##### 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 September 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
    
    58-2395199(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    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
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



S1 CORPORATION
 QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements:Condensed Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008
    
    
    1Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended
September 30, 2009 and 2008
    
    
    2Condensed Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 2009 and 2008
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    25PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    26Item 1A. Risk Factors
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 6. Exhibits
    
    
    27Signature
    
    
    28Exhibit 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)
(Unaudited)
 September 30,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    67,407
    
    
    $
    63,840Accounts receivable, net
    
    
    56,873
    
    
    
    42,561Prepaid expenses
    
    
    5,004
    
    
    
    5,123Other current assets
    
    
    5,527
    
    
    
    3,575Total current assets
    
    
    134,811
    
    
    
    115,099Property and equipment, net
    
    
    23,207
    
    
    
    23,015Intangible assets, net
    
    
    5,392
    
    
    
    7,585Goodwill, net
    
    
    126,618
    
    
    
    124,362Other assets
    
    
    9,274
    
    
    
    8,625Total assets
    
    $
    299,302
    
    
    $
    278,686LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    2,079
    
    
    $
    1,366Accrued compensation and benefits
    
    
    12,930
    
    
    
    16,147Accrued restructuring
    
    
    2,158
    
    
    
    2,323Accrued other expenses
    
    
    9,440
    
    
    
    10,271Deferred revenues
    
    
    30,984
    
    
    
    25,271Current portion of debt obligation
    
    
    2,004
    
    
    
    3,917Total current liabilities
    
    
    59,595
    
    
    
    59,295Debt obligation, excluding current portion
    
    
    5,188
    
    
    
    6,196Accrued restructuring, excluding current portion
    
    
    1,901
    
    
    
    3,443Other liabilities
    
    
    1,594
    
    
    
    1,012Total liabilities
    
    
    68,278
    
    
    
    69,946Stockholders equity:Preferred stock
    
    
    10,000
    
    
    
    10,000Common stock
    
    
    522
    
    
    
    528Additional paid in capital
    
    
    1,790,141
    
    
    
    1,791,924Accumulated deficit
    
    
    (1,567,472
    )
    
    
    (1,587,957
    )Accumulated other comprehensive loss
    
    
    (2,167
    )
    
    
    (5,755
    )Total stockholders equity
    
    
    231,024
    
    
    
    208,740Total liabilities and stockholders equity
    
    $
    299,302
    
    
    $
    278,686Preferred shares issued and outstanding
    
    
    749,064
    
    
    
    749,064Common shares issued and outstanding
    
    
    52,203,371
    
    
    
    52,799,310
  1




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S1 CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenue:Software licenses
    
    $
    10,225
    
    
    $
    9,208
    
    
    $
    34,154
    
    
    $
    26,860Support and maintenance
    
    
    13,472
    
    
    
    12,259
    
    
    
    39,569
    
    
    
    36,557Professional services
    
    
    25,787
    
    
    
    24,939
    
    
    
    72,952
    
    
    
    69,797Data center
    
    
    10,853
    
    
    
    12,243
    
    
    
    32,792
    
    
    
    36,596Total revenue
    
    
    60,337
    
    
    
    58,649
    
    
    
    179,467
    
    
    
    169,810Operating expenses:Cost of software licenses (1)
    
    
    623
    
    
    
    938
    
    
    
    2,735
    
    
    
    3,075Cost of professional services, support and maintenance (1)
    
    
    19,200
    
    
    
    19,422
    
    
    
    55,997
    
    
    
    54,947Cost of data center (1)
    
    
    7,079
    
    
    
    6,743
    
    
    
    21,169
    
    
    
    19,701Selling and marketing
    
    
    7,500
    
    
    
    8,360
    
    
    
    23,751
    
    
    
    25,919Product development
    
    
    8,996
    
    
    
    7,658
    
    
    
    26,141
    
    
    
    21,440General and administrative
    
    
    5,578
    
    
    
    6,094
    
    
    
    17,581
    
    
    
    18,912Depreciation and amortization of intangible assets
    
    
    2,298
    
    
    
    2,257
    
    
    
    7,298
    
    
    
    6,685Total operating expenses
    
    
    51,274
    
    
    
    51,472
    
    
    
    154,672
    
    
    
    150,679Operating income
    
    
    9,063
    
    
    
    7,177
    
    
    
    24,795
    
    
    
    19,131Interest and other (expense) income, net
    
    
    (516
    )
    
    
    296
    
    
    
    (1,034
    )
    
    
    714Income before income tax expense
    
    
    8,547
    
    
    
    7,473
    
    
    
    23,761
    
    
    
    19,845Income tax expense
    
    
    1,637
    
    
    
    1,282
    
    
    
    3,276
    
    
    
    3,328Net income
    
    $
    6,910
    
    
    $
    6,191
    
    
    $
    20,485
    
    
    $
    16,517Earnings per share:Basic
    
    $
    0.13
    
    
    $
    0.11
    
    
    $
    0.38
    
    
    $
    0.29Diluted
    
    $
    0.12
    
    
    $
    0.11
    
    
    $
    0.37
    
    
    $
    0.28Weighted average common shares outstanding  basic
    
    
    52,598,922
    
    
    
