Jack Henry & Associates (JKHY) 6 Nov 242025 Q1 Earnings call transcript

Good morning, and welcome to the Jack Henry First Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Vance Sherard, Vice President of Investor Relations. Please go ahead.

Thank you, Viate. you Earnings the Call. thank Quarter Henry and XXXX Fiscal morning, for Jack joining First Good Today, Greg and Adelson; joined and I'm by CFO Treasurer, President Mimi and CEO, Carsley.

the Greg provide and on discuss our industry. his opening the fiscal the observations will and will my of our remarks, Relations open insights Following website. on Mimi first business financial quarter year share then outlined which Q&A is lines the Investor and Afterwards, a release, available Henry Jack will press full section in year session. the yesterday's the guidance for we results of in

this includes expectations. these to that differ note to company which Please results that statements. our from obligated call revise The involve uncertainties risks or and materially actual is statements cause could not forward-looking update

additional and risk that press in to statements and statements a results actual such Factors of yesterday's our refer materially to cause Risk forward-looking For differ the summary could from release sections XX-K. and forward-looking information factors

we financial for these discuss call, Reconciliations included yesterday's in During non-GAAP are income. as release. press measures non-GAAP and operating measures this will revenue non-GAAP such

the hand will to over I Now Greg. call

report in it of and commitment you, solid in and work our Good like appreciate to each our to by Vance. by for financial you this our clients. quarter morning's thanking thing I'm takes for pleased the I'd whatever Thank performance joining first fiscal year results begin I to associates hard their doing call. of morning, doing overall XXXX. the our right success

our we'll takeaways provide script overall I about main share and quarter, will then last the As in detail from business. my I introduced X additional quarter

revenue of slightly in the QX anticipated ahead We our had August. exceeded First, our X.X% We financial first in growth X.XX% of non-GAAP quarter performance. outlook.

for in indicated and were growth August, and slower processing. by rates annual we maintenance card QX margins on-premise As impacted revenue

in several quarter. this creating last difficult contract software usage year, of Additionally, comparison long-term QX closed a for

provided We to the with contraction. that margin revenue quarter year XXX commentary would guidance only non-GAAP of of points confident see ended X%. remain non-GAAP basis in our We full contraction of in XX We X% August points. basis

Second.

Our X X, sales continued our included wins. over performance. with the in competitive Of that After win. a QX assets, team, were asset record sales $X core we sales financial QX institutions including the positive $X for in X attainment billion one with billion momentum record

move We existing processing X clients our in-house to to also deals private from closed cloud.

Third.

last and conference. and significant of conference X,XXX the We attendance. conference largest Last a new number a month from were year, very our conference. sales nearly Henry is client attended Our produces wins prospects year Phoenix prospects core successful the of clients of had with Jack Connect that in in This our XX leads.

on overall business. Now for our more detail

placed of During Work Places We most year third list be ranked consecutive several in the XXX proud national Best ring. included in quarter, Week workplaces, top to loved top News XX. we in were to XXth our the marking

We News also the earning stars, Week's rating. is Most highest possible X Workplaces list, Admired which made

list. our in that based annual XXXX year on #XX rankings ranked we consecutive Additionally, revenue, IDC's representing XXth FinTech on

and national financial these delivering exceptional our institutions. and empowers recognitions receive to as honored culture, reflect to regional commitment success community are We service they technology that people-first innovative in

clients clients FedNow of new RTP perform and continued of clients XXX in debit on clients XX% well. XXX approximately the clients. FedNow clients the approximately RTP, now signed live XX% using credit X We processing We have Zelle using to quarter. live the segment Payments representing new X the XXX representing Our clients and platform,

segment, Crimes Complementary new our contracts the quarter. in we X In Defender signed Financial

payment mitigate module, solution transactions. fraud Zelle, addition, designed Crimes In new the for help real-time we to RTP FedNow contracts Financial signed in faster fraud XX and a Defender

stages various customers installed another Crimes Financial of have and have in XX XX implementation. Defender We

XXX and in We also installed have of various payment implementation. stages XX faster modules

Continuing with digital see segment, we with Banno our to strong success solution. Complementary our continue

as as quarter, platform signed Banno new Banno XX the we the to retail clients XX For Business new deals. well

