##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended June 30, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period From  to
 Commission File Number: 000-24931
 S1 CORPORATION
 (Exact name of
registrant as specified in its charter)
 Delaware(State or other jurisdiction of 
incorporation or organization)
    
    58-2395199(I.R.S. Employer
Identification No.)705 Westech DriveNorcross, Georgia
    
    30092(Address of principal executive
    
    (Zip Code)offices)
 (404) 923-3500
 (Former name, former address and former fiscal year, if changed since last report.)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 Yes o No þ




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##### 



S1 CORPORATION
 QUARTERLY PERIOD ENDED JUNE 30, 2009
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements:Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008
    
    
    2Condensed Consolidated Statements of Operations for the Three Months and Six Months ended June 30, 2009 and 2008
    
    
    3Condensed Consolidated Statements of Cash Flows for the Three Months and Six Months ended June 30, 2009 and 2008
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    27PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    30Item 6. Exhibits
    
    
    30Signature
    
    
    31Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 S1 CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (IN THOUSANDS, EXCEPT SHARE DATA)
 June 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    75,207
    
    
    $
    63,840Accounts receivable, net
    
    
    57,136
    
    
    
    42,561Prepaid expenses
    
    
    4,788
    
    
    
    5,123Other current assets
    
    
    3,035
    
    
    
    3,575Total current assets
    
    
    140,166
    
    
    
    115,099Property and equipment, net
    
    
    23,132
    
    
    
    23,015Intangible assets, net
    
    
    6,105
    
    
    
    7,585Goodwill, net
    
    
    126,671
    
    
    
    124,362Other assets
    
    
    7,738
    
    
    
    8,625Total assets
    
    $
    303,812
    
    
    $
    278,686LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    2,818
    
    
    $
    1,366Accrued compensation and benefits
    
    
    14,214
    
    
    
    16,147Accrued restructuring
    
    
    2,136
    
    
    
    2,323Accrued other expenses
    
    
    11,953
    
    
    
    10,271Deferred revenues
    
    
    33,762
    
    
    
    25,271Current portion of debt obligation
    
    
    2,074
    
    
    
    3,917Total current liabilities
    
    
    66,957
    
    
    
    59,295Debt obligation, excluding current portion
    
    
    5,494
    
    
    
    6,196Accrued restructuring, excluding current portion
    
    
    2,480
    
    
    
    3,443Other liabilities
    
    
    1,456
    
    
    
    1,012Total liabilities
    
    
    76,387
    
    
    
    69,946Stockholders equity:Preferred stock
    
    
    10,000
    
    
    
    10,000Common stock
    
    
    529
    
    
    
    528Additional paid in capital
    
    
    1,793,841
    
    
    
    1,791,924Accumulated deficit
    
    
    (1,574,382
    )
    
    
    (1,587,957
    )Accumulated other comprehensive loss
    
    
    (2,563
    )
    
    
    (5,755
    )Total stockholders equity
    
    
    227,425
    
    
    
    208,740Total liabilities and stockholders equity
    
    $
    303,812
    
    
    $
    278,686Preferred shares issued and outstanding
    
    
    749,064
    
    
    
    749,064Common shares issued and outstanding
    
    
    52,912,688
    
    
    
    52,799,310
   2




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##### Table of Contents



S1 CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenue:Software licenses
    
    $
    12,311
    
    
    $
    8,117
    
    
    $
    23,929
    
    
    $
    17,652Support and maintenance
    
    
    13,612
    
    
    
    12,595
    
    
    
    26,097
    
    
    
    24,298Professional services
    
    
    24,090
    
    
    
    23,736
    
    
    
    47,165
    
    
    
    44,858Data center
    
    
    10,829
    
    
    
    12,040
    
    
    
    21,939
    
    
    
    24,353Total revenue
    
    
    60,842
    
    
    
    56,488
    
    
    
    119,130
    
    
    
    111,161Operating expenses:Cost of software licenses (1)
    
    
    1,272
    
    
    
    1,145
    
    
    
    2,112
    
    
    
    2,137Cost of professional services, support and maintenance (1)
    
    
    18,537
    
    
    
    18,033
    
    
    
    36,797
    
    
    
    35,525Cost of data center (1)
    
    
    7,118
    
    
    
    6,401
    
    
    
    14,090
    
    
    
    12,958Selling and marketing
    
    
    9,429
    
    
    
    9,343
    
    
    
    16,251
    
    
    
    17,559Product development
    
    
    8,973
    
    
    
    7,027
    
    
    
    17,145
    
    
    
    13,782General and administrative
    
    
    7,487
    
    
    
    6,383
    
    
    
    12,003
    
    
    
    12,818Depreciation and amortization of intangible assets
    
    
    2,427
    
    
    
    2,203
    
    
    
    5,000
    
    
    
    4,428Total operating expenses
    
    
    55,243
    
    
    
    50,535
    
    
    
    103,398
    
    
    
    99,207Operating income
    
    
    5,599
    
    
    
    5,953
    
    
    
    15,732
    
    
    
    11,954Interest and other (expense) income, net
    
    
    (528
    )
    
    
    124
    
    
    
    (518
    )
    
    
    418Income before income tax expense
    
    
    5,071
    
    
    
    6,077
    
    
    
    15,214
    
    
    
    12,372Income tax expense
    
    
    440
    
    
    
    941
    
    
    
    1,639
    
    
    
    2,046Net income
    
    $
    4,631
    
    
    $
    5,136
    
    
    $
    13,575
    
    
    $
    10,326Earnings per share:Basic
    
    $
    0.09
    
    
    $
    0.09
    
    
    $
    0.25
    
    
    $
    0.18Diluted
    
    $
    0.08
    
    
    $
    0.09
    
    
    $
    0.25
    
    
    $
    0.18Weighted average common shares outstanding  basic
    
    
    52,868,795
    
    
    
    56,622,937
    
    
    
    52,851,339
    
    
    
    56,587,193Weighted average common shares outstanding  fully diluted
    
    
    53,601,856
    
    
    
    57,354,991
    
    
    
