse economic and market conditions caused by the COVID-19 pandemic, the Company considered a variety of qualitative factors to determine if an additional quantitative impairment test was required subsequent to our annual impairment test. Based on a variety of factors, including the excess of the fair value over the carrying amount in the most recent impairment test, we determined that an additional quantitative impairment test was not required. Equity Method Investment On July 23, 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 $18.1 million and $18.5 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of June 30, 2020 and December 31, 2019, respectively. Name Change Effective January 1, 2020, Official Payments Corporation, a wholly owned subsidiary, changed its name to ACI Payments, Inc. An amended and restated certificate of incorporation was filed with the state of Delaware to reflect the change. The Official Payments Corporation name and corresponding trade name may continue to be used until all stationary and marketing materials are transitioned to ACI Payments, Inc. equivalents. New Accounting Standards Recently Adopted In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, codified as ASC 326. Subsequent amendments to the guidance were issued as follows: ASU 2018-19 in November 2018; ASU 2019-04 in April 2019; ASU 2019-05 in May 2019; ASU's 2019-10 and 2019-11 in November 2019; and ASU 2020-02 in February 2020. This ASU provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in ASU 2016-13 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company is required to use a forward-looking expected credit loss model for billed and accrued receivables. The Company adopted ASU 2016-13 as of January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the condensed consolidated financial statements. In February 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which clarifies or improves various financial instruments topics in the accounting standards codification to increase stakeholder awareness. ASU 2020-03 was effective upon issuance and did not have a material impact on the condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate (“LIBOR”). This guidance includes optional expedients and exceptions for applying U.S. GAAP to transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 is effective for all entities as of March 12, 2020, through December 31, 2022, when the reference rate replacement activity is expected to be completed. The adoption of ASU 2020-04 did not have an impact on the Company's condensed consolidated financial statements. Recently Issued Accounting Standards Not Yet Effective In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions within ASC 740, as well as clarify and simplify other aspects of the accounting for income taxes to promote consistency among reporting entities. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2020. The Company is currently assessing the impact the adoption of ASU 2019-12 will have on its condensed consolidated financial statements.
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Revenue |
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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 and geographic location. 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):
No customer accounted for more than 10% of the Company’s consolidated receivables balance as of June 30, 2020, or December 31, 2019. 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. •SaaS and PaaS revenue from variable consideration that will be recognized in accordance with the direct allocation method. Revenue allocated to remaining performance obligations was $672.2 million as of June 30, 2020, of which the Company expects to recognize approximately 44% over the next 12 months and the remainder thereafter. During the three and six months ended June 30, 2020 and 2019, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.
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Acquisition |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition Speedpay On May 9, 2019, the Company acquired Speedpay, a subsidiary of The Western Union Company (“Western Union”), for $754.1 million in cash, including working capital adjustments, pursuant to a Stock Purchase Agreement, among the Company, Western Union, and ACI Worldwide Corp., a wholly owned subsidiary of the Company. The Company has included the financial results of Speedpay in the condensed consolidated financial statements from the date of acquisition. The combination of the Company and Speedpay bill pay solutions serves more than 4,000 customers across the U.S., bringing expanded reach in existing and complementary market segments such as consumer finance, insurance, healthcare, higher education, utilities, government, and mortgage. The acquisition of Speedpay increased the scale of the Company’s On Demand platform business and allows the acceleration of platform innovation through increased research and development and investment in ACI's On Demand platform infrastructure. To fund the acquisition, the Company amended its existing Credit Agreement, dated February 24, 2017, for an additional $500.0 million senior secured term loan (“Delayed Draw Term Loan”), in addition to drawing $250.0 million on the available Revolving Credit Facility. See Note 4, Debt, for terms of the Credit Agreement. The remaining acquisition consideration was funded with cash on hand. The Company expensed approximately $16.6 million and $21.3 million of costs related to the acquisition of Speedpay for the three and six months ended June 30, 2019, respectively. These costs, which consist primarily of investment bank, consulting, and legal fees, are included in general and administrative expenses in the accompanying condensed consolidated statements of operations. Speedpay contributed approximately $80.2 million in total revenue and $15.0 million in total operating income for the three months ended June 30, 2020. Speedpay contributed approximately $168.9 million in total revenue and $27.3 million in total operating income for the six months ended June 30, 2020. Speedpay contributed approximately $49.3 million in total revenue and $7.6 million in total operating income for the three and six months ended June 30, 2019. In connection with the acquisition, the Company recorded the following amounts based upon its purchase price allocation as of June 30, 2020 (in thousands, except weighted average useful lives):