    56,559,777
    
    
    
    52,766,275
    
    
    
    56,577,987Weighted average common shares outstanding  fully diluted
    
    
    53,452,888
    
    
    
    57,526,966
    
    
    
    53,494,437
    
    
    
    57,330,269
 
 (1)
    
    Excludes charges for depreciation. Cost of software licenses includes amortization of
acquired technology.  2




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S1 CORPORATION


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(Unaudited)
 Nine Months EndedSeptember 30,2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    20,485
    
    
    $
    16,517Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    8,650
    
    
    
    8,752Provision for doubtful accounts receivable and billing adjustments
    
    
    (534
    )
    
    
    (342
    )Deferred income taxes
    
    
    240
    
    
    
    Stock-based compensation expense
    
    
    421
    
    
    
    4,605Changes in assets and liabilities:Increase in accounts receivable
    
    
    (11,730
    )
    
    
    (3,610
    )(Increase) decrease in prepaid expenses and other assets
    
    
    (1,962
    )
    
    
    1,263Increase in accounts payable
    
    
    646
    
    
    
    134(Decrease) increase in income taxes payable
    
    
    (938
    )
    
    
    2,099Decrease in accrued expenses and other liabilities
    
    
    (1,557
    )
    
    
    (290
    )Increase in deferred revenue
    
    
    5,429
    
    
    
    2,053Net cash provided by operating activities
    
    
    19,150
    
    
    
    31,181Cash flows from investing activities:Maturities of investment securities
    
    
    2,504
    
    
    
    20,653Purchases of investment securities
    
    
    (5,224
    )
    
    
    (3,447
    )Amounts released from escrow related to sale of business
    
    
    
    
    
    
    3,712Purchases of property, equipment and technology
    
    
    (6,364
    )
    
    
    (7,273
    )Net cash (used in) provided by investing
activities
    
    
    (9,084
    )
    
    
    13,645Cash flows from financing activities:Proceeds from exercise of employee stock options, net of stockwithheld for payroll taxes
    
    
    192
    
    
    
    858Payments on capital leases and debt obligations
    
    
    (2,921
    )
    
    
    (2,785
    )Repurchase of common stock
    
    
    (4,971
    )
    
    
    (10,167
    )Net cash used in financing activities
    
    
    (7,700
    )
    
    
    (12,094
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    1,201
    
    
    
    (2,357
    )Net increase in cash and cash equivalents
    
    
    3,567
    
    
    
    30,375Cash and cash equivalents at beginning of period
    
    
    63,840
    
    
    
    45,011Cash and cash equivalents at end of period
    
    $
    67,407
    
    
    $
    75,386
  3




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S1 CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. BACKGROUND AND BASIS OF PRESENTATION
     2. RECENT ACCOUNTING PRONOUNCEMENTS
   4




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3. FAIR VALUE MEASUREMENTS
     5




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##### Table of Contents



September 30, 2009
    
    December 31, 2008Carrying
    
    Estimated
    
    Carrying
    
    EstimatedValue
    
    Fair Value
    
    Value
    
    Fair ValueCash and cash equivalents
    
    $
    67,407
    
    
    $
    67,407
    
    
    $
    63,840
    
    
    $
    63,840Short-term investments included
in other current assets:Mutual fund trust
    
    
    
    
    
    
    
    
    
    
    1,493
    
    
    
    1,493Fixed term deposits
    
    
    3,542
    
    
    
    3,542
    
    
    
    
    
    
    
    Derivative assets
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    69Long-term investments included
in non-current other assets:Mutual fund trust
    
    
    
    
    
    
    
    
    
    
    902
    
    
    
    902Fixed term deposits
    
    
    2,000
    
    
    
    2,000
    
    
    
    289
    
    
    
    289Long-term borrowings
    
    
    5,188
    
    
    
    5,061
    
    
    
    6,196
    
    
    
    6,103
  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)December 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. 6




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Fair Value Measurements at Reporting DateUsing Signifcant Unobservable Inputs (Level 3)Balance at December 31, 2008
    
    $
    2,395Realized gain in earnings
    
    
    109Cash settlements
    
    
    (2,504
    )Ending balance at September 30, 2009
    
    $
    
 4. ACCOUNTS RECEIVABLE
  5. GOODWILL AND INTANGIBLE ASSETS
  Enterprise
    
    
    Postilion
    
    
    TotalBalance, December 31, 2008
    
    $
    48,697
    
    
    $
    75,665
    
    
    $
    124,362Effect of foreign currency translations
    
    
    3,371
    
    
    
    (1,115
    )
    
    
    2,256Balance, September 30, 2009
    
    $
    52,068
    
    
    $
    74,550
    
    
    $
    126,618
  Gross
    
    
    Accumulated
    
    
    NetCarrying Value
    
    
    Amortization
    
    
    Carrying ValueAcquired technology
    
    $
    21,938
    
    
    $
    (20,367
    )
    
    $
    1,571Customer relationships
    
    
    12,000
    
    
    
