Jack Henry & Associates (JKHY) 7 Feb 182018 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to Jack Henry & Associates' Second Quarter Fiscal 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time.

As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Officer. Financial Chief Williams, Kevin Please, go sir. ahead

state Treasurer, Thanks, for the Good XXXX is call. CFO David morning. me President call second Thank today us earnings and Williams, Kevin joining Foss, for I'm on Jack today fiscal the with you quarter Kristi. and Henry our Associates & turn and this of to over Dave performance provide some and for be quarter. normal. call morning CEO. The business In the fairly thoughts of about for the the his will the agenda a the minute, I'll to

any the some constitute that, I'll give concerning questions thoughts Following forward-looking then lines to results the regarding events, remarks subject press a which company expectations, guidance revise future you Q&A. the actual from obligation about risks the no about to differ to updated we we provide future, I future. strategies, statements yesterday, those factors, and And additional uncertainties. and out or of responses for of trends and open statement undertakes to number materially which are deal or these Like the need up anticipate these could or update comments a to put will or events due with objectives, the number and statements. results expectations release I the cause to some remind

entitled in I'll XX-K and call please that, to refer the to our release Factors Statements. factors the information, these additional over a risk sections of turn For summary yesterday's press and now and Dave. With Risk Forward-Looking

earnings. quarter We're report and with revenue Good Kevin. Thank morning, another everyone. to you, record pleased

to begin work and clients. so want continuing I our results discussed provide them and many I've times, As thanking by associates, these service can't solutions achieve outstanding of today to for our without dedication the hard we to

for on my the break events already Total Ensenta regard operations quarter X% a our team law was I'll for from Organic for excluding these We solid and increased focus the X% a X% the of the both and growth had Revenue with in seen, let this increased core both XX% the revenue changes quarters. if there bit to exclude you increased quarter in impact business. acquisition. the the down quarter as Kevin numbers impacts you've fees of deconversion performance fees quarter remarks. is also quarters. comments of noise a side revenue of our of his result quarter. ongoing from of tax the As the and increased and of our deconversion on XX% by unusual by the very impact

businesses this Our quarter X% perform of to X% deconversion increase fees. a the revenue well in payments increase excluding posting impact a and also continue

X% of quarter a Our complementary solutions posted business increase increase for deconversion a in revenue X% excluding and the fees. impact the also

Our team takeaways, on deals, side a core The solid teams quarter, competitive combined nine banking closed core were side. had ahead the second quota. and new union of sales which very all the credit of seven finishing on XX with slightly

of several our strategic and Management, Risk new offering We our key card Solution. see with Enterprise to like continued Mitigation success solutions also solid Treasury our

And December discussed conversions have customers card taking are All converted extremely already ago. move all more to reference new processing we've weeks banks past, and As of solution. banks our we're calls. four couple the to two in We a in been continuing successful. two

our we In Enterprise group. several late start and in December, other Solutions the beta business implement announced calendar QX. scale of Payment to coming large combined will Ensenta in We this acquisition Valley. the card in Silicon conversions months We've clients plan with

and address Jobs don't this release, bonuses the ATM business. and we'll government of added existing highly Ensenta branching business. be also become rage. to deposit capture remote to has in the the set our to brings regard associates as services more Tax taking to with Instead, complementary highlighted we the enacted is recently press several programs. a to payments we functionality As solution the our capture, With do our tax Cuts $X,XXX Act, coming savings impactful one-time meaningful announce portion months intend share and steps in shared

impacts The his first opportunities. guidance highlight program in pursue program significant I'll the remarks future. With in for other tenure for or that, voluntary and detail this numbers. turn is financial it on the to a will other of some to in retirement the will with impact include employees Kevin planned over Kevin his

and of ago, line this of Services includes pay, and were services if year The processing, compared invitation all up fees services, deconversion compared X% of digital and year & The or were to quarter. you exclude both quarter, remittance revenue, and with along deposit remote the the X% which compared bill in-house or Thanks, revenue. in fees deconversion capture of card Support prior license, which Deconversion transaction outsourcing quarters. up fees to were X% increased bundled hardware, from the line year revenue, includes to million $X.X line online fees prior Dave. maintenance, Processing the

total As X% for both is reported X% quarters. Dave deconversion mentioned, revenue or up excluding as fees

