☒ | 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 |
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Delaware | 47-0772104 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
3520 Kraft Rd, | Suite 300 | Naples, | Florida | ||
(Address of principal executive | ( |
Large accelerated filer | ☒ | 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 | ||
Common Stock, $0.005 par value | ACIW | Nasdaq Global Select Market |
TABLE OF CONTENTS | ||||||||
Page | ||||||||
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Item 1 | ||||||||
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PART II – OTHER INFORMATION | ||||||||
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March 31, | December 31, | |||||||
2019 | 2018 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 176,173 | $ | 148,502 | ||||
Receivables, net of allowances of $3,663 and $3,912, respectively | 265,750 | 348,182 | ||||||
Prepaid expenses | 31,464 | 23,277 | ||||||
Other current assets | 40,830 | 46,516 | ||||||
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Total current assets | 514,217 | 566,477 | ||||||
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Noncurrent assets | ||||||||
Accrued receivables, net | 177,407 | 189,010 | ||||||
Property and equipment, net | 70,909 | 72,729 | ||||||
Operating leaseright-of-use assets | 60,978 | — | ||||||
Software, net | 130,812 | 137,228 | ||||||
Goodwill | 909,691 | 909,691 | ||||||
Intangible assets, net | 162,845 | 168,127 | ||||||
Deferred income taxes, net | 38,408 | 27,048 | ||||||
Other noncurrent assets | 48,875 | 52,145 | ||||||
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TOTAL ASSETS | $ | 2,114,142 | $ | 2,122,455 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 28,046 | $ | 39,602 | ||||
Employee compensation | 29,570 | 38,115 | ||||||
Current portion of long-term debt | 20,788 | 20,767 | ||||||
Deferred revenue | 91,369 | 104,843 | ||||||
Other current liabilities | 90,604 | 93,293 | ||||||
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Total current liabilities | 260,377 | 296,620 | ||||||
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Noncurrent liabilities | ||||||||
Deferred revenue | 60,853 | 51,292 | ||||||
Long-term debt | 645,784 | 650,989 | ||||||
Deferred income taxes, net | 24,705 | 31,715 | ||||||
Operating lease liabilities | 50,636 | — | ||||||
Other noncurrent liabilities | 39,203 | 43,608 | ||||||
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Total liabilities | 1,081,558 | 1,074,224 | ||||||
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Commitments and contingencies | ||||||||
Stockholders’ equity | ||||||||
Preferred stock; $0.01 par value; 5,000,000 shares authorized; no shares issued at March 31, 2019, and December 31, 2018 | — | — | ||||||
Common stock; $0.005 par value; 280,000,000 shares authorized; 140,525,055 shares issued at March 31, 2019, and December 31, 2018 | 702 | 702 | ||||||
Additionalpaid-in capital | 636,960 | 632,235 | ||||||
Retained earnings | 837,805 | 863,768 | ||||||
Treasury stock, at cost, 23,994,620 and 24,401,694 shares at March 31, 2019, and December 31, 2018, respectively | (351,587 | ) | (355,857 | ) | ||||
Accumulated other comprehensive loss | (91,296 | ) | (92,617 | ) | ||||
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Total stockholders’ equity | 1,032,584 | 1,048,231 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,114,142 | $ | 2,122,455 | ||||
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June 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 139,396 | $ | 148,502 | |||
Receivables, net of allowances of $3,781 and $3,912, respectively | 286,393 | 348,182 | |||||
Settlement assets | 613,290 | 32,256 | |||||
Prepaid expenses | 30,645 | 23,277 | |||||
Other current assets | 52,259 | 14,260 | |||||
Total current assets | 1,121,983 | 566,477 | |||||
Noncurrent assets | |||||||
Accrued receivables, net | 177,513 | 189,010 | |||||
Property and equipment, net | 70,805 | 72,729 | |||||
Operating lease right-of-use assets | 62,316 | — | |||||
Software, net | 246,314 | 137,228 | |||||
Goodwill | 1,279,472 | 909,691 | |||||
Intangible assets, net | 374,908 | 168,127 | |||||
Deferred income taxes, net | 63,569 | 27,048 | |||||
Other noncurrent assets | 53,440 | 52,145 | |||||
TOTAL ASSETS | $ | 3,450,320 | $ | 2,122,455 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 46,975 | $ | 39,602 | |||
Settlement liabilities | 589,742 | 31,605 | |||||
Employee compensation | 38,976 | 38,115 | |||||
Current portion of long-term debt | 34,089 | 20,767 | |||||
Deferred revenue | 79,311 | 104,843 | |||||
Other current liabilities | 81,156 | 61,688 | |||||
Total current liabilities | 870,249 | 296,620 | |||||
Noncurrent liabilities | |||||||
Deferred revenue | 59,122 | 51,292 | |||||
Long-term debt | 1,352,096 | 650,989 | |||||
Deferred income taxes, net | 23,243 | 31,715 | |||||
Operating lease liabilities | 50,550 | — | |||||
Other noncurrent liabilities | 42,483 | 43,608 | |||||
Total liabilities | 2,397,743 | 1,074,224 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock; $0.01 par value; 5,000,000 shares authorized; no shares issued at June 30, 2019, and December 31, 2018 | — | — | |||||
Common stock; $0.005 par value; 280,000,000 shares authorized; 140,525,055 shares issued at June 30, 2019, and December 31, 2018 | 702 | 702 | |||||
Additional paid-in capital | 650,797 | 632,235 | |||||
Retained earnings | 843,530 | 863,768 | |||||
Treasury stock, at cost, 23,840,186 and 24,401,694 shares at June 30, 2019, and December 31, 2018, respectively | (349,426 | ) | (355,857 | ) | |||
Accumulated other comprehensive loss | (93,026 | ) | (92,617 | ) | |||
Total stockholders’ equity | 1,052,577 | 1,048,231 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 3,450,320 | $ | 2,122,455 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Revenues | ||||||||
Software as a service and platform as a service | $ | 108,557 | $ | 104,280 | ||||
License | 21,078 | 28,046 | ||||||
Maintenance | 55,111 | 56,659 | ||||||
Services | 21,109 | 20,325 | ||||||
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Total revenues | 205,855 | 209,310 | ||||||
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Operating expenses | ||||||||
Cost of revenue (1) | 114,941 | 107,336 | ||||||
Research and development | 36,194 | 36,791 | ||||||
Selling and marketing | 29,430 | 31,893 | ||||||
General and administrative | 31,517 | 28,649 | ||||||
Depreciation and amortization | 21,866 | 21,345 | ||||||
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Total operating expenses | 233,948 | 226,014 | ||||||
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Operating loss | (28,093 | ) | (16,704 | ) | ||||
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Other income (expense) | ||||||||
Interest expense | (11,614 | ) | (9,365 | ) | ||||
Interest income | 3,033 | 2,744 | ||||||
Other, net | (1,912 | ) | (55 | ) | ||||
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Total other income (expense) | (10,493 | ) | (6,676 | ) | ||||
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Loss before income taxes | (38,586 | ) | (23,380 | ) | ||||
Income tax benefit | (12,623 | ) | (3,952 | ) | ||||
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Net loss | $ | (25,963 | ) | $ | (19,428 | ) | ||
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Loss per common share | ||||||||
Basic | $ | (0.22 | ) | $ | (0.17 | ) | ||
Diluted | $ | (0.22 | ) | $ | (0.17 | ) | ||
Weighted average common shares outstanding | ||||||||
Basic | 116,090 | 115,642 | ||||||
Diluted | 116,090 | 115,642 |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues | |||||||||||||||
Software as a service and platform as a service | $ | 172,499 | $ | 113,600 | $ | 281,056 | $ | 217,880 | |||||||
License | 52,541 | 45,555 | 73,619 | 73,601 | |||||||||||
Maintenance | 51,922 | 55,048 | 107,033 | 111,707 | |||||||||||
Services | 20,656 | 20,792 | 41,765 | 41,117 | |||||||||||
Total revenues | 297,618 | 234,995 | 503,473 | 444,305 | |||||||||||
Operating expenses | |||||||||||||||
Cost of revenue (1) | 155,240 | 116,261 | 270,181 | 223,597 | |||||||||||
Research and development | 39,235 | 37,862 | 75,429 | 74,653 | |||||||||||
Selling and marketing | 32,962 | 33,160 | 62,392 | 65,053 | |||||||||||
General and administrative | 49,319 | 28,837 | 80,836 | 57,486 | |||||||||||
Depreciation and amortization | 26,744 | 21,033 | 48,610 | 42,378 | |||||||||||
Total operating expenses | 303,500 | 237,153 | 537,448 | 463,167 | |||||||||||
Operating loss | (5,882 | ) | (2,158 | ) | (33,975 | ) | (18,862 | ) | |||||||
Other income (expense) | |||||||||||||||
Interest expense | (15,323 | ) | (9,717 | ) | (26,937 | ) | (19,082 | ) | |||||||
Interest income | 2,997 | 2,742 | 6,030 | 5,486 | |||||||||||
Other, net | 1,402 | (1,677 | ) | (510 | ) | (1,732 | ) | ||||||||
Total other income (expense) | (10,924 | ) | (8,652 | ) | (21,417 | ) | (15,328 | ) | |||||||
Loss before income taxes | (16,806 | ) | (10,810 | ) | (55,392 | ) | (34,190 | ) | |||||||
Income tax expense (benefit) | (22,531 | ) | 3,764 | (35,154 | ) | (188 | ) | ||||||||