    (8,179
    )
    
    
    3,821Total intangible assets
    
    $
    33,938
    
    
    $
    (28,546
    )
    
    $
    5,392
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Acquired technology
    
    $
    437
    
    
    $
    662
    
    
    $
    1,352
    
    
    $
    2,068Customer relationships
    
    
    276
    
    
    
    282
    
    
    
    841
    
    
    
    847Total amortization expense
    
    $
    713
    
    
    $
    944
    
    
    $
    2,193
    
    
    $
    2,915
 7




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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
  September 30,
    
    
    December 31,2009
    
    
    2008Accrued service fees payable
    
    $
    3,729
    
    
    $
    3,148Accrued third party products and
royalties
    
    
    1,200
    
    
    
    1,530Sales and income taxes payable
    
    
    3,035
    
    
    
    3,588Other
    
    
    1,476
    
    
    
    2,005Total accrued other
expenses
    
    $
    9,440
    
    
    $
    10,271
 7. DEFERRED REVENUE
  September 30,
    
    
    December 31,2009
    
    
    2008Software licenses
    
    $
    3,292
    
    
    $
    4,008Professional services
    
    
    10,142
    
    
    
    7,056Support and maintenance
    
    
    17,550
    
    
    
    14,207Deferred revenue, current
    
    
    30,984
    
    
    
    25,271Deferred revenue, non-current (1)
    
    
    52
    
    
    
    160Total deferred revenue
    
    $
    31,036
    
    
    $
    25,431
 
 (1)
    
    Non-current deferred revenue is included in Long-term Other liabilities.  8. INCOME TAXES
  8




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9. STOCK-BASED COMPENSATION PLANS
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Operating expenses:Cost of professional services, support and maintenance
    
    $
    6
    
    
    $
    31
    
    
    $
    67
    
    
    
    104Cost of data center
    
    
    35
    
    
    
    29
    
    
    
    78
    
    
    
    76Selling and marketing
    
    
    (364
    )
    
    
    (5
    )
    
    
    (437
    )
    
    
    1,601Product development
    
    
    36
    
    
    
    15
    
    
    
    142
    
    
    
    599General and administrative
    
    
    148
    
    
    
    342
    
    
    
    571
    
    
    
    2,225Total stock-based compensation (benefit) expense
    
    $
    (139
    )
    
    $
    412
    
    
    $
    421
    
    
    $
    4,605Grant type:Stock options
    
    $
    607
    
    
    $
    1,239
    
    
    $
    1,821
    
    
    $
    3,185Restricted stock
    
    
    607
    
    
    
    267
    
    
    
    1,169
    
    
    
    702Stock appreciation rights
    
    
    (1,353
    )
    
    
    (1,094
    )
    
    
    (2,569
    )
    
    
    718Total stock-based compensation (benefit) expense
    
    $
    (139
    )
    
    $
    412
    
    
    $
    421
    
    
    $
    4,605
    9




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10. SEGMENT REPORTING AND MAJOR CUSTOMERS
   Three Months Ended September 30, 2009
    
    
    Three Months Ended September 30, 2008Enterprise
    
    
    Postilion
    
    
    Total
    
    
    Enterprise
    
    
    Postilion
    
    
    TotalRevenue:Software licenses
    
    $
    2,478
    
    
    $
    7,747
    
    
    
    10,225
    
    
    $
    1,696
    
    
    $
    7,512
    
    
    $
    9,208Support and maintenance
    
    
    4,792
    
    
    
    8,680
    
    
    
    13,472
    
    
    
    4,200
    
    
    
    8,059
    
    
    
    12,259Professional services
    
    
    18,850
    
    
    
    6,937
    
    
    
    25,787
    
    
    
    19,741
    
    
    
    5,198
    
    
    
    24,939Data center
    
    
    6,957
    
    
    
    3,896
    
    
    
    10,853
    
    
    
    7,269
    
    
    
    4,974
    
    
    
    12,243Total revenue
    
    $
    33,077
    
    
    $
    27,260
    
    
    $
    60,337
    
    
    $
    32,906
    
    
    $
    25,743
    
    
    $
    58,649Operating expenses:Direct costs
    
    
    14,591
    
    
    
    12,311
    
    
    
    26,902
    
    
    
    15,965
    
    
    
    11,138
    
    
    
    27,103Selling and marketing
    
    
    2,835
    
    
    
    4,665
    
    
    
    7,500
    
    
    
    3,643
    
    
    
    4,717
    
    
    
    8,360Product development
    
    
    5,209
    
    
    
    3,787
    
    
    
    8,996
    
    
    
    4,584
    
    
    
    3,074
    
    
    
    7,658General and administrative
    
    
    2,620
    
    
    
    2,958
    
    
    
    5,578
    
    
    
    3,202
    
    
    
    2,892
    
    
    
    6,094Depreciation and
amortization
of intangible assets
    
    
    1,168
    
    
    
    1,130
    
    
    
    2,298
    
    
    
    1,127
    
    
    
    1,130
    
    
    
    2,257Total operating expenses
    
    
    26,423
    
    
    
    24,851
    
    
    