During the six months ended June 30, 2020, the Company made adjustments to the preliminary purchase price allocation as additional information became available for accounts payable. These adjustments and any resulting adjustments to the statements of operations were not material to the Company’s previously reported operating results or financial position. The Company's review of the purchase price allocation has been completed. Factors contributing to the purchase price that resulted in the goodwill (which is tax deductible) include the acquisition of management, sales, and technology personnel with the skills to market new and existing products of the Company, enhanced product capabilities, complementary products, and customers. Unaudited Pro Forma Financial Information The pro forma financial information in the table below presents the combined results of operations for ACI and Speedpay as if the acquisition had occurred January 1, 2018. The pro forma information is shown for illustrative purposes only and is not necessarily indicative of future results of operations of the Company or results of operations of the Company that would have actually occurred had the transaction been in effect for the periods presented. This pro forma information is not intended to represent or be indicative of actual results had the acquisition occurred as of the beginning of each period, and does not reflect potential synergies, integration costs, or other such costs or savings. Certain pro forma adjustments have been made to net income (loss) for the three and six months ended June 30, 2019, to give effect to estimated adjustments that remove the amortization expense on eliminated Speedpay historical identifiable intangible assets, add amortization expense for the value of acquired identified intangible assets (primarily acquired software, customer relationships, and trademarks), and add estimated interest expense on the Company’s additional Delayed Draw Term Loan and Revolving Credit Facility borrowings. Additionally, certain transaction expenses that are a direct result of the acquisition have been excluded. The three and six months ended June 30, 2020, are not presented as Speedpay is included in the Company's consolidated results for the entire periods. The following is the unaudited summarized pro forma financial information (in thousands, except per share data):
Walletron On May 9, 2019, the Company also completed the acquisition of Walletron, which delivers patented mobile wallet technology. The Company has included the financial results of Walletron in the condensed consolidated financial statements from the date of acquisition, which were not material.
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Debt |
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Debt | Debt As of June 30, 2020, the Company had $200.0 million, $736.6 million, and $400.0 million outstanding under its Revolving Credit Facility, Term Loan, and Senior Notes, respectively, with up to $300.0 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended. 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. The Credit Agreement consists of (a) a -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 -year $279.0 million senior secured term loan facility (the "Initial Term Loan") and (c) a -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. The Credit Facility will mature on April 5, 2024. 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) a London Interbank Offered Rate (“LIBOR”) 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 LIBOR 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 LIBOR rate borrowings. Interest is due and payable monthly. The interest rate in effect for the Credit Facility as of June 30, 2020, was 2.43%. 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 LIBOR 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. The Company’s obligations under the Credit Facility and cash management arrangements entered into with lenders under the Credit Facility (or affiliates thereof) and the obligations of the subsidiary guarantors are secured by first-priority security interests in substantially all assets of the Company and any guarantor, including 100% of the capital stock of ACI Worldwide Corp. and each domestic subsidiary of the Company, each domestic subsidiary of any guarantor, and 65% of the voting capital stock of each foreign subsidiary of the Company that is directly owned by the Company or a guarantor, in each case subject to certain exclusions set forth in the credit documentation governing the Credit Facility. The collateral agreement of the Credit Agreement, as amended, released the lien on certain assets of ACI Payments, Inc., our electronic bill presentment and payment affiliate, to allow ACI Payments, Inc. to comply with certain eligible securities and unencumbered asset requirements related to money transmitter or transfer license rules and regulations. The Credit Agreement contains a number of covenants that, among other things and subject to certain exceptions, restrict the Company’s and its subsidiaries' ability to: create, incur, assume or suffer to exist any additional indebtedness; create, incur, assume or suffer to exist any liens; enter into agreements and other arrangements that include negative pledge clauses; pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; create restrictions on the