Net income (loss) | $ | 5,725 | $ | (14,574 | ) | $ | (20,238 | ) | $ | (34,002 | ) | ||||
Income (loss) per common share | |||||||||||||||
Basic | $ | 0.05 | $ | (0.13 | ) | $ | (0.17 | ) | $ | (0.29 | ) | ||||
Diluted | $ | 0.05 | $ | (0.13 | ) | $ | (0.17 | ) | $ | (0.29 | ) | ||||
Weighted average common shares outstanding | |||||||||||||||
Basic | 116,586 | 115,548 | 116,287 | 115,595 | |||||||||||
Diluted | 118,786 | 115,548 | 116,287 | 115,595 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Net loss | $ | (25,963 | ) | $ | (19,428 | ) | ||
Other comprehensive income: | ||||||||
Foreign currency translation adjustments | 1,321 | 5,659 | ||||||
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Total other comprehensive income | 1,321 | 5,659 | ||||||
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Comprehensive loss | $ | (24,642 | ) | $ | (13,769 | ) | ||
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) | $ | 5,725 | $ | (14,574 | ) | $ | (20,238 | ) | $ | (34,002 | ) | ||||
Other comprehensive loss: | |||||||||||||||
Foreign currency translation adjustments | (1,730 | ) | (12,907 | ) | (409 | ) | (7,248 | ) | |||||||
Total other comprehensive loss | (1,730 | ) | (12,907 | ) | (409 | ) | (7,248 | ) | |||||||
Comprehensive income (loss) | $ | 3,995 | $ | (27,481 | ) | $ | (20,647 | ) | $ | (41,250 | ) |
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||
Balance as of December 31, 2017 | $ | 702 | $ | 610,345 | $ | 550,866 | $ | (319,960 | ) | $ | (77,356 | ) | $ | 764,597 | ||||||||||
Net loss | — | — | (19,428 | ) | — | — | (19,428 | ) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 5,659 | 5,659 | ||||||||||||||||||
Stock-based compensation | — | 6,362 | — | — | — | 6,362 | ||||||||||||||||||
Shares issued and forfeited, net, under stock plans including income tax benefits | — | 206 | — | 9,671 | — | 9,877 | ||||||||||||||||||
Repurchase of 1,346,427 shares of common stock | — | — | — | (31,113 | ) | — | (31,113 | ) | ||||||||||||||||
Repurchase of restricted share awards for tax | — | — | — | (914 | ) | — | (914 | ) | ||||||||||||||||
Cumulative effect of accounting change, ASC 606 | — | — | 243,981 | — | — | 243,981 | ||||||||||||||||||
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Balance as of March 31, 2018 | $ | 702 | $ | 616,913 | $ | 775,419 | $ | (342,316 | ) | $ | (71,697 | ) | $ | 979,021 | ||||||||||
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Balance as of December 31, 2018 | $ | 702 | $ | 632,235 | $ | 863,768 | $ | (355,857 | ) | $ | (92,617 | ) | $ | 1,048,231 | ||||||||||
Net loss | — | — | (25,963 | ) | — | — | (25,963 | ) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 1,321 | 1,321 | ||||||||||||||||||
Stock-based compensation | — | 6,585 | — | — | — | 6,585 | ||||||||||||||||||
Shares issued and forfeited, net, under stock plans including income tax benefits | — | (1,860 | ) | — | 7,525 | — | 5,665 | |||||||||||||||||
Repurchase of 23,802 shares of common stock | — | — | — | (631 | ) | — | (631 | ) | ||||||||||||||||
Repurchase of restricted share awards and restricted share | — | — | — | (2,624 | ) | — | (2,624 | ) | ||||||||||||||||
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Balance as of March 31, 2019 | $ | 702 | $ | 636,960 | $ | 837,805 | $ | (351,587 | ) | $ | (91,296 | ) | $ | 1,032,584 | ||||||||||
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Three Months Ended June 30, 2019 | |||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||
Balance as of March 31, 2019 | $ | 702 | $ | 636,960 | $ | 837,805 | $ | (351,587 | ) | $ | (91,296 | ) | $ | 1,032,584 | |||||||||
Net income | — | — | 5,725 | — | — | 5,725 | |||||||||||||||||
Other comprehensive loss | — | — | — | — | (1,730 | ) | (1,730 | ) | |||||||||||||||
Stock-based compensation | — | 14,372 | — | — | — | 14,372 | |||||||||||||||||
Shares issued and forfeited, net, under stock plans including income tax benefits | — | (535 | ) | — | 2,346 | — | 1,811 | ||||||||||||||||
Repurchase of restricted share awards and restricted share units for tax withholdings | — | — | — | (185 | ) | — | (185 | ) | |||||||||||||||
Balance as of June 30, 2019 | $ | 702 | $ | 650,797 | $ | 843,530 | $ | (349,426 | ) | $ | (93,026 | ) | $ | 1,052,577 | |||||||||
Three Months Ended June 30, 2018 | |||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||
Balance as of March 31, 2018 | $ | 702 | $ | 616,913 | $ | 775,419 | $ | (342,316 | ) | $ | (71,697 | ) | $ | 979,021 | |||||||||
Net loss | — | — | (14,574 | ) | — | — | (14,574 | ) | |||||||||||||||
Other comprehensive loss | — | — | — | — | (12,907 | ) | (12,907 | ) | |||||||||||||||
Stock-based compensation | — | 7,705 | — | — | — | 7,705 | |||||||||||||||||
Shares issued and forfeited, net, under stock plans including income tax benefits | — | 233 | — | 6,325 | — | 6,558 | |||||||||||||||||
Repurchase of 1,000,000 shares of common stock | — | — | — | (23,414 | ) | — | (23,414 | ) | |||||||||||||||
Repurchase of restricted share awards for tax withholdings | — | — | — | (1,674 | ) | — | (1,674 | ) | |||||||||||||||
Balance as of June 30, 2018 | $ | 702 | $ | 624,851 | $ | 760,845 | $ | (361,079 | ) | $ | (84,604 | ) | $ | 940,715 |
STOCKHOLDERS’ EQUITY
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (25,963 | ) | $ | (19,428 | ) | ||
Adjustments to reconcile net loss to net cash flows from operating activities: | ||||||||
Depreciation | 5,901 | 5,926 | ||||||
Amortization | 18,951 | 19,067 | ||||||
Amortization of operating leaseright-of-use assets | 3,383 | — | ||||||
Amortization of deferred debt issuance costs | 753 | 699 | ||||||
Deferred income taxes | (17,414 | ) | (4,827 | ) | ||||
Stock-based compensation expense | 6,585 | 6,362 | ||||||
Other | 574 | (663 | ) | |||||
Changes in operating assets and liabilities | ||||||||
Receivables | 94,549 | 68,741 | ||||||
Accounts payable | (10,297 | ) | (2,611 | ) | ||||
Accrued employee compensation | (8,598 | ) | (14,743 | ) | ||||
Current income taxes | (1,041 | ) | (3,569 | ) | ||||
Deferred revenue | (4,127 | ) | 11,326 | |||||
Other current and noncurrent assets and liabilities | (20,829 | ) | (21,144 | ) | ||||
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Net cash flows from operating activities | 42,427 | 45,136 | ||||||
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Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (5,250 | ) | (5,937 | ) | ||||
Purchases of software and distribution rights | (4,578 | ) | (6,652 | ) | ||||
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Net cash flows from investing activities | (9,828 | ) | (12,589 | ) | ||||
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Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 831 | 753 | ||||||
Proceeds from exercises of stock options | 4,857 | 9,118 | ||||||
Repurchase of restricted share awards and restricted share units for tax withholdings | (2,624 | ) | (914 | ) | ||||
Repurchases of common stock | (631 | ) | (31,113 | ) | ||||
Proceeds from revolving credit facility | — | 48,000 | ||||||
Repayment of revolving credit facility | — | (50,000 | ) | |||||
Repayment of term portion of credit agreement | (5,937 | ) | (5,187 | ) | ||||
Payments on other debt | (1,857 | ) | (352 | ) | ||||
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Net cash flows from financing activities | (5,361 | ) | (29,695 | ) | ||||
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Effect of exchange rate fluctuations on cash | 433 | 1,719 | ||||||
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Net increase in cash and cash equivalents | 27,671 | 4,571 | ||||||
Cash and cash equivalents, beginning of period | 148,502 | 69,710 | ||||||
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Cash and cash equivalents, end of period | $ | 176,173 | $ | 74,281 | ||||
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Supplemental cash flow information | ||||||||
Income taxes paid | $ | 5,949 | $ | 8,263 | ||||
Interest paid | $ | 14,388 | $ | 13,127 |
thousands, except share amounts)
Six Months Ended June 30, 2019 | |||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||
Balance as of December 31, 2018 | $ | 702 | $ | 632,235 | $ | 863,768 | $ | (355,857 | ) | $ | (92,617 | ) | $ | 1,048,231 | |||||||||
Net loss | — | — | (20,238 | ) | — | — | (20,238 | ) | |||||||||||||||
Other comprehensive loss | — | — | — | — | (409 | ) | (409 | ) | |||||||||||||||
Stock-based compensation | — | 20,957 | — | — | — | 20,957 | |||||||||||||||||
Shares issued and forfeited, net, under stock plans including income tax benefits | — | (2,395 | ) | — | 9,871 | — | 7,476 | ||||||||||||||||
Repurchase of 23,802 shares of common stock | — | — | — | (631 | ) | — | (631 | ) | |||||||||||||||
Repurchase of restricted share awards and restricted share units for tax withholdings | — | — | — | (2,809 | ) | — | (2,809 | ) | |||||||||||||||
Balance as of June 30, 2019 | $ | 702 | $ | 650,797 | $ | 843,530 | $ | (349,426 | ) | $ | (93,026 | ) | $ | 1,052,577 | |||||||||
Six Months Ended June 30, 2018 | |||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||
Balance as of December 31, 2017 | $ | 702 | $ | 610,345 | $ | 550,866 | $ | (319,960 | ) | $ | (77,356 | ) | $ | 764,597 | |||||||||