    53,515,854
    
    
    
    57,220,150
 
 (1)
    
    Excludes charges for depreciation. Cost of software licenses includes amortization of
acquired technology.   3




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S1 CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (IN THOUSANDS)
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    4,631
    
    
    $
    5,136
    
    
    $
    13,575
    
    
    $
    10,326Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    2,884
    
    
    
    2,865
    
    
    
    5,915
    
    
    
    5,835Provision for doubtful accounts receivable and billing adjustments
    
    
    307
    
    
    
    (728
    )
    
    
    (92
    )
    
    
    (385
    )Stock-based compensation expense
    
    
    3,091
    
    
    
    2,305
    
    
    
    560
    
    
    
    4,193Changes in assets and liabilities:Increase in accounts receivable
    
    
    (2,840
    )
    
    
    (3,362
    )
    
    
    (11,630
    )
    
    
    (8,627
    )(Increase) decrease in prepaid expenses and other assets
    
    
    (1,536
    )
    
    
    (133
    )
    
    
    (1,254
    )
    
    
    107Increase in accounts payable
    
    
    967
    
    
    
    131
    
    
    
    1,381
    
    
    
    1,157(Decrease) increase in income taxes payable
    
    
    (308
    )
    
    
    90
    
    
    
    627
    
    
    
    1,229Increase (decrease) in accrued expenses and other liabilities
    
    
    2,337
    
    
    
    623
    
    
    
    (733
    )
    
    
    (2,009
    )(Decrease) increase in deferred revenues
    
    
    (286
    )
    
    
    4,613
    
    
    
    8,187
    
    
    
    4,473Net cash provided by operating activities
    
    
    9,247
    
    
    
    11,540
    
    
    
    16,536
    
    
    
    16,299Cash flows from investing activities:Maturities of short-term investment securities
    
    
    231
    
    
    
    5,595
    
    
    
    917
    
    
    
    11,450Purchases of short-term investment securities
    
    
    
    
    
    
    (801
    )
    
    
    
    
    
    
    (982
    )Amounts released from escrow related to sale of business
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,712Purchases of property, equipment and technology
    
    
    (1,484
    )
    
    
    (2,506
    )
    
    
    (4,506
    )
    
    
    (4,717
    )Net cash (used in) provided by investing
activities
    
    
    (1,253
    )
    
    
    2,288
    
    
    
    (3,589
    )
    
    
    9,463Cash flows from financing activities:(Payments)
proceeds from exercise of employee stock options, net of stock withheld for payroll taxes
    
    
    (12
    )
    
    
    53
    
    
    
    142
    
    
    
    828Payments on capital leases and debt obligations
    
    
    (615
    )
    
    
    (935
    )
    
    
    (2,545
    )
    
    
    (1,868
    )Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,739
    )Net cash used in financing activities
    
    
    (627
    )
    
    
    (882
    )
    
    
    (2,403
    )
    
    
    (2,779
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    1,452
    
    
    
    (636
    )
    
    
    823
    
    
    
    (561
    )Net increase in cash and cash equivalents
    
    
    8,819
    
    
    
    12,310
    
    
    
    11,367
    
    
    
    22,422Cash and cash equivalents at beginning of period
    
    
    66,388
    
    
    
    55,123
    
    
    
    63,840
    
    
    
    45,011Cash and cash equivalents at end of period
    
    $
    75,207
    
    
    $
    67,433
    
    
    $
    75,207
    
    
    $
    67,433
   4




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S1 CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. BACKGROUND AND BASIS OF PRESENTATION
     2. RECENT ACCOUNTING PRONOUNCEMENTS
   5




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6




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3. FAIR VALUE MEASUREMENTS
  June 30, 2009
    
    
    December 31, 2008Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedValue
    
    
    Fair Value
    
    
    Value
    
    
    Fair ValueCash and cash equivalents
    
    $
    75,207
    
    
    $
    75,207
    
    
    $
    63,840
    
    
    $
    63,840Short-term investments included
in other current assets:Mutual fund trust
    
    
    1,146
    
    
    
    1,146
    
    
    
    1,493
    
    
    
    1,493Derivative assets
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    69Long-term investments included
in non-current other assets:Mutual fund trust
    
    
    423
    
    
    
    423
    
    
    
    902
    
    
    
    902Fixed term deposits
    
    
    330
    
    
    
    330
    
    
    
    289
    
    
    
    289Long-term borrowings
    
    
    5,494
    
    
    
    5,383
    
    
    
    6,196
    
    
    
    6,103
     7




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Fair Value Measurements at Reporting Date UsingQuoted Prices in
    
    
    
    
    
    
    SignificantActive Markets for
    
    
    Significant Other
    
    
    UnobservableCarrying
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    InputsValue
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)June 30, 2009:Mutual fund trust (1)
    
    $
    1,569
    
    
    $
    
    
    
    $
    
    
    
    $
    1,569Total
    
    $
    1,569
    
    
    $
    
    
    
    $
    
    
    
    $
    1,569December 31, 2008:Mutual fund trust (1)
    
    $
    2,395
    
    
    $
    
    
    
    $
    
    
    
    $
    2,395Derivative assets
    
    
    69
    
    
    
    
    
    
    
    69
    
    
    
    Total
    
    $
    2,464
    
    
    $
    
    
    
    $
    69
    
    
    $
    2,395
 (1)
    
    Represents the combined short-term and long-term portion of the mutual fund
trust.  Fair Value Measurements at Reporting Date
Using Significant Unobservable Inputs (Level 3)
 Balance at December 31, 2008
    
    $
    2,395Realized gain in earnings
    
    
    10Unrealized
gain in other comprehensive income (loss)
    
    
    81Settlements
    
    
    (917
    )Ending balance at June 30, 2009
    
    $
    1,569
 4. ACCOUNTS RECEIVABLE
  5. GOODWILL AND INTANGIBLE ASSETS
  Enterprise
    
    
    Postilion
    
    
    TotalBalance, December 31, 2008
    
    $
    48,697
    
    
    $
    75,665
    
    
    $
    124,362Effect of foreign currency
translations
    
    
    3,418
    
    
    
