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Segment Information | 9 Months Ended
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Sep. 30, 2024
Segment Reporting [Abstract] |
Segment Information | Segment Information The Company reports financial performance based on its operating segments, Banks, Merchants, and Billers, and analyzes Segment Adjusted EBITDA as a measure of segment profitability. The Company’s Chief Executive Officer is also the chief operating decision maker ("CODM"). The CODM, together with other senior management personnel, focus their review on consolidated financial information and the allocation of resources based on operating results, including revenues and Segment Adjusted EBITDA, for each segment, separate from corporate operations. No operating segments have been aggregated to form the reportable segments. Banks. ACI provides payment solutions to large and mid-size banks globally for retail banking, real time, digital, and other payment services. These solutions transform banks’ complex payment environments to speed time to market, reduce costs, and deliver a consistent experience to customers across channels while enabling them to prevent and rapidly react to fraudulent activity. In addition, they enable banks to meet the requirements of different real-time payments schemes and to quickly create differentiated products to meet consumer, business, and merchant demands. Merchants. ACI’s support of merchants globally includes Tier 1 and Tier 2 merchants, online-only merchants and the payment service providers, independent selling organizations, value-added resellers, and acquirers who service them. These customers operate in a variety of verticals, including general merchandise, grocery, hospitality, dining, transportation, and others. The Company's solutions provide merchants with a secure, omni-channel payments platform that gives them independence from third-party payment providers. They also offer secure solutions to online-only merchants that provide consumers with a convenient and seamless way to shop. Billers. Within the billers segment, ACI provides electronic bill presentment and payment (“EBPP”) services to companies operating in the consumer finance, insurance, healthcare, higher education, utility, government, and mortgage categories. The solutions enable these customers to support a wide range of payment options and provide a convenient consumer payments experience that drives consumer loyalty and increases revenue. Revenue is attributed to the reportable segments based upon customer. Expenses are attributed to the reportable segments in one of three methods: (1) direct costs of the segment, (2) labor costs that can be attributed based upon time tracking for individual projects, or (3) costs that are allocated. Allocated costs are generally marketing and sales related activities. Segment Adjusted EBITDA is the measure reported to the CODM for purposes of making decisions on allocating resources and assessing the performance of the Company’s segments, and, therefore, Segment Adjusted EBITDA is presented in conformity with ASC 280, Segment Reporting. Segment Adjusted EBITDA is defined as earnings (loss) from operations before interest, income tax expense (benefit), depreciation and amortization (“EBITDA”) adjusted to exclude net other income (expense). Corporate and unallocated expenses includes global facilities and information technology costs and long-term product roadmap expenses in addition to corporate overhead costs that are not allocated to reportable segments. The overhead costs relate to human resources, finance, legal, accounting, and merger and acquisition activity. These costs along with depreciation and amortization and stock-based compensation are not considered when management evaluates segment performance. The following is selected financial data for the Company’s reportable segments for the periods indicated (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Revenue |  |  |  |  |  |  |
Banks | $ | 222,031 |  |  | $ | 155,684 |  |  | $ | 471,109 |  |  | $ | 361,231 |
Merchants | 50,120 |  |  | 36,267 |  |  | 123,865 |  |  | 107,556 |
Billers | 179,601 |  |  | 171,064 |  |  | 546,276 |  |  | 507,229 |
Total revenue | $ | 451,752 |  |  | $ | 363,015 |  |  | $ | 1,141,250 |  |  | $ | 976,016 |
Segment Adjusted EBITDA |  |  |  |  |  |  |
Banks | $ | 153,944 |  |  | $ | 91,010 |  |  | $ | 274,794 |  |  | $ | 167,313 |
Merchants | 26,711 |  |  | 10,296 |  |  | 52,737 |  |  | 26,751 |
Billers | 30,920 |  |  | 39,186 |  |  | 99,092 |  |  | 100,056 |
Depreciation and amortization | (31,515) |  |  | (30,463) |  |  | (86,710) |  |  | (93,438) |
Stock-based compensation expense | (11,346) |  |  | (6,822) |  |  | (30,165) |  |  | (17,537) |
Corporate and unallocated expenses | (46,128) |  |  | (41,283) |  |  | (123,901) |  |  | (135,053) |
Interest, net | (14,485) |  |  | (16,345) |  |  | (44,004) |  |  | (48,183) |
Other, net | (823) |  |  | 1,084 |  |  | (1,692) |  |  | (6,403) |
Income (loss) before income taxes | $ | 107,278 |  |  | $ | 46,663 |  |  | $ | 140,151 |  |  | $ | (6,494) |