Busines. currently million XXX We on Banno Banno We registered the quarter finished million have had the retail clients end XX.X increase users, over platform. a users QX XX XX.X registered with year, more than Banno with with the of live At over XXX the we months. XX% last past

can this we technology sponsored year, Henry only February, Henry through and goes X strategy benchmark Jack to Each We early surveys. tuck mid-January in Jack the clients.

the survey technology and their from a to and co-sponsored Bank We spending mid-June prioritization early also in were September. results July with questions Director published

in objectives XX% are Director their increase the bank increase operational deposits. retain to and customers of reported XXXX. for the Their an and budget year efficiency, improve In technologies survey, fiscal respondents Bank technology top attract

efficiency Those consistent last technology In and our said strategy with next increasing findings own they of that increase deposits, operational spring. X benchmark XX% survey, results loans. are being priorities to from spending top growing the years growing with our clients published over their plan

apart, conducted planned key months results yield surveys they X and the X around similar spending Although were technology priorities. very

reviews the received earlier, prospects As Jack that from event. tremendous was a I mentioned and consultants Henry industry clients, rave our success Connect we that attended

X,XXX with XXX attendance, we hosted Along than institutions. clients prospect XX financial in more attendees the from

philosophy technology included fintech competitors technology XXX to with Our provider. be showcase most open which third-party in our being underscores an

XX% again XXXX. of indicated at survey want these exhibit exit fintechs our conference to in vendor Our

on robust and we progress technology was our anchored by agenda made the initiative. significant modernization conference The

breaking strategy The them core cloud-native building continue We platform, a of to API-first the platform. and out Henry on execute components Jack key of the

domestic with entitlement. broker live international and data wires, are We wires,

in to calendar during digital are general commercial core with and remain testing We only deposit XXXX. both track a year exception and processing retail beta ledger. We deliver on

on the progress continue provide our throughout details year. more will I to

annual CEOs, the for CEO years Henry Connect, at As was by our record forum, in we've held we Jack us. done new prior XXX which attended a

and meeting the invest efficiencies modernize the improve The about they year, in enhance less economy that businesses. to digital suggested their are in attendees and throughout continue general the capabilities, feedback overall last concerned to technology

of SMB solution both agenda prospects, the received CEO with was demonstration recently announced Moov. by The well included our clients and

As May Day, solution deliver adopter on at remain Investor mentioned track XXXX. early clients unique of Banno this we to to in

use sold institution bank our their will daily to more the be while credit approval tap devices, X The higher-value and deposits through accounting and iOS the for will continuous benefit SMB and with from relationship enrollment at customers. windows, settlement reconciliation. solution and This the to Android center SMB financial both of positioning capabilities capture pay one-click and

Shareholder next hold we in [indiscernible]. closing, Annual In Meeting our week

I option viewing We returning observers offer demand remain webcast optimistic I based to surveys to an also in our about environment will a extremely pipeline recent time. remotely. watch referenced all-time the on the for

feedback of our -- and prospects regarding consultants exceptional results technology. from clients, of future. our service culture, along drive continue continue innovative our differentiation industry strengths, will key to proven we positive These execution, us record the positive Furthermore, and hear position well track with differentiators to for and

turn to our specifics more financials. it over With for on Mimi I'll that,

morning, good and Greg, you, Thank everyone.

continued while of service and year. earnings revenue focus our growth Our and clients a on and to supporting culture, to start and another healthy community our quarter innovation institution regional solid led financial fiscal

first fiscal the outlook will with I quarter the guidance. our our 'XX cover commentary details on results and and second quarter conclude then behind

base increased year, largely reflecting flat clients. for QX earnings period also our revenue expectations. million, providing we $X prior our the consolidation consistent last and X%, released which This GAAP with non-GAAP with with same of deconversion revenue was the minimal Quarterly year achieving approximately guidance. to our of and our is full expectations full consistent

services services a support moderated significant year continue hardware the with revenue be GAAP taking revenue Data non-GAAP to details. revenue. compared processing prior and at and Now hosting increased of drivers look closer and Lower and X%. and growth. support license services support and revenues

Our cloud key and of strong long our offerings reoccurring total revenue growth persistence XX% have engine. double-digit been increased private contributor This is revenue reflecting and over in a quarter, public the XX% growth.