Net loss | — | — | (34,002 | ) | — | — | (34,002 | ) | |||||||||||||||
Other comprehensive loss | — | — | — | — | (7,248 | ) | (7,248 | ) | |||||||||||||||
Stock-based compensation | — | 14,067 | — | — | — | 14,067 | |||||||||||||||||
Shares issued and forfeited, net, under stock plans including income tax benefits | — | 439 | — | 15,996 | — | 16,435 | |||||||||||||||||
Repurchase of 2,346,427 shares of common stock | — | — | — | (54,527 | ) | — | (54,527 | ) | |||||||||||||||
Repurchase of restricted share awards for tax withholdings | — | — | — | (2,588 | ) | — | (2,588 | ) | |||||||||||||||
Cumulative effect of accounting change, ASC 606 | — | — | 243,981 | — | — | 243,981 | |||||||||||||||||
Balance as of June 30, 2018 | $ | 702 | $ | 624,851 | $ | 760,845 | $ | (361,079 | ) | $ | (84,604 | ) | $ | 940,715 |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (20,238 | ) | $ | (34,002 | ) | |
Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||
Depreciation | 11,831 | 11,875 | |||||
Amortization | 42,799 | 37,469 | |||||
Amortization of operating lease right-of-use assets | 7,029 | — | |||||
Amortization of deferred debt issuance costs | 1,683 | 1,445 | |||||
Deferred income taxes | (41,331 | ) | (3,044 | ) | |||
Stock-based compensation expense | 20,957 | 14,067 | |||||
Other | 1,533 | (248 | ) | ||||
Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||
Receivables | 88,596 | 67,689 | |||||
Accounts payable | 1,294 | (3,658 | ) | ||||
Accrued employee compensation | (1,163 | ) | (5,805 | ) | |||
Current income taxes | (5,634 | ) | (7,243 | ) | |||
Deferred revenue | (17,981 | ) | 10,142 | ||||
Other current and noncurrent assets and liabilities | (32,510 | ) | (17,576 | ) | |||
Net cash flows from operating activities | 56,865 | 71,111 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (9,915 | ) | (11,108 | ) | |||
Purchases of software and distribution rights | (11,300 | ) | (16,776 | ) | |||
Acquisition of businesses, net of cash acquired | (758,546 | ) | — | ||||
Other | — | (1,467 | ) | ||||
Net cash flows from investing activities | (779,761 | ) | (29,351 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock | 1,753 | 1,564 | |||||
Proceeds from exercises of stock options | 5,816 | 14,906 | |||||
Repurchase of restricted share awards and restricted share units for tax withholdings | (2,809 | ) | (2,588 | ) | |||
Repurchases of common stock | (631 | ) | (54,527 | ) | |||
Proceeds from revolving credit facility | 250,000 | 85,000 | |||||
Repayment of revolving credit facility | (15,000 | ) | (84,000 | ) | |||
Proceeds from term portion of credit agreement | 500,000 | — | |||||
Repayment of term portion of credit agreement | (9,424 | ) | (10,375 | ) | |||
Payments for debt issuance costs | (12,830 | ) | — | ||||
Payments on other debt | (2,220 | ) | (1,550 | ) | |||
Net cash flows from financing activities | 714,655 | (51,570 | ) | ||||
Effect of exchange rate fluctuations on cash | (865 | ) | (867 | ) | |||
Net decrease in cash and cash equivalents | (9,106 | ) | (10,677 | ) | |||
Cash and cash equivalents, beginning of period | 148,502 | 69,710 | |||||
Cash and cash equivalents, end of period | $ | 139,396 | $ | 59,033 | |||
Supplemental cash flow information | |||||||
Income taxes paid | $ | 15,476 | $ | 20,613 | |||
Interest paid | $ | 23,937 | $ | 17,297 |
Certain prior period amounts have been reclassified to conform to current year presentation. The Company reclassified $32.3 million from other current assets to settlement assets and $31.6 million from other current liabilities to settlement liabilities in the condensed consolidated balance sheet as of December 31, 2018.
Other Current Assets and
(in thousands) | March 31, 2019 | December 31, 2018 | ||||||
Settlement receivables | $ | 13,842 | $ | 8,605 | ||||
Settlement deposits | 10,549 | 23,651 | ||||||
Other | 16,439 | 14,260 | ||||||
|
|
|
| |||||
Total other current assets | $ | 40,830 | $ | 46,516 | ||||
|
|
|
| |||||
(in thousands) | March 31, 2019 | December 31, 2018 | ||||||
Settlement payables | $ | 23,552 | $ | 31,605 | ||||
Operating lease liabilities | 14,334 | — | ||||||
Royalties payable | 14,751 | 11,318 | ||||||
Vendor financed licenses | 4,152 | 3,551 | ||||||
Accrued interest | 4,848 | 8,407 | ||||||
Other | 28,967 | 38,412 | ||||||
|
|
|
| |||||
Total other current liabilities | $ | 90,604 | $ | 93,293 | ||||
|
|
|
|
June 30, 2019 | December 31, 2018 | ||||||
Operating lease liabilities | $ | 15,193 | $ | — | |||
Vendor financed licenses | 13,574 | 3,551 | |||||
Accrued interest | 9,660 | 8,407 | |||||
Royalties payable | 5,693 | 11,318 | |||||
Other | 37,036 | 38,412 | |||||
Total other current liabilities | $ | 81,156 | $ | 61,688 |
were as follows (in thousands):
ACI On Demand | ACI On Premise | Total | ||||||||||
Gross Balance, prior to December 31, 2018 | $ | 183,783 | $ | 773,340 | $ | 957,123 | ||||||
Total impairment prior to December 31, 2018 | — | (47,432 | ) | (47,432 | ) | |||||||
Balance, December 31, 2018 | 183,783 | 725,908 | 909,691 | |||||||||
Goodwill from acquisitions (1) | 369,781 | — | 369,781 | |||||||||
Balance, June 30, 2019 | $ | 553,564 | $ | 725,908 | $ | 1,279,472 |
(1) | Goodwill from acquisitions relates to 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, Acquisitions. The purchase price allocations for Speedpay and Walletron are preliminary as of June 30, 2019, and are subject to future changes during the maximum one-year measurement period. |
March 31, | December 31, | |||||||
(in thousands) | 2019 | 2018 | ||||||
Billed receivables | $ | 158,807 | $ | 239,275 | ||||
Allowance for doubtful accounts | (3,663 | ) | (3,912 | ) | ||||
|
|
|
| |||||
Billed receivables, net | $ | 155,144 | $ | 235,363 | ||||
|
|
|
| |||||
Accrued receivables | 320,575 | 336,858 | ||||||
Significant financing component | (32,562 | ) | (35,029 | ) | ||||
|
|
|
| |||||
Total accrued receivables, net | 288,013 | 301,829 | ||||||
Less: current accrued receivables | 120,569 | 123,053 | ||||||
Less: current significant financing component | (9,963 | ) | (10,234 | ) | ||||
|
|
|
| |||||
Total long-term accrued receivables, net | $ | 177,407 | $ | 189,010 | ||||
|
|
|
| |||||
Total receivables, net | $ | 443,157 | $ | 537,192 | ||||
|
|
|
|
June 30, 2019 | December 31, 2018 | ||||||
Billed receivables | $ | 158,052 | $ | 239,275 | |||
Allowance for doubtful accounts | (3,781 | ) | (3,912 | ) | |||
Billed receivables, net | 154,271 | 235,363 | |||||
Accrued receivables | 341,417 | 336,858 | |||||
Significant financing component | (31,782 | ) | (35,029 | ) | |||
Total accrued receivables, net | 309,635 | 301,829 | |||||
Less: current accrued receivables | 142,248 | 123,053 | |||||
Less: current significant financing component | (10,126 | ) | (10,234 | ) | |||
Total long-term accrued receivables, net | 177,513 | 189,010 | |||||
Total receivables, net | $ | 463,906 | $ | 537,192 |
Balance, December 31, 2018 | $ | 156,135 | ||
Deferral of revenue | 42,533 | |||
Recognition of deferred revenue | (46,701 | ) | ||
Foreign currency translation | 255 | |||
|
| |||
Balance, March 31, 2019 | $ | 152,222 | ||
|
|
Balance, December 31, 2018 | $ | 156,135 | |
Deferral of revenue | 79,147 | ||
Recognition of deferred revenue | (97,104 | ) | |
Foreign currency translation | 255 | ||
Balance, June 30, 2019 | $ | 138,433 |
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.
innovation through increased research and development and investment in ACI On Demand's platform infrastructure.
Amount | Weighted Average Useful Lives | |||||
Current assets: | ||||||
Cash and cash equivalents | $ | 135 | ||||
Receivables, net of allowances | 18,422 | |||||
Settlement assets | 239,604 | |||||
Prepaid expenses | 317 | |||||
Other current assets | 19,585 | |||||
Total current assets acquired | 278,063 | |||||
Noncurrent assets: | ||||||
Goodwill | 367,142 | |||||
Software | 113,600 | 7 years | ||||
Customer relationships | 208,500 | 15 years | ||||
Trademarks | 10,900 | 5 years | ||||
Other noncurrent assets | 3,745 | |||||
Total assets acquired | 981,950 | |||||
Current liabilities: | ||||||
Accounts payable | 6,743 | |||||
Settlement liabilities | 212,892 | |||||
Employee compensation | 1,959 | |||||
Other current liabilities | 3,802 | |||||
Total current liabilities acquired | 225,396 | |||||
Noncurrent liabilities: | ||||||
Other noncurrent liabilities | 1,219 | |||||
Total liabilities acquired | 226,615 | |||||
Net assets acquired | $ | 755,335 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Pro forma revenue | $ | 334,077 | $ | 322,407 | $ | 628,136 | $ | 626,691 | |||||||
Pro forma net income (loss) | 15,249 | (7,382 | ) | (5,996 | ) | (13,595 | ) | ||||||||
Pro forma income (loss) per share: | |||||||||||||||
Basic | $ | 0.13 | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.12 | ) | ||||
Diluted | 0.13 | (0.06 | ) | (0.05 | ) | (0.12 | ) |
Effectiveamended.
Through March 31, 2019, the Company expensed approximately $4.7 million of costs related to the acquisition of Speedpay. These costs, which consist primarily of consulting and legal fees, are included in general and administrative expenses in the condensed consolidated statements of operations.