    (1,109
    )
    
    
    2,309Balance, June 30, 2009
    
    $
    52,115
    
    
    $
    74,556
    
    
    $
    126,671
  8




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Gross
    
    
    Accumulated
    
    
    NetCarrying Value
    
    
    Amortization
    
    
    Carrying ValueAcquired technology
    
    $
    21,938
    
    
    $
    (19,930
    )
    
    $
    2,008Customer relationships
    
    
    12,000
    
    
    
    (7,903
    )
    
    
    4,097Total
    
    $
    33,938
    
    
    $
    (27,833
    )
    
    $
    6,105
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Acquired technology
    
    $
    457
    
    
    $
    662
    
    
    $
    915
    
    
    $
    1,407Customer relationships
    
    
    283
    
    
    
    282
    
    
    
    565
    
    
    
    565Total
    
    $
    740
    
    
    $
    944
    
    
    $
    1,480
    
    
    $
    1,972
  2013 and2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    thereafterEnterprise
    
    $
    245
    
    
    $
    245
    
    
    $
    245
    
    
    $
    184
    
    
    $
    Postilion
    
    
    2,445
    
    
    
    1,335
    
    
    
    1,282
    
    
    
    706
    
    
    
    898Total
    
    $
    2,690
    
    
    $
    1,580
    
    
    $
    1,527
    
    
    $
    890
    
    
    $
    898
 6. ACCRUED OTHER EXPENSES
  June 30,
    
    
    December 31,2009
    
    
    2008Accrued service fees payable
    
    $
    3,785
    
    
    $
    3,148Accrued third party products and
royalties
    
    
    1,674
    
    
    
    1,530Sales and income taxes payable
    
    
    4,977
    
    
    
    3,588Other
    
    
    1,517
    
    
    
    2,005Total
    
    $
    11,953
    
    
    $
    10,271
  9




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7. DEFERRED REVENUE
  June 30,
    
    
    December 31,2009
    
    
    2008Software licenses
    
    $
    3,292
    
    
    $
    4,008Professional services
    
    
    9,453
    
    
    
    7,056Support and maintenance
    
    
    21,017
    
    
    
    14,207Deferred revenue, current
    
    
    33,762
    
    
    
    25,271Deferred revenue, non-current (1)
    
    
    64
    
    
    
    160Total deferred revenue
    
    $
    33,826
    
    
    $
    25,431
 (1)
    
    Non-current deferred revenue is included in long-term other liabilities.  8. INCOME TAXES
  9. STOCK OPTION PLANS
    10




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Operating expenses:Cost of professional services, support and maintenance
    
    $
    213
    
    
    $
    27
    
    
    $
    61
    
    
    $
    73Cost of data center
    
    
    23
    
    
    
    22
    
    
    
    43
    
    
    
    47Selling and marketing
    
    
    1,147
    
    
    
    882
    
    
    
    (73
    )
    
    
    1,606Product development
    
    
    236
    
    
    
    262
    
    
    
    106
    
    
    
    584General and administrative
    
    
    1,472
    
    
    
    1,112
    
    
    
    423
    
    
    
    1,883Total stock-based compensation expense
    
    $
    3,091
    
    
    $
    2,305
    
    
    $
    560
    
    
    $
    4,193Grant type:Stock options
    
    $
    620
    
    
    $
    982
    
    
    $
    1,214
    
    
    $
    1,946Restricted stock
    
    
    349
    
    
    
    261
    
    
    
    562
    
    
    
    435Stock appreciation rights
    
    
    2,122
    
    
    
    1,062
    
    
    
    (1,216
    )
    
    
    1,812Total stock-based compensation expense
    
    $
    3,091
    
    
    $
    2,305
    
    
    $
    560
    
    
    $
    4,193
  As of June 30,2009
    
    
    2008Expected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %Expected volatility
    
    
    58.6
    %
    
    
    43.6
    %Risk-free interest rate
    
    
    1.2
    %
    
    
    2.9
    %Expected life
    
    2.0 years
    
    
    3.1 years
  Six Months Ended June 30,2009
    
    
    2008Expected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %Expected volatility
    
    
    49.1
    %
    
    
    44.4
    %Risk-free interest rate
    
    
    2.6
    %
    
    
    3.2
    %Expected life
    
    4.4 years
    
    
    4.4 years
  11




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Unrecognized
    
    
    WeightedExpense
    
    
    Average Period(in thousands)
    
    
    (in years)Stock Options
    
    $
    4,404
    
    
    
    1.3Restricted Stock
    
    $
    7,180
    
    
    
    1.8
  10. SEGMENT REPORTING AND MAJOR CUSTOMERS
    Three Months Ended June 30, 2009
    
    
    Three Months Ended June 30, 2008Enterprise
    
    
    Postilion
    
    
    Total
    
    
    Enterprise
    
    
    Postilion
    
    
    TotalRevenue:Software licenses
    
    $
    1,683
    
    
    $
    10,628
    
    
    
    12,311
    
    
    $
    2,437
    
    
    $
    5,680
    
    
    $
    8,117Support and maintenance
    
    
    5,002
    
    
    
    8,610
    
    
    
    13,612
    
    
    
    4,499
    
    
    
    8,096
    
    
    
    12,595Professional services
    
    
    17,741
    
    
    
    6,349
    
    
    
    24,090
    
    
    
    18,104
    
    
    
    5,632
    
    
    
    23,736Data center
    
    
    6,986
    
    
    
    3,843
    
    
    
    10,829
    
    
    
    7,032
    
    
    
    5,008
    
    
    
    12,040Total revenue
    
    $
    31,412
    
    
    $
    29,430
    
    
    $
    60,842
    
    
    $
    32,072
    
    
    $
    24,416
    
    
    $
    56,488Operating expenses:Direct costs
    
    
    14,974
    
    
    
    11,953
    
    
    
    26,927
    
    
    
    15,152
    
    
    
    10,427
    
    
    