with XX% processing growth Shifting model. quarter. processing revenue total for revenue, We strong contributor non-GAAP our drivers cards, growth to on a significant payment quarterly basis which include trend, long-term increased saw digital for performance and is and another and both the of revenue. X% Continuing GAAP long-term

Quarterly fee would reoccurring was Completing at revenue, of quarterly was grew revenue total revenue XX% total XX%. X%. enterprise commentary I and on revenue highlight

nonkey hardware grew Excluding revenue X%.

cost for and the costs, on moving direct included license of personnel for amortization. quarter the expenses. internal revenue, both higher with increased which basis Drivers drop, GAAP Beginning Next, quarter. and the to non-GAAP the increased X%

for clarification million and was For assist to intangibles the with models, $X quarter. amortization of the acquisition-related

a expense increased was basis onetime increase both and R&D related non-GAAP primarily related decreased GAAP prior on Ending year to XX% basis with Next, on year's over costs. GAAP The X% quarter. for the last quarter for the quarterly personnel SG&A expense versus to the

margin on annually SG&A expansion. non-GAAP increased generating We on X% remain focused basis. compounding a

margin year we guidance. XX%, decrease While expansion non-GAAP in full results our our ability an basis with to the deliver quarter point to full in delivered remain confident consistent year XX margins

the per fully fiscal results These share in XX%. was of $X.XX, driven nonrecurring. earnings solid a up quarterly were by QX 'XX This expense that produced of GAAP diluted partially

Reviewing operating the X segments.

are performance the by board. pleased We across positive

core increased of X% growth against Our key with XX%. on non-GAAP a revenue tough was XX% quarter segment of the total for revenue a revenue basis comp. tremendous segment quarterly

Nonkey X%. implementation. and by with points. software Margins impacted operating headcount decreased revenues, decreased usage associated were primarily Non-GAAP on the annual maintenance margin basis XX

lower and our segment management Revenue growth Payments revenue of cost to segment from Margins incentives. of non-GAAP quarterly and strong operating network growth on increased benefited again due margin X% impressive was had in basis. The points. from XXX revenue a growth risk basis non-GAAP growth card solutions continued card-related

due Finally, hosting direct partially store. revenue. points, and Complementary contracted the primarily being X% quarterly segment and product a in amortization, XX offset a mix costs, strong by non-GAAP and with digital Segment margin increased digital growth growth licensee hosting from consistent basis support fees revenue to

of let's cash Now review a capital turn and flow allocation. to

the last a norm. was cash higher in a than annual $XX quarter decrease reflecting year First over $XXX maintenance period, collections operating QX flow million shift, timing the million, prior historical

months million, flow in XX resulting XX% a cash $XXX was Trailing free conversion.

to dedication trailing metrics. invested capital will I of year into a XX-month consistent guidance and with quarterly cadence value quarter, on on Heading XX%. second conclude full comments resulted return in the Our creation

non-GAAP fiscal guidance of press reiterated. to which As full XXXX you're with are aware, metrics, year GAAP all release along reconciliation a yesterday's included our guidance

clarity rate included press that it to not 'XX The should a a provide be and tax be fiscal numbers, center. noted additional EPS is the metrics, is release our on XX% new purpose intended used. non-GAAP is While a also to this guidance

are with the as in guidance fiscal current operations consistent. line the metrics our of and business target near-term remains year healthy All

fiscal margin financial on with throughout sequentially outlook the revenue remains Our year. non-GAAP increase for the to pace upbeat performance of track XXXX

target. longer-term expectations accelerating The expected strong rest to This slightly revenue will of guidance with improve margins non-GAAP QX cadence pronounced more to half down. growth flat with second in year difficult. non-GAAP strongly, Consequently, is X% remaining full a consistent for resulting is our year be approximately and result a the that will in

As see fiscal we results. a relating the license the timing of along financial business our component software's year quarterly results implementation. fluctuations usage consistently with indicator reminder, of is in Therefore, to strong correct the

QX conclusion, through our and us with on revenue expectations that profitable and to sets delivering up stated margin remain consistent scale growth achieve at expansion. was with a We long-term long-term targets. consistent our full is focused In growth year compounding

efforts that more We drove of for will results these X,XXX strong open appreciate please their associates our dedicated [ ] line investors you the for than questions? ongoing our the confidence. Viate, and

the [Operator with Schmidt from Instructions] first Andrew Citi. question And comes

caught want If for a quarter full the for to I year, bit. unpack don't core on a on too just growth so I quarter I first down managed could Maybe performance performance. get the drill revenue the you first just know little up the moment.