Assets are not allocated to segments, and the Company’s CODM does not evaluate operating segments using discrete asset information. The following is revenue by primary solution category for the Company’s reportable segments for the periods indicated (in thousands):
| Three Months Ended September 30, 2024
| Banks |  | Merchants |  | Billers |  | Total
Primary Solution Categories |  |  |  |  |  |  |
Bill Payments | $ | — |  |  | $ | — |  |  | $ | 179,601 |  |  | $ | 179,601 |
Merchant Payments | — |  |  | 50,120 |  |  | — |  |  | 50,120 |
Fraud Management | 18,451 |  |  | — |  |  | — |  |  | 18,451 |
Real-Time Payments | 45,376 |  |  | — |  |  | — |  |  | 45,376 |
Issuing and Acquiring | 158,204 |  |  | — |  |  | — |  |  | 158,204 |
Total | $ | 222,031 |  |  | $ | 50,120 |  |  | $ | 179,601 |  |  | $ | 451,752 |
| Three Months Ended September 30, 2023
| Banks |  | Merchants |  | Billers |  | Total
Primary Solution Categories |  |  |  |  |  |  |
Bill Payments | $ | — |  |  | $ | — |  |  | $ | 171,064 |  |  | $ | 171,064 |
Merchant Payments | — |  |  | 36,267 |  |  | — |  |  | 36,267 |
Fraud Management | 16,543 |  |  | — |  |  | — |  |  | 16,543 |
Real-Time Payments | 26,374 |  |  | — |  |  | — |  |  | 26,374 |
Issuing and Acquiring | 112,767 |  |  | — |  |  | — |  |  | 112,767 |
Total | $ | 155,684 |  |  | $ | 36,267 |  |  | $ | 171,064 |  |  | $ | 363,015 |
| Nine Months Ended September 30, 2024
| Banks |  | Merchants |  | Billers |  | Total
Primary Solution Categories |  |  |  |  |  |  |
Bill Payments | $ | — |  |  | $ | — |  |  | $ | 546,276 |  |  | $ | 546,276 |
Merchant Payments | — |  |  | 123,865 |  |  | — |  |  | 123,865 |
Fraud Management | 39,145 |  |  | — |  |  | — |  |  | 39,145 |
Real-Time Payments | 96,553 |  |  | — |  |  | — |  |  | 96,553 |
Issuing and Acquiring | 335,411 |  |  | — |  |  | — |  |  | 335,411 |
Total | $ | 471,109 |  |  | $ | 123,865 |  |  | $ | 546,276 |  |  | $ | 1,141,250 |
| Nine Months Ended September 30, 2023
| Banks |  | Merchants |  | Billers |  | Total
Primary Solution Categories |  |  |  |  |  |  |
Bill Payments | $ | — |  |  | $ | — |  |  | $ | 507,229 |  |  | $ | 507,229 |
Merchant Payments | — |  |  | 107,556 |  |  | — |  |  | 107,556 |
Fraud Management | 38,051 |  |  | — |  |  | — |  |  | 38,051 |
Real-Time Payments | 72,271 |  |  | — |  |  | — |  |  | 72,271 |
Issuing and Acquiring | 250,909 |  |  | — |  |  | — |  |  | 250,909 |
Total | $ | 361,231 |  |  | $ | 107,556 |  |  | $ | 507,229 |  |  | $ | 976,016 |
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Banks |  |  |  |  |  |  |
Software as a service and platform as a service | $ | 11,697 |  |  | $ | 10,167 |  |  | $ | 33,924 |  |  | $ | 29,158 |
License | 143,338 |  |  | 77,779 |  |  | 235,357 |  |  | 136,980 |
Maintenance | 43,916 |  |  | 48,084 |  |  | 133,215 |  |  | 142,050 |
Services | 23,080 |  |  | 19,654 |  |  | 68,613 |  |  | 53,043 |
Total | $ | 222,031 |  |  | $ | 155,684 |  |  | $ | 471,109 |  |  | $ | 361,231 |
Merchants |  |  |  |  |  |  |
Software as a service and platform as a service | $ | 32,069 |  |  | $ | 30,162 |  |  | $ | 94,298 |  |  | $ | 89,660 |
License | 14,091 |  |  | 1,900 |  |  | 17,627 |  |  | 5,701 |
Maintenance | 3,643 |  |  | 3,834 |  |  | 10,831 |  |  | 11,314 |
Services | 317 |  |  | 371 |  |  | 1,109 |  |  | 881 |
Total | $ | 50,120 |  |  | $ | 36,267 |  |  | $ | 123,865 |  |  | $ | 107,556 |
Billers |  |  |  |  |  |  |
Software as a service and platform as a service | $ | 179,601 |  |  | $ | 171,040 |  |  | $ | 546,276 |  |  | $ | 507,157 |
License | — |  |  | — |  |  | — |  |  | — |
Maintenance | — |  |  | 24 |  |  | — |  |  | 72 |
Services | — |  |  | — |  |  | — |  |  | — |
Total | $ | 179,601 |  |  | $ | 171,064 |  |  | $ | 546,276 |  |  | $ | 507,229 |
The following is the Company's revenue by geographic location for the periods indicated (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Revenue |  |  |  |  |  |  |
United States | $ | 241,054 |  |  | $ | 226,911 |  |  | $ | 698,704 |  |  | $ | 633,379 |
Other | 210,698 |  |  | 136,104 |  |  | 442,546 |  |  | 342,637 |
Total | $ | 451,752 |  |  | $ | 363,015 |  |  | $ | 1,141,250 |  |  | $ | 976,016 |
The following is the Company’s long-lived assets by geographic location for the periods indicated (in thousands):
| September 30, 2024 |  | December 31, 2023
Long-lived Assets |  |  |
United States | $ | 1,155,409 |  |  | $ | 1,216,158 |
Other | 787,302 |  |  | 763,437 |
Total | $ | 1,942,711 |  |  | $ | 1,979,595 |
No single customer accounted for more than 10% of the Company's consolidated revenue during the three and nine months ended September 30, 2024 and 2023. The United Kingdom accounted for 12.0% of the Company's consolidated revenues during the three months ended September 30, 2024. No other country outside the United States accounted for more than 10% of the Company's consolidated revenues during the three months ended September 30, 2023 and nine months ended September 30, 2024 and 2023.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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