Jack Henry & Associates (JKHY) 17 Aug 222022 Q4 Earnings call transcript

Good morning everyone and welcome to the Jack Henry & Associates Fourth Quarter and Fiscal Year End 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Mr. Officer Financial Chief Williams, and Treasurer. Kevin go please ahead. Sir,

CFO us Good quarter Jack the you with some Board and of Kevin our and and market regarding concludes sales about call have and on joining initiatives year close year, morning. state will a for David his CEO. performance for for over Dave to business, Foss, provide the today our Williams, the I'm of comments I'll Henry guidance thoughts which we turn release. call. comments, his year XXXX quarter some the for the regarding call XXXX Treasurer and end is comments and financial some in the and thoughts Thank that Dave we me after fiscal provide press In earnings general, industry and additional today and Then after & I regarding comments place. Associates Chair minute, fiscal to provide also the the in press yesterday provided was key in release put out fourth

We will lines up for the then Q&A. open

risks a expectations, or First, includes of events certain materially from to statements. differ remarks number are to these those obligation or this I that questions uncertainties. or of number or responses Like undertakes revise anticipate cause that these factors due we strategies, objectives, call to results about a to update The no to concerning including actual could which company and statements, need the future, trends forward-looking remind future results. events, statement you any subject to

can Risk release over yesterday's in XX-K this our Dave. now the including With information, non-GAAP summary the operating we call Statements. yesterday's discuss found of a non-GAAP for reconciliations these For Forward-Looking historical measures, and income. sections additional factors to also financial turn certain and will and Factors call, On please release. to refer that, press risk non-GAAP and I'll The be revenue measures in financial non-GAAP press entitled

good share everyone. we and and sales produced you Kevin well to record Today you, for very pleased as are income with record Thank as operating morning bookings. a quarter revenue there details

to the work our by As and into thanking commitment went begin hard fourth for fiscal today results producing for for all the like year. that associates I'd always, quarter and entire our those

Deconversion quarter fourth X% fiscal the compared XX% for X% total increased as about down year of increased the and to For basis. the quarter. revenue fees XXXX on a quarter were non-GAAP prior

the although deconversion negatively, reminder, it impacts a long-term for positive is in reduction quarter fees a As business. a our

the segments, to by X% on we segment in Turning quarter increased X% a quarter solid the Revenue of and core increased for had our basis. business. by the non-GAAP a

and revenue quarter, a Payments increase Our increase posting basis. X% a a performed in this non-GAAP well, X% on segment

We robust XX% also in increase in revenue complimentary basis. a this a non-GAAP had with our X% and on very a quarter increase a solutions quarter, businesses

closely fourth that broken record. now and strongest of Those in will you highlighted fourth quarter. who know release, our new fourth history 'XX, sales record an record the I us the the quarter in quarter second XXXX, quarter We company. of fiscal was the set sales that we in As we've all-time of follow in the the of quarter the broke that in press

those detail attainment year, being institutions. a this regarding XX%. in successes Additionally, this sales dollar has the five the the sales around highest year provide we remarkable multi-billion quarter, a ever takeaways by QX teams. we little with booked of competitive sales To All-in-all third our XX exceeded in quarter core been for of

might quarter in existing to in digital XX move guess, the offerings our very solution. the Several our also as suite saw cloud Banno our complimentary of XX deals customers demand a the clients you platform new pack. processing private signed We XX and to signed card to digital clients we strong new our our Additionally, on-premise quarter leading environment. with, to

XX greater core competitive than takeaways XX we For in the assets. them billion of with $X full year, signed

XX contracts to on-premise signed our our cloud, new to XX customers, Banno clients private digital new we clients Additionally, move core for processing solution. card and XXX

to course, these our to for important all Jack other as contracts solutions. wide variety contracts of a revenue signed we our of almost represent Of but solutions a long-term many variety of that it's for of note other recurring well, commitments Henry

already annual up happy I'm conference Our At decision very that. XX prospects At registered had our users analyst Jack client organization. conference attend on for our just month move up you million signed say to of core at going to XX Banking this hopefully X.X scheduled we have prospects case client the our work that, is their to May, month, we and end the Henry. to we with to surpassed the shared Banno and I platform. missed attendees signed have that end repeat I'm annual with In Digital of and attend to this finalize our sales core in conference

end As million fiscal roughly year, the were we registered at users. X.X of of the

center two by Payrailz This stressed As technology we've increase I've of had the Xst our most person accelerates also digital generation payments, to and demand payments-as-a-service because enhances Payrailz Jack the of the technology of a in Jack this with to a acquire compliments payments their their hub past, corporate strategies. is time to consumer the remain hub the real channels, Henry's payments, account on strengthen payments more. ecosystem. optionality about space definitive enhances the transfers, bill strategy, money this modernization of seen Jack XXX% rebranding. and supports the July commercial payment to payments, tied platform. virtual revenue account clients you've by capabilities on additional in stack with solutions this the Xth, channels and and enabling closing payments-as-a-service is a count. in strategy and moving at strategically announced August types. we all holders' Payrailz Jack to Henry's customer that significant payment Jack On supports Today, account with Acquiring capabilities X, Jack payment Henry Payrailz our user as the pay, and of Henry's clients point and simplify so of position to will experiences. functionality, our Hopefully flexibility about the seen business of next business for modernize payment XX. and for users an their growing that consolidates X.X adding expected numerous we like reference, with registered person number diverse announcement in agreement payment almost for extensive August million Henry's digital years immediately to users, existing providing for XXXX, collective August Payrailz complexity Henry an payment