and But the details how we you And on can about -- as first then Core should the drivers few the performed in quarter? year just talk the a trajectory the progresses, progresses? there year maybe more expect little as

the of because I'll So be and the about Core a I'll Mimi doing, revenue. off talk start specifics with the on let what combination you're attainment that could

will tell hurricane the of that were you had a hurricanes couple due that So there -- I we to and the X that core or wins. pushes happened.

a that quarter pushed quarter. have that the in the And would we first closed got few to deals anticipated we that had second

obviously, push those during And didn't type people lose a we contract going to just them. timing. challenges. try sign They not we're to to of were So

So that's of part it.

the that as the But that continue $X we including honestly, have come several opportunities, fruition that others the here was the we expect exciting billion. to to highlighted we part well. And we in win multibillion-dollar

component. part question the of side, let I your sales and revenue of handle part think, potential Mimi that the So is the I'll on --

the we're you Greg to key year across remains growth intact as going So expect strongly and Core, year alluded now, of continue see demand to to particularly your installation goes should that all solid the just as prior around segments the strong of in question sales. on and with

you that your it growth revenue out we will in how the year note as with progresses. floor And acceleration called for the QX subsequent be to so expect, similar

cadence think So half. nothing a to see from second particular strong to just I call very perspective. out you're a going

Yes. other a X really record And it I else and that everybody point out point, is does think still for think had quarter. Andrew, I we

year. us off the the really So wins, But quarter. we have won X would anyway if in our having and last hurricane was even we're at a core fairly core doing wins, typically have things complementary just you which, quarter of the the or first is we that it normal light typically it pushes to reality happened been with coming tangentially that look is QX products XX-or-so of again, a record from QX a for that

Henry the by makes Maybe to the whether good then wake Jack we've sense. should any just with that perspective? seen this underlying bookings whether in It's you cycle an in impacted there sales be the revenue from is growth Yes, cycle consolidation historically? it. than election, early, just very of what remind but see us obviously, the how And it's balance record different -- the Got could this quarter.

can add So start, again, Mimi I'll on.

I think of things. there's couple a

So think for of change what will President don't seen have baked what the we've before. results is 'XX, that election much we I baked 'XX. we have obviously, Knowing, a one, into

the should timing and a regulatory, expect M&A. of So some of in little what more hopefully, know improvement his we to related bit we playbook

something But then our obviously, for in that we've we've into baked teams our for do additional this are I with and call, conversion If have added, and would gotten banking happening will we several lined already already be the based that added year that from on second last acquisitions clients. additional our up half else institutions for of union that gravy be on teams 'XX and mentioned think us. But the feedback both credit accelerates, we already the and we've already migration the number.

And get those can't knowledge so they going very slots. of to that course, we happen get early are on of deals

through so happens. what that. And see But we'll we're working

and And we today, hopefully, enhance. taken regulatory that. regime approvals, the some would the timing I challenges that see really M&A getting expect that, think we the the that there's down in of hope they've lessening obviously, past then approach on would of slowing and that

And credit asset articulating the sizes in winning and XX% lot more us opportunities. and of to years, growing and last own X continues these institutions, more position growth we've X our we're again, the we're the the which a with more of XX% over the the been union drivers last over bank growth that years

Yes.

never as see thing But again, that guidance I think only for to last deconversion year the is revenue. But don't timing they turnover And spot their this and I really The Greg. it's said, where would are on, deconversion forecast. else not on add the higher you anything to I that's know, in this we bake it for leading renewal the of on imagine institution next for year, depends revenue, administration. to of to cycle. given and the M&A new hard you given year really year the impact essentially would the hard

comes with KBW. from Vasu question Next Govil

Banno for X first guess ask you, to win. about wanted the Greg. retail I I

in look good is last wins we've of back, the new quarters. XX a said slowest the you but one seen think the if number, in I I quarter, several probably which it's

color that? core? know cores going call Just third-party Banno talked to Just around anything like and have you And any there, is into? about anything you I sell that also related then effort how to the out timing identified

Yes. Good question.