    51,274
    
    
    
    28,521
    
    
    
    22,951
    
    
    
    51,472Operating income
    
    $
    6,654
    
    
    $
    2,409
    
    
    $
    9,063
    
    
    $
    4,385
    
    
    $
    2,792
    
    
    $
    7,177
 10




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Nine Months Ended September 30, 2009
    
    
    Nine Months Ended September 30, 2008Enterprise
    
    
    Postilion
    
    
    Total
    
    
    Enterprise
    
    
    Postilion
    
    
    TotalRevenue:Software licenses
    
    $
    6,948
    
    
    $
    27,206
    
    
    
    34,154
    
    
    $
    5,722
    
    
    $
    21,138
    
    
    $
    26,860Support and maintenance
    
    
    14,459
    
    
    
    25,110
    
    
    
    39,569
    
    
    
    12,405
    
    
    
    24,152
    
    
    
    36,557Professional services
    
    
    55,165
    
    
    
    17,787
    
    
    
    72,952
    
    
    
    54,935
    
    
    
    14,862
    
    
    
    69,797Data center
    
    
    21,183
    
    
    
    11,609
    
    
    
    32,792
    
    
    
    21,404
    
    
    
    15,192
    
    
    
    36,596Total revenue
    
    $
    97,755
    
    
    $
    81,712
    
    
    $
    179,467
    
    
    $
    94,466
    
    
    $
    75,344
    
    
    $
    169,810Operating expenses:Direct costs
    
    
    45,482
    
    
    
    34,419
    
    
    
    79,901
    
    
    
    46,028
    
    
    
    31,695
    
    
    
    77,723Selling and marketing
    
    
    9,853
    
    
    
    13,898
    
    
    
    23,751
    
    
    
    11,614
    
    
    
    14,305
    
    
    
    25,919Product development
    
    
    15,891
    
    
    
    10,250
    
    
    
    26,141
    
    
    
    13,154
    
    
    
    8,286
    
    
    
    21,440General and administrative
    
    
    8,559
    
    
    
    9,022
    
    
    
    17,581
    
    
    
    10,141
    
    
    
    8,771
    
    
    
    18,912Depreciation and
amortization
of intangible assets
    
    
    3,705
    
    
    
    3,593
    
    
    
    7,298
    
    
    
    3,392
    
    
    
    3,293
    
    
    
    6,685Total operating expenses
    
    
    83,490
    
    
    
    71,182
    
    
    
    154,672
    
    
    
    84,329
    
    
    
    66,350
    
    
    
    150,679Operating income
    
    $
    14,265
    
    
    $
    10,530
    
    
    $
    24,795
    
    
    $
    10,137
    
    
    $
    8,994
    
    
    $
    19,131
 Geography
 Revenue
    
    
    RevenueThree Months Ended
    
    
    Nine Months Ended
    
    
    Property and EquipmentSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Americas
    
    $
    42,517
    
    
    $
    40,955
    
    
    $
    128,200
    
    
    $
    121,539
    
    
    $
    20,906
    
    
    $
    21,669InternationalEMEI
    
    
    9,485
    
    
    
    11,110
    
    
    
    27,629
    
    
    
    31,835
    
    
    
    789
    
    
    
    893Africa
    
    
    2,814
    
    
    
    2,217
    
    
    
    8,277
    
    
    
    7,246
    
    
    
    1,415
    
    
    
    374APAC
    
    
    5,521
    
    
    
    4,367
    
    
    
    15,361
    
    
    
    9,190
    
    
    
    97
    
    
    
    79Total
    
    $
    60,337
    
    
    $
    58,649
    
    
    $
    179,467
    
    
    $
    169,810
    
    
    $
    23,207
    
    
    $
    23,015
 Major Customer.
 11. NET INCOME PER COMMON SHARE
  11




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands, except per share data)
    
    
    (in thousands, except per share data)Basic earnings per share:Net income
    
    $
    6,910
    
    
    $
    6,191
    
    
    $
    20,485
    
    
    $
    16,517Amount allocated to participating preferred stockholders
    
    
    (135
    )
    
    
    (115
    )
    
    
    (403
    )
    
    
    (306
    )Amount allocated to participating restricted stockholders
    
    
    (134
    )
    
    
    (31
    )
    
    
    (236
    )
    
    
    (61
    )Net income available to common stockholders
    
    $
    6,641
    
    
    $
    6,045
    
    
    $
    19,846
    
    
    $
    16,150Basic weighted average common shares outstanding
    
    
    52,599
    
    
    
    56,560
    
    
    
    52,766
    
    
    
    56,578Basic earnings per share
    
    $
    0.13
    
    
    $
    0.11
    
    
    $
    0.38
    
    
    $
    0.29Diluted earnings per share:Net income
    
    $
    6,910
    
    
    $
    6,191
    
    
    $
    20,485
    
    
    $
    16,517Amount allocated to participating preferred stockholders
    
    
    (133
    )
    
    
    (112
    )
    
    
    (397
    )
    
    
    (301
    )Amount allocated to participating restricted stockholders
    
    
    (132
    )
    