payment of dividends or other distributions by subsidiaries; make investments, loans, advances and acquisitions; merge, consolidate or enter into any similar combination or sell assets, including equity interests of the subsidiaries; enter into sale and leaseback transactions; directly or indirectly engage in transactions with affiliates; alter in any material respect the character or conduct of the business; enter into amendments of or waivers under subordinated indebtedness, organizational documents, and certain other material agreements; and hold certain assets and incur certain liabilities. Expected Discontinuation of LIBOR In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced it will no longer compel banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee has proposed the Secured Overnight Financing Rate ("SOFR") as its recommended alternative to LIBOR, and the first publication of SOFR rates was released in April 2018. The Company is evaluating the potential impact of the transition from LIBOR as an interest rate benchmark to other potential alternative reference rates, including SOFR. The Company's Credit Agreement is currently indexed to LIBOR and the maturity date of the Credit Agreement extends beyond 2021. The Credit Agreement contemplates the discontinuation of LIBOR and provides options for the Company in such an event. The Company will continue to actively assess the related opportunities and risks involved in this transition. 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 June 30, 2020, are as follows (in thousands):
The Credit Agreement and 2026 Notes contain certain customary affirmative covenants and negative covenants that limit or restrict, subject to certain exceptions, the incurrence of liens, indebtedness of subsidiaries, mergers, advances, investments, acquisitions, transactions with affiliates, change in nature of business, and the sale of the assets. In addition, the Credit Agreement and 2026 Notes contain certain customary mandatory prepayment provisions. The Company is also required to maintain a consolidated leverage ratio at or below a specified amount and an interest coverage ratio at or above a specified amount. As specified in the Credit Agreement and 2026 Notes agreement, if certain events occur and continue, the Company may be required to repay all amounts outstanding under the Credit Facility and 2026 Notes. As of June 30, 2020, 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 a $140.0 million uncommitted overdraft facility with Bank of America, N.A. The overdraft facility bears interest at LIBOR plus 0.875% 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 June 30, 2020, there was no amount outstanding on the overdraft facility. As of December 31, 2019, there was $1.5 million 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 June 30, 2020, $13.8 million was outstanding, of which $9.4 million and $4.4 million is included in other current liabilities and other noncurrent liabilities, respectively, in the consolidated balance sheet. As of December 31, 2019, $13.8 million was outstanding, of which $6.0 million and $7.8 million was included in other current liabilities and other noncurrent liabilities, respectively, in the consolidated balance sheet.
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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 six months ended June 30, 2020 and 2019, totaled 72,228 and 60,362, respectively. 2020 Equity and Incentive Compensation Plan On June 9, 2020, upon recommendation of the Company’s board of directors (the “board”), stockholders approved the ACI Worldwide, Inc. 2020 Equity and Incentive Compensation Plan (the “2020 Plan”). The 2020 Plan authorizes the board to provide for equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, dividend equivalents, and certain other awards, including those denominated or payable in, or otherwise based on, the Company’s common stock ("awards"). The purpose of the 2020 Plan is to provide incentives and rewards for service and/or performance by providing awards to non-employee directors, officers, other employees, and certain consultants and other service providers of the Company and its subsidiaries. Following the approval of the 2020 Plan, the 2016 Equity and Performance Incentive Plan (the “2016 Incentive Plan”) was terminated. Termination of the 2016 Incentive Plan did not affect any equity awards outstanding under the 2016 Incentive Plan. Subject to adjustment and share counting rules as described in the 2020 Plan, a total of 6,658,754 shares of common stock are available for awards granted under the 2020 Plan. Shares underlying certain awards under the 2020 Plan, the Company’s 2005 Equity and Performance Incentive Plan (the "2005 Incentive Plan"), and the 2016 Incentive Plan (each including as amended or amended and restated) that are cancelled or forfeited, expire, are settled for cash, or are unearned after June 9, 2020, will again be available under the 2020 Plan. The board generally will be able to amend the 2020 Plan, subject to stockholder approval in certain circumstances, as described in the 2020 Plan. Stock Options A summary of stock option activity is as follows:
The total intrinsic value of stock options exercised during the six months ended June 30, 2020 and 2019, was $10.5 million and $6.0 million, respectively. There were no stock options granted during the six months ended June 30, 2020 or 2019. Long-term Incentive Program Performance Share Awards A summary of nonvested long-term incentive program performance share awards (“LTIP performance shares”) is as follows:
During the six months ended June 30, 2020, a total of 668,240 LTIPs vested. The Company withheld 165,237 of those shares to pay the employees’ portion of the minimum payroll withholding taxes. Restricted Share Awards A summary of nonvested restricted share awards (“RSAs”) is as follows:
During the six months ended June 30, 2020, a total of 88,913 RSAs vested. The Company withheld 28,233 of those shares to pay the employees’ portion of the minimum payroll withholding taxes. Total Shareholder Return Awards During the six months ended June 30, 2020 and 2019, pursuant to the 2016 Incentive Plan, the Company granted total shareholder return awards (“TSRs”). TSRs are performance shares that are earned, if at all, based upon the Company’s total shareholder return as compared to a group of peer companies over a -year performance period. The award payout can range from 0% to 200%. To determine the grant date fair value of the TSRs, a Monte Carlo simulation model is used. The Company recognizes compensation expense for the TSRs over a three-year performance period based on the grant date fair value. A summary of nonvested TSRs is as follows:
During the six months ended June 30, 2020, a total of 199,413 TSRs awards granted in fiscal 2017 vested and achieved a payout rate of 93% based on the Company's total shareholder return as compared to a group of peer companies over a -year performance period. The Company withheld 53,033 of those shares to pay the employees’ portion of the minimum payroll withholding taxes. The fair value of TSRs granted during the six months ended June 30, 2020 and 2019, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, using the following weighted average assumptions:
Restricted Share Units During the six months ended June 30, 2020 and 2019, pursuant to the 2020 Plan and the 2016 Incentive Plan, respectively, the Company granted restricted share unit awards (“RSUs”). RSUs generally have requisite service periods of years and vest in increments of 33% on the anniversary of the grant dates. RSUs granted to our board vest one year from grant or as of the next annual shareholders meeting, whichever is earlier. Under each arrangement, RSUs are issued without direct cost to the employee on the vesting date. The Company estimates the fair value of the RSUs based upon the market price of the Company’s stock at the date of grant. The Company recognizes compensation expense for RSUs on a straight-line basis over the requisite service period. A summary of nonvested RSUs is as follows:
During the six months ended June 30, 2020, a total of 399,605 RSUs vested. The Company withheld 109,652 of those shares to pay the employees’ portion of the minimum payroll withholding taxes. As of June 30, 2020, there were unrecognized compensation costs of $30.1 million related to nonvested RSUs, $27.1 million related to nonvested TSRs, and less than $0.1 million related to nonvested stock options, which the Company expects to recognize over weighted average periods of 2.1 years, 1.9 years, and 0.7 years, respectively. The Company recorded stock-based compensation expense recognized under ASC 718 for the three months ended June 30, 2020 and 2019, of $7.9 million and $14.4 million, respectively, with corresponding tax benefits of $1.4 million and $2.8 million, respectively. The Company recorded stock-based compensation expense recognized under ASC 718 for the six months ended June 30, 2020 and 2019, of $14.9 million and $21.0 million, respectively, with the corresponding tax benefits of $2.8 million and $4.0 million, 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 resale is 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 June 30, 2020 and 2019, totaled $2.1 million and $3.0 million, respectively. Software for resale amortization expense recorded during the six months ended June 30, 2020 and 2019, totaled $4.0 million and $6.0 million, respectively. These software amortization expense amounts are reflected in cost of revenue in the condensed consolidated statements of operations. Amortization of software for internal use is computed using the straight-line method over an estimated useful life of generally to ten years. Software for internal use amortization expense recorded during the three months ended June 30, 2020 and 2019, totaled $18.5 million and $13.3 million, respectively. Software for internal use amortization expense recorded during the six months ended June 30, 2020 and 2019, totaled $35.2 million and $23.7 million, respectively. These software amortization expense amounts are reflected in depreciation and amortization 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 June 30, 2020 and 2019, totaled $9.2 million and $7.6 million, respectively. Other intangible assets amortization expense recorded during the six months ended June 30, 2020 and 2019, totaled $18.5 million and $13.1 million, respectively. Based on capitalized intangible assets as of June 30, 2020, estimated amortization expense amounts in future fiscal years are as follows (in thousands):
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Common Stock and Treasury Stock |
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Jun. 30, 2020 | |
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. In February 2018, 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 repurchased 1,000,000 shares for $28.9 million under the program during the six months ended June 30, 2020. Under the program to date, the Company has repurchased 46,357,495 shares for approximately $612.3 million. As of June 30, 2020, the maximum remaining amount authorized for purchase under the stock repurchase program was $112.1 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 1.8 million and 2.1 million options to purchase shares, RSUs, and contingently issuable shares during the three months ended June 30, 2020 and 2019, respectively, as their effect would be anti-dilutive. The diluted loss per share computation excludes 6.1 million and 7.5 million options to purchase shares, RSUs, and contingently issuable shares during the six months ended June 30, 2020 and 2019, respectively, as their effect would be anti-dilutive. Common stock outstanding as of June 30, 2020, and December 31, 2019, was 116,366,996 and 115,986,352, respectively.