So there's the don't wins, of concern nothing I -- -- there. no number on

again NetTeller still will actually of kind is lot time point getting additional Core a timing. We've that to platform, from of Banno think this moving of have customers are some ready I A announce. that been it which we're We're laggard platform to customers sunsetting be the old to a the lot announcing our told help ones move. accelerate deals and we'll over in at tied, wins.

all. quarter, is, last -- with year, QX it reality you last we for comparing is hopefully that sales of no that much concern there year. Banno we what had line us. very win to heavy really the a with to get in fourth Business is XX much But at quarter. And particular were fairly But line the And in

base. to Related the outside the of

to they So outside being as base. Banno that this other of products some really of taking open are. the our we're than say mostly applies it with does some honestly, But we've as the competitors they to challenges had some our

because trying been really that have to this. to way timing to embark upon is to as a the out necessarily honestly, different doing of parallel. a of I you a And costs at working we but through we're approaching so I what path that, want we're and we've to us. to bypass integration of different some it that have get work they a typical the for to points us don't And and want And want to don't way some have and our looked byproduct share it competitors, way, that do it

those platform. integrations difficult to and The that And makes happen, a really it the which more more API need appropriate Banno platform integration to it's applicable lot work. for Banno has some of more

initiatives. base that allow outside So what we're we're do and with able offer that and us outside with doing the through to we're some that process going parallel will in a to what the of Moov the things able do leverage to get of be is doing in that be we're going base, the to to other

to a a and at of end in this that no change of change success hoped the bit the year. probably in level -- fiscal line, productivity of this we time by had So have point just little in

come to we that, to more different a are going and So us. think be it's more approach on taking but for successful I

you, one And Mimi. Great. a quick for

free like quarter? flow XX% guide anything that takes any conversion, you given had any there? puts and the on cash -- Just last Just us to the change

to cash the of the intact everyone just So indicator I feel cash QX particularly a are I remaining to the comfortable the annual, noted months that at and times, XX free annual flow. a because XX% people There the QX, payments maintenance. remind QX with guide there XX of And would timing better is the XX. trailing the related of a were flow to the that couple

called benefited And last million mix I to quarter's QX. as being on a out this higher $XX call, QX QX about paid from in

So if XXX% year QX But that we full within QX. you like really we've about to that everyone I the well think XX% range. XX%, prior seen guide -- is think it are year guidance give in should that closer comfort the

The with Rayna from next comes Oppenheimer. question Kumar

asset So you're bank. one of $XX than win just a seeing unions recently your processing your area? in of I'm called billion competition any competitors for banks and wondering core out increased competitive less credit focus if in

competitive as always them win -- all. else, Rayna and a But of in happened. lot kind we've compete we -- deal, with don't we particular We don't I of particular what said, they mean, all. That sure competed but with and anybody more a that them win I than company space, no. know that from a we No. pressure, standpoint lot win

sure, billion $X bases. renewals the continuing be was successful we are in but significant client of do I to larger said, that for including, XX all we've opportunity the over months the difference won, very price, that last just plus able a to we're a our at is, been in like space, the reality there lot And

Jack that from all been they're XX So staying the we've it's with anywhere Henry. renewing the to XX

point. there's no this concerns So at

year? earnings basis could payment by to showing margin upside That's XX helpful. expansion if Understood. resilience environment other to evidenced economy be to seems be there The Do more your companies. reports very for think target this macro you from this recent persists, fiscal XX point

Yes.

we reflects yes, growth. our the anticipate little say to half is the particularly this robust consumer growing a pretty always card of the in early an have planned first but I We transaction spring, already and stronger. because second closing quarter. area probably volumes, it's economy a point, think that too we're a in spending But just upside for and sentiment at substantial there do us is

with Bank next comes from Kupferberg of The question America. Jason

the just tuned. the on I half priority around and be the guess second of at our to you QX cadence. the start X% growth wanted implementation you year full models about to talked appreciate in second got to midpoint the with on revenue to get and I half outlook to definitely get

you sounds be that's just factors drive maybe to that which you wanted that it are acceleration just It into most going on go that. layer Core, can but lines a the deeper a just lot in? have, going clarify visibility pronounced to to check But in revenue and of is like

Jason. question, Great

quite give drivers me more second year. the some little make on bit a color for the that Let you confident feel the of us of half