Symitar, that forward Banking provider well-rounded Henry. As reflects using ProfitStars Jack community than for the uniting to Jack unique see we financial and as and will simply advocate Henry's as We rather brands, Jack you institutions. and technology financial regional move role go a brands an believe Henry market us as

offering financial operations a will is experience. and voice brand account believe in community doing network modernize technology, are and of company, solutions result full we operate of one better to platform the by to we partners. new access institutions now strengthen client We a wide FinTech help we single, Our continue consistent to streamline speak the as work of our which with have connections holders a regional array a and outcome from to as a

the Jack know, you top-XX services. best of publications thrilled around named the Henry work to many As to best were in as is place work by be as Recently, named country. we place in to LinkedIn various regularly financial a

work placement culture at we scores strong and to best to place that have our is employee lists a testament the culture. on reflect Our Jack engagement Henry consistent workplace

our well strategy listening pleased values this they and score benchmarks. and engagement say XX% rate began I'm we overall, Additionally, industry We that believe XX% associates employees XX%. from in of all a capital than to of an that feedback was Henry's above participation Jack gather share our greater our to achieved year continuous

As joined team X. August, several on coming busy a for have now speed the we and the beginning finance the effective and to named on shared of past July been Xst weeks. Carsley September up CFO have Jack and Henry comprehensive we search on has completed financials Mimi our a at new story

in with As lead we with expect financial us of stated comes to Investor our she a and experience, September industry a traveling investors the analysts and strong will press meet in has XX than Mimi release, this to of Relations that Sherard call in Director she be with will years I also November. technology of number background. but Vance more

delaying Kevin that have wish accommodating the a the been retirement. for addition his date through Mimi, of process he course, future. help the search we until a now with are could intended Kevin confident we was to prepared by us the who retirement company build replacement has very happy found Of

you association years. company XX his almost well with of our back many been but has know, Jack As years, with Henry XX Kevin over for goes

a on Henry on take all success. this I'd us to time, behalf for for that During execution opportunity everything of thank done years. like successful Kevin these tremendous he he's associates, has make to and Jack impact shareholders, many so customers, had to our our and

missed You will Kevin. be

was a confidently very on fiscal back As company. good say year I reflect can our XXXX, for it I

levels our engagement and of also scores and very customer customer high are remain scores engagement employee high. Our satisfaction

and these teams of our We success. of have and board successfully level track our and completed new expect to replacements continue members several leadership leadership record retirements

year demand all for our well extremely business. successful Technology performing of are have high for teams sales remains overall positioned Jack and segments another us Our Henry and in Solutions

us to we We continue believe for that right doing well. will constituents the commitment have to our thing serve a

disciplined expect to with that and shareholders. our company approach the and provide We will employees, continue for our stability to help approach customers, running

detail year, I very the be that, to fiscal Kevin to about on turn over continued As to it we With some I'm numbers. began future. new for going our the optimistic

Thanks, Dave.

service $X increased up what compared quarter. we than ago. higher thought revenue to XX% but compared the XX% to of were slightly from last Our in revenue compared ago. support XXXX, the million or the down in prior deconversion actually would quarter quarter quarter, year a With fourth and year the down quarter, it million $X same X% to it year's be, still fiscal hardware, and revenue implementation being combined was License,

quarter. and for to the data processing, basis, private growth XX% X% which public the growing year. the previous service continue cloud grew compared for to compared revenue total year, show quarter by to and non-GAAP our the and in the strong quarter fees prior a hosting support On offerings, Our

show and increased a GAAP both primarily to compared basis. of volumes driven Digital as fourth a Banno revenue in continues increase the be very is slightly X% a revenue processing quarter strong. growth revenue demand last X% strong continues the digital on and Total and X% fiscal year was quarter basis. on GAAP XXXX, for basis higher up Our on to non-GAAP for the by platform quarter same card non-GAAP increased The

increased up with associated cost costs higher year Our personnel was to revenue higher customer maintenance processing compared costs, third X% ago. last primarily card of to and due to year's costs license a quarter. compared This and

last and increase compared development prior costs XXXX, fiscal personnel for increased this to consulting and costs. was personnel to quarter research expense Our XX% to the The in same to which related the and expense SG&A costs, includes travel primarily of due quarter And year compared commissions increased primarily increased increase XX% again due quarter. the year. and was fourth fourth

Our reported flat non-GAAP were XX.X% basis. consolidated at a margins on operating essentially

margins year XX.X% to for to deductions. effects increased the primarily fourth expansion XX.X% basis. last XX.X% expanded a this non-GAAP year due fiscal from timing quarter to to year margin in of tax Effective a for of XXXX XX.X% a the quarter same nice rate compared operating Our on ago,

compared last to million of the to million last fourth income with share per year current quarter year. net the Our earnings grew for $XX.XX compared quarter $XX.X $XX.XX fiscal for X% $XX.X to

decreased the Our cash projects in year, into year. amortization being our prior software intangibles year. year-to-date due actually service flow last amortization total primarily $XX.X this to the last placed Included to the capitalized compared the to to increased fiscal the for in acquisitions, is related million X.X% year, compared year. prior to amortization X.X% compared total $XX.X which million to decreased Depreciation

back $XX.X and from for operating purchase flow due was $XXX.X into was the to last net up cash increased capitalized through We fiscal year, of invested million year, income primarily previous company software. was million Our million which year. compared to $XXX million our $XXX.X the CapEx,

conversion actually Our of assets CapEx were net represents was free cash working this. net is flow $XXX.X responsible flow, and which of disposal adding were software and for cash proceeds two from less This operating items income. million. XX% primary back cap that capital There