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Other, Net |
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Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other, Net | Other, NetOther, net is primarily comprised of foreign currency transaction gains of $1.9 million and $1.4 million for the three months ended June 30, 2020 and 2019, respectively. Other, net is primarily comprised of foreign currency transaction losses of $7.9 million and $0.5 million for the six months ended |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company reports financial performance based on its segments, ACI On Demand and ACI On Premise, 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. ACI On Demand serves the needs of banks, merchants, and billers who use payments to facilitate their core business. These on-demand solutions are maintained and delivered through the cloud via our global data centers and are available in either a single-tenant environment for SaaS offerings, or in a multi-tenant environment for PaaS offerings. ACI On Premise serves customers who manage their software on site or through a third-party public cloud environment. These on-premise customers use the Company’s software to develop sophisticated solutions, which are often part of a larger system located and managed at the customer specified site. These customers require a level of control and flexibility that ACI On Premise solutions can offer, and they have the resources and expertise to take a lead role in managing these solutions. Revenue is attributed to the reportable segments based upon the product sold and mechanism for delivery to 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 products, or (3) costs that are allocated. Allocated costs are generally marketing and sales related activities as well as information technology and facilities related expense for which multiple segments benefit. The Company also allocates certain depreciation costs to the segments. 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 stock-based compensation, and net other income (expense). Corporate and unallocated expenses consist of the corporate overhead costs that are not allocated to reportable segments. These overhead costs relate to human resources, finance, legal, accounting, merger and acquisition activity, and other costs that 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 geographic market and primary solution category for the Company’s reportable segments 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 and six months ended June 30, 2020 and 2019. No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the three and six months ended June 30, 2020 and 2019.
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Income Taxes |
6 Months Ended |
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Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate for the three and six months ended June 30, 2020, was 30% and 32%, respectively. The Company reported tax expense on pretax income for the three months ended June 30, 2020 and a tax benefit on a pretax loss for the six months ended June 30, 2020. The Company’s foreign entities recognized earnings of $10.7 million and a loss of $3.7 million for the three and six months ended June 30, 2020, respectively. The effective tax rate for the three months ended June 30, 2020, was negatively impacted by state income tax charges on a domestic profit. The effective tax rate for the six months ended June 30, 2020, was positively impacted by equity compensation excess tax benefits and state income tax benefits on a domestic loss. The effective tax rate for the three and six months ended June 30, 2019, was 134% and 63%, respectively. The Company reported an overall tax benefit on a pretax loss for the three and six months ended June 30, 2019. The earnings of the Company’s foreign entities for the three and six months ended June 30, 2019, were $11.0 million and $4.8 million, respectively. The effective tax rates for the three and six months ended June 30, 2019, was positively impacted by state income tax benefits on a domestic loss. In addition, the Company released a majority of its valuation allowance established against its U.S. foreign tax credit deferred tax asset, resulting in a non-cash benefit to income tax expense of approximately $18.5 million. The Company released the valuation allowance following the acquisition of Speedpay and determined it would more likely than not be able to utilize the foreign tax credits in future years due to additional income provided by Speedpay. 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 June 30, 2020, and December 31, 2019, the amount of unrecognized tax benefits for uncertain tax positions was $30.0 million and $29.0 million, respectively, excluding related liabilities for interest and penalties of $1.2 million as of June 30, 2020 and December 31, 2019. The Company believes it is reasonably possible that the total amount of unrecognized tax benefits will decrease within the next 12 months by approximately $11.7 million, due to the settlement of various audits and the expiration of statutes of limitation.
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Condensed Consolidated Financial Statements (Policies) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 AccountsThe 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 reportable segments, ACI On Demand and ACI On Premise, as the reporting units. Changes in the carrying amount of goodwill attributable to each reporting unit during the six months ended June 30, 2020, were as follows (in thousands):
(1)Goodwill from acquisitions relates to adjustments in the goodwill recorded for the acquisition of E Commerce Group Products, Inc. ("ECG"), along with ECG's subsidiary, Speedpay, Inc. (collectively referred to as "Speedpay") and Walletron, Inc. ("Walletron"), as discussed in Note 3, Acquisition. Recoverability of goodwill is measured using a discounted cash flow valuation 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, 2019, annual impairment test. Given the adverse economic and market conditions caused by the COVID-19 pandemic, the Company considered a variety of qualitative factors to determine if an additional quantitative impairment test was required subsequent to our annual impairment test. Based on a variety of factors, including the excess of the fair value over the carrying amount in the most recent impairment test, we determined that an additional quantitative impairment test was not required.
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Recent Accounting Standards | New Accounting Standards Recently Adopted In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, codified as ASC 326. Subsequent amendments to the guidance were issued as follows: ASU 2018-19 in November 2018; ASU 2019-04 in April 2019; ASU 2019-05 in May 2019; ASU's 2019-10 and 2019-11 in November 2019; and ASU 2020-02 in February 2020. This ASU provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in ASU 2016-13 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company is required to use a forward-looking expected credit loss model for billed and accrued receivables. The Company adopted ASU 2016-13 as of January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the condensed consolidated financial statements. In February 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which clarifies or improves various financial instruments topics in the accounting standards codification to increase stakeholder awareness. ASU 2020-03 was effective upon issuance and did not have a material impact on the condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate (“LIBOR”). This guidance includes optional expedients and exceptions for applying U.S. GAAP to transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 is effective for all entities as of March 12, 2020, through December 31, 2022, when the reference rate replacement activity is expected to be completed. The adoption of ASU 2020-04 did not have an impact on the Company's condensed consolidated financial statements. Recently Issued Accounting Standards Not Yet Effective In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions within ASC 740, as well as clarify and simplify other aspects of the accounting for income taxes to promote consistency among reporting entities. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2020. The Company is currently assessing the impact the adoption of ASU 2019-12 will have on its condensed consolidated financial statements.