    
    (31
    )
    
    
    (233
    )
    
    
    (61
    )Net income available to common stockholders
    
    $
    6,645
    
    
    $
    6,048
    
    
    $
    19,855
    
    
    $
    16,155Basic weighted average common shares outstanding
    
    
    52,599
    
    
    
    56,560
    
    
    
    52,766
    
    
    
    56,578Dilutive effect of employee stock options
    
    
    854
    
    
    
    967
    
    
    
    728
    
    
    
    752Diluted weighted average common shares outstanding
    
    
    53,453
    
    
    
    57,527
    
    
    
    53,494
    
    
    
    57,330Diluted earnings per share
    
    $
    0.12
    
    
    $
    0.11
    
    
    $
    0.37
    
    
    $
    0.28
 12. COMPREHENSIVE INCOME
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    6,910
    
    
    $
    6,191
    
    
    $
    20,485
    
    
    $
    16,517Other comprehensive income (loss):Currency translation adjustment
    
    
    477
    
    
    
    (1,912
    )
    
    
    3,657
    
    
    
    (2,904
    )Cash flow hedges, net of tax
    
    
    
    
    
    
    23
    
    
    
    (69
    )
    
    
    127Unrealized gain on securities, net of tax
    
    
    (81
    )
    
    
    (3
    )
    
    
    
    
    
    
    Total other comprehensive income (loss)
    
    
    396
    
    
    
    (1,892
    )
    
    
    3,588
    
    
    
    (2,777
    )Comprehensive income
    
    $
    7,306
    
    
    $
    4,299
    
    
    $
    24,073
    
    
    $
    13,740
 12




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
   Executive Overview
     13




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##### Table of Contents



Revenue from Significant Customers
  Recent Accounting Pronouncements
  Critical Accounting Policies and Estimates
   
    
    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;
 14




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##### Table of Contents




    
    reserves for contingencies; and
    
    income taxes.
 Revenue recognition.
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Subscription revenue:Enterprise
    
    $
    861
    
    
    $
    751
    
    
    $
    2,335
    
    
    $
    1,980Postilion
    
    
    3,273
    
    
    
    2,407
    
    
    
    9,370
    
    
    
    6,569Total Company
    
    $
    4,134
    
    
    $
    3,158
    
    
    $
    11,705
    
    
    $
    8,549
   Stock-based compensation.
 15




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Operating expenses:Cost of professional
services, support and
maintenance
    
    $
    6
    
    
    $
    31
    
    
    $
    67
    
    
    
    104Cost of data center
    
    
    35
    
    
    
    29
    
    
    
    78
    
    
    
    76Selling and marketing
    
    
    (364
    )
    
    
    (5
    )
    
    
    (437
    )
    
    
    1,601Product development
    
    
    36
    
    
    
    15
    
    
    
    142
    
    
    
    599General and administrative
    
    
    148
    
    
    
    342
    
    
    
    571
    
    
    
    2,225Total stock-based compensation (benefit) expense
    
    $
    (139
    )
    
    $
    412
    
    
    $
    421
    
    
    $
    4,605Grant type:Stock options
    
    $
    607
    
    
    $
    1,239
    
    
    $
    1,821
    
    
    $
    3,185Restricted stock
    
    
    607
    
    
    
    267
    
    
    
    1,169
    
    
    
    702Stock appreciation rights
    
    
    (1,353
    )
    
    
    (1,094
    )
    
    
    (2,569
    )
    
    
    718Total stock-based compensation (benefit) expense
    
    $
    (139
    )
    
    $
    412
    
    
    $
    421
    
    
    $
    4,605
 Effects of Foreign Currencies
   Three Months Ended September 30, 2009
    
    
    Nine Months Ended September 30, 2009At Prior Year
    
    
    
    
    
    
    
    
    
    
    At Prior YearExchange
    
    
    Exchange
    
    
    
    
    
    
    Exchange
    
    
    ExchangeRates (1)
    
    
    Rate Effect
    
    
    As reported
    
    
    Rates (1)
    
    
    Rate Effect
    
    
    As reportedRevenue
    
    $
    61,177
    
    
    $
    (840
    )
    
    $
    60,337
    
    
    $
    184,822
    
    
    $
    (5,355
    )
    
    $
    179,467Operating expenses
    
    
    52,269
    
    
    
    (995
    )
    
    
    51,274
    
    
    
    161,162
    
    
    
    (6,490
    )
    
    
    154,672Operating income
    
    
    8,908
    
    
    
    155
    
    
    
    9,063
    
    
    
    23,660
    
    
    
    1,135
    
    
    
    24,795Net income
    
    
    6,445
    
    
    
    465
    
    
    
    6,910
    
    
    
    18,890
    
    
    
    1,595
    
    
    
    20,485Basic earnings per share
    
    $
    0.12
    
    
    $
    0.01
    
    
    $
    0.13
    
    
    $
    0.35
    
    
    $
    0.03
    
    
    $
    0.38Diluted earnings per share
    
    $
    0.12
    
    
    $
    
    
    