XX% at consolidating margins reported Our quarter operating year. were compared this last flat to

also of year; loss three this the from decreased from XX.X%. entirely payment And that and the initiative year. new did due both Conference cost half first deconversion slightly Conference decrease by due faster expense fees increased total from and not acquisitions JHA in year, did quarters, margins we've excluding combining increased then conference discussed the ProfitStars previous education combined that to from we operating payments the our hold small our operating XX.X% we on which our things: to platform is our Banking ProfitStars to a and calls; this last However, even the

again, payments the had additional fees, For from headwinds from operating flat. our this we Without faster core XX.X% improved payments XX.X% from, our platform segments, In quarter. relatively were our again, were core XX% our to costs our quarter, our year's some segment, initiatives. margins In new margins XX.X%. and compared last deconversion payments segment,

same Without they XX.X% margins XX.X% decreased versus XX.X% to years deconversions, about margins deconversions flat Our XX.X%. both and at this relatively XX% XX.X% last from the XX.X% remain excluding decreased year. last to year. Complementing year

Our the Jobs significantly the from Tax obviously, Cuts effective impacted TCJA, sheet tax rate, to or by our to liabilities tax and which rate of deferred the Act, the new. is, adjustment balance due the old the on

under penny the of the year our negatively to to quarter, have we EPS Due reserve other in year quarter. rate project the new rate the though rules. XX.X% to impacted adjustments for effective of quarters from to next our as end, the of year year, Excluding a with blended effects tax approximately even incorporate rules the the sweeping our a tax the Therefore, half tax little effective quarter our this we actually now, which under during the and half and the XX%. by continue rate old tax fiscal TCJA, XX.X% in last changes TCJA tax will increased two XX% (X:XX) we year over a the the be of each to

intangibles and compared year-to-date last which total night, included the is amortization from increased $X.X For year million of was million acquisitions, release this $X.X press the in in to cash review which slightly the year. fiscal disclosed to amortization, reserve cash the flow last

$XXX.X software defined $XX.X of increase. capital or expenditures, year compared year-to-date was year-to-date down million operating XX% $XX.X and to we've from and proceeds last year, hefty returned buybacks through less which products, shareholders and cash company deployed capital by is Our CapEx free as back a sale stock $XX.X from assets, flow, developing which through million our cap ago. year this dividends. million to investing million million is cash We've Year-to-date, also flow, into our a $XX.X

have XX go on acquisition our exclude Ensenta in impacts the had drawn we capacity our on TCJA. as we XX% for December; forward. unlevered provides trailing the million one-time an however, which the At was XX/XX, to months late significant still XX% basically, or flexibility if on equity and, facility revolver $XXX Our of balance we sheet, revolver the related return you significant

Cuts Jobs Tax and about get Some of the will some Act we comments of and benefits from those. plans our impact the regarding the

a a the Dave of at these are: not all for financially base right we plan base to throughout organization; from us zero paths exit offers allows have we either backfilled replace of within positions with which for should it benefit severance seasoned pay the achieve a creating will simple and will movement be savings could with talent as be the in need company promotional opportunities employees, calculated benefit FY rate. they certain mentioned, this to of upward a or long-term for it provide providing XXXX certain also a that voluntary are the benefits resource. path some roles also it It backfilled program will long-term amount; by replacing allow not and departure will expected the As or early associates for lower

as provide. QX. will million will estimate However, of we for which Based the to those that a be for financially, we in one-time a benefit said, cost on depart $X participants will that us I be severance eligible will the that approximately in allowance electing cost QX this

we However, idea including currently better a I'm that QX, my when have the in report amount we but guidance. will is

normal our increased benefits be anticipate quarterly at later would discussing quarter. Board Obviously, dividends this quarter this I we'll (sic) that addition, the have with TCGA historically uses of week plans Directors from potential again for [TCJA] In that our will we other meeting. this do of we and

in ongoing plans. them will benefits some directed be other Some uses at possibly provide and which benefits our future, to enhancements current to the employees