I year the was strong. first, Hardware call So quite last would out

comp That second year in half a half. harder first this than

$X the million is about bit of a half year first Hardware eases up that a year. the little the So second impact this drag in half

to I impact. We revenue, is expect in a see to lower see that's [indiscernible] said half. have we growth record starting the comp. I in we're we bit, do new second so pick faster opportunity strong think Card little impact another We a and this sales expect continue. the payment is of and the The cloud growth spring up to just QX

ramp, think Defender revenue accelerating, like things as then implementations, new running adoption to to I and F&B then strategy. digital And the we're overall products consulting continue tied just transaction

the success in So the for year that prior of the all coming all second us implementation gives sales impact on the half. board confidence plus

second. a just And Core talking for about Okay. wins

quarter. you lumpy year never And XX this XX over X typical mentioned code think year, and on is still reasonable converting XX. visibility. it's pipeline ZIP usually how wanted know a target think It's couple a know I check on overall said this ratable. to the you quarter. but you hurricanes, It's because quarters? based to see still to fiscal by XX the the I pipeline We slipped I is few for deals the in I you And the confidence early. next just you of a in of

It tracking again, which than X having more again with for -- tracking we And still us. is. nice the the we're in is $X XX, billion. that. quarter, again typically a year, already first well. lighter did And we're Last we're We're quarter

And not just it's a -- a them $X one $X deal, deal. of billion billion was

pipeline So and even absolutely ever robust on all-time and been. again the track QX. an after as the at high is it's It's as year record QX record and

confident very our feel numbers. ability hit go So normal to in the team's

Sachs. The next Will question Goldman comes from with Nance

Just run there rate, having of guidance, back the anything not exactly caution given a is of prior understand second payments nice half growth comp there's half in implementation of It's following like picture, kind at a another wanting excluding against when rating year. a that confidence the into us the run in is a year, you year they year. in but an But back easier in one stronger like to I comps little few the Maybe guess, about of of sounds -- big the exiting just half would of following bit the maybe there. in to first asking quarters? comp And on rate easier payments, acceleration. the you rate growth for schedule tough that's kind that more just implementation half for most the hear from feel the it and following the if I your good think

recommend to say FY is bit deal question, give a 'XX would Will. appreciate quarter wouldn't as yet. I that. your far a taking And I I any we said, cadence X little and annualizing away

some a But think we'll get growth new grow-over the some that little cloud we faster of a onetime just with adoption, think and feel. I not like sales there get are continuation certainly products, So closer, of kind the a a implementation, payment I as things are

launched of us believing Yes. products to the the I'll continued just Day, to piece of just Will, things we're the much the of the And closer of implementations level get of queues we will getting up year only the to that inch goal there, add is seeing there. that is and the end doing, to success as to have. said, the lot is with X% hoping and at the and the But thing we're have our were Investor Mimi much move that, described going and new as levels a continue through at been some the all we that, to

And even obviously, able the data some in around and of that things in tech modernization, launched to we've that. been all things get broker

much reality we additional guidance. So have and giving to with an we more it sales to But any before happen. go still time take make all all-time feel place we confident you do the is needs things have the in motion, pipeline

Got it.

touched more capital a figured any come priorities allocation environment of I bank that's conducive to M&A, Okay. on bit And what that. We would the I appreciate be environment? on I and might kind I just ask. but you're capital M&A to about little thinking allocation color just and then guess any an mind just M&A? how

our say to future from we're we're growth innovation. a in steadfast would Yes. our I capital invest continuing allocation perspective, through in prioritization

to the start throughout debt continuing position to paying the continue We're And that We a dividend continue share down option. year. debt, policy. the look debt. to cash always down our change long-standing more support flow repurchases an paid positive we'll post We at build as as down to we into

is always interesting process over quarters. several there any last M&A table. been on It's the And hasn't just the

an and attractive, coming the be M&A only to tech more think again, hopefully, conducive, people there'll down not being interesting be journey. prospects. acceleration if interest hopefully, rates So our be map that road But some between financially would to have