4. Debt
As of March 31, 2019, the Company had $279.0 million and $400.0 million outstanding under its Term Credit Facility and Senior Notes, respectively,In connection with up to $500.0 million of unused borrowings under the Revolving Credit Facility portion ofamending the Credit Agreement, as amended.
Credit Agreement
On February 24, 2017, the Company entered into an amendedincurred and restated credit agreement (the “Credit Agreement”) replacing the existing agreement with a syndicatepaid debt issuance costs of financial institutions,$12.8 million as lenders, and Bank of America, N.A., as the administrative agent, providing for revolving loans, swingline loans, letters of credit, and a term loan. June 30, 2019.
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. On October 9, 2018, the Company entered into the first amendment to theThe collateral agreement of the Credit Agreement. This amendmentAgreement, as amended, released the lien on certain assets of Official Payments Corporation (“OPAY”),OPAY, our electronic bill presentment and payment affiliate, to allow OPAY to comply with certain eligible securities and unencumbered asset requirements related to money transmitter or transfer license rules and regulations.
The Company used the net proceeds of the offering described above to redeem in full the Company’s outstanding 6.375% Senior Notes due 2020, including accrued interest, and repaid a portion of the outstanding amount under the Term Credit Facility.
Fiscal year ending December 31, | ||||
2019 | $ | 17,810 | ||
2020 | 23,747 | |||
2021 | 31,662 | |||
2022 | 205,804 | |||
2023 | — | |||
Thereafter | 400,000 | |||
|
| |||
Total | $ | 679,023 | ||
|
|
The Credit Agreement and 2026 Notes also contain certain customary mandatory prepayment provisions. As specified in the Credit Agreement and 2026 Notes agreement, if certain events shall occur, the Company may be required to repay all or a portion of the amounts outstanding under the Credit Facility or 2026 Notes.
Fiscal Year Ending December 31, | |||
Remainder of 2019 | $ | 19,475 | |
2020 | 38,950 | ||
2021 | 38,950 | ||
2022 | 50,431 | ||
2023 | 69,906 | ||
Thereafter | 1,192,823 | ||
Total | $ | 1,410,535 |
March 31, 2019 | December 31, 2018 | |||||||
Term credit facility | $ | 279,023 | $ | 284,959 | ||||
5.750% Senior notes, due August 2026 | 400,000 | 400,000 | ||||||
Debt issuance costs | (12,451 | ) | (13,203 | ) | ||||
|
|
|
| |||||
Total debt | 666,572 | 671,756 | ||||||
Less: current portion of term credit facility | 23,747 | 23,747 | ||||||
Less: current portion of debt issuance costs | (2,959 | ) | (2,980 | ) | ||||
|
|
|
| |||||
Total long-term debt | $ | 645,784 | $ | 650,989 | ||||
|
|
|
|
Other
June 30, 2019 | December 31, 2018 | ||||||
Term loans | $ | 775,535 | $ | 284,959 | |||
Revolving credit facility | 235,000 | — | |||||
5.750% Senior notes, due August 2026 | 400,000 | 400,000 | |||||
Debt issuance costs | (24,350 | ) | (13,203 | ) | |||
Total debt | 1,386,185 | 671,756 | |||||
Less: current portion of term loans | 38,950 | 23,747 | |||||
Less: current portion of debt issuance costs | (4,861 | ) | (2,980 | ) | |||
Total long-term debt | $ | 1,352,096 | $ | 650,989 |
Upon execution, these arrangements have been treated as a non-cash investment and financing activity for purposes of the condensed consolidated statements of cash flows.
Stock Options | 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, 2018 | 4,864,836 | $ | 17.76 | |||||||||||||
Exercised | (313,282 | ) | 15.50 | |||||||||||||
Forfeited | (3,496 | ) | 17.89 | |||||||||||||
|
|
|
| |||||||||||||
Outstanding as of March 31, 2019 | 4,548,058 | $ | 17.91 | 6.02 | $ | 68,018,687 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Exercisable as of March 31, 2019 | 3,946,163 | $ | 17.58 | 5.80 | $ | 60,350,648 | ||||||||||
|
|
|
|
|
|
|
|
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, 2018 | 4,864,836 | $ | 17.76 | |||||||||
Exercised | (365,808 | ) | 15.90 | |||||||||
Forfeited | (3,496 | ) | 17.89 | |||||||||
Outstanding as of June 30, 2019 | 4,495,532 | $ | 17.91 | 5.77 | $ | 73,859,896 | ||||||
Exercisable as of June 30, 2019 | 3,951,380 | $ | 17.59 | 5.54 | $ | 66,188,229 |
June 30, 2018 | |||||
Expected life (years) | 5.6 | ||||
Risk-free interest rate | 2.7 | % | |||
Expected volatility | 26.4 | % | |||
Expected dividend yield | — |
Nonvested LTIP Performance Shares | Number of Shares at Expected Attainment | Weighted- Average Grant Date Fair Value | ||||||
Nonvested as of December 31, 2018 | 540,697 | $ | 19.83 | |||||
Forfeited | (1,036 | ) | 20.12 | |||||
|
|
|
| |||||
Nonvested as of March 31, 2019 | 539,661 | $ | 19.83 | |||||
|
|
|
|
Number of Shares at Expected Attainment | Weighted Average Grant Date Fair Value | |||||
Nonvested as of December 31, 2018 | 540,697 | $ | 19.83 | |||
Forfeited | (16,319 | ) | 20.12 | |||
Change in attainment | 377,557 | 20.22 | ||||
Nonvested as of June 30, 2019 | 901,935 | $ | 19.99 |
Nonvested Restricted Share Awards | Number of Shares | Weighted- Average Grant Date Fair Value | ||||||
Nonvested as of December 31, 2018 | 213,337 | $ | 20.21 | |||||
Vested | (98,769 | ) | 20.12 | |||||
Forfeited | (3,975 | ) | 20.12 | |||||
|
|
|
| |||||
Nonvested as of March 31, 2019 | 110,593 | $ | 20.29 | |||||
|
|
|
|
Number of Shares | Weighted Average Grant Date Fair Value | |||||
Nonvested as of December 31, 2018 | 213,337 | $ | 20.21 | |||
Vested | (104,763 | ) | 20.21 | |||
Forfeited | (9,068 | ) | 20.12 | |||
Nonvested as of June 30, 2019 | 99,506 | $ | 20.21 |
Nonvested Total Shareholder Return Awards | Number of Shares | Weighted- Average Grant Date Fair Value | ||||||
Nonvested as of December 31, 2018 | 718,931 | $ | 29.25 | |||||
Granted | 436,674 | 47.90 | ||||||
Forfeited | (5,457 | ) | 31.31 | |||||
|
|
|
| |||||
Nonvested as of March 31, 2019 | 1,150,148 | $ | 36.32 | |||||
|
|
|
|
Number of Shares | Weighted Average Grant Date Fair Value | |||||
Nonvested as of December 31, 2018 | 718,931 | $ | 29.25 | |||
Granted | 436,674 | 47.90 | ||||
Forfeited | (18,050 | ) | 36.06 | |||
Nonvested as of June 30, 2019 | 1,137,555 | $ | 36.30 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Expected life (years) | 2.8 | 2.9 | ||||||
Risk-free interest rate | 2.5 | % | 2.4 | % | ||||
Expected volatility | 29.3 | % | 28.0 | % | ||||
Expected dividend yield | — | — |
Six Months Ended
June 30, 2019 2018 Expected life (years) 2.8 2.9 Risk-free interest rate 2.5 % 2.4 % Expected volatility 29.3 % 28.0 % Expected dividend yield — —
Nonvested Restricted Share Units | Number of Shares | Weighted- Average Grant Date Fair Value | ||||||
Nonvested as of December 31, 2018 | 651,045 | $ | 23.82 | |||||
Granted | 550,091 | 33.07 | ||||||
Vested | (173,547 | ) | 23.36 | |||||
Forfeited | (8,346 | ) | 23.36 | |||||
|
|
|
| |||||
Nonvested as of March 31, 2019 | 1,019,243 | $ | 28.90 | |||||
|
|
|
|
Number of Shares | Weighted Average Grant Date Fair Value | |||||
Nonvested as of December 31, 2018 | 651,045 | $ | 23.82 | |||
Granted | 679,480 | 33.06 | ||||
Vested | (257,982 | ) | 24.13 | |||
Forfeited | (22,465 | ) | 26.60 | |||
Nonvested as of June 30, 2019 | 1,050,078 | $ | 29.66 |
March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Balance | Gross Carrying Amount | Accumulated Amortization | Net Balance | |||||||||||||||||||
Customer relationships | $ | 298,459 | $ | (136,628 | ) | $ | 161,831 | $ | 297,991 | $ | (131,187 | ) | $ | 166,804 | ||||||||||
Trademarks and tradenames | 16,346 | (15,332 | ) | 1,014 | 16,348 | (15,025 | ) | 1,323 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 314,805 | $ | (151,960 | ) | $ | 162,845 | $ | 314,339 | $ | (146,212 | ) | $ | 168,127 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Balance | Gross Carrying Amount | Accumulated Amortization | Net Balance | ||||||||||||||||||
Customer relationships | $ | 506,831 | $ | (143,307 | ) | $ | 363,524 | $ | 297,991 | $ | (131,187 | ) | $ | 166,804 | |||||||||
Trademarks and tradenames | 27,253 | (15,869 | ) | 11,384 | 16,348 | (15,025 | ) | 1,323 | |||||||||||||||
Total other intangible assets | $ | 534,084 | $ | (159,176 | ) | $ | 374,908 | $ | 314,339 | $ | (146,212 | ) | $ | 168,127 |
Fiscal Year Ending December 31, | Software Amortization | Other Intangible Assets Amortization | ||||||
Remainder of 2019 | $ | 37,383 | $ | 16,340 | ||||
2020 | 40,353 | 20,992 | ||||||
2021 | 27,637 | 20,506 | ||||||
2022 | 13,167 | 20,359 | ||||||
2023 | 6,633 | 20,053 | ||||||
Thereafter | 5,639 | 64,595 | ||||||
|
|
|
| |||||
Total | $ | 130,812 | $ | 162,845 | ||||
|
|
|
|
Fiscal Year Ending December 31, | Software | Other Intangible Assets | ||||||
Remainder of 2019 | $ | 35,197 | $ | 18,830 | ||||
2020 | 62,338 | 37,046 | ||||||
2021 | 49,336 | 36,555 | ||||||
2022 | 31,603 | 36,409 | ||||||
2023 | 23,123 | 36,107 | ||||||
Thereafter | 44,717 | 209,961 | ||||||
Total | $ | 246,314 | $ | 374,908 |
The components
Balance, December 31, 2018 | $ | 4,127 | ||
Amounts paid during the period | (389 | ) | ||
Foreign currency translation adjustments | 42 | |||
|
| |||
Balance, March 31, 2019 | $ | 3,780 | ||
|
|
Balance, December 31, 2018 | $ | 4,127 | |
Amounts paid during the period | (777 | ) | |
Foreign currency translation adjustments | 2 | ||
Balance, June 30, 2019 | $ | 3,352 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Weighted average shares outstanding: | ||||||||
Basic weighted average shares outstanding | 116,090 | 115,642 | ||||||
Add: Dilutive effect of stock options and RSUs | — | — | ||||||
|
|
|
| |||||
Diluted weighted average shares outstanding | 116,090 | 115,642 | ||||||
|
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Weighted average shares outstanding: | |||||||||||
Basic weighted average shares outstanding | 116,586 | 115,548 | 116,287 | 115,595 | |||||||
Add: Dilutive effect of stock options and RSUs | 2,200 | — | — | — | |||||||
Diluted weighted average shares outstanding | 118,786 | 115,548 | 116,287 | 115,595 |
The diluted loss per share computation excludes 7.5 million and 8.3 million options to purchase shares, RSAs, RSUs, and contingently issuable shares during the six months ended June 30, 2019 and 2018, respectively, as their effect would be anti-dilutive.