and and up guidance. This million future cause from the deconversion impact projected still into do remainder continue caused FY FY guidance, by provide already than year as for our activity to X% comfortable a which GAAP the with years. a couple EPS that discussed. fiscal fees revenue growing continue we year will cause of deconversion that. last However, payment margin to operations will as Also, will headwind, of items previous increased the headwind, platform payment that FY we those a our how though discussed you pressure to longer-term new current continue even any our XXXX divestitures, from in not was revenue any so our revenue of our plans customers noise, to QX $X some were at other in XXXX over and we are we we were for expect other some reported Previous cost our be X% our decrease the the range. quarter place build down performing. next the see basis, also are we those true at will the fiscal and had consensus all there in XXXX would recent calls, year-to-date. commented but which And getting And QX, for converted beginning to $X.XX, we get on to expect QX we by little, can Therefore, platform that M&A on quarterly we on revenue

However, $X.XX EPS QX to with be tax the effective rate the of projected currently lower in EPS of should XX%, $X.XX our the impact range.

or reported $X.XX expect to previously deconversion discussed, slightly lower the we X% be by offset QX, of the to effective in expense with additional but deconversion which from range that anticipated due lower impact X% growth provide calls. For rates, fees, rate, in EPS in QX estimated plan to GAAP $X we expected lower than there in expect million of fees, to the range we in tax the in revenue the earnings the higher stock updates $X.XX. full-year $X.XX EPS will effective Obviously, fees changes could $X.XX, deconversion future be which buybacks make our or estimated tax to the changes would of

total the retro be standards will opening will tax are we our also range. we FY about provide the take ASC open ready we XXX, for Kristi, lines XXXX, start to on in will be effective July our comments us now please a For FY XXXX. that restatement which new we of will previous XXXX, effective XX% numbers earnings concludes as revenue that you Also XX% next looking for X, questions. the up full anticipate reporting more our rate doing call to we for anticipate clarity and into This call questions. more that

ISI. Evercore first of Our question David is from Togut

Your line is open.

you, good morning. Thank

morning. Good

Good morning.

Any unions XX quarter, particular product from lines, highlighted out? due wins to certain themes in credit new core to any key competitive banks, from deals the You in takeaways. the call anything signings, X all X

to anything call so wins out there's seeing there, that if pretty significant No, David, or it's for been don't with I core some consistent know we've out. in major nothing quite as as across time are the the particular, far other what products board,

And there. other not core heavily weighted towards any provider one out

product. core one Not

Yeah.

Yeah.

Core product.

banks' would update interest Okay. reform, on intentions Understood. helpful, tax And then interest calendar likely rising given second, which for U.S. margin. help have just rates, net be XXXX spending any you

Yeah, it's a good question.

think, about the talked bit bank it to earnings last last two have in that up seemed We a year. pick calls, the spending little I

I will the with deals. think that our doesn't tell those – it's ever the company. But there's pipeline higher of had, it's history turn largest a you bankers, holding they've intention big into not when sales go the consistent. talk ended the I QX pretty they pipeline teams at some mean to in that of largest great much spend you flood rate. to But

some that that They're at have. no actual prepared we'll trying tax of to I major to that to right into think now. waiting most point, spending, still do on the they impact to savings still changes clients technology see the trickle highlight are assume what some of I their our decide I'm that of business. see reform with but

there's a to last all bank on closures. bank least Understood. through for the closures, months and Internet lot demand banking? Is year is out increased continued biggest mobile XX focus calling of And the flowing article in then at the yesterday think, been for an journal that I

bank I'm closures, you closures, assuming not mean branch right?

sorry, I'm branch closures.