    $
    0.12
    
    
    $
    0.34
    
    
    $
    0.03
    
    
    $
    0.37
 
 (1)
    
    Current year results translated into U.S. Dollars using prior years period
average exchange rates. 16




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##### Table of Contents



Comparison of the Three Months Ended September 30, 2009 and 2008
 Revenue
 Three Months Ended September 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    2008
    
    
    Chg
    
    
    2009
    
    
    2008
    
    
    Chg
    
    
    2009
    
    
    2008
    
    
    ChgRevenue:Software licenses
    
    $
    2,478
    
    
    $
    1,696
    
    
    
    46
    %
    
    $
    7,747
    
    
    $
    7,512
    
    
    
    3
    %
    
    $
    10,225
    
    
    $
    9,208
    
    
    
    11
    %Support and maintenance
    
    
    4,792
    
    
    
    4,200
    
    
    
    14
    %
    
    
    8,680
    
    
    
    8,059
    
    
    
    8
    %
    
    
    13,472
    
    
    
    12,259
    
    
    
    10
    %Professional services
    
    
    18,850
    
    
    
    19,741
    
    
    
    -5
    %
    
    
    6,937
    
    
    
    5,198
    
    
    
    33
    %
    
    
    25,787
    
    
    
    24,939
    
    
    
    3
    %Data center
    
    
    6,957
    
    
    
    7,269
    
    
    
    -4
    %
    
    
    3,896
    
    
    
    4,974
    
    
    
    -22
    %
    
    
    10,853
    
    
    
    12,243
    
    
    
    -11
    %Total revenue
    
    $
    33,077
    
    
    $
    32,906
    
    
    
    1
    %
    
    $
    27,260
    
    
    $
    25,743
    
    
    
    6
    %
    
    $
    60,337
    
    
    $
    58,649
    
    
    
    3
    %
    17




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##### Table of Contents



Operating direct costs
 Three Months Ended September 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %Operating direct costs:Cost of software licenses
    
    $
    150
    
    
    
    6
    %
    
    $
    236
    
    
    
    14
    %
    
    $
    473
    
    
    
    6
    %
    
    $
    702
    
    
    
    9
    %
    
    $
    623
    
    
    
    6
    %
    
    $
    938
    
    
    
    10
    %Cost of professional
services,
support and maintenance
    
    
    10,446
    
    
    
    44
    %
    
    
    11,714
    
    
    
    49
    %
    
    
    8,754
    
    
    
    56
    %
    
    
    7,708
    
    
    
    58
    %
    
    
    19,200
    
    
    
    49
    %
    
    
    19,422
    
    
    
    52
    %Cost of data center
    
    
    3,995
    
    
    
    57
    %
    
    
    4,015
    
    
    
    55
    %
    
    
    3,084
    
    
    
    79
    %
    
    
    2,728
    
    
    
    55
    %
    
    
    7,079
    
    
    
    65
    %
    
    
    6,743
    
    
    
    55
    %Total operating direct costs
    
    $
    14,591
    
    
    
    44
    %
    
    $
    15,965
    
    
    
    49
    %
    
    $
    12,311
    
    
    
    45
    %
    
    $
    11,138
    
    
    
    43
    %
    
    $
    26,902
    
    
    
    45
    %
    
    $
    27,103
    
    
    
    46
    %
  Cost of software licenses.
 Cost of professional services, support and maintenance.
 Cost of data center.
 18




---



##### Table of Contents



Operating indirect expenses.
 Three Months Ended September 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %Operating indirect expenses:Selling and marketing
    
    $
    2,835
    
    
    
    9
    %
    
    $
    3,643
    
    
    
    11
    %
    
    $
    4,665
    
    
    
    17
    %
    
    $
    4,717
    
    
    
    18
    %
    
    $
    7,500
    
    
    
    12
    %
    
    $
    8,360
    
    
    
    14
    %Product development
    
    
    5,209
    
    
    
    16
    %
    
    
    4,584
    
    
    
    14
    %
    
    
    3,787
    
    
    
    14
    %
    
    
    3,074
    
    
    
    12
    %
    
    
    8,996
    
    
    
    15
    %
    
    
    7,658
    
    
    
    13
    %General and administrative
    
    
    2,620
    
    
    
    8
    %
    
    
    3,202
    
    
    
    10
    %
    
    
    2,958
    
    
    
    11
    %
    
    
    2,892
    
    
    
    11
    %
    
    
    5,578
    
    
    
    9
    %
    
    
    6,094
    
    
    
    10
    %Depreciation and amortization
of intangible assets
    
    
    1,168
    
    
    
    4
    %
    
    
    1,127
    
    
    
    3
    %
    
    
    1,130
    
    
    
    4
    %
    
    
    1,130
    
    
    
    4
    %
    
    
    2,298
    
    
    
    4
    %
    
    
    2,257
    
    
    
    4
    %Total operating indirect expenses
    
    $
    11,832
    
    
    
    36
    %
    
    $
    12,556
    
    
    
    38
    %
    
    $
    12,540
    
    
    
    46
    %
    
    $
    11,813
    
    
    
    46
    %
    
    $
    24,372
    
    
    