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Revenue | ||||||||
ACI On Premise | $ | 96,007 | $ | 105,030 | ||||
ACI On Demand | 109,848 | 104,280 | ||||||
|
|
|
| |||||
Total revenue | $ | 205,855 | $ | 209,310 | ||||
|
|
|
| |||||
Segment Adjusted EBITDA | ||||||||
ACI On Premise | $ | 28,268 | $ | 38,898 | ||||
ACI On Demand | (262 | ) | (4,233 | ) | ||||
Depreciation and amortization | (24,852 | ) | (24,993 | ) | ||||
Stock-based compensation expense | (6,585 | ) | (6,362 | ) | ||||
Corporate and unallocated expenses | (24,662 | ) | (20,014 | ) | ||||
Interest, net | (8,581 | ) | (6,621 | ) | ||||
Other, net | (1,912 | ) | (55 | ) | ||||
|
|
|
| |||||
Loss before income taxes | $ | (38,586 | ) | $ | (23,380 | ) | ||
|
|
|
| |||||
Depreciation and amortization | ||||||||
ACI On Premise | $ | 3,030 | $ | 2,975 | ||||
ACI On Demand | 7,562 | 7,736 | ||||||
Corporate | 14,260 | 14,282 | ||||||
|
|
|
| |||||
Total depreciation and amortization | $ | 24,852 | $ | 24,993 | ||||
|
|
|
| |||||
Stock-based compensation expense | ||||||||
ACI On Premise | $ | 1,956 | $ | 1,467 | ||||
ACI On Demand | 1,951 | 1,463 | ||||||
Corporate | 2,678 | 3,432 | ||||||
|
|
|
| |||||
Total stock-based compensation expense | $ | 6,585 | $ | 6,362 | ||||
|
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | |||||||||||||||
ACI On Premise | $ | 125,119 | $ | 121,395 | $ | 221,126 | $ | 226,425 | |||||||
ACI On Demand | 172,499 | 113,600 | 282,347 | 217,880 | |||||||||||
Total revenue | $ | 297,618 | $ | 234,995 | $ | 503,473 | $ | 444,305 | |||||||
Segment Adjusted EBITDA | |||||||||||||||
ACI On Premise | $ | 57,069 | $ | 54,760 | $ | 85,337 | $ | 93,658 | |||||||
ACI On Demand | 17,340 | (3,364 | ) | 17,078 | (7,597 | ) | |||||||||
Depreciation and amortization | (29,778 | ) | (24,351 | ) | (54,630 | ) | (49,344 | ) | |||||||
Stock-based compensation expense | (14,372 | ) | (7,705 | ) | (20,957 | ) | (14,067 | ) | |||||||
Corporate and unallocated expenses | (36,141 | ) | (21,498 | ) | (60,803 | ) | (41,512 | ) | |||||||
Interest, net | (12,326 | ) | (6,975 | ) | (20,907 | ) | (13,596 | ) | |||||||
Other, net | 1,402 | (1,677 | ) | (510 | ) | (1,732 | ) | ||||||||
Loss before income taxes | $ | (16,806 | ) | $ | (10,810 | ) | $ | (55,392 | ) | $ | (34,190 | ) | |||
Depreciation and amortization | |||||||||||||||
ACI On Premise | $ | 3,019 | $ | 2,849 | $ | 6,049 | $ | 5,824 | |||||||
ACI On Demand | 8,489 | 7,826 | 16,051 | 15,562 | |||||||||||
Corporate | 18,270 | 13,676 | 32,530 | 27,958 | |||||||||||
Total depreciation and amortization | $ | 29,778 | $ | 24,351 | $ | 54,630 | $ | 49,344 | |||||||
Stock-based compensation expense | |||||||||||||||
ACI On Premise | $ | 2,051 | $ | 1,838 | $ | 4,007 | $ | 3,305 | |||||||
ACI On Demand | 2,214 | 1,834 | 4,165 | 3,297 | |||||||||||
Corporate | 10,107 | 4,033 | 12,785 | 7,465 | |||||||||||
Total stock-based compensation expense | $ | 14,372 | $ | 7,705 | $ | 20,957 | $ | 14,067 |
Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | |||||||||||||||||||||||
ACI On Premise | ACI On Demand | Total | ACI On Premise | ACI On Demand | Total | |||||||||||||||||||
Primary Geographic Markets | ||||||||||||||||||||||||
Americas - United States | $ | 26,422 | $ | 93,036 | $ | 119,458 | $ | 30,864 | $ | 88,946 | $ | 119,810 | ||||||||||||
Americas - Other | 10,945 | 2,743 | 13,688 | 16,784 | 2,319 | 19,103 | ||||||||||||||||||
EMEA | 42,451 | 12,068 | 54,519 | 38,686 | 12,009 | 50,695 | ||||||||||||||||||
Asia Pacific | 16,189 | 2,001 | 18,190 | 18,696 | 1,006 | 19,702 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 96,007 | $ | 109,848 | $ | 205,855 | $ | 105,030 | $ | 104,280 | $ | 209,310 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Primary Solution Categories | ||||||||||||||||||||||||
Bill Payments | $ | — | $ | 68,967 | $ | 68,967 | $ | — | $ | 66,168 | $ | 66,168 | ||||||||||||
Digital Channels | 8,725 | 9,788 | 18,513 | 11,363 | 10,644 | 22,007 | ||||||||||||||||||
Merchant Payments | 5,022 | 19,339 | 24,361 | 5,010 | 12,371 | 17,381 | ||||||||||||||||||
Payments Intelligence | 7,037 | 8,981 | 16,018 | 10,420 | 11,798 | 22,218 | ||||||||||||||||||
Real-Time Payments | 14,715 | 618 | 15,333 | 13,641 | 450 | 14,091 | ||||||||||||||||||
Retail Payments | 60,508 | 2,155 | 62,663 | 64,596 | 2,849 | 67,445 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 96,007 | $ | 109,848 | $ | 205,855 | $ | 105,030 | $ | 104,280 | $ | 209,310 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | ||||||||||||||||||||||
ACI On Premise | ACI On Demand | Total | ACI On Premise | ACI On Demand | Total | ||||||||||||||||||
Primary Geographic Markets | |||||||||||||||||||||||
Americas - United States | $ | 35,696 | $ | 155,825 | $ | 191,521 | $ | 25,394 | $ | 97,825 | $ | 123,219 | |||||||||||
Americas - Other | 12,413 | 2,107 | 14,520 | 11,776 | 2,348 | 14,124 | |||||||||||||||||
EMEA | 52,155 | 12,492 | 64,647 | 62,489 | 12,425 | 74,914 | |||||||||||||||||
Asia Pacific | 24,855 | 2,075 | 26,930 | 21,736 | 1,002 | 22,738 | |||||||||||||||||
Total | $ | 125,119 | $ | 172,499 | $ | 297,618 | $ | 121,395 | $ | 113,600 | $ | 234,995 | |||||||||||
Primary Solution Categories | |||||||||||||||||||||||
Bill Payments | $ | — | $ | 125,339 | $ | 125,339 | $ | — | $ | 74,371 | $ | 74,371 | |||||||||||
Digital Channels | 9,444 | 18,011 | 27,455 | 8,917 | 10,310 | 19,227 | |||||||||||||||||
Merchant Payments | 7,637 | 17,942 | 25,579 | 5,308 | 15,411 | 20,719 | |||||||||||||||||
Payments Intelligence | 6,504 | 8,874 | 15,378 | 7,974 | 10,247 | 18,221 | |||||||||||||||||
Real-Time Payments | 21,809 | 907 | 22,716 | 15,741 | 484 | 16,225 | |||||||||||||||||
Retail Payments | 79,725 | 1,426 | 81,151 | 83,455 | 2,777 | 86,232 | |||||||||||||||||
Total | $ | 125,119 | $ | 172,499 | $ | 297,618 | $ | 121,395 | $ | 113,600 | $ | 234,995 |
Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | ||||||||||||||||||||||
ACI On Premise | ACI On Demand | Total | ACI On Premise | ACI On Demand | Total | ||||||||||||||||||
Primary Geographic Markets | |||||||||||||||||||||||
Americas - United States | $ | 62,118 | $ | 248,861 | $ | 310,979 | $ | 56,258 | $ | 186,770 | $ | 243,028 | |||||||||||
Americas - Other | 23,358 | 4,850 | 28,208 | 28,560 | 4,668 | 33,228 | |||||||||||||||||
EMEA | 94,606 | 24,560 | 119,166 | 101,175 | 24,434 | 125,609 | |||||||||||||||||
Asia Pacific | 41,044 | 4,076 | 45,120 | 40,432 | 2,008 | 42,440 | |||||||||||||||||
Total | $ | 221,126 | $ | 282,347 | $ | 503,473 | $ | 226,425 | $ | 217,880 | $ | 444,305 | |||||||||||
Primary Solution Categories | |||||||||||||||||||||||
Bill Payments | $ | — | $ | 194,306 | $ | 194,306 | $ | — | $ | 140,539 | $ | 140,539 | |||||||||||
Digital Channels | 18,169 | 27,799 | 45,968 | 20,280 | 20,954 | 41,234 | |||||||||||||||||
Merchant Payments | 12,659 | 37,281 | 49,940 | 10,383 | 28,957 | 39,340 | |||||||||||||||||
Payments Intelligence | 13,541 | 17,855 | 31,396 | 18,329 | 20,870 | 39,199 | |||||||||||||||||
Real-Time Payments | 36,524 | 1,525 | 38,049 | 29,382 | 934 | 30,316 | |||||||||||||||||
Retail Payments | 140,233 | 3,581 | 143,814 | 148,051 | 5,626 | 153,677 | |||||||||||||||||
Total | $ | 221,126 | $ | 282,347 | $ | 503,473 | $ | 226,425 | $ | 217,880 | $ | 444,305 |
March 31, | December 31, | |||||||
2019 | 2018 | |||||||
Long-lived assets | ||||||||
United States | $ | 829,953 | $ | 811,435 | ||||
Other | 731,564 | 717,495 | ||||||
|
|
|
| |||||
$1,561,517 | $1,528,930 | |||||||
|
|
|
|
June 30, 2019 | December 31, 2018 | ||||||
Long-lived Assets | |||||||
United States | $ | 1,538,730 | $ | 811,435 | |||
Other | 726,038 | 717,495 | |||||
Total | $ | 2,264,768 | $ | 1,528,930 |
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 has determined that it is more likely than not that it will be able to utilize the foreign tax credits in future years due to additional income provided by Speedpay.
