ACI WORLDWIDE, INC.ACIW

ACI WORLDWIDE, INC. Leases Disclosure

10-KFiled Feb 26, 20263 min read
Leases
The Company has operating leases primarily for corporate offices and data centers. Excluding office leases, leases with an initial term of 12-months or less that do not include an option to purchase the underlying asset are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term.

The Company’s leases typically include certain renewal options to extend the leases for up to 25 years, some of which include options to terminate the leases within one year. The exercise of lease renewal options is at the Company’s sole discretion. The Company combines lease and non-lease components of its leases and currently has no leases with options to purchase the leased property. Payments of maintenance and property tax costs paid by the Company are accounted for as variable lease cost, which are expensed as incurred.

The Company has entered into an assignment and assumption of lease agreement with a third-party for one of its corporate offices. The third-party is responsible for making payments directly to the landlord and the related lease's initial term expires on September 30, 2031. During an initial period ending April 30, 2025, the Company was required to make a base rent contribution of less than $0.1 million per month to the third-party, with the third-party responsible for the entirety of the lease payments after that date.

The components of lease cost are as follows (in thousands):
Years Ended December 31,
202520242023
Operating lease cost
$10,871 $11,053 $13,074 
Variable lease cost
1,415 1,266 2,663 
Sublease income
(1,693)(359)— 
Total lease cost
$10,593 $11,960 $15,737 
Supplemental cash flow information related to leases is as follows (in thousands):
Years Ended December 31,
202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$9,410 $10,678 $14,039 
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases
$13,162 $4,875 $6,359 
Non-cash sublease payments
Operating leases
$1,894 $602 $— 

Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate): 
December 31,
20252024
Assets:
Operating lease right-of-use assets
$28,733 $28,864 
Liabilities:
Other current liabilities
$8,856 $9,265 
Operating lease liabilities
22,609 22,592 
Total operating lease liabilities
$31,465 $31,857 
Weighted average remaining operating lease term (years)
4.494.71
Weighted average operating lease discount rate
3.56 %3.76 %

The Company uses its incremental borrowing rate as the discount rate. As the Company enters into operating leases in multiple jurisdictions and denominated in currencies other than the U.S. dollar, judgment is used to determine the Company’s incremental borrowing rate including (1) conversion of its subordinated borrowing rate (using published yield curves) to an unsubordinated and collateralized rate, (2) adjusting the rate to align with the term of each lease, and (3) adjusting the rate to incorporate the effects of the currency in which the lease is denominated.

Maturities on lease liabilities as of December 31, 2025, are as follows (in thousands): 
Fiscal Year Ending December 31,
2026$9,760 
20278,417 
20287,015 
20293,832 
20302,847 
Thereafter
1,579 
Total lease payments
33,450 
Less: imputed interest
1,985 
Total lease liability
$31,465 

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 27, 2025
2023Feb 29, 2024
2022Mar 1, 2023
2021Feb 24, 2022
2020Feb 25, 2021
2019Feb 27, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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