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Condensed Consolidated Financial Statements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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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Summary of Changes in the Carrying Amount of Goodwill | Changes in the carrying amount of goodwill attributable to each reporting unit during the six months ended June 30, 2020, were as follows (in thousands):
(1)Goodwill from acquisitions relates to adjustments in the goodwill recorded for the acquisition of E Commerce Group Products, Inc. ("ECG"), along with ECG's subsidiary, Speedpay, Inc. (collectively referred to as "Speedpay") and Walletron, Inc. ("Walletron"), as discussed in Note 3, Acquisition.
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Revenue (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Acquisition (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | In connection with the acquisition, the Company recorded the following amounts based upon its purchase price allocation as of June 30, 2020 (in thousands, except weighted average useful lives):
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Summary of Unaudited Summarized Pro Forma Financial Information | The following is the unaudited summarized pro forma financial information (in thousands, except per share data):
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Debt (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Maturities on Debt Outstanding | Maturities on debt outstanding as of June 30, 2020, 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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Stock-Based Compensation Plans (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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LTIP Performance Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Nonvested Performance Award Activity | A summary of nonvested long-term incentive program performance share awards (“LTIP performance shares”) is as follows:
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Restricted Share Awards (RSAs) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Nonvested Restricted Share Award Activity | A summary of nonvested restricted share awards (“RSAs”) 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 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 six months ended June 30, 2020 and 2019, were estimated on the date of grant using the Monte Carlo simulation model, acceptable under ASC 718, 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 RSUs is as follows:
|
Software and Other Intangible Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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):
|
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Schedule of Estimated Intangible Asset Amortization Expense in Future Fiscal Years | Based on capitalized intangible assets as of June 30, 2020, estimated amortization expense amounts in future fiscal years are as follows (in thousands):
|
Earnings (Loss) Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Reconciliation of Weighted Average Share Amounts Used to Compute Both Basic and Diluted 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):
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 Geographic Markets and Primary Solution Categories | The following is revenue by primary geographic market and primary solution category for the Company’s reportable segments 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):
|
Condensed Consolidated Financial Statements - Summary of Other Current Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Current Liabilities | ||
Operating lease liabilities | $ 13,976 | $ 15,049 |
Vendor financed licenses | 17,873 | 9,667 |
Royalties payable | 5,097 | 6,107 |
Accrued interest | 8,868 | 9,212 |
Other | 33,181 | 36,936 |
Total other current liabilities | $ 78,995 | $ 76,971 |
Condensed Consolidated Financial Statements - Additional Information (Details) - USD ($) $ in Millions |
Jul. 23, 2019 |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Condensed Financial Statements, Captions [Line Items] | |||
Amount of off balance sheet settlement funds | $ 165.9 | $ 274.0 | |
India payment technology and services company | |||
Condensed Financial Statements, Captions [Line Items] | |||
Payments to acquire investment interest | $ 18.3 | ||
Percentage of voting interests acquired | 30.00% | ||
Equity method investment, amount recorded | $ 18.1 | 18.5 | |
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 | $ 416.7 | $ 432.0 |
Revenue - Summary of Total Receivables (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Billed receivables | $ 183,408 | $ 213,654 |
Allowance for doubtful accounts | (3,661) | (5,149) |
Billed receivables, net | 179,747 | 208,505 |
Accrued receivables | 374,845 | 399,302 |
Significant financing component | (29,969) | (35,569) |