Gabriele Dominick comes with question next from Point. The Compass

just it if but on growth, if in you businesses? some call, So the change some and extra the I could bit lower You in a earlier curious touched the any little less color expected guess, there of I give profitable pace was deemphasizing there? was

a it's up question, Yes, to glad I'm I it great in you was Will's question. going even did. And honestly, so bring

are focused it. we So on

that fruition. is to as through things, these several process individual going take of completely it for mentioned meetings this take rationalization Investor is years we've Some and of to product Day

that mentioned There are couple about they I exploring be on already would opportunities a a divestiture, of we're some potential of sunsettings. before. as whether we've we businesses announcing been that talked small products

happen. -- years that get for those typically So we take to X

we're Some of and move margin that there's Banno Crimes We came line. faster take a just customers But that a Yellow little better a and be will allow it the along and we meeting, Financial more priority, and on it. to actually will that out like bit Hammer is focused faster we're still through. things of to our products doing continues priority. scrutiny that advancing time other and and have to things working to strategy that team a But us it

other X The question. but lay would doubtful this that it's doubtful I your you there at quarter. point see It's in big like on color only for chunk a

to we're cash actual these whether -- of whether whether just it be Some tally, different pursue be it more going it sunsetting, at be divestitures. looking

over that timing I of less one time, quarter. drag noticeable big total out. you'll to of they have other we would of But think on it's X So doubt I stack just impact up to Obviously, performance. lines the on the revenue that be improvement that of top a a that each see any call

based the also cost tech some in on and focus -- it's should some shared our us been the control to of it the margin to analyzation, continued services in And and with we've containment modernization level doing expense expansion. of of on what environment back help the going

both the of growth those will help things as So revenue the us well as all margin. drive

happened. were And election being results basically sure. expecting this it to you see better just guess, was margin for Yes, the nice I quarter. than the

go to any your until clients I'm were be? understood tech certain do going think second. for back was that to winner Do you So investments have sense who a that you from this the to they going up holding -- just they

growth about the you how that budget tech investments of in and come discretionary spend you going captured in complementary products, surveys, do went just could And more likely of year talk that start going your in you election through or think do not they're where maybe think making was some like that incremental or once to that less? maybe those there's pursue a they're to the because that twice guys

Honestly, feedback who make collective and at have they what which regardless gotten House. to do the direct is we've because just I this White in such sense positive do so so point, of on don't, all been want

do just have say Now of or an what we know I looking know. I folks based know could be are what and today. M&A purchase at because opportunity recent I we -- I our most products see a of and through bank feedback on happened don't the as But didn't that, necessarily get there would and opportunities an to forum, maybe M&A, that be got that don't I don't particular accelerated at the could -- opportunities environment there that today have. literally had CEO ago month that

And Heckmann next question the from Peter D.A. comes with Davidson.

that And modern Greg, clients? how I decision-making? priority these out how sense connect, with your well for that and much a are process multibillion-dollar thought I see really core? putting that terms it are their And towards much is conference core pretty to vendor platform? some of to has of looking with wanted that on a migrate modular in how a mean you is an underway the is institutions important of how resonating emphasis just or unbundled

Yes.

just -- mentioned, from it's of just products some prospects for the also Yes, not public core that being unbundling cloud. Core, the and non-Core of and the the XX there, and personally we but the the the in I understanding a strategy the of of just not built, period them we've it's taking what of we're I we think into the had of value I cloud XX of time. about so the Core, met public as were with prospects strategy doing, that

So have told us course, and with today. clients those whom level not prospects, of prospects as of same well, that that conversation they're they're seeing but with our our

strongly So But yes, we things that plays that it. the strategy other in also emphasize. it plays

Pay technology been innovative Financial building the that our things in done what that along other our opening culture, be and whether that service, we've in done enterprise through the line. or Center years Crimes we've what we've in account or Our with

strategy, is but the of just Henry. what combination but overall not drive a Jack then overall this, is things, that to Core, gravitating it the So strategy is Pete,

also shared componentry there's well and modernization, so what's And as think as that we where I for enhancing they people on, that tomorrow. add that on might as on the going they're that's tech really the innovation comfort supporting may is core to I If build resonating services the experience So existing today giving the go

is. our we emphasize are for is fintechs reality they the When client -- this, that Yes. them. conferences, our our putting they walk there allow the that to to One pick understand where know Jack they best are last what is into Henry showcase other also is product versus the philosophy. was them going and mouth XXX point, And money open tech they did I

And before, or too, I charged go so they they're do an because they're big a level today. of want base integration, that same to the that as do a outsize getting part, If of with is