    25,579Selling and marketing
    
    
    4,632
    
    
    
    4,797
    
    
    
    9,429
    
    
    
    4,133
    
    
    
    5,210
    
    
    
    9,343Product development
    
    
    5,627
    
    
    
    3,346
    
    
    
    8,973
    
    
    
    4,472
    
    
    
    2,555
    
    
    
    7,027General and administrative
    
    
    3,616
    
    
    
    3,871
    
    
    
    7,487
    
    
    
    3,339
    
    
    
    3,044
    
    
    
    6,383Depreciation and
amortization
of intangible assets
    
    
    1,229
    
    
    
    1,198
    
    
    
    2,427
    
    
    
    1,110
    
    
    
    1,093
    
    
    
    2,203Total operating expenses
    
    
    30,078
    
    
    
    25,165
    
    
    
    55,243
    
    
    
    28,206
    
    
    
    22,329
    
    
    
    50,535Operating income
    
    $
    1,334
    
    
    $
    4,265
    
    
    $
    5,599
    
    
    $
    3,866
    
    
    $
    2,087
    
    
    $
    5,953
  12




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##### Table of Contents



Six Months Ended June 30, 2009
    
    
    Six Months Ended June 30, 2008Enterprise
    
    
    Postilion
    
    
    Total
    
    
    Enterprise
    
    
    Postilion
    
    
    TotalRevenue:Software licenses
    
    $
    4,470
    
    
    $
    19,459
    
    
    $
    23,929
    
    
    $
    4,026
    
    
    $
    13,626
    
    
    $
    17,652Support and maintenance
    
    
    9,667
    
    
    
    16,430
    
    
    
    26,097
    
    
    
    8,205
    
    
    
    16,093
    
    
    
    24,298Professional services
    
    
    36,315
    
    
    
    10,850
    
    
    
    47,165
    
    
    
    35,194
    
    
    
    9,664
    
    
    
    44,858Data center
    
    
    14,226
    
    
    
    7,713
    
    
    
    21,939
    
    
    
    14,135
    
    
    
    10,218
    
    
    
    24,353Total revenue
    
    $
    64,678
    
    
    $
    54,452
    
    
    $
    119,130
    
    
    $
    61,560
    
    
    $
    49,601
    
    
    $
    111,161Operating expenses:Direct costs
    
    
    30,891
    
    
    
    22,108
    
    
    
    52,999
    
    
    
    30,063
    
    
    
    20,557
    
    
    
    50,620Selling and marketing
    
    
    7,018
    
    
    
    9,233
    
    
    
    16,251
    
    
    
    7,971
    
    
    
    9,588
    
    
    
    17,559Product development
    
    
    10,682
    
    
    
    6,463
    
    
    
    17,145
    
    
    
    8,570
    
    
    
    5,212
    
    
    
    13,782General and administrative
    
    
    5,939
    
    
    
    6,064
    
    
    
    12,003
    
    
    
    6,939
    
    
    
    5,879
    
    
    
    12,818Depreciation and
amortization
of intangible assets
    
    
    2,537
    
    
    
    2,463
    
    
    
    5,000
    
    
    
    2,265
    
    
    
    2,163
    
    
    
    4,428Total operating expenses
    
    
    57,067
    
    
    
    46,331
    
    
    
    103,398
    
    
    
    55,808
    
    
    
    43,399
    
    
    
    99,207Operating income
    
    $
    7,611
    
    
    $
    8,121
    
    
    $
    15,732
    
    
    $
    5,752
    
    
    $
    6,202
    
    
    $
    11,954
 Geography
 Revenue
    
    
    Revenue
    
    
    Property and EquipmentThree Months Ended June 30,
    
    
    Six Months Ended June 30,
    
    
    June 30,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Americas
    
    $
    43,248
    
    
    $
    40,716
    
    
    $
    85,684
    
    
    $
    80,583
    
    
    $
    21,290
    
    
    $
    21,669InternationalEMEI
    
    
    9,311
    
    
    
    10,247
    
    
    
    18,143
    
    
    
    20,725
    
    
    
    766
    
    
    
    893Africa
    
    
    2,924
    
    
    
    2,315
    
    
    
    5,463
    
    
    
    5,030
    
    
    
    978
    
    
    
    374APAC
    
    
    5,359
    
    
    
    3,210
    
    
    
    9,840
    
    
    
    4,823
    
    
    
    98
    
    
    
    79Total
    
    $
    60,842
    
    
    $
    56,488
    
    
    $
    119,130
    
    
    $
    111,161
    
    
    $
    23,132
    
    
    $
    23,015
 Major Customer.
 11. NET INCOME PER COMMON SHARE
   13




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands, except per share data)Basic earnings per share:Net income
    
    $
    4,631
    
    
    $
    5,136
    
    
    $
    13,575
    
    
    $
    10,326Amount allocated to participating preferred stockholders
    
    
    (91
    )
    
    
    (95
    )
    
    
    (267
    )
    
    
    (191
    )Amount allocated to participating restricted stockholders
    
    
    (42
    )
    
    
    (19
    )
    
    
    (102
    )
    
    
    (32
    )Net income available to common stockholders
    
    $
    4,498
    
    
    $
    5,022
    
    
    $
    13,206
    
    
    $
    10,103Basic weighted average common shares outstanding
    
    
    52,869
    
    
    
    56,623
    
    
    
    52,851
    
    
    
    56,587Basic earnings per share
    
    $
    0.09
    
    
    $
    0.09
    
    
    $
    0.25
    
    
    $
    0.18Diluted earnings per share:Net income
    
    $
    4,631
    
    
    $
    5,136
    
    
    $
    13,575
    
    
    $
    10,326Amount allocated to participating preferred stockholders
    
    
    (90
    )
    
    
    (94
    )
    
    
    (264
    )
    
    
    (189
    )Amount allocated to participating restricted stockholders
    
    
    (41
    )
    
    
    (18
    )
    
    
    (101
    )
    