    40
    %
    
    $
    24,369
    
    
    
    42
    %Operating income
    
    $
    6,654
    
    
    
    20
    %
    
    $
    4,385
    
    
    
    13
    %
    
    $
    2,409
    
    
    
    9
    %
    
    $
    2,792
    
    
    
    11
    %
    
    $
    9,063
    
    
    
    15
    %
    
    $
    7,177
    
    
    
    12
    %
  Selling and marketing expenses.
 Product development expenses.
  General and administrative expenses.
 Depreciation and amortization of other intangible assets.
 Non-operating expenses.
 Three Months Ended September 30,2009
    
    2008
    
    ChgNon-operating expenses:Interest and other (expense) income
    
    $
    (516
    )
    
    $
    296
    
    
    
    -274
    %Income tax expense
    
    
    1,637
    
    
    
    1,282
    
    
    
    28
    %
 19




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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 Nine Months Ended September 30, 2009 and 2008
 Revenue
 Nine Months Ended September 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    2008
    
    
    Chg
    
    
    2009
    
    
    2008
    
    
    Chg
    
    
    2009
    
    
    2008
    
    
    ChgRevenue:Software licenses
    
    $
    6,948
    
    
    $
    5,722
    
    
    
    21
    %
    
    $
    27,206
    
    
    $
    21,138
    
    
    
    29
    %
    
    $
    34,154
    
    
    $
    26,860
    
    
    
    27
    %Support and maintenance
    
    
    14,459
    
    
    
    12,405
    
    
    
    17
    %
    
    
    25,110
    
    
    
    24,152
    
    
    
    4
    %
    
    
    39,569
    
    
    
    36,557
    
    
    
    8
    %Professional services
    
    
    55,165
    
    
    
    54,935
    
    
    
    0
    %
    
    
    17,787
    
    
    
    14,862
    
    
    
    20
    %
    
    
    72,952
    
    
    
    69,797
    
    
    
    5
    %Data center
    
    
    21,183
    
    
    
    21,404
    
    
    
    -1
    %
    
    
    11,609
    
    
    
    15,192
    
    
    
    -24
    %
    
    
    32,792
    
    
    
    36,596
    
    
    
    -10
    %Total revenue
    
    $
    97,755
    
    
    $
    94,466
    
    
    
    3
    %
    
    $
    81,712
    
    
    $
    75,344
    
    
    
    8
    %
    
    $
    179,467
    
    
    $
    169,810
    
    
    
    6
    %
   20




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##### Table of Contents



Operating direct costs
 Nine Months Ended September 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %Operating direct costs:Cost of software licenses
    
    $
    663
    
    
    
    10
    %
    
    $
    988
    
    
    
    17
    %
    
    $
    2,072
    
    
    
    8
    %
    
    $
    2,087
    
    
    
    10
    %
    
    $
    2,735
    
    
    
    8
    %
    
    $
    3,075
    
    
    
    11
    %Cost of professional
services,
support and maintenance
    
    
    32,767
    
    
    
    47
    %
    
    
    33,345
    
    
    
    50
    %
    
    
    23,230
    
    
    
    54
    %
    
    
    21,602
    
    
    
    55
    %
    
    
    55,997
    
    
    
    50
    %
    
    
    54,947
    
    
    
    52
    %Cost of data center
    
    
    12,052
    
    
    
    57
    %
    
    
    11,695
    
    
    
    55
    %
    
    
    9,117
    
    
    
    79
    %
    
    
    8,006
    
    
    
    53
    %
    
    
    21,169
    
    
    
    65
    %
    
    
    19,701
    
    
    
    54
    %Total operating direct costs
    
    $
    45,482
    
    
    
    47
    %
    
    $
    46,028
    
    
    
    49
    %
    
    $
    34,419
    
    
    
    42
    %
    
    $
    31,695
    
    
    
    42
    %
    
    $
    79,901
    
    
    
    45
    %
    
    $
    77,723
    
    
    
    46
    %
  Cost of software licenses.
 Cost of professional services, support and maintenance.
 21




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##### Table of Contents



Cost of data center.
 Operating indirect expenses.
 Nine Months Ended September 30,Enterprise
    
    
    Postilion
    
    
    Total2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %
    
    
    2009
    
    
    %
    
    
    2008
    
    
    %Operating indirect expenses:Selling and marketing
    
    $
    9,853
    
    
    
    10
    %
    
    $
    11,614
    
    
    
    12
    %
    
    $
    13,898
    
    
    
    17
    %
    
    $
    14,305
    
    
    
    19
    %
    
    $
    23,751
    
    
    
    13
    %
    
    $
    25,919
    
    
    
    15
    %Product development
    
    
    15,891
    
    
    
    16
    %
    
    
    13,154
    
    
    
    14
    %
    
    
    10,250
    
    
    
    13
    %
    
    
    8,286
    
    
    
    11
    %
    
    
    26,141
    
    
    
    15
    %
    
    
    21,440
    
    
    
    13
    %General and administrative
    
    
    8,559
    
    
    
    9
    %
    
    
    10,141
    
    
    