Total accrued receivables, net | 344,876 | 363,733 |
Less: current accrued receivables | 155,320 | 161,714 |
Less: current significant financing component | (10,408) | (11,022) |
Total long-term accrued receivables, net | 199,964 | 213,041 |
Total receivables, net | $ 524,623 | $ 572,238 |
Revenue - Summary of Changes in Deferred Revenue (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Change in Contract with Customer, Liability [Roll Forward] | |
Deferred revenue, beginning balance | $ 118,939 |
Deferral of revenue | 80,744 |
Recognition of deferred revenue | (60,410) |
Foreign currency translation | (1,852) |
Deferred revenue, ending balance | $ 137,421 |
Revenue - Additional Information (Details) $ in Millions |
Jun. 30, 2020
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Revenue allocated to remaining performance obligations | $ 672.2 |
Revenue allocated to remaining performance obligations, percentage to be recognized over the next 12 months | 44.00% |
Acquisition - Summary of Unaudited Pro Forma Financial Information (Details) - SpeedPay - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Business Acquisition [Line Items] | ||
Pro forma revenue | $ 334,077 | $ 628,136 |
Pro forma net income (loss) | $ 15,249 | $ (5,996) |
Pro forma income (loss) per share: | ||
Basic (in USD per share) | $ 0.13 | $ (0.05) |
Diluted (in USD per share) | $ 0.13 | $ (0.05) |
Debt - Schedule of Maturities on Long-Term Debt Outstanding (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Remainder of 2020 | $ 19,475 |
2021 | 38,950 |
2022 | 50,431 |
2023 | 69,906 |
2024 | 757,823 |
Thereafter | 400,000 |
Total | $ 1,336,585 |
Debt - Summary of Total Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Total debt | $ 1,317,095 | $ 1,373,155 |
Debt issuance costs | (19,490) | (21,905) |
Less: current portion of term loans | 34,206 | 34,148 |
Less: current portion of debt issuance costs | (4,744) | (4,802) |
Total long-term debt | 1,282,889 | 1,339,007 |
Term Loans | ||
Debt Instrument [Line Items] | ||
Total debt | 736,585 | 756,060 |
Less: current portion of term loans | 38,950 | 38,950 |
Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt | 200,000 | 239,000 |
Senior Notes | 5.750% Senior Notes, due August 2026 | ||
Debt Instrument [Line Items] | ||
Total debt | $ 400,000 | $ 400,000 |
Stock-Based Compensation Plans - Summary of Nonvested LTIP Performance Shares (Details) - LTIP Performance Shares |
6 Months Ended |
---|---|
Jun. 30, 2020
$ / shares
shares
| |
Number of Shares at Expected Attainment | |
Nonvested, beginning balance (in shares) | shares | 669,469 |
Vested (in shares) | shares | (668,240) |
Forfeited (in shares) | shares | (5,368) |
Change in attainment (in shares) | shares | 4,139 |
Nonvested, ending balance (in shares) | shares | 0 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 20.12 |
Vested (in dollars per share) | $ / shares | 20.12 |
Forfeited (in dollars per share) | $ / shares | 20.12 |
Change in attainment (in dollars per share) | $ / shares | 20.12 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 0 |
Stock-Based Compensation Plans - Summary of Nonvested RSAs (Details) - Restricted Share Awards (RSAs) |
6 Months Ended |
---|---|
Jun. 30, 2020
$ / shares
shares
| |
Number of Shares | |
Nonvested, beginning balance (in shares) | shares | 92,842 |
Vested (in shares) | shares | (88,913) |
Forfeited (in shares) | shares | (3,929) |
Nonvested, ending balance (in shares) | shares | 0 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 20.13 |
Vested (in dollars per share) | $ / shares | 20.12 |
Forfeited (in dollars per share) | $ / shares | 20.35 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 0 |
Stock-Based Compensation Plans - Summary of Nonvested TSRs (Details) - Total Shareholder Return Awards (TSRs) |
6 Months Ended |
---|---|
Jun. 30, 2020
$ / shares
shares
| |
Number of Shares | |
Nonvested, beginning balance (in shares) | shares | 1,062,291 |
Granted (in shares) | shares | 677,195 |
Vested (in shares) | shares | (199,413) |
Forfeited (in shares) | shares | (79,246) |
Change in payout rate (in shares) | shares | (14,259) |
Nonvested, ending balance (in shares) | shares | 1,446,568 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 35.77 |
Granted (in dollars per share) | $ / shares | 30.01 |
Vested (in dollars per share) | $ / shares | 24.37 |
Forfeited (in dollars per share) | $ / shares | 39.41 |
Change in payout rate (in dollars per share) | $ / shares | 24.37 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 34.56 |
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 |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 2 years 9 months 18 days | 2 years 9 months 18 days |
Risk-free interest rate | 0.50% | 2.50% |
Expected volatility | 31.40% | 29.30% |
Expected dividend yield | 0.00% | 0.00% |