Three Months Ended March 31, 2019 | ||||
Operating lease cost | $ | 4,036 | ||
Variable lease cost | 986 | |||
Sublease income | (139 | ) | ||
|
| |||
Total lease cost | $ | 4,883 | ||
|
|
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||
Operating lease cost | $ | 4,287 | $ | 8,323 | |||
Variable lease cost | 760 | 1,746 | |||||
Sublease income | (141 | ) | (280 | ) | |||
Total lease cost | $ | 4,906 | $ | 9,789 |
Three Months Ended March 31, 2019 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ | 5,411 | ||
Right-of-use assets obtained in exchange for new lease obligations: | ||||
Operating leases | 1,218 |
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||
Operating cash flows from operating leases | $ | 4,849 | $ | 10,260 | |||
Right-of-use assets obtained in exchange for new lease obligations: | |||||||
Operating leases | $ | 4,984 | $ | 6,202 |
March 31, 2019 | ||||
Assets: | ||||
Operating leaseright-of-use assets | $ | 60,978 | ||
|
| |||
Liabilities: | ||||
Other current liabilities | $ | 14,334 | ||
Operating lease liabilities | 50,636 | |||
|
| |||
Total operating lease liabilities | $ | 64,970 | ||
|
| |||
Weighted average remaining operating lease term | 7.02 | |||
Weighted average operating lease discount rate | 3.96 | % |
June 30, 2019 | |||
Assets: | |||
Operating lease right-of-use assets | $ | 62,316 | |
Liabilities: | |||
Other current liabilities | $ | 15,193 | |
Operating lease liabilities | 50,550 | ||
Total operating lease liabilities | $ | 65,743 | |
Weighted average remaining operating lease term (years) | 6.78 | ||
Weighted average operating lease discount rate | 4.07 | % |
Fiscal year ending December 31, | ||||
2019 | $ | 12,471 | ||
2020 | 14,895 | |||
2021 | 10,915 | |||
2022 | 8,387 | |||
2023 | 6,698 | |||
Thereafter | 21,122 | |||
|
| |||
Total lease payments | 74,488 | |||
Less: imputed interest | 9,518 | |||
|
| |||
Total lease liability | $ | 64,970 | ||
|
|
Fiscal Year Ending December 31, | |||
Remainder of 2019 | $ | 8,605 | |
2020 | 16,547 | ||
2021 | 11,956 | ||
2022 | 9,130 | ||
2023 | 7,474 | ||
Thereafter | 21,554 | ||
Total lease payments | 75,266 | ||
Less: imputed interest | 9,523 | ||
Total lease liability | $ | 65,743 |
Fiscal Year Ending December 31, | |||
2019 | $ | 16,925 | |
2020 | 14,212 | ||
2021 | 10,538 | ||
2022 | 8,178 | ||
2023 | 6,529 | ||
Thereafter | 21,196 | ||
Total minimum lease payments | $ | 77,578 |
increased competition;
the performance of our strategic products, Universal Payments solutions;
demand for our products;
consolidations and failures in the financial services industry;
customer reluctance to switch to a new vendor;
failure to obtain renewals of customer contracts or to obtain such renewals on favorable terms;
delay or cancellation of customer projects or inaccurate project completion estimates;
the complexity of our products and services and the risk that they may contain hidden defects;
compliance of our products with applicable legislation, governmental regulations, and industry standards;
our compliance with privacy regulations;
being subject to security breaches or viruses;
our ability to adequately protect our intellectual property;
increasing intellectual property rights litigation;
certain payment funding methods expose us to the credit and/or operating risk of our clients;
business interruptions or failure of our information technology and communication systems;
our offshore software development activities;
operating internationally;
global economic conditions impact on demand for our products and services;
attracting and retaining employees;
potential future litigation;
our sale of Community Financial Services (“CFS”) assets and liabilities to Fiserv, Inc. (“Fiserv”), including potential claims arising under the transaction agreement, the transition services agreement or with respect to retained liabilities;
future acquisitions, strategic partnerships, and investments;
risk of difficulties integrating E Commerce Group Products, Inc. and its subsidiary, Speedpay, Inc. (collectively referred to as "Speedpay"), which may cause us to fail to realize anticipated benefits of the acquisition;
restrictions and other financial covenants in our debt;
difficulty meeting our debt service requirements;
the accuracy of our backlog estimates;
exposure to unknown tax liabilities;
the cyclical nature of our revenue and earnings and the accuracy of forecasts due to the concentration of revenue generating activity during the final weeks of each quarter; and
volatility in our stock price.
Effective April 5, 2019,
Credit Agreement. The remaining acquisition consideration was funded with cash on hand.
Committed Backlog, which includes (1) contracted revenue that will be recognized in future periods (contracted but not recognized) from software license fees, maintenance fees, services fees, and SaaS and PaaS fees specified in executed contracts (including estimates of variable consideration if required under ASC 606) and included in the transaction price for those contracts, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods and (2) estimated future revenues from software license fees, maintenance fees, services fees, and SaaS and PaaS fees specified in executed contracts.
Renewal Backlog, which includes estimated future revenues from assumed contract renewals to the extent we believe recognition of the related revenue will occur within the corresponding backlog period.
We have historically included assumed renewals in backlog estimates based upon automatic renewal provisions in the executed contract and our historic experience with customer renewal rates.
License arrangements are assumed to renew at the end of their committed term or under the renewal option stated in the contract at a rate consistent with historical experience. If the license arrangement includes extended payment terms, the renewal estimate is adjusted for the effects of a significant financing component.
Maintenance fees are assumed to exist for the duration of the license term for those contracts in which the committed maintenance term is less than the committed license term.
SaaS and PaaS arrangements are assumed to renew at the end of their committed term at a rate consistent with our historical experiences.
Foreign currency exchange rates are assumed to remain constant over the60-month backlog period for those contracts stated in currencies other than the U.S. dollar.
Our pricing policies and practices are assumed to remain constant over the60-month backlog period.
Anticipated increases in transaction, account, or processing volumes by our customers.
Optional annual uplifts or inflationary increases in recurring fees.
Services engagements, other than SaaS and PaaS arrangements, are not assumed to renew over the60-month backlog period.
The potential impact of consolidation activity within our markets and/or customers.