    
    (31
    )Net income available to common stockholders
    
    $
    4,500
    
    
    $
    5,024
    
    
    $
    13,210
    
    
    $
    10,106Basic weighted average common shares outstanding
    
    
    52,869
    
    
    
    56,623
    
    
    
    52,851
    
    
    
    56,587Dilutive effect of employee stock options
    
    
    733
    
    
    
    732
    
    
    
    665
    
    
    
    633Diluted weighted average common shares outstanding
    
    
    53,602
    
    
    
    57,355
    
    
    
    53,516
    
    
    
    57,220Diluted earnings per share
    
    $
    0.08
    
    
    $
    0.09
    
    
    $
    0.25
    
    
    $
    0.18
 12. COMPREHENSIVE INCOME
  Three Months     Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    4,631
    
    
    $
    5,136
    
    
    $
    13,575
    
    
    $
    10,326Other comprehensive income (loss):Currency translation adjustment
    
    
    4,150
    
    
    
    (773
    )
    
    
    3,180
    
    
    
    (992
    )Cash flow hedges, net of tax
    
    
    
    
    
    
    (9
    )
    
    
    (69
    )
    
    
    104Unrealized gain on securities, net of tax
    
    
    66
    
    
    
    3
    
    
    
    81
    
    
    
    3Total other comprehensive income (loss)
    
    
    4,216
    
    
    
    (779
    )
    
    
    3,192
    
    
    
    (885
    )Comprehensive income
    
    $
    8,847
    
    
    $
    4,357
    
    
    $
    16,767
    
    
    $
    9,441
  14




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
   Executive Overview
      15




---



##### Table of Contents



Enterprise
    
    PostilionS1 Enterprise
    
    Postilion
    
    FSBSelf Service BankingOnline BankingPersonal Banking
    
    Global
    
    US
    
    Business Banking
    
    Global
    
    US
    
    Bill pay services
    
    US
    
    US
    
    Corporate Banking
    
    Global
    
    
    
    Trade Finance
    
    Global
    
    
    
    Mobile Banking
    
    Global
    
    Global
    
    Voice Banking
    
    Global
    
    US
    
    Full Service BankingTeller
    
    Global
    
    
    
    USSales and Service
    
    Global
    
    
    
    USCall Center
    
    Global
    
    
    
    USLending
    
    
    
    
    
    USPayments
    
    
    
    Global
    
    Insurance
    
    US
    
    
    
    
 Revenue from Significant Customers
  Critical Accounting Policies and Estimates
   16




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##### Table of Contents




    
    revenue recognition;
    
    estimation of our allowance for doubtful accounts and billing adjustments;
    
    valuation and recoverability of long-lived assets, including goodwill;
    
    determination of technological feasibility and capitalization of software development costs;
    
    determination of the fair value of employee stock options and stock appreciation rights
awards;
    
    recognition of costs in connection with restructuring plans;
    
    reserves for contingencies; and
    
    income taxes.
 Revenue recognition.
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Subscription revenue:Enterprise
    
    $
    778
    
    
    $
    682
    
    
    $
    1,474
    
    
    $
    1,229Postilion
    
    
    3,059
    
    
    
    2,129
    
    
    
    6,097
    
    
    
    4,160Total Company
    
    $
    3,837
    
    
    $
    2,811
    
    
    $
    7,571
    
    
    $
    5,389
   17




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##### Table of Contents



Stock-based compensation.
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Operating expenses:Cost of professional services, support and maintenance
    
    $
    213
    
    
    $
    27
    
    
    $
    61
    
    
    $
    73Cost of data center
    
    
    23
    
    
    
    22
    
    
    
    43
    
    
    
    47Selling and marketing
    
    
    1,147
    
    
    
    882
    
    
    
    (73
    )
    
    
    1,606Product development
    
    
    236
    
    
    
    262
    
    
    
    106
    
    
    
    584General and administrative
    
    
    1,472
    
    
    
    1,112
    
    
    
    423
    
    
    
    1,883Total stock-based compensation expense
    
    $
    3,091
    
    
    $
    2,305
    
    
    $
    560
    
    
    $
    4,193Grant type:Stock options
    
    $
    620
    
    
    $
    982
    
    
    $
    1,214
    
    
    $
    1,946Restricted stock
    
    
    349
    
    
    
    261
    
    
    
    562
    
    
    
    435Stock appreciation rights
    
    
    2,122
    
    
    
    1,062
    
    
    
    (1,216
    )
    
    
    1,812Total stock-based compensation expense
    
    $
    3,091
    
    
    $
    2,305
    
    
    $
    560
    
    
    $
    4,193
 Recent Accounting Pronouncements
  Effects of Foreign Currencies
   Three Months Ended June 30, 2009
    
    
    Six Months Ended June 30, 2009At Prior
    
    
    
    
    
    
    
    
    
    
    At PriorYear
    
    
    
    
    
    
    
    
    
    
    YearExchange
    
    
    Exchange
    
    
    
    
    
    
    Exchange
    
    
    ExchangeRates (1)
    
    
    Rate Effect
    
    
    As reported
    
    
    Rates (1)
    
    
    Rate Effect
    
    
    As reportedRevenue
    
    $
    62,517
    
    
    $
    (1,675
    )
    
    $
    60,842
    
    
    $
    123,645
    
    
    $
    (4,515
    )
    
    $
    119,130Operating expenses
    
    
    57,403
    
    
    
    (2,160
    )
    
    
    55,243
    
    
    
    108,893
    
    
    
    (5,495
    )
    
    
    103,398Operating income
    
    
    5,114
    
    
    
    485
    
    
    
    5,599
    
    
    
    14,752
    
    
    
    980
    
    
    
    15,732Net income
    
    
    3,861
    
    
    
    770
    
    
    
    4,631
    
    
    
    12,445
    
    
    
    1,130
    
    
    
    13,575Basic earnings per share
    
    $
    0.07
    
    
    $
    0.02
    
    
    $
    0.09
    
    
    $
    0.23
    
    
    $
    0.02
    
    
    $
    0.25Diluted earnings per share
    
    $
    0.07
    
    
    $
    0.01
    
    
    $
    0.08
    
    
    $
    0.23
    
    
    $
    0.02
    
    
    $
    0.25
 (1)
    