up were $XX to ago. a year Our million compared receivables

this that collections, which over monthly the is Friday is third the little catch of increased especially will I is year our increase to is to it monthly a due a was average August. our our And revenue, for then with However, in average due and continues ground primarily an where grow. we recurring right timing balance billings to annual July annual in line did maintenance say of maintenance. last But so as ago, a up billings

our The other million, year in commissions this expense previous contracting impact primarily which strong two of working would have from prepaid related items, increase had prepaid the of million which due to this the cash XXX%. or capital due sorry. flow in income the in $XX of year, Without is the in the been than to that item, I'm these was the balance item capital was $XX increased products. other cost prepaid free conversion we greater working net to And other,

the fiscal treasury. $XXX.X dividends to as return of We in A purchase to million of 'XX. During sheet line. cash our paid compared a XX, FY year to $XX year couple $XX.X ago, the for $XXX.X much million pretty for of comments we on shareholders X.XX million total of a million spent shares $XXX in June of million position balance million

was Our million a ago. compared to up to revolver little balance year $XXX million $XXX a

XX assets XX.X%. months for return Our on trailing average the is

XX.X%, the metrics. and are average key we is of invested on very return is Our for which XX those trailing for XX months months capital return equity trailing the XX.X%, on proud

fiscal For guidance FY for and 'XX non-GAAP GAAP release in guidance we've provided both XXXX. revenue yesterday the press

of also We to a in non-GAAP revenue release GAAP information. reconciliation the segment following provided the

also things month. be significantly, However, include close revised. if to announced of that guidance Also, this on clear, recently were be this Payrailz then environment does based to not this be to is clear, the scheduled change of acquisition and impact just will to guidance is just today's guidance the later this

is no in future there from potential impact So acquisition. financial that this guidance

on X.X% our based anticipates For the based 'XX, current of by front. growth decrease this revenue million in GAAP release fiscal 'XX, million the this from approximately to we're what compared over approximately revenue million revenue on guidance growth deconversion to $XX announcement revenue activity And on $XX reflects on for fiscal yesterday, will down is M&A $XX seeing FY 'XX. the the which

we For $X.X% 'XX down our for is non-GAAP obviously convert, for revenue initial FY guide a in have many compared had the growth but easier 'XX from of payments, comp revenue 'XX FY business, than FY implementation, merge, slightly approximately is parts FY in growth and X.X% 'XX to X.X%, 'XX. we non-GAAP saw even of in will we FY and our little which

from revenue deconversion to has FY will in due decrease that 'XX decrease is the to XX.X% X.X% obviously So deconversion margin and revenue, to it for non-GAAP we we to Initial high XX.X% happy this are anticipated very for primarily report guide operating in GAAP because to revenue extremely were margins. 'XX, close growth. guiding approximately

essentially margin Our to 'XX. for initial projected FY is operating guide flat approximately at for non-GAAP be XX.X%

reasons operating talked margins, there's guidance. this May some the week for when about changed Some of flat since we been things projected because first that

cloud. core our is revenue license on headwinds XX% our private are in customers now of Continued

Dave going month mentioned which in-person. Conference, is Education Annual to Our later be this

some there not the seen significant expense two years. So there last will in be we have that

costs and office of and increased I'm seeing, in retain cyber, processors increase other compensation customers talent E&O your expense vendors, to insurance, health, which party of Continued attract sure increased in continued most and third especially a are increase have continues return of to security costs this tough costs significantly. to protect facility then as of XX/XX/XXXX, cyber we costs now employees, increased and just customer's to increased have our date environment, travel

first as And employees, rental both our on tickets this on cars Hotel continues in our since last increased try have of in guidance. Obviously from noted we environment than travel XX% month for guidance XX% then Just average and significantly. even gone has in February. February. changed costs we've conservative XX% meals increased May, obviously airline our to have as month about of rooms the increase last Therefore, up. all expansion average to though change the and we week talked have it less be is the

have lived know, promise all you As going hopefully this I always provide. guidance and the under and the philosophy over deliver that's and what is to

states Jobs Acts XX.X%. is federal approximately tax have now some a have Our Tax to tax projected for and the rate Cuts more utilized 'XX gotten last four little years. the But decreased rate from other been the to FY fully aggressive effective benefits than and over the increase

FY GAAP Our open range This guidance $X.XX our a 'XX now of is concludes $X.XX. EPS to comments.

now will are up open the We you for questions? lines call please Jamie, questions. to going take

[Operator from with KBW. first question. your from comes Please today Instructions] Our question Vasundhara Govil go ahead

thanks congratulations to in Hi, was contributing I to go as your guess taking And discussions for in the of now? on extent another is my sort really quarter. if, strategy strong what sort I to modernization David, tech with you learning meet first interested of clients new sales question.

Yes, Vasu. good morning,

for of leading good as the it's we're so. topic, But prospects, I stressed point. year I've Henry technology the a the native way future. think this cloud, tech Jack as certainly modernization calls, It given true or public not has strategy customers knowing delivering talking in far next comfort on the about prior the a as that is but a with lot a in is So technology

whether the with prospective I doors Jack any I us but has because I be they absolutely Henry. opportunities with not can lot closed a contributing or opened of customers future the directly say whether see with for just know created definitely that's that comfort, with engaged so that customers, And don't to deals, to

the on it. Kevin Got Thanks And for you, color thanks I the in guide. margin all the the sort for color. mean, then change of for

that the you margins? in by still segment we You saw at were last be And your should be looking said relative year? revenue that conservative, sort terms you any to conservative so might guide expect areas to a trend then end of of think where sort what growth, change are we of the in for what

anywhere, then Yes, so concern area probably there's cloud. if think payments and in our our I obviously in it's private

from continue in over margin obviously QX bunch if we mentioned, a those when customers over, cloud. move those to our over. signed we that of Dave is As And move private our a on-prem move to to we lift whole nice customers