Yeah.

so make that Yeah, sense. Okay. would

for yeah, stimulating demand mobile. So, that's certainly

to newer quarter signed mobile for XX demand. the We've in is Mobile. We solution. new see Banno Our Banno continued solution customers the good

mobile more in think the to So being they have probably on continued putting that of target certainly and have is closure there of by your some that so as the technology focus hands consumer, is I branch thesis branches. many don't driven on

Kevin, Great. a you allocation question, light way in sheet. for final unleveraged tax a of you've while. you changing Quick highlighted think balance sheet had about the the reform? great Obviously, Are now you balance capital

really not David. No,

consecutive opening years. the we've is in mean, This dividends fiscal the we dividend. now said increased XX quarter I that I typically As obviously, comments, for increased

do a than to we'll that up anticipate that. We again that typical. would might increase that's board. I So, But little more the

some to a a if in that little put plans overly conservative, but we in this my We years have is sudden to cash, this, cautious we're laws of give us talking maybe to for two little change that pull employee then don't opportunity We're benefit, change employees thing But, a some board go into or M&A all that plans about up the some us that ourselves But of tax administration a additional in there to stronger. cash about these the position the now gives back dividends lose does additional we be tell we little will of the we board week and we to other use free it said, want it going have I to too. to that and now maybe sudden out right now. be something the that I've at as three and actually set some for gone. cash, strategizing away all look so and activity place I'll some a changes I'm talked don't potential and because a our you is to mind those

So move we're to little we as going forward. a cautious be

more if that's Dave. the opportunity a many in So way don't of correcting, historically, continue We're going to continues going part we've capital. way to question your market kind to get forward, buy in our going. way that short the that gives think which our answer we're deploy of long Obviously, so probably to the we're of done and there's going I changes to us an back, go that's some stock

very you much. Understood. Thank

bet. You

you. Thank

Brett Our is next from Stephens. of Huff question

is Your open. line

morning, guys. Good

Morning, Brett.

three, – One actually or product. questions Two me. two on from

that outlook folks solution. a know when thought press still conversion that about now, done start middle full success the little shutting we of is release Knowing timeline? issuing the is of systems would you some said of reasonable the some old what Kevin, of down. you could in mentioned bit You the the to think, converting kind and be you processing And I XXXX fiscal

Yeah.

That's remember, And got the we've Yeah. reason, platforms. two Brett.

we there. get one can those the sooner the obviously, hopefully, out two backup of And trying than rather later. where, for have systems both get got we And off those. to we've it mainframe we're So systems customers

start and we margins costs and some can getting ahead improvement. go out taking some So start

some the So we by that are costs for continuing increase to now in initiatives those base cost headwinds see the quarter about $XXX,XXX. our

to to going there transaction the And new to these is there. we move So we're customers true over have cost pay on fees those. in platform, as

So be pretty mentioned moved first gone obviously, track we But four target, and, there well Dave we're it. and them have that all in so we mid-XXXX. the over anticipate think hit but some still really margin to is have to conversions like going to by on we're still pressure, early continue the to still

on then, SAS, is in that kind how with the space. with updates offering unique a enterprise offering seems And fraud SAS, helpful. it the going? very like That's of your partnership that's that, on And you're reselling

We really it. feel good Yeah. about

They live Brett. in customer have bankers We are most knew it's feedback, been very banks targeted their SAS because the really to delivery five had bank that the now, $XX has as go billion no signed seven only the model. Customer about positive. world. And customers installed I more quarter. reaction below as SAS, but far We they a largest were think model at in

that about bankers And but an that always never knew would for option so, assume be SAS, most them.

about technology, Jack they fact industry-leading technology, the get Henry. that So, this hosted to very by excited access they're

through So financial tools and install at SAS through they are the offering. the all don't institution they analytics, onsite that the get their full have go the to available

now. right there out buzz good a there's So

we the seven said, quarter. more signed I As in

solution that future. the about optimistic I'm for So,

Good.

that and and Fair card Banno the of Mini Day solution invites, at be sort go And our that which the faster and will the be as out shortly we'll going part ahead May the in for processing ERMS X Atlanta, all of and in on Georgia, Analyst I'll plug payments Tech that.

be I'm excited going us don't and got those trying a was a question think part sort term can there to write, in one. that Kevin, thought down. what I the and you in of remind I all missed I numbers in timing? was of of they what were one to it I I came think terms was see Last just a difference you at, this. fees to

our right where term Yeah. was now, thought to In ahead Well, were year. we relatively actually QX QX, going were of last million they fees $X.X be flat.

Okay.

in XQ? mean early, that call came they came came that So in out won't of – does and a little $X fees, XQ it, those that they term this million time,

No. when happen, or no these There's things rhyme reason Brett.

Okay.