    Current year results translated into U.S. Dollars using prior years period
average exchange rates.  18




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##### Table of Contents



Comparison of the Three Months Ended June 30, 2009 and 2008
 Revenue
 Three Months Ended June 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    2008
    
    
    Chg
    
    
    2009
    
    
    2008
    
    
    Chg
    
    
    2009
    
    
    2008
    
    
    ChgRevenue:Software licenses
    
    $
    1,683
    
    
    $
    2,437
    
    
    
    -31
    %
    
    $
    10,628
    
    
    $
    5,680
    
    
    
    87
    %
    
    $
    12,311
    
    
    $
    8,117
    
    
    
    52
    %Support and maintenance
    
    
    5,002
    
    
    
    4,499
    
    
    
    11
    %
    
    
    8,610
    
    
    
    8,096
    
    
    
    6
    %
    
    
    13,612
    
    
    
    12,595
    
    
    
    8
    %Professional services
    
    
    17,741
    
    
    
    18,104
    
    
    
    -2
    %
    
    
    6,349
    
    
    
    5,632
    
    
    
    13
    %
    
    
    24,090
    
    
    
    23,736
    
    
    
    1
    %Data center
    
    
    6,986
    
    
    
    7,032
    
    
    
    -1
    %
    
    
    3,843
    
    
    
    5,008
    
    
    
    -23
    %
    
    
    10,829
    
    
    
    12,040
    
    
    
    -10
    %Total revenue
    
    $
    31,412
    
    
    $
    32,072
    
    
    
    -2
    %
    
    $
    29,430
    
    
    $
    24,416
    
    
    
    21
    %
    
    $
    60,842
    
    
    $
    56,488
    
    
    
    8
    %
     19




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##### Table of Contents



Operating direct costs
 Three Months Ended June 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %Operating direct costs:Cost of software licenses
    
    $
    203
    
    
    
    12
    %
    
    $
    418
    
    
    
    17
    %
    
    $
    1,069
    
    
    
    10
    %
    
    $
    727
    
    
    
    13
    %
    
    $
    1,272
    
    
    
    10
    %
    
    $
    1,145
    
    
    
    14
    %Cost of professional
services,
support and maintenance
    
    
    10,730
    
    
    
    47
    %
    
    
    10,999
    
    
    
    49
    %
    
    
    7,807
    
    
    
    52
    %
    
    
    7,034
    
    
    
    51
    %
    
    
    18,537
    
    
    
    49
    %
    
    
    18,033
    
    
    
    50
    %Cost of data center
    
    
    4,041
    
    
    
    58
    %
    
    
    3,735
    
    
    
    53
    %
    
    
    3,077
    
    
    
    80
    %
    
    
    2,666
    
    
    
    53
    %
    
    
    7,118
    
    
    
    66
    %
    
    
    6,401
    
    
    
    53
    %Total operating direct costs
    
    $
    14,974
    
    
    
    48
    %
    
    $
    15,152
    
    
    
    47
    %
    
    $
    11,953
    
    
    
    41
    %
    
    $
    10,427
    
    
    
    43
    %
    
    $
    26,927
    
    
    
    44
    %
    
    $
    25,579
    
    
    
    45
    %
  Cost of software licenses.
 Cost of professional services, support and maintenance.
 Cost of data center.
  20




---



##### Table of Contents



Operating indirect expenses.
 Three Months Ended June 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %Operating indirect expenses:Selling and marketing
    
    $
    4,632
    
    
    
    15
    %
    
    $
    4,133
    
    
    
    13
    %
    
    $
    4,797
    
    
    
    16
    %
    
    $
    5,210
    
    
    
    21
    %
    
    $
    9,429
    
    
    
    15
    %
    
    $
    9,343
    
    
    
    17
    %Product development
    
    
    5,627
    
    
    
    18
    %
    
    
    4,472
    
    
    
    14
    %
    
    
    3,346
    
    
    
    11
    %
    
    
    2,555
    
    
    
    10
    %
    
    
    8,973
    
    
    
    15
    %
    
    
    7,027
    
    
    
    12
    %General and administrative
    
    
    3,616
    
    
    
    12
    %
    
    
    3,339
    
    
    
    10
    %
    
    
    3,871
    
    
    
    13
    %
    
    
    3,044
    
    
    
    12
    %
    
    
    7,487
    
    
    
    12
    %
    
    
    6,383
    
    
    
    11
    %Depreciation and
amortization
of intangible assets
    
    
    1,229
    
    
    
    4
    %
    
    
    1,110
    
    
    
    3
    %
    
    
    1,198
    
    
    
    4
    %
    
    
    1,093
    
    
    
    4
    %
    
    
    2,427
    
    
    
    4
    %
    
    
    2,203
    
    
    
    4
    %Total operating indirect
expenses
    
    $
    15,104
    
    
    
    48
    %
    
    $
    13,054
    
    
    
    41
    %
    
    $
    13,212
    
    
    
    45
    %
    
    $
    11,902
    
    
    
    49
    %
    
    $
    28,316
    
    
    
    47
    %
    
    $
    24,956
    
    
    
    44
    %
  Selling and marketing expenses
 Product development expenses
  General and administrative expenses
 Depreciation and amortization of other intangible assets
 Non-operating expenses.
 Three Months Ended June 30,2009
    
    
    2008
    
    
    ChgNon-operating expenses:Interest and other (expense)
income
    
    $
    (528
    )
    
    $
    124
    
    
    
    -526
    %Income tax expense
    
    
    440
    
    
    
    941
    
    
    
    -53
    %
  21




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##### Table of Contents



Interest and other (expense) income, net .
 Income tax expense.
 
    
    for tax expense in certain subsidiaries or jurisdictions for which we do not have
NOLs to utilize;
    
    in the United States due to limitations on the use of our federal NOLs for
alternative minimum tax purposes which will be paid in cash; and
    
    for tax expense in certain subsidiaries or jurisdictions for which we have not
fully reserved the deferred tax assets.
  Comparison of the Six Months Ended June 30, 2009 and 2008
 Revenue
 Six Months Ended June 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    2008
    