So those two margins. three be growth in obviously areas Those it's Banno that are areas. areas, then the continued because three one the those probably that's also would conservative, the if we're digital nice of probably

QX, segments, should be not to the strong signed that As customers continued, in have core backlog movement but only new on-prem private that we far as cloud, just of the continue because the install. in we also from to

now for driven solutions. to complimentary, that rolling install continue that flagship And is of by we're going pretty to as, new I'm core the mean, things. our So be other treasury sure I our out all least backlog Banno and core, at out as and that's our for solution well, XX and also months fraud digital

there. showing a most still strong products But just And our little a our lot to demand that as of pay [ph] signs of help should there's bill and So solution deal move payments CPS just a August then growth. in out grow are the continue EPS bit. will close huge we for our

Great. color. Thank the you for

bet. You

Our question. Rayna Evercore. Kumar next your with ahead from question comes Please go from

question. UBS. taking It's Thanks morning. actually my Good for

the a conferences to core and conference in-house outsourced previous number how and just attending conversion? month. are timeline curious or Thank You I'm your mentioned then solutions XX you've later just prospects prospects are now finally of that potential that had you. right using if know to compares this

thanks Sure, Rayna.

to up had, guess you is to come an So XX intuit know, have thing exact ever and all our can what show that, have is, are you conference. I prospects the not what it is but client This from -- all for be would I don't number a most the confident. we that that record we've

people a and to The the we're that these are coming talking their is, to have whole not reason more looking time bunch that are They're So means to that of core investing spend come move are we prospects that at Jack with who I client conference. a us. Henry. to stress

there is, The a we calls do that XX say new XX a is year, other can thing year. normally that core what on customers that's these I I would if to in good correlate really

XX that up conference have join to come the We signed to there. us client are to

sign a in diligence them process. When I great we're a the sign, as of spend is to their beginning are their So time step some the at This and with mean, they far kind due come of of concerned. final as us. little

bank core as of as XX times conversion. doing for conversions prep surgery get heart all phrase for because ready at have and time lung a like credit they work don't terms They need think the do that. we for or depends of core that same a lot to a all used is And or a time anything it's that's and you're union, good they to on lot conversion and to do you talk nine provider not it conversion, staff in terms because of after a regardless training to core concerned, So of to so is, the months that, and But we can't of conversion on lot far when you've still in have to normal and sign. XX a when do, who of just a core a measure sign. they core slot them are nine in a months normally you the

point good My technology now interest. and level interest as Henry there a a in that's you, was the bringing not right to the amount provider next tell this fiscal more of apply into try So what to for is a good way XX up number it tremendous and of projections a indicator the Jack are objective year. there's of of

there open And starting we cloud regulatory open follow more a And that space public changes institutions very more switching then on That's helpful. you financial of Amazon any be to the David, or are should FI to aware Web up, FIs Services infrastructure? are going see Azure? where Microsoft be a in to would to as to

Yes, great Rayna. up follow that's a

So said there other demand cloud public I've There's are great no a right today no the for calls, cloud. There's are this solution. for answer doing is And out clamoring that today in demand stack nobody no and no. on the now everything today. that full there public providers

the Our that bank and whole we will but in with believe, that. get last there's is and be point and almost to make announcement environment and along credit sure regulatory with with I've where strategy customers the few to prospective months know believe both CEOs, going in future shift this existing today, done no customers our that union to of We was and when demand the meetings we're we going there expect lots and there.

comfortable see about and as stack talk move. cloud, public of full credit the ready being So regulators are and to you'll banks on unions become kind more processed to with they more the of that the the starting make idea

So, but an forward something need direction. regulators course, the and will evolve customer evolve of that to evolution then that and it's in same demand

you. Thank

from your question. with Our Please question comes go Davis Raymond James. from ahead next John

color year? of Hey, flow conversion you XXX% free called kind cash fourth just or flow above for free the in good we're morning just timing of on conversion there some given Kevin, XXXX, any a this guys. items a expected on chance cash out the is quarter

had the had say commissions up year JD, had that's the increase we prepaid from QX. things we obviously mean, the in and some that Yes, actually contract fourth in that the QX this with the build but the in especially quarter, contract of strong of we because I strong would I in huge

that should forward. to move obviously next level out year as continue we So

will our we year, I are to going However, so say up. cores have that obviously every grow

FY should we because the positive more get, to and sold. it So our actually now should we would I be in we'll capital a say collected just working FY those maintenance of did change receivables for so conversion back next But out, work a timing than year year what 'XX. right XXX% be gets in things annual that next in billings at given on we depends 'XX just

those to that I So early to going Are all things XXX%? mean, me above it's back prediction should too be JD. said, being we for to be XXX%. we make

you a No, enough. payments, no, on Okay. deceleration a year-over-year X% really but little obviously just had on basis. comp fair bit, tough a And then

kind impact credit So from low double normalization, have is kind segment debit 'XX Is you this of the seen stack you're two-year specifically? in think and still way of about any mix a payments that the basis to right on digits?

are growth JD about you Are asking about revenue or you talking payment volume?