I a it's those wall, going I'm when throwing one the of at hit. dart to no mean, it's have things, idea if you

And be give did the – so, you that I full down us $X – to does can't remember; one Is up million is year think, I that you said changed? going the number or $X million. or because before, other.

No. year-to-date; be to QX down guidance think said bit. a million which we're still $X is I in my from going $X It's down I and, down growth which on comments, last the is year, about was QX in why million, opening it little down revenue like was where

million, but be going we're So, down down we may not million $X $X for to I full $X still year. the to million probably be think

guys. I what Thanks, That's needed. Okay.

Thanks.

you. Thank

is Fitzgerald. Foresi of question from Cantor next Our Joseph

open. is line Your

Hi.

novo of want were outsourcing sense I grew fast how wins? de So there any a get to and

novo any de Whether there wins? were

maybe outsourcing just I'm like grew? a sense me just how give of – fast

banking The quarter, the in new think and them signed customers clients. we outsourced. the clients of seven nine core as we I far majority of as that signed So, number were

to... will the from on all the credit banking out to four the revenue talking the the the the of the in up That number and think impact those meaning in for all as quarter, in clients, it quarter, up just outsourcing signings the us but union credit in-house signed future. want to in you looking clients change while and think sets banking the the if were, add – on side of out actual of I moving And then, union And and doesn't far so side. as – five the I I'm four Kevin's future. customers we financials

Yeah, at services, the much which true is guidance for quarter, cloud line provided. grew right outsourcing in XX% the actually and we've with in pretty

any assets? in unions And those billion $X of Okay. credit over

new by unions, quarter credit We that in a a union; $X in signed as in-to-outs customers. any of one of aren't did it's union, new We pretty signed year, had many without credit six some couple but, the $X so billion we for a didn't one sign one. common this – billion quarter ago, pipeline. a where was We to $X go over as a but we have to year, which years remarkable, that but far was there credit we the rare sign it's signing billion our

There are several pipeline. in the Yeah.

Yeah.

for can then, margins end And one what trajectory, any Okay. the give Thanks. me the and us some you just thoughts on on could last the do of year? year this next margin color through

we I margins have some mean, Overall, it's the all initiatives I this on Yeah. create operating And said, faster quarter. to like going slightly payments margins. different and were things, with down headwinds with

think to to offset other I again, to areas helping in that's the those think I couple we're of quarters, next headwinds. get continuing going down, leverage be probably but they're

these be Obviously, migrated give FY should updated guidance relatively relatively be continue to customers later, they slight XXXX. as slightly over. some to we going get but should there's So flat all margin they to of flat but pressure, remain down we'll in

you. Thank Okay.

Yeah.

you. Thank

Our of next Kartik Northcoast question is Mehta from Research.

is open. line Your

good and Kevin. Hey, Dave morning,

morning. Good

this and you in pipeline winning. demand quarter are the Dave, in maybe you history. company are just second the what wondering, products if you seen I'm that Hey, that the was you've talked talk largest this creating about probably about

core the the a, a core quarter, concerned, strong, business the in our signing I'm side. as the is kind but me quarter totally that's of that's a really didn't across and far It's for in deplete pipeline number, takeaways on XX board, continues heartening remarkable thing as Yeah. XX we is

So is core strong.

Management and payment partnerships, in lots And First not we solution Banno complementary the the the interest PSCU of solutions, pipeline number robust a side, and board, the it's kind board. deals really of across Risk but we highlighted Treasury like across new Enterprise Management, On a across that there. the Data then, pipeline and the only in so suite, the earlier, have newer our of

there particularly say XX be standing After anything wouldn't deals there'd other is the that's worried the a core strong. pipeline I out than a new that as continues but look the there's as core was in in drop that So big are the quarter, signing business working. off, fact little that to I still a lot far

is Kartik, thing, three another all Well, brands'... actually

Yeah

right extremely ...sales are pipelines robust now.