    
    Chg
    
    
    2009
    
    
    2008
    
    
    Chg
    
    
    2009
    
    
    2008
    
    
    ChgRevenue:Software licenses
    
    $
    4,470
    
    
    $
    4,026
    
    
    
    11
    %
    
    $
    19,459
    
    
    $
    13,626
    
    
    
    43
    %
    
    $
    23,929
    
    
    $
    17,652
    
    
    
    36
    %Support and maintenance
    
    
    9,667
    
    
    
    8,205
    
    
    
    18
    %
    
    
    16,430
    
    
    
    16,093
    
    
    
    2
    %
    
    
    26,097
    
    
    
    24,298
    
    
    
    7
    %Professional services
    
    
    36,315
    
    
    
    35,194
    
    
    
    3
    %
    
    
    10,850
    
    
    
    9,664
    
    
    
    12
    %
    
    
    47,165
    
    
    
    44,858
    
    
    
    5
    %Data center
    
    
    14,226
    
    
    
    14,135
    
    
    
    1
    %
    
    
    7,713
    
    
    
    10,218
    
    
    
    -25
    %
    
    
    21,939
    
    
    
    24,353
    
    
    
    -10
    %Total revenue
    
    $
    64,678
    
    
    $
    61,560
    
    
    
    5
    %
    
    $
    54,452
    
    
    $
    49,601
    
    
    
    10
    %
    
    $
    119,130
    
    
    $
    111,161
    
    
    
    7
    %
    22




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##### Table of Contents



Operating direct costs
 Six Months Ended June 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %Operating direct costs:Cost of software licenses
    
    $
    513
    
    
    
    11
    %
    
    $
    752
    
    
    
    19
    %
    
    $
    1,599
    
    
    
    8
    %
    
    $
    1,385
    
    
    
    10
    %
    
    $
    2,112
    
    
    
    9
    %
    
    $
    2,137
    
    
    
    12
    %Cost of professional
services,
support and maintenance
    
    
    22,321
    
    
    
    49
    %
    
    
    21,631
    
    
    
    50
    %
    
    
    14,476
    
    
    
    53
    %
    
    
    13,894
    
    
    
    54
    %
    
    
    36,797
    
    
    
    50
    %
    
    
    35,525
    
    
    
    51
    %Cost of data center
    
    
    8,057
    
    
    
    57
    %
    
    
    7,680
    
    
    
    54
    %
    
    
    6,033
    
    
    
    78
    %
    
    
    5,278
    
    
    
    52
    %
    
    
    14,090
    
    
    
    64
    %
    
    
    12,958
    
    
    
    53
    %Total operating direct costs
    
    $
    30,891
    
    
    
    48
    %
    
    $
    30,063
    
    
    
    49
    %
    
    $
    22,108
    
    
    
    41
    %
    
    $
    20,557
    
    
    
    41
    %
    
    $
    52,999
    
    
    
    44
    %
    
    $
    50,620
    
    
    
    46
    %
  Cost of software licenses.
 Cost of professional services, support and maintenance.
  23




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##### Table of Contents



Cost of data center.
 Operating indirect expenses.
 Six Months Ended June 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %Operating indirect expenses:Selling and marketing
    
    $
    7,018
    
    
    
    11
    %
    
    $
    7,971
    
    
    
    13
    %
    
    $
    9,233
    
    
    
    17
    %
    
    $
    9,588
    
    
    
    19
    %
    
    $
    16,251
    
    
    
    14
    %
    
    $
    17,559
    
    
    
    16
    %Product development
    
    
    10,682
    
    
    
    17
    %
    
    
    8,570
    
    
    
    14
    %
    
    
    6,463
    
    
    
    12
    %
    
    
    5,212
    
    
    
    11
    %
    
    
    17,145
    
    
    
    14
    %
    
    
    13,782
    
    
    
    12
    %General and administrative
    
    
    5,939
    
    
    
    9
    %
    
    
    6,939
    
    
    
    11
    %
    
    
    6,064
    
    
    
    11
    %
    
    
    5,879
    
    
    
    12
    %
    
    
    12,003
    
    
    
    10
    %
    
    
    12,818
    
    
    
    12
    %Depreciation and
amortization
of intangible assets
    
    
    2,537
    
    
    
    4
    %
    
    
    2,265
    
    
    
    4
    %
    
    
    2,463
    
    
    
    5
    %
    
    
    2,163
    
    
    
    4
    %
    
    
    5,000
    
    
    
    4
    %
    
    
    4,428
    
    
    
    4
    %Total operating indirect
expenses
    
    $
    26,176
    
    
    
    40
    %
    
    $
    25,745
    
    
    
    42
    %
    
    $
    24,223
    
    
    
    44
    %
    
    $
    22,842
    
    
    
    46
    %
    
    $
    50,399
    
    
    
    42
    %
    
    $
    48,587
    
    
    
    44
    %
  Selling and marketing expenses
 Product development expenses
  General and administrative expenses
 Depreciation and amortization of other intangible assets
  24




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##### Table of Contents



Non-operating expenses.
 Six Months Ended June 30,2009
    
    
    2008
    
    
    ChgNon-operating expenses:Interest and other (expense)
income
    
    $
    (518
    )
    
    $
    418
    
    
    
    -224
    %Income tax expense
    
    
    1,639
    
    
    
    2,046
    
    
    
    -20
    %
 Interest and other (expense) income, net.
 Income tax expense.
 
    
    for tax expense in certain subsidiaries or jurisdictions for which we do not have
NOLs to utilize;
    
    in the United States due to limitations on the use of our federal NOLs for
alternative minimum tax purposes which will be paid in cash; and
    
    for tax expense in certain subsidiaries or jurisdictions for which we have not
fully reserved the deferred tax assets.
  Liquidity and Capital Resources
  Six Months Ended June 30,2009
    