March 31, 2019 | December 31, 2018 | |||||||
ACI On Premise | $ | 1,861 | $ | 1,875 | ||||
ACI On Demand | 2,290 | 2,299 | ||||||
|
|
|
| |||||
Total | $ | 4,151 | $ | 4,174 | ||||
|
|
|
| |||||
March 31, 2019 | December 31, 2018 | |||||||
Committed | $ | 1,734 | $ | 1,832 | ||||
Renewal | 2,417 | 2,342 | ||||||
|
|
|
| |||||
Total | $ | 4,151 | $ | 4,174 | ||||
|
|
|
|
June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||
ACI On Premise | $ | 1,880 | $ | 1,861 | $ | 1,875 | |||||
ACI On Demand | 3,813 | 2,290 | 2,299 | ||||||||
Total | $ | 5,693 | $ | 4,151 | $ | 4,174 | |||||
June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||
Committed | $ | 2,105 | $ | 1,734 | $ | 1,832 | |||||
Renewal | 3,588 | 2,417 | 2,342 | ||||||||
Total | $ | 5,693 | $ | 4,151 | $ | 4,174 |
Three Months Ended March 31, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Amount | % of Total Revenue | $ Change vs 2018 | % Change vs 2018 | Amount | % of Total Revenue | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Software as a service and platform as a service | $ | 108,557 | 53 | % | $ | 4,277 | 4 | % | $ | 104,280 | 50 | % | ||||||||||||
License | 21,078 | 10 | % | (6,968 | ) | -25 | % | 28,046 | 13 | % | ||||||||||||||
Maintenance | 55,111 | 27 | % | (1,548 | ) | -3 | % | 56,659 | 27 | % | ||||||||||||||
Services | 21,109 | 10 | % | 784 | 4 | % | 20,325 | 10 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total revenues | 205,855 | 100 | % | (3,455 | ) | -2 | % | 209,310 | 100 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of revenue | 114,941 | 56 | % | 7,605 | 7 | % | 107,336 | 51 | % | |||||||||||||||
Research and development | 36,194 | 18 | % | (597 | ) | -2 | % | 36,791 | 18 | % | ||||||||||||||
Selling and marketing | 29,430 | 14 | % | (2,463 | ) | -8 | % | 31,893 | 15 | % | ||||||||||||||
General and administrative | 31,517 | 15 | % | 2,868 | 10 | % | 28,649 | 14 | % | |||||||||||||||
Depreciation and amortization | 21,866 | 11 | % | 521 | 2 | % | 21,345 | 10 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total operating expenses | 233,948 | 114 | % | 7,934 | 4 | % | 226,014 | 108 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating loss | (28,093 | ) | -14 | % | (11,389 | ) | 68 | % | (16,704 | ) | -8 | % | ||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Interest expense | (11,614 | ) | -6 | % | (2,249 | ) | 24 | % | (9,365 | ) | -4 | % | ||||||||||||
Interest income | 3,033 | 1 | % | 289 | 11 | % | 2,744 | 1 | % | |||||||||||||||
Other, net | (1,912 | ) | -1 | % | (1,857 | ) | 3376 | % | (55 | ) | 0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total other income (expense) | (10,493 | ) | -5 | % | (3,817 | ) | 57 | % | (6,676 | ) | -3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Loss before income taxes | (38,586 | ) | -19 | % | (15,206 | ) | 65 | % | (23,380 | ) | -11 | % | ||||||||||||
Income tax benefit | (12,623 | ) | -6 | % | (8,671 | ) | 219 | % | (3,952 | ) | -2 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net loss | $ | (25,963 | ) | -13 | % | $ | (6,535 | ) | 34 | % | $ | (19,428 | ) | -9 | % | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Amount | % of Total Revenue | $ Change vs 2018 | % Change vs 2018 | Amount | % of Total Revenue | |||||||||||||||
Revenues: | ||||||||||||||||||||
Software as a service and platform as a service | $ | 172,499 | 58 | % | $ | 58,899 | 52 | % | $ | 113,600 | 48 | % | ||||||||
License | 52,541 | 18 | % | 6,986 | 15 | % | 45,555 | 19 | % | |||||||||||
Maintenance | 51,922 | 17 | % | (3,126 | ) | (6 | )% | 55,048 | 23 | % | ||||||||||
Services | 20,656 | 7 | % | (136 | ) | (1 | )% | 20,792 | 9 | % | ||||||||||
Total revenues | 297,618 | 100 | % | 62,623 | 27 | % | 234,995 | 100 | % | |||||||||||
Operating expenses: | ||||||||||||||||||||
Cost of revenue | 155,240 | 52 | % | 38,979 | 34 | % | 116,261 | 49 | % | |||||||||||
Research and development | 39,235 | 13 | % | 1,373 | 4 | % | 37,862 | 16 | % | |||||||||||
Selling and marketing | 32,962 | 11 | % | (198 | ) | (1 | )% | 33,160 | 14 | % | ||||||||||
General and administrative | 49,319 | 17 | % | 20,482 | 71 | % | 28,837 | 12 | % | |||||||||||
Depreciation and amortization | 26,744 | 9 | % | 5,711 | 27 | % | 21,033 | 9 | % | |||||||||||
Total operating expenses | 303,500 | 102 | % | 66,347 | 28 | % | 237,153 | 101 | % | |||||||||||
Operating loss | (5,882 | ) | (2 | )% | (3,724 | ) | 173 | % | (2,158 | ) | (1 | )% | ||||||||
Other income (expense): | ||||||||||||||||||||
Interest expense | (15,323 | ) | (5 | )% | (5,606 | ) | 58 | % | (9,717 | ) | (4 | )% | ||||||||
Interest income | 2,997 | 1 | % | 255 | 9 | % | 2,742 | 1 | % | |||||||||||
Other, net | 1,402 | — | % | 3,079 | (184 | )% | (1,677 | ) | (1 | )% | ||||||||||
Total other income (expense) | (10,924 | ) | (4 | )% | (2,272 | ) | 26 | % | (8,652 | ) | (4 | )% | ||||||||
Loss before income taxes | (16,806 | ) | (6 | )% | (5,996 | ) | 55 | % | (10,810 | ) | (5 | )% | ||||||||
Income tax expense (benefit) | (22,531 | ) | (8 | )% | (26,295 | ) | (699 | )% | 3,764 | 2 | % | |||||||||
Net income (loss) | $ | 5,725 | 2 | % | $ | 20,299 | (139 | )% | $ | (14,574 | ) | (6 | )% |
2018, of which $49.3 million, or 21%, was due to the acquisition of Speedpay.
Total license
2018, of which $41.8 million, or 18%, and $16.6 million, or 7%, was due to the acquisition of Speedpay and significant transaction and integration-related expenses associated with the acquisition of Speedpay, respectively.
fees.
promotions expense.
Depreciation and Amortization
Depreciation and amortization increased $0.5 million, or 2%, during the three months ended March 31, 2019, as compared to the same period in 2018. Depreciation and amortization was $0.4 million lower for the three months ended March 31,June 30, 2019, as compared to the same period in 2018, due to the impact of foreign currencies weakening against the U.S. dollar. Excluding the impact of the acquisition of Speedpay, significant acquisition and integration-related expenses, and foreign currency, depreciationgeneral and amortizationadministrative expense increased $0.9$4.0 million, or 4%14%, for the three months ended March 31,June 30, 2019, as compared to the same period in 2018, primarily due to an increase in personnel and related expenses.
rates.
$1.7 million.
Six Months Ended June 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Amount | % of Total Revenue | $ Change vs 2018 | % Change vs 2018 | Amount | % of Total Revenue | |||||||||||||||
Revenues: | ||||||||||||||||||||
Software as a service and platform as a service | $ | 281,056 | 56 | % | $ | 63,176 | 29 | % | $ | 217,880 | 49 | % | ||||||||
License | 73,619 | 15 | % | 18 | — | % | 73,601 | 17 | % | |||||||||||
Maintenance | 107,033 | 21 | % | (4,674 | ) | (4 | )% | 111,707 | 25 | % | ||||||||||
Services | 41,765 | 8 | % | 648 | 2 | % | 41,117 | 9 | % | |||||||||||
Total revenues | 503,473 | 100 | % | 59,168 | 13 | % | 444,305 | 100 | % | |||||||||||
Operating expenses: | ||||||||||||||||||||
Cost of revenue | 270,181 | 54 | % | 46,584 | 21 | % | 223,597 | 50 | % | |||||||||||
Research and development | 75,429 | 15 | % | 776 | 1 | % | 74,653 | 17 | % | |||||||||||
Selling and marketing | 62,392 | 12 | % | (2,661 | ) | (4 | )% | 65,053 | 15 | % | ||||||||||
General and administrative | 80,836 | 16 | % | 23,350 | 41 | % | 57,486 | 13 | % | |||||||||||
Depreciation and amortization | 48,610 | 10 | % | 6,232 | 15 | % | 42,378 | 10 | % | |||||||||||
Total operating expenses | 537,448 | 107 | % | 74,281 | 16 | % | 463,167 | 104 | % | |||||||||||
Operating loss | (33,975 | ) | (7 | )% | (15,113 | ) | 80 | % | (18,862 | ) | (4 | )% | ||||||||
Other income (expense): | ||||||||||||||||||||
Interest expense | (26,937 | ) | (5 | )% | (7,855 | ) | 41 | % | (19,082 | ) | (4 | )% | ||||||||
Interest income | 6,030 | 1 | % | 544 | 10 | % | 5,486 | 1 | % | |||||||||||
Other, net | (510 | ) | — | % | 1,222 | (71 | )% | (1,732 | ) | — | % | |||||||||
Total other income (expense) | (21,417 | ) | (4 | )% | (6,089 | ) | 40 | % | (15,328 | ) | (3 | )% | ||||||||
Loss before income taxes | (55,392 | ) | (11 | )% | (21,202 | ) | 62 | % | (34,190 | ) | (8 | )% | ||||||||
Income tax benefit | (35,154 | ) | (7 | )% | (34,966 | ) | 18,599 | % | (188 | ) | — | % | ||||||||
Net loss | $ | (20,238 | ) | (4 | )% | $ | 13,764 | (40 | )% | $ | (34,002 | ) | (8 | )% |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Revenue | ||||||||
ACI On Premise | $ | 96,007 | $ | 105,030 | ||||
ACI On Demand | 109,848 | 104,280 | ||||||
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Total revenue | $ | 205,855 | $ | 209,310 | ||||
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Segment Adjusted EBITDA | ||||||||
ACI On Premise | $ | 28,268 | $ | 38,898 | ||||
ACI On Demand | (262 | ) | (4,233 | ) | ||||
Depreciation and amortization | (24,852 | ) | (24,993 | ) | ||||
Stock-based compensation expense | (6,585 | ) | (6,362 | ) | ||||
Corporate and unallocated expenses | (24,662 | ) | (20,014 | ) | ||||
Interest, net | (8,581 | ) | (6,621 | ) | ||||
Other, net | (1,912 | ) | (55 | ) | ||||
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Loss before income taxes | $ | (38,586 | ) | $ | (23,380 | ) | ||
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Depreciation and amortization | ||||||||
ACI On Premise | $ | 3,030 | $ | 2,975 | ||||
ACI On Demand | 7,562 | 7,736 | ||||||
Corporate | 14,260 | 14,282 | ||||||