Yeah.

year, And going then, thoughts this head fees XXXX? what be to know, more bank you're bank you FY that to you year are term we're about into as to last I lead Kevin, would consolidation, consolidation any going if on see compared that seeing year – believe to activity down said maybe but we

are mean, I much just think All going banks been XX at out our like rate pace. up. tell few we're pick mean going of But same to banks which going a the I it's I last just by X% don't has think losing it a other some there that that yeah, the years. consolidation trend. extremely M&A X% or that in to about for XX be means the I to I I are see banks. our acquired buying quite are getting it's don't right. it's you teams Again, like would busy,

And team added had to two conversion fact We lot we add end so Kartik, other handle a is are are just of that highlighted another pace we any full and But had we ago, when so that more anticipate the M&A been it's work calls steady. in continuing that we couple now. they've ago, a a one indicates don't right there's think add to steam. the M&A, and and a place, they banks – pretty in team. that team, up running acquiring doing our conversion quarters because of banks I we

year sure have wondering expense about to retirement not were some not wanted a I you're be there million said just And thought have going with thinking just, the about $X just that, make the the right associated would I you to benefit you're Kevin, margins, next have then early savings you when for you this think maybe that? you be this So way. that talking I going that and was I'm to FY year And flat. won't initially XXXX clarification, would

Yeah Kartik. throughout be in say I both that, million. would you're Dave for and organization, going that, thing the that and have won't absolutely of associates mean that some to that but could offset right, other I we're there, our $X I is doing we be other things some that mentioned the which easily

So more that probably same have will FY we XXXX. if not expense, in

both. Okay. right. you. Thank All you, Thank

Yeah.

Thanks.

you. Thank

question from Fargo. Willi next Our is Tim Wells of

Your line is open.

benefit to sort what think, sort think per But of cetera of the programs. a another part of there some just a And Kevin, to the comp programs the some Hi. just for past ongoing levels. have average at there Yeah, Thank in creating maybe Ultimately, employees, sort you you variety think bring with about just and you opportunities of compensation is go go et I I'm on saves. lower step and of Kartik's. to of about FTE, benefit, to implementation if way we through talent, talking way I to is back think talked up once of guess, about can trying get ahead. you're of good morning. I two terms the questions related tax somewhat the about

a and have accept voluntary. because to totally have a problem idea Henry, certain actually so salaries of salary of way to which that truly covers the a we at they program this, tenured age $XXX,XXX could they we be Jack a Tim, offered and like number Yeah, will with personnel, years salary. of it because is which certain no this have to to knowing it's And ones or pretty of have $XX,XXX wide no from that anywhere gamut be

Okay.

to able basically Now, you on FY be when is we will I'll and in have be I going report QX, number say what's the to said, that XXXX. and like I QX impact

opportunity That'll Perfect. around I is associates, sort seeing the on sort upward to something about anything or this quite guys be an the income you been do get of of it maybe for here cetera thinking thinking recruiting retention employee mobility you Thank of just sort statement? been to disrupting freeing a and topic, created have internally did guess, have of sort you. for about has other up you – without while really same great. or do an just or this satisfaction impetus et

is Tim. good Dave. that's This question, Yeah, a

So you're half we we have and news news churn talented about because, low some programs good news I based as low, annual we've really that employee through on have good really basis. surveys the blocked we thing the they're investors potentially is to this bad people standard surveys guys industry do, year, turnover of on rate. that. potential it's you Well, turnover. an The very move having who with is, not very employee sometimes aware, every we bad some The on want talked is year, news there's on really our the rate occasion constant talent. you about up, those do in One is engagement think fact with and follow you're every satisfaction again,

there's our up, at that it topic, So, come does concern about associates among it's comes but something up. mass some not this the company

an it have some us chance already the and more in the take that as some proven movement up overall responsibility. an on was we Kevin people has for at some create reducing to same highlighted, time, as to themselves, And give compensation. far will the organization and move people impact have so, And really believe as opportunity this give

go – question was last sorry. ahead, My Kevin, just I'm Great.

Tim, we can have retention them for up-and-comers we programs programs our that and have identified goes appropriately which a aligned to that training sure to are and so number we those associates, make they go. on do of and identify are ones where we want that

Yeah.