    11
    %
    
    
    9,022
    
    
    
    11
    %
    
    
    8,771
    
    
    
    12
    %
    
    
    17,581
    
    
    
    10
    %
    
    
    18,912
    
    
    
    11
    %Depreciation and amortization
of intangible assets
    
    
    3,705
    
    
    
    4
    %
    
    
    3,392
    
    
    
    4
    %
    
    
    3,593
    
    
    
    4
    %
    
    
    3,293
    
    
    
    4
    %
    
    
    7,298
    
    
    
    4
    %
    
    
    6,685
    
    
    
    4
    %Total operating indirect expenses
    
    $
    38,008
    
    
    
    39
    %
    
    $
    38,301
    
    
    
    41
    %
    
    $
    36,763
    
    
    
    45
    %
    
    $
    34,655
    
    
    
    46
    %
    
    $
    74,771
    
    
    
    42
    %
    
    $
    72,956
    
    
    
    43
    %Operating income
    
    $
    14,265
    
    
    
    15
    %
    
    $
    10,137
    
    
    
    11
    %
    
    $
    10,530
    
    
    
    13
    %
    
    $
    8,994
    
    
    
    12
    %
    
    $
    24,795
    
    
    
    14
    %
    
    $
    19,131
    
    
    
    11
    %
  Selling and marketing expenses.
 Product development expenses.
  General and administrative expenses.
 22




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##### Table of Contents



Depreciation and amortization of other intangible assets.
 Non-operating expenses.
 Nine Months Ended September 30,2009
    
    2008
    
    ChgNon-operating expenses:Interest and other (expense) income
    
    $
    (1,034
    )
    
    $
    714
    
    
    
    -245
    %Income tax expense
    
    
    3,276
    
    
    
    3,328
    
    
    
    -2
    %
 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.
  23




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##### Table of Contents



Liquidity and Capital Resources
  Nine Months ended September 30,2009
    
    
    2008Net cash provided by operating activities before
changes in operating assets and liabilities
    
    $
    29,262
    
    
    $
    29,532Change in operating assets and liabilities
    
    
    (10,112
    )
    
    
    1,649Net cash provided by operating activities
    
    
    19,150
    
    
    
    31,181Net cash (used in) provided by investing activities
    
    
    (9,084
    )
    
    
    13,645Net cash used in financing activities
    
    
    (7,700
    )
    
    
    (12,094
    )Effect of exchange rates on cash and cash equivalents
    
    
    1,201
    
    
    
    (2,357
    )Net increase in cash and cash equivalents
    
    $
    3,567
    
    
    $
    30,375
 September 30, 2009
    
    December 31, 2008Cash and cash equivalents
    
    $
    67,407
    
    
    $
    63,840Working capital
    
    
    75,216
    
    
    
    55,804Total assets
    
    
    299,302
    
    
    
    278,686Total stockholders equity
    
    
    231,024
    
    
    
    208,740
 Operating Activities
 Investing Activities
 Financing Activities
 Off-Balance Sheet Arrangements.
 Stock Repurchase Program.
 24




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##### Table of Contents



Restructuring.
 SARs.
 Capital Requirements.
 
 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.
 25




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##### Table of Contents



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.
 
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  Total number of
    
    
    Approximate dollarshares purchased
    
    
    value of shares thatTotal number
    
    
    
    
    
    
    as part of a publicly
    
    
    may yet be purchasedof shares
    
    
    Average price
    
    
    announced plan or
    
    
    under the plan orPeriod
    
    purchased
    
    
    paid per share
    
    
    program
    
    
    programJuly 1, 2009 - July 31, 2009
    
    
    1,704
    
    
    $
    6.50
    
    
    
    1,704
    
    
    $
    9,562,143August 1, 2009 - August 31, 2009
    
    
    530,529
    
    
    
    6.75
    
    
    
    530,529
    
    
    
    5,978,596September 1, 2009 - September 30,
2009
    
    
    222,646
    
    
    
    6.13
    
    
    
    222,646
    
    
    
    4,613,863Total
    
    
    754,879
    
    
    $
    6.57
    
    
    
    754,879
 26




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##### Table of Contents



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).10.1
    
    Amendment to Agreement between S1 and Paul Parrish dated August 18, 2009 (filed as
Exhibit 10.1 to S1s Current Report on Form 8-K filed with the SEC on August 18, 2009 and
incorporated herein by reference).10.2
    
    Amendment to Agreement between S1 and Meigan Putnam dated August 18, 2009 (filed as
Exhibit 10.2 to S1s Current Report on Form 8-K filed with the SEC on August 18, 2009 and
incorporated herein by reference).10.3
    
    Separation and Consulting Agreement between S1 and Stephen M. Dexter dated August 27,
2009 (filed as Exhibit 10.1 to S1s Amendment No. 1 to Current Report on Form 8-K filed
with the SEC on August 31, 2009 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.
 27




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##### Table of Contents



SIGNATURE
  S1 CORPORATIONBy:
    /s/ PAUL M. PARRISHPaul M. ParrishChief Financial Officer
(Principal Financial Officer) 28