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Total depreciation and amortization | $ | 24,852 | $ | 24,993 | ||||
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Stock-based compensation expense | ||||||||
ACI On Premise | $ | 1,956 | $ | 1,467 | ||||
ACI On Demand | 1,951 | 1,463 | ||||||
Corporate | 2,678 | 3,432 | ||||||
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Total stock-based compensation expense | $ | 6,585 | $ | 6,362 | ||||
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | |||||||||||||||
ACI On Premise | $ | 125,119 | $ | 121,395 | $ | 221,126 | $ | 226,425 | |||||||
ACI On Demand | 172,499 | 113,600 | 282,347 | 217,880 | |||||||||||
Total revenue | $ | 297,618 | $ | 234,995 | $ | 503,473 | $ | 444,305 | |||||||
Segment Adjusted EBITDA | |||||||||||||||
ACI On Premise | 57,069 | 54,760 | 85,337 | 93,658 | |||||||||||
ACI On Demand | 17,340 | (3,364 | ) | 17,078 | (7,597 | ) | |||||||||
Depreciation and amortization | (29,778 | ) | (24,351 | ) | (54,630 | ) | (49,344 | ) | |||||||
Stock-based compensation expense | (14,372 | ) | (7,705 | ) | (20,957 | ) | (14,067 | ) | |||||||
Corporate and unallocated expenses | (36,141 | ) | (21,498 | ) | (60,803 | ) | (41,512 | ) | |||||||
Interest, net | (12,326 | ) | (6,975 | ) | (20,907 | ) | (13,596 | ) | |||||||
Other, net | 1,402 | (1,677 | ) | (510 | ) | (1,732 | ) | ||||||||
Loss before income taxes | $ | (16,806 | ) | $ | (10,810 | ) | $ | (55,392 | ) | $ | (34,190 | ) | |||
Depreciation and amortization | |||||||||||||||
ACI On Premise | $ | 3,019 | $ | 2,849 | $ | 6,049 | $ | 5,824 | |||||||
ACI On Demand | 8,489 | 7,826 | 16,051 | 15,562 | |||||||||||
Corporate | 18,270 | 13,676 | 32,530 | 27,958 | |||||||||||
Total depreciation and amortization | $ | 29,778 | $ | 24,351 | $ | 54,630 | $ | 49,344 | |||||||
Stock-based compensation expense | |||||||||||||||
ACI On Premise | $ | 2,051 | $ | 1,838 | $ | 4,007 | $ | 3,305 | |||||||
ACI On Demand | 2,214 | 1,834 | 4,165 | 3,297 | |||||||||||
Corporate | 10,107 | 4,033 | 12,785 | 7,465 | |||||||||||
Total stock-based compensation expense | $ | 14,372 | $ | 7,705 | $ | 20,957 | $ | 14,067 |
revenue.
operating expenses.
March 31, 2019 | December 31, 2018 | |||||||
Cash and cash equivalents | $ | 176,173 | $ | 148,502 | ||||
Availability under revolving credit facility | 500,000 | 500,000 | ||||||
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Total liquidity | $ | 676,173 | $ | 648,502 | ||||
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June 30, 2019 | December 31, 2018 | ||||||
Cash and cash equivalents | $ | 139,396 | $ | 148,502 | |||
Availability under revolving credit facility | 265,000 | 500,000 | |||||
Total liquidity | $ | 404,396 | $ | 648,502 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Net cash provided by (used by): | ||||||||
Operating activities | $ | 42,427 | $ | 45,136 | ||||
Investing activities | (9,828 | ) | (12,589 | ) | ||||
Financing activities | (5,361 | ) | (29,695 | ) |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Net cash provided by (used by): | |||||||
Operating activities | $ | 56,865 | $ | 71,111 | |||
Investing activities | (779,761 | ) | (29,351 | ) | |||
Financing activities | 714,655 | (51,570 | ) |
2018, except as disclosed below (in thousands).
Payments Due by Period | ||||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | ||||||||||||||||
Term loan | $ | 775,535 | $ | 38,950 | $ | 79,644 | $ | 656,941 | $ | — | ||||||||||
Term loan interest (1) | 152,542 | 35,401 | 65,366 | 51,775 | — | |||||||||||||||
Revolving credit facility | 235,000 | — | — | 235,000 | — | |||||||||||||||
Revolving credit facility interest (2) | 52,035 | 10,955 | 21,909 | 19,171 | — | |||||||||||||||
Financed internal-use software (3) | 19,795 | 11,634 | 8,161 | — | — | |||||||||||||||
Total | $ | 1,234,907 | $ | 96,940 | $ | 175,080 | $ | 962,887 | $ | — |
(1) | Based on Term Loan debt outstanding and interest rate in effect at June 30, 2019, of 4.65%. |
(2) | Based on Revolving Credit Facility debt outstanding and interest rate in effect at June 30, 2019, of 4.65%. |
(3) | During the six months ended June 30, 2019, the Company financed certain multi-year license agreements for internal-use software for $10.4 million with annual payments through April 2022. As of June 30, 2019, $19.8 million is outstanding under these and other agreements previously entered into, of which $11.6 million and $8.2 million is included in other current liabilities and other noncurrent liabilities, respectively, in the accompanying condensed consolidated balance sheet. |
Revenue Recognition
Business Combinations
Intangible Assets and Goodwill
Stock-Based Compensation
Accounting for Income Taxes
threesix months ended March 31,June 30, 2019. We conduct business in all parts of the world and are thereby exposed to market risks related to fluctuations in foreign currency exchange rates. The U.S. dollar is the single largest currency in which our revenue contracts are denominated. Any decline in the value of local foreign currencies against the U.S. dollar results in our products and services being more expensive to a potential foreign customer. In those instances where our goods and services have already been sold, receivables may be more difficult to collect. Additionally, in jurisdictions where the revenue contracts are denominated in U.S. dollars and operating expenses are incurred in the local currency, any decline in the value of the U.S. dollarMarch 31,June 30, 2019, a hypothetical ten percent increase or decrease in effective interest rates would increase or decrease interest income by approximately $0.1 million annually.
as it executes integration activities.March 31,June 30, 2019.adopted ASC 842,Leases, on January 1, 2019, which required management to make changesconsider the transaction material to our policiesresults of operations, cash flows, and processesfinancial position from the date of the acquisition through June 30, 2019, and believe the internal controls and procedures of Speedpay have a material effect on our internal control over financial reporting. See Note 3, Acquisition, to implement new or modify existingour unaudited condensed consolidated financial statements included in Part 1 of this Form 10-Q for discussion of the acquisition and related financial data.during the quarter ended March 31, 2019. This included modifications to our existing controls over the review of supplier contracts and other agreements, the implementation of a new lease accounting system, and new controls related to disclosure requirements.March 31,June 30, 2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
2018.2018, other than as disclosed below. Additional risks and uncertainties, including risks and uncertainties not presently known to us, or that we currently deem immaterial, could also have an adverse effect on our business, financial condition and/or results of operations.
Period January 1, 2019 through January 31, 2019 February 1, 2019 through February 28, 2019 March 1, 2019 through March 31, 2019 Total Pursuant to our 2005 Incentive Plan, we granted RSAs and RSUs. Under each arrangement, shares are issued without direct cost to the employee. During the three months ended March 31,June 30, 2019: 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 23,802 $ 26.50 23,802 $ 175,956,000 84,152 (1) 31.18 — 175,956,000 — — — 175,956,000 107,954 $ 30.15 23,802 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, 2019 through April 30, 2019 502 (1) $ 33.96 — $ 175,956,000 May 1, 2019 through May 31, 2019 — — — 175,956,000 June 1, 2019 through June 30, 2019 5,120 (1) 32.71 — 175,956,000 Total 5,622 $ 32.82 — (1) March 31,June 30, 2019, 272,31690,429 shares of the RSAs and RSUs vested. We withheld 84,1525,622 of those shares to pay the employees’ portion of the applicable payroll taxes.
Exhibit No. Description 2.01 (1) 3.01 (2) 3.02 (3) 4.01 (4) Form of Common Stock Certificate (P) 10.01 (5) 10.02 (6) 10.03 (7) 10.04 (8) 10.05 (9) 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
This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference. |
(P) | Paper Exhibit |
(1) | Incorporated herein by reference to Exhibit 2.1 to the registrant’s quarterly report on Form 10-Q for the period ended March 31, 2019. |
(2) | Incorporated herein by reference to Exhibit 3.1 to the registrant’s current report on Form8-K filed August 17, 2017. |
(3) | Incorporated herein by reference to Exhibit 3.1 to the registrant’s current report on Form8-K filed February 27, 2017. |
(4) | Incorporated herein by reference to Exhibit 4.01 to the registrant’s Registration StatementNo. 33-88292 on FormS-1. |
(5) | Incorporated herein by reference to Exhibit 10.1 to the registrant’s current report on Form8-K filed March 8, 2019. |
(6) | Incorporated herein by reference to Exhibit 10.2 to the registrant’s current report on Form8-K filed March 8, 2019. |
(7) | Incorporated herein by reference to Exhibit 10.3 to the registrant’s current report on Form8-K filed March 8, 2019. |
(8) | Incorporated herein by reference to Exhibit 10.4 to the registrant’s current report on Form8-K filed March 8, 2019. |
(9) | Incorporated herein by reference to Exhibit 10.1 to the registrant’s current report on Form8-K filed April 11, 2019. |
ACI WORLDWIDE, INC. (Registrant) | ||||
Date: | By: | /s/ SCOTT W. BEHRENS | ||
Scott W. Behrens | ||||
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37