Stock-Based Compensation Plans - Summary of Nonvested RSUs (Details) - Restricted Share Units (RSUs) |
6 Months Ended |
---|---|
Jun. 30, 2020
$ / shares
shares
| |
Number of Shares | |
Nonvested, beginning balance (in shares) | shares | 1,009,404 |
Granted (in shares) | shares | 787,871 |
Vested (in shares) | shares | (399,605) |
Forfeited (in shares) | shares | (114,303) |
Nonvested, ending balance (in shares) | shares | 1,283,367 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 29.96 |
Granted (in dollars per share) | $ / shares | 25.65 |
Vested (in dollars per share) | $ / shares | 29.14 |
Forfeited (in dollars per share) | $ / shares | 29.68 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 27.59 |
Software and Other Intangible Assets - Schedule of Estimated Amortization Expense for Future Fiscal Years Based on Capitalized Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 335,697 | $ 356,969 |
Software Amortization | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2020 | 37,072 | |
2021 | 61,612 | |
2022 | 43,302 | |
2023 | 27,501 | |
2024 | 20,551 | |
Thereafter | 26,249 | |
Total | 216,287 | |
Other Intangible Assets Amortization | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2020 | 18,346 | |
2021 | 36,379 | |
2022 | 36,234 | |
2023 | 35,932 | |
2024 | 31,520 | |
Thereafter | 177,286 | |
Total | $ 335,697 |
Common Stock and Treasury Stock - Additional Information (Details) - USD ($) |
6 Months Ended | 187 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Feb. 28, 2018 |
|
Equity [Abstract] | ||||
Amount approved for repurchase | $ 200,000,000.0 | |||
Shares repurchased (in shares) | 1,000,000 | 23,802 | 46,357,495 | |
Shares repurchased, value | $ 28,881,000 | $ 631,000 | $ 612,300,000 | |
Maximum remaining amount authorized for purchase | $ 112,100,000 | $ 112,100,000 |
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 | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Weighted average shares outstanding: | ||||
Basic weighted average shares outstanding (in shares) | 116,033 | 116,586 | 116,019 | 116,287 |
Add: Dilutive effect of stock options and RSUs (in shares) | 1,231 | 2,200 | 0 | 0 |
Diluted weighted average shares outstanding (in shares) | 117,264 | 118,786 | 116,019 | 116,287 |
Earnings (Loss) Per Share - Additional Information (Details) - shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Earnings Per Share [Abstract] | |||||
Antidilutive securities excluded from earnings (loss) per share, options to purchase shares and RSUs (in shares) | 1,800,000 | 2,100,000 | 6,100,000 | 7,500,000 | |
Common stock outstanding (in shares) | 116,366,996 | 116,366,996 | 115,986,352 |
Other, Net - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Other Income and Expenses [Abstract] | ||||
Foreign currency transaction gains (losses) | $ 1.9 | $ 1.4 | $ (7.9) | $ (0.5) |
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Revenue | $ 299,910 | $ 297,618 | $ 591,395 | $ 503,473 |
Depreciation and amortization | (35,692) | (29,778) | (69,514) | (54,630) |
Stock-based compensation expense | (7,932) | (14,372) | (14,882) | (20,957) |
Corporate and unallocated expenses | (19,402) | (36,141) | (43,943) | (60,803) |
Interest, net | (11,188) | (12,326) | (25,459) | (20,907) |
Other, net | 2,041 | 1,402 | (7,717) | (510) |
Income (loss) before income taxes | 19,991 | (16,806) | (15,321) | (55,392) |
Operating Segments | ACI On Demand | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 180,573 | 172,499 | 373,523 | 282,347 |
Segment Adjusted EBITDA | 33,071 | 17,340 | 56,192 | 17,078 |
Depreciation and amortization | (10,852) | (8,489) | (20,184) | (16,051) |
Stock-based compensation expense | (2,273) | (2,214) | (4,299) | (4,165) |
Operating Segments | ACI On Premise | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 119,337 | 125,119 | 217,872 | 221,126 |
Segment Adjusted EBITDA | 59,093 | 57,069 | 90,002 | 85,337 |
Depreciation and amortization | (3,431) | (3,019) | (6,537) | (6,049) |
Stock-based compensation expense | (2,279) | (2,051) | (4,309) | (4,007) |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | (21,409) | (18,270) | (42,793) | (32,530) |
Stock-based compensation expense | $ (3,380) | $ (10,107) | $ (6,274) | $ (12,785) |
Income Taxes - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||||
Effective tax rate, percentage | 30.00% | 134.00% | 32.00% | 63.00% | |
Earnings (loss) of foreign entities | $ (10.7) | $ 11.0 | $ 3.7 | $ 4.8 | |
Valuation allowance increase (decrease), amount | $ 18.5 | ||||
Unrecognized tax benefit for uncertain tax positions | 30.0 | 30.0 | $ 29.0 | ||
Liabilities for interest and penalties, excluded from unrecognized tax benefits for uncertain tax positions | 1.2 | 1.2 | $ 1.2 | ||
Decrease in unrecognized tax benefits due to the settlement of various audits and expiration of statutes of limitations | $ 11.7 | $ 11.7 |
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