    
    2008Net cash provided by operating activities before
changes in operating assets and liabilities
    
    $
    19,958
    
    
    $
    19,969Change in operating assets and liabilities
    
    
    (3,422
    )
    
    
    (3,670
    )Net cash provided by operating activities
    
    
    16,536
    
    
    
    16,299Net cash (used in) provided by investing activities
    
    
    (3,589
    )
    
    
    9,463Net cash used in financing activities
    
    
    (2,403
    )
    
    
    (2,779
    )Effect of exchange rates on cash and cash equivalents
    
    
    823
    
    
    
    (561
    )Net increase in cash and cash equivalents
    
    $
    11,367
    
    
    $
    22,422
  25




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##### Table of Contents



June 30, 2009
    
    
    December 31, 2008Cash and cash
equivalents
    
    $
    75,207
    
    
    $
    63,840Working capital
    
    
    73,209
    
    
    
    55,804Total assets
    
    
    303,812
    
    
    
    278,686Total stockholders
equity
    
    
    227,425
    
    
    
    208,740
 Operating Activities
 Investing Activities
 Financing Activities
 Off-Balance Sheet Arrangements.
 Stock Repurchase Program.
 Restructuring.
 SARs.
 Capital Requirements.
  26




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
 Changes in Internal Control over Financial Reporting.
 
 PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  You should consider carefully the Risk Factors. If any of these risks actually occur, our
business, financial condition or results of operations would likely suffer. In that case, the
trading price of our common stock could decline, and you may lose all or a part of the money you
paid to buy our common stock.
 Our
business may be materially adversely impacted by volatile U.S. and global market and economic conditions
   27




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##### Table of Contents



We have engaged third-parties to assist us with certain implementation activities which may
not be successful and which may result in harm to our business, reputation and financial results
  Our business and financial results may be negatively impacted by fluctuations in foreign
currency exchange rates
  We are subject to government regulation which may interfere with our ability to conduct our
business, including our ability to attract and maintain customers, and could negatively impact our
business and financial results
  We face added business, political, regulatory, operational, financial and economic risks as a
result of our international operations, any of which could increase our costs and hinder our growth
  
    
    fluctuations in currency exchange rates;
 
    
    governmental currency controls;
 
    
    changes in various regulatory requirements;
 
    
    political, economic and military changes and disruptions;
 
    
    difficulties in enforcing our contracts in foreign jurisdictions;
 
    
    export/import controls;
 
    
    tariff regulations;
 
    
    difficulties in staffing and managing foreign sales, professional
services, product development and support operations;
 
    
    greater difficulties in trade accounts receivable collection; and
 
    
    possible adverse tax consequences.
  28




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##### Table of Contents



29




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##### Table of Contents



Item 4.
    
    Submission of Matters to a Vote of Security Holders
  (1)
    
    Election of directors to the Board.
 Director Nominee
    
    For
    
    
    AgainstJohn W. Spiegel
    
    
    45,589,125
    
    
    
    574,626Thomas P. Johnson, Jr.
    
    
    45,626,710
    
    
    
    537,041
  (2)
    
    Ratification of Appointment of PricewaterhouseCoopers LLP as our Independent
Public Accounting Firm for 2009. There were no broker non-votes.
 For
    
    
    
    
    Against
    
    
    Abstentions45,581,003
    
    
    
    
    
    140,085
    
    
    
    442,663
 
 Item 6.
    
    Exhibits
 Exhibit No.
    
    Exhibit Description3.1
    
    
    Amended and Restated Certificate of Incorporation of S1 Corporation (S1) (filed as
Exhibit 1 to S1s Registration Statement on Form 8-A filed with the Securities and Exchange
Commission (the SEC) on September 30, 1998 and incorporated herein by reference).3.2
    
    
    Certificate of Amendment of Amended and Restated Certificate of Incorporation of S1
dated June 3, 1999 (filed as Exhibit 4.2 to S1s Registration Statement on Form S-8 (File
No. 333-82369) filed with the SEC on July 7, 1999 and incorporated herein by reference).3.3
    
    
    Certificate of Amendment of Amended and Restated Certificate of Incorporation of S1
dated November 10, 1999 (filed as Exhibit 3.3 to S1s Annual Report on Form 10-K for the
fiscal year ended December 31, 1999, filed with the SEC on March 30, 2000 and incorporated
herein by reference).3.4
    
    
    Certificate of Designation for S1s Series B Redeemable Convertible Preferred Stock
(filed as Exhibit 2 to S1s Registration Statement on Form 8-A filed with the SEC on
September 30, 1998 and incorporated herein by reference).3.5
    
    
    Amended and Restated Bylaws of S1, as amended (filed as Exhibit 3.6 to S1s Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2006 filed with the SEC on May
8, 2006 and incorporated herein by reference).4.1
    
    
    Specimen certificate for S1s common stock (filed as Exhibit 4 to S1s Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2000, filed with the SEC on May 15,
2000 and incorporated herein by reference).4.2
    
    
    Specimen certificate for S1s Series B Redeemable Convertible Preferred Stock (filed as
Exhibit 4.3 to S1s Annual Report on Form 10-K for the fiscal year ended December 31, 1998,
filed with the SEC on March 31, 1999 and incorporated herein by reference).31.1
    
    
    Certification of Chief Executive Officer.31.2
    
    
    Certification of Chief Financial Officer.32.1
    
    
    Certificate of Chief Executive Officer pursuant to §906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certificate of Chief Financial Officer pursuant to §906 of the Sarbanes-Oxley Act of 2002.
  30




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##### Table of Contents



SIGNATURE
  S1 CORPORATIONBy:
    /s/ PAUL M. PARRISHPaul M. ParrishChief Financial Officer
(Principal Financial Officer)  31




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Exhibit Description31.1
    
    
    Certification of Chief Executive Officer.31.2
    
    
    Certification of Chief Financial Officer.32.1
    
    
    Certificate of Chief Executive Officer pursuant to §906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certificate of Chief Financial Officer pursuant to §906 of the Sarbanes-Oxley Act of 2002.
  32