I question the last the have just And recent is Great. acquisition. on

a a and I this successful you been this sales of their company, guys rate those where another opportunity over the look pretty years to getting you product reasonable opportunity force. much across about one force, mature purchase customer of it? set, channels an or sort how your step but you when where base performance obviously, distribution sort should is – the think price, a it this I at force, scale by products, just think into customers, is guess, of your think saw curious I the product larger your sales to and ramp sales set, I'm growth see just is, again your transactions have the the your with you real we up buying of

was you've very idea, do the our That's Solutions Payment it. to what team The complementary business. with Ensenta we Enterprise Yeah. nailed

union our consumers. traditional so credit so We're we if business the the EPS, not side with much So, strong very at you the on much of side. house, not with look are businesses, very on banking commercial strong

Now capture strong look strong our Ensenta, with you about business, was to mobile opposed union scanner very at they're credit consumers, much on side, as capture. the very very which traditional

The other. very already together, to years. they're at complementary that sales force doing for things we've these how have been two So Henry each Jack you knows sell because to it put the we

and, top the the largest in because of side and, force of now some And banking in sales largest on hands essentially, we're on the brought the were we this, combined we credit space largest that put union of we'll largest things our doing we by provider us it it, be type the didn't of the on that together side, become we So this the that have. technology. provider

union the branching in support solution example, So robust government of options. the for payments shared some capture ATM more to space, a and ability credit

so And in had we what EPS. place to already really nice with complementary a addition it's

Great. much the so for Thanks time.

Yeah.

you. Thank

Greene Oppenheimer. is of Our Glen next from question

open. line is Your

Good Thanks. morning.

Kevin assume questions, first. for of few outlook you Kevin, was EPS a an GAAP number. $X.XX I $X.XX, to gave that clarifications Just the

Yes.

Do like you that or have the the equivalent or $X.XX What non-GAAP, was something $X.XX? more non-GAAP? like

that, top that the You my it'd of be Glenn. something have the mean the I without Yeah, tax? don't impact of like off head.

we to okay. then, sure I Okay. just make wanted are just... And

the of Job Tax impact Jobs the and (sic) in [Tax with number beyond. Cuts Act] Act and GAAP and Cuts true there a for QX is That

a at just back explain half whereas XX% high you to just you why to tax that, to in walk again? XX%? the XX% could through it's Could going And rate is Okay. level forward XX%, the that

the to XX% get fiscal not rate, rate so down first we're XX% second second the or is to down. XX% again, is the at Because, company, half and more a of still our the Yeah. half year XX%, a like year-end half which at blended it's rate the a blended is for the

full the rules to year to IRS get half use So the so average, the XX% blended just rate. a the second we're to full It's way have to tax of year XX% to or get to impact XX% in work. going a

in-to-outsourcing did jumped the late, what I any – give call quarter? And of you number Fine. but was of the on outsourcing little indication a Okay. the bit decisions in

in-to-outs, touched ago; little on the I five credit banking had side. the and union so, side four on on bit we a

then, early, impact high-level Kevin, have know it's you And but of of XXX? a I do Okay. the view ASC

And system. (XX:XX); we're through opening through said in in have all We've should still completely We contracts We the sometime Glenn. No. that I mean, don't. March. that of going going mock gone conversion completely I've in that one. one we're comments, of the the converted. really converted I through have another our should

we able play June, then, is actually be end XXX comes through ASC which us. dual the for do of So basically into reporting when will to

end fiscal we years, when reporting forward report the the actually then so, and into retro And for we two year, the will going do XXXX. previous of FY

the It's processing you're in a you're there. interested what – maybe converting demand side. both Okay. the debit credit color bit the process new what in more you're new of just side, Obviously, incremental the and a obviously card but then, on lot, the seeing early. doing little clients in And Dave, seeing I'm on from

Yeah.

four new debit XX course, credit the credit the because the and of So, we quarter. quarter in in quarter, have new then customers Symitar customers good we and past; in debit so, signed all new And, Banking three demand. in customers the are didn't those

it it the renewing industry good are number and already they renewals earlier, We've this the some consultants. some in from the this rare it's in solution. consultants, before, – As customers of press solution. had the and press but commented has – I good business give with to been consultants a the really they've pipeline for I've some of have, mentioned And that interest impressed are or you deals a lot on new of

from still still to we continue days demand to will have So success from prospects. existing work only get do existing we to not platform, only to show this drive our customers a customers, converted lot think and early converting in of over, more customers I that the new but in as but

So, in about I'm at right very the good and feeling process. solution now where the sales we're

All Great. right. Thanks a lot.

Glenn. Thanks,

Thank you.

is question from Dave next Baird. of Our Koning

Your line is open.

tax you think, XX%, tax right? then on year quick Yeah. what one to to Hey, question the guys, next I QX, rate was we right Glenn's XX% thanks. all And on and right and all rate. are XX.X% that QX then QX numbers, follow-up is I XX%, Are said guess those just said, XX% you and normalized,

That Yes. Dave. is correct,

Okay.

that G&A? million would Okay. does is it in then, of where fall? sales of cost items secondly, it or Good. And one be? in that Where line in cost the $X Is the

Dave. It will be resides wherever person at, the

in of share some be SG&A. the there'll lion's will So of some be sales, in in R&D and but cost it

for of of thing, to said guess you X% And QX? Got X% to X% you. fees kind so term that guess, the of the – I way and Is it there's growth think the I think all right QX, divestitures, fair of also, to from is tailwind acquisitions, think There's then, the in – you each headwind said from I X% think the and last stuff neutral. net reported. is Okay. then I a

right would way the That think be about to it.

Cool. Okay.

got. you. we all that's think, I Thank

Dave. Thanks,

Thank you.

of is from Heckmann question D.A. next Our Davidson. Peter

Your open. is line

margins some Hi, been and give is insight Pete. also Alexis business, guys. has look can like from the then Henry for tech hoping This in licensing Huseby you any on Jack Ensenta Ensenta? the I'm on what

on question, have any from second So, licensing was Ensenta, tech the question? that the been we

Yes. Thank you.

did prior relationship of They to the competitor have we a acquisition. Yeah, were not ours. with Ensenta a

the earlier, happy heads meaning side business, we than the stronger So, we so than we them we complementary I they on business highlighted competed of this as were much much why clients the the were, up. with consumer And business, serving stronger with acquisition. nature were of is they were which were on

from licensing as were And technology we competitor. So, them, they as... were not a far

a we've Yeah. are owned margins because average, The high because in them purchase of quite the price bit only than days Obviously, that's amortization, included and corporate of those depreciation for our lower primarily currently XX now. accounting.

in any in of put be fiscal yet, little a it's synergies those there the we've the So, year. gotten place end by which of tough should to say

pretty basically line margins. our FY average So should margin up operating be their in by with corporate XXXX, much

you great, NetTeller to any at product that Okay, planned And uptake? all? be And is then Banno thank provide you. could replacing update on

NetTeller is for is strategy popular functioning that. the very the fully customer So, not to Banno unless solution. chooses NetTeller do Internet replace a to banking

banking mobile focused some new those on be certainly, a have designed goDough. solution customers Banno it. no intent is it that kind sold, They're to it. to use There more to customers. with but A lot net called premium who're tied We is running solution directly of displace to happy NetTeller, of customers. customers currently

quarter far customers XX year. this fiscal have in and So, signed signed so the new we XX

do expected loss Thanks. to uptick Great. any requirements their expect accounting standard portfolios? then, loan finally, related credit you And see to for current

(XX:XX) out rolled probably. So, don't know, our year we a solution, ago about I

we already have have so, and – for happening our And baked numbers sales a been those year. into have about been for a year

So, result as I won't trend. business expect spike current the be We've for some at that'll just continue about that now There big (XX:XX). been a in of a year.

you. Thank great. Okay,

Thanks.

Thanks

Williams any further does for Kevin session Thank to Mr. back the you. to over And our turn call for that I'd conclude remarks. like Q&A today.

efforts associates of operations from our customers. Thanks, with Kristi. Again, pleased the ongoing and to our all results our of we're take care of the

And thank today. associates to managers, you I and executives, focus what on replay provide continue Our for customers best you to will want and our Kristi, our shareholders. us our please number? joining all is for again the

you that program, number X-XXX-XXX-XXXX. does may is gentlemen, X-XXX-XXX-XXXX. you have and Again, conclude and thank today's in is Thanks. day. today's a This replay Ladies for all great disconnect. Everyone, participating conference. The