Yes, sorry, yes, revenue payments. growth in

the Well, FY CPS. are compared I Obviously drivers high FY the our to be big is in going revenue to of for 'XX. think growth single digits 'XX that EPS and

what JD. and grower Our the buckets in three online bill EPS with should we pay CPS our of see low slowest we're if align is But seeing the digit, the payments. going moons to we're to double there grow it's demand a digit little the because could and goes, everything be single all very if still able even high we seeing, maybe get

But later me from price Payrailz quarter. wise, announced closes capital know didn't I revenue, you disclose stock help on just it. acquisition also any which the month, the is then you then announced slated And one at obviously us this when earnings back in didn't can to, you last allocation, you Okay. the all buy impact you size or immaterial,

on So allocation would should kind the helpful? there in capital be deals of color more expect Any pipe? we

end place, the any month. we close agreement not per mean, disclose allowed actually to in we this of are I JD, financial have so definitive Well, after we the impacts until

of know, stock end towards much quarter. the earnings. reason blacked in will now magnitude how announce stock the I a guidance extremely of stock we July from So buy and our stock from that after mean, and is announce like the out it out didn't are the you so earnings to think I give until we our performed that went Dave just be our the this back But mean, Xst well quarter we about before any fact actually really can because up from you until we back, acquisition. I the are buying quarter blacked we any

jumped So that up $XXX. time, above up during XX% our stock

a revolver out for some other deals powder on continue on as us already let we out draw other keep second at be to targets part And in smart question, have your want with that's right it would So when me dry look an to in JD, there, and the the there. we of when jump got about obviously buy acquisition we're -- both jump to our in a we've feet in pipeline. potential

So looking shiny acquirer. little But say object, we we obviously sense as specifically you call again, us. when I've been known more, are but continue We've go our a a and couple, if deals don't we're we We today well deals historically past we'll three in been But always enough, with it an to make comes now normal always that looking. strategy. for look absolutely and but deals on pipeline. a chase are evaluation years know, acquirer. anomaly stressed at getting have we'll the disciplined we that are for serial have expectations, These over and earnings to talk the anything, over and over about things the wouldn't

the all appreciate I Okay. guys. color. Thanks

Yep.

next question. comes from from question your Please with ahead Davidson. D.A. Our Peter Heckmann go

my taking for Thanks questions.

to you or net dilutive assume you any accretive or is possible income guidance disclose it on would about it know it whether neutral? is Payrailz, but specifics, current to can't talk So I your possible be

it Peter probably will 'XX FY slightly For dilutive. be

point be because but accretive yet, nicely from we diluted and that in be 'XX, finalized 'XX closed to it that grow totally yet, obviously it but slightly haven't haven't on. should FY We will FY

when you then material level 'XX think in guidance, guidance? any And of about your buyback helpful. incorporated that's Okay, your

my There fee. guidance into incorporated is no buyback

Got it and I assume not…

be to just things Two clear on.

mean, past never given I assumed anytime assumed So it's I've guidance has acquisition. an buybacks and never

EBITDA times Correct, three correct. for be that with, as what M&A net be the comfortable deal? thinking pro right to And would would the then go on would you management about forma leverage for the ceiling you're

as mean Dave the go said, in years, right years the I I had we've for market three times I would the been tell have three we been I've leveraged. that would I kind have of so the but Pete, valuations obviously ridiculous, we've actually, financing mean, times I will would mean, for of deal, Yes, been out say, because last three I deals think I past, approved and the you over mean, and

drive So we're comfortable company not that the would be shiny deal Dave move out laser objects, right FI boards further, as help it's was that going it's and we'd then on to it said, something and times. the if very customers our will company something that need us us forward. three if for will our chase with mean, the I and but go the the absolutely industry focus to the

your your Okay, I retirement great that's Kevin, a years. and time have over all in appreciate helpful. Well, help the

You Pete. bet

your Baird. Koning go from question Please comes next Our from question. ahead Dave with

of little the that Oh yes. change would off forward? Hey Like for on base guys. term there's downdraft basically, for can to take that would grow detail there year, normally of of kind And bit the outlook, think and in kind that thanks right? in guidance. all Kevin of in margin the of longer anything XXXX the going kind long-term nothing we progression, new margins then base kind it of incremental and the about this just more of this like the Is kind change

everybody what ridiculous a buy and mean we for just don't McDonald's or have mean, I think No, I on quarter there's in I distracting inflation some nothing call mean, as and that. and this seen months. of cheese five you that. you knows, your I'm four kid mean, see pay last there, I if the pound Pete. fries serious

grow once we go I mean, margin can then should our to FY over right gets absolutely that, and typical 'XX inflation over under hurdles. back expansion we we once So, control get can these

Yes, sense. bought biscuit had that makes that at experience. McDonald's I and yesterday a same

you So, that. thank for

This call totally is in going a earnings direction. different

the the I had growth last went But Visa I guess on had quarters. looked really at ago and transactions question comp I just then they stable second of just they pretty I number you're had, a paid debit two tough too. a And year the back in transactions know in and and the

I quarter quarters, things I they you but know think both like did I this why business? all stuff, of guess, them growth you sorts were at decelerated and the X% in and payments know in there's have different but I else decelerate

out specific anything know Dave. don't to call I of

I that huge core. a we last tell Well, in you remember had you will in year if 'XX, growth

our we had comp And tough in a so year last to year. payments segment compared this

Okay.

So it really just is that, yes that makes sense.

Yes.

All right, thank you.

Thanks, bet. Dave. You

from question Please ahead go from Our comes next Nabhan question. with Stephens. Charles your

front margins and wanted know the 'XX. of the course over the of know now, a to little a the license right some the factors I timing of year. Hey, good mentioned Kevin, but conference of some towards color lot are there's get of weighted the headwind of, end I morning like you around variables I the guys.

a the then potentially to the the that equal? case, see that the something we of assume year half above being end, all could bulk fair flattish back margin things front headwind of in it the and be the would 'XX, in is So for

absolutely QX meeting Well, education going conference is I margins on so mean, QX. to impact is have right. group in that yes you're is in Charles, a the user big

on you're it be of that's because revenue, license, easier mean, once should that's get the has out a based the right. It mean, -- over year comps I that's the The delivery that. past So little so been. spread license always lumpy. I we

not to that just is any the to get to is really going in term. sure a going -- And then just don't going so absolutely the cost revenue other down. you then And basis, So which easier things year-over-year that's know that's quarters in are challenge. short license talent that really don't but hit, is on to a retain I'm there be

the way going year now. a for entire So right it we're that's be seeing to challenge the

think you're right. So I

I that margins biggest be I through of deal we better I get be challenges QX. you're think there's But the QX, other should will in after to the going year. the right; over headwind little think but have get to the a balance with and we're think

then at of base up, that's us coming Banno update around an was And give a customer topic Day could follow could and the and appreciate as a of a the your wins bit, just much from how that. are some how ability secondly, I little base? sell outside right, versus terms of I cross Analyst if And new business specifically get how All color new wondering in if the existing I for Banno the was -- the wins? on you to wanted to sort you we drill that that's positioned on

Yes, thanks Chuck.

Jack and very news Banno been XXX% and lot commonly talked Henry developers. base the tech inside It's commanding an and in around the the happening as have impact of that Banno are about that this have in developers salaries core great wins like impacted companies a did off, first on were the we've the of lot past, So a the fact resignation business reported far as moving been high high been by we that. the

the been we've transparent sharing as the customers, prospects our release back our very Banno fact and sharing with outside fact So that date far to had base. our that, move the we've as

business the release move to date calendar for Banno back into had also We XXXX.

Banno light it to so get we're fire business under a from out is. tremendous new success platform. believe, we customers as going hearing we that And But, prospects we're having there, once that's it the Banno really and

get by but be line to to able was here sell full past Banno the excited the or of in there, base, probably business that over outside just most year That out the we're to business transparency. we're impacted so. So excited resignation the great and is

because time, actually thing Banno. a deals closed only actually And that some XXX% we've in that wins I'd for a fact, probably Banno Banno. is our solution new long have we add because The and won have almost in industry core is I probably this a ever core takes I've the of Banno is other been known core deal,

top solution there our out is new the taken a XXX% of line those the is that's customers from selling also the inside core so away -- right, were but Dave it that base, and we're all So competitors. includes that

And your Kevin, you Thank in it. very the years future. of best for all Got help luck over the and much. you thank

Thank you.

Oppenheimer. Our question go ahead Dominick your Gabriele from with next from Please comes question.

upmarket medium smaller be just and And sense first the so Thanks I great. maybe that the that talk willing follow be sound and thanks. I from is say asset you're wanted would public and size asset would that that might willing FIs size be possible that? then then correct? let's Does it much. there, moves take that it have they solutions institutions make it to does start up, do developing in sooner versus small to might Hey, large and more a on cloud about, just to why financial

I it's it happen. expect that that Dominick, mean, if could think happen to don't I No, possible I way,

What potential right? to of functionality they're customers their The releases. that new of greater as that expectations going the be will it's be into institutions think it are flexibility benefit and public the move more larger to The as I move smaller are there's because demands financial higher. larger, a and new will institution. cloud, for paying is than our make a customers far them more generally

stack institutions that the mid-size on. I So think cloud public, first. I will And of more full the banks kind think it will be, it's regional will public that adopt likely smaller offering follow

are of regional to really $XX you'll as that cloud. public billion banks we But happens. billion after to expectation going billion, been to what $X banks got see. is that, first and and we be then my $X adopt, everything be it the the wait see that a as smaller so follow got before, $X It's to to Now kind will -- see probably along and done and to far banks large never billion wait moving that's to

is cloud keep Now a because moving mean, pieces saying public solution. I public Banno different I everything today. cloud to we're

get are got but to just about there we're stack, there. I when but you're we the see progression, pieces already that public we think talking the So when cloud, that's are full to see going way

kind start from and out…? the far from of out as middle expand So as there

I what think. That's

multi-pronged And I of, very interesting. up -- here, Okay. question there's off front. just listed Interesting, you. thank curious, I was you in a me so forgive just

listed You've from kind cost normalization. of bunch of seeing a different the that pressures just you're

separate, well, the of on about you in how the kind and of sizing any but to your us probably sort Is just this various to enhancements? then of follow about they products for a are some smallest? think think do just investing to from Thanks further ones, where whole the as customers a also factors on that, listed how demand way And could of You your bunch largest think there guys. as to environment that various similar seeing the adjusting technology they're shift them. for

one would question. thing a cost personnel And probably, there's sizing biggest don't as jumps good attract is one. far that mean, talent that's I the Yes, the retain be I out probably and to that any so know me. probably as impact, at

other market Cyber. mean, it's have that go and then more up expenses just, last that. I insurance they're I'm hard E&O are, significantly insurance. premiums year out there The for sure I our and going a travel it's and going of or behind traveling. year, maybe not to that experiencing our would travel ones people again expenses everybody's went probably up we right are be up, only mean, but this ahead because

X,XXX going to So be are example, to Diego customers in conference employees that care for XXX week San of education going plus to XXX, we there. over the our, next take I have believe,

-- travel in last are to year costs the and this up any just significantly going to year be compared that. I don't there's see So end

rates customers business think, I money, there, mind And so customers so of in know our is, to the we've lending are the right? So that all in Dominick second with happier our keep up. are thing question the going

are growth. to continuing margin customers net interest Our see spread a

the sales organization the that evidenced And their grab are an has as to highly also gone talked other as are we've new customers, seeing CPI motivated efficiency to their money provide and or on loan done opportunities can increase They're And that costs they're technology solutions by and in success. it's and their side. find to so, certainly motivated significantly. previously, make deposit increases, up it highly although up fairly side they areas, we've opportunity going whether about our

So have seeing. that there technology, of that margins the net they're know the for lending demand they do and is but of their business no customer slowing you increased down all in benefit at side new interest

Great. Thank you.

Sure.

question. from go ahead comes question your next Please Suisse. Nik Our Cremo from with Credit

I XXXX just Good hoping into morning, we and my across the for and non-GAAP was and margin Kevin. get dig the thanks question to expectations segments? some color see can if congrats taking to

are complimentary. Oh, to and our think obviously we're going I going margins don't, margin I mean, to because going some I see big Well, and say across lines core getting R&D flat, be in pressure and they're to know payments, cost I when don't the segments. in I improvement probably SG&A be, of probably we're sales. the

have So, in some those segments. because of that directly and the not don't we margin SG&A R&D impacting is segments

below that's So going margins solid it's make with But the the for expansion. slight some to R&D the the for allocate that segments and don't themselves line SG&A year. should we the flat be it really be

in like to extra like for more you're M&A just base, from what up, Got term color. in are a XXXX big seeing then And you the follow step for customer just or down M&A conservative? is fee activity to of guidance your that, wanted it. my relative seeing just environment, I the terms Thanks ask

Yes.

they other lined well we're because they up is, slowdown past are into customers we we seeing on and in Nik, stressed of absolutely calls the a lot these the we've on one have when of So things that, a visibility another advance. calls acquiring want acquiring one first are slot they're customers and to of institution, get make if looking the at in a conversion

is visibility. of lot a be We don't acquired. have customers we necessarily when our to so going one know of And

the down to down movement lot in to year. a regarding we M&A coming activity projected the because overall the next revenue And why be conversion we expect overall of that's visibility, in market. year, be have the have We

the tea happening but the will that and that's be unions space, among coming and reading just down credit expectation banks leaves our Now in to, is what's current that's overall in M&A trying understand year.

$XX the predict before I that we But year, knew to I year. of up but revenue that's mean, be $XX beginning at to be this would dreamt was to Nik year it appeared million solid. going like, million M&A the going year be not be down we mean, up was fairly Yes. the it never last, because this deconversion did we

basically in it down in was it what XXXX, So XXXX. was up

kind it inflation? two what rising on the years. down right due based Could interest mean, so now there's it's you that be think environment. M&A having an of looks bit. slowing pipeline different that's I could I could that because factors seeing the rates, impact M&A to, many So in on flat to little the we're point it a the But for be like is

you. helpful. very Understood, Thank

go Autonomous Our comes question. next from ahead Please from your Research. question Ken with Suchoski

those I and with those then opportunity talk to wanted Can David does do look to we morning, Kevin. Thanks non-core how Banno. taking quantify on you with morning. try for like good up what that customers? about just my core customers? is opportunity And go comments questions much follow those the Hi, left How opportunity? to on this

Yes, is that. how big that's answer big do a of question, a Ken, kind to best I'll my

Jack inside So, off base. are close we've have first core, but not running it's And today, customers. running don't Banno but have existing the to, we've lots so customers had And core that we so we goal sold core when about that outside anymore, that we then of think roughly sell Henry overall, to base, base, success opportunity what and X,XXX we they're get whole the core not base things. refer today. probably non-core there guess banks we non-Jack who and to different the inside a running was hundreds with course, Henry customers inside I that the the of running to Stars, other who core unions are the Profit lots not of would are used to variety credit to solutions as of a brand Banno thousand, use customers

have So that are go Jack can something that we unions us. doing already non-core X,XXX They mine. with that we and credit banks Henry know and base that's of already

relationship go a go that Banno new have and with to sales can regs mine opportunities base once with have We base. We them. outside we the

So tremendous there's opportunity. a

unions a thing totally today and internet I'll United union and solution I've solution mobile running almost any said other on The and look the to credit not different. same platform, that Banno is your They the Banno banking totally concern. They is States function are the different. on consistent, they you're stress system. whether laptop, over that a over, bank direction. in is, banking phone credit or and call or experience and eliminates in that move user want is your so single banks the

a just there's go direction. outside there to need get in them to want to delivered that that motivator We So the base. for

it, it you experience. your your just brands wanted guess, to Can performance, about Okay, David, that ask your might great. I I I then for better think going about consolidating across how revenue impact as rates one you and I comments growth, that retention and the to the And sales opportunity leads talk customer there, you company. to a your And you’re client think mentioned operate base? believe

Sure, yes.

Number now this. weeks couple ties we eliminate So expense to in, we're any on very marketing August it and different associated supporting just a few We points one, made announcement the excited about brands. this key adjustment. X, several so can a of of ago so the with

consistent that brands Investor Adelson, call thought the that logical expense May there, this think like customers. different One past with when at one we year you had to about brand. play In Jack brands, natural there Henry Conference. President more for kind almost our experience it a talked push Greg a this in had that And different of for delivering the there's savings we've about So a three the two cost different at are importantly, it's move I the toward been companies. this we've initiative now. more was or But our

and any a sales gives a help consistent certainly the Jack perception on moving and customer side, that customer toward side will of so on with doing brand, aid when really experience our -- us to business processes, referral the company our our only in to prospects, prospective we customer believe it positive not making And will but comes one sure around for company, one consistent existing expense for customers Henry.

industry. published Jack highest you had you of separate once customer and customer get we'll ratings companies. concern well, then sat with knocked We on the ratings. of ratings like by satisfaction far. some to customer that eliminate has project, one been, say, this report in thing studies that sat Henry hope highest would the while our we we have kind a overall regularly. them operate our I Well, in on So The

and I Great. as appreciate your Thank you David. very the much, thoughts on retirement. always Kevin congrats

Thanks, Ken.

next Our from [Operator ahead Please question. your Faucette with from James Instructions] comes question Stanley. Morgan go

opportunities impact the all morning the to of development evolve, great and adding maturing do that for needs everybody release commentary. traction and that I interesting. kind you How thanks to where does a you things like around the and good of and will the them? about capabilities? a staffing you for market looking Hey, feature that perspective, features talked think from how you're the is feature much -- also see and and how how bit about impacting back market and Banno found address go And feature platform to to wanted resignation think states, how kinds and development your you'll those those you at but evolve early different commentary

you you're in would and stops, another with idea do comes be the James. if request as this would soon you beat, features sure new where X. got an business, When it's for never up to think get interesting you've you Yes, it somebody question, As everybody nice right?

So commercial that know is, news have the The that's much an we business. been side. solution for have pretty The missing tremendous on consumer with competitor side customers what we good today, on any with in project. consumer only market that we beats has for Banno us know ongoing we a piece the

like can't their solution very ever market, once have to expect Banno want with a like more get platform adding does to we we're do increased, They only to in But functionality going that to able confident because new stop our new So like platform that business terrific solution features, a compete adding demand you're a customers to things that, you are developing anybody. we're demanding features, enhancements customer to more but that. not through a that. through be going

whole is that us So is forever, it time, but Banno same strategy on say that's good forever long won't really that an The for I built for, talking we've will very tech on. go but long a that been about is, is the for time. a modernization on commitment news platform ongoing

that from it bolster what future to Henry, so And we so anything we'll of have the tech just offering the and and do the Jack been story with in the overall modernization we've for of that to talking technology future about Banno continues financial adds institutions. as

And that us increases one it's prices, like what a and mean, obviously with of I period and your aren't inflation, then an how sense. in of does terms interesting is and price general lot that familiar discussions the pricing of look that selling promotion, the what's environment even part the products in impact you impact how for competitive like? expecting will changes associated or with are and that that your

in and to involve large not the changed. it we've to talked of engagement banks another, space that credit not to Yes, negotiate any but much price. our will one it and And, today, comparison is the consultant in product pretty the role has unions a customers, environment is do only before, competitive purchase consultant's about

happening so, that engagement there economy, the every, regardless the opportunity And squeeze consultant of in and to sure they can. every of is what's try they the make that out

differentiated pricing So that's I kind us back offering right? the from add first these customer expectation it are when the reputation pack that's opportunity future going our is The pay continue can't say happening think solution, result stay is to in then expectation you to that opportunity charge of solution, dramatic is to economy more, change. that more it Because our of stakes. not to a comes enhanced and question, It's competitors, because the to to differentiated really to your The just, when so platforms comes I where is not more. opportunity solution of ahead we for by we're to not, an today as will better. just that and anything as our function, functions we consultant what's that that's where don't general anything as a table or And challenge has has better. it's far the changed which one then and sure more. Banno make It's customers looks which

Gabriele your And our up. next Please question from is a up with follow Dominick Oppenheimer. follow ahead from go

to the just revenue to Day. I thanks. the think should great, Hey, talk the we how about wanted guidance about, you in and on growth should, Investor investors how

points, there there new then could think walk that between and said, customer is that X.X% kind was much. roughly creating I us below And basis the those maybe of, help for those Delta? XX Thanks the expectation term X%. a features, two that so grows between revenue and points long all Is any waterfall sales XXXX. way you slide we're various

mean, said Well, Analyst at to I you're X.X%. the I’ve X% I at right and mean, the absolutely we're Day, X.X% right.

in So yes, of coming we're comp. considering the I for that tough XXXX, makes we mean, of we're on had X% low the almost year But off of growth end pretty it huge that. the with

recurring grow ball if X.X% going out to in a crystal I for my Obviously XXXX XX% a hope to I'm at I so, that's get plus pretty -- XXXX? to that thinking feat back but grow X% is we grow XXXX, can a can mean, I that's in would compared we far. So company revenue, good little pace. that foggy mean,

Sure.

on the wins too. Now sense. all quarter And congrats that makes this

You Thank bet. you.

with I'd floor over and And session. question-and-answer closing back like for any today's the turn to gentlemen, we'll that, conclude remarks. ladies Kevin Williams to

Thanks, to Jamie. Obviously our to that we these for customers, we're very are with deals new thank pleased I work the associates signed in by continue the with and of company, that, future have the themselves ongoing for future. the handled previous to want our care of all to the results all everything and of quarter. operations forward our improve our excited they hard for taking continue challenges and way moving we've

again to is you replay for to customers shareholders. Jamie All on and of with focus that, us number? us want the our what at for Jack today. provide Henry best thank would you our I continue And please joining

gentlemen, access with call this will to the conference today conclude the of digital we ladies replay And conference. and that,

approximately (XXX) of XXX-XXXX event. (XXX) X conclusion today's after or XXX-XXXX, dial one beginning may the You hour

attending to We You'll which joining. number do disconnect your you will be has a your now may the presentation prompted name record The company XXX-XX-XX. conference and and lines. concluded. enter when conference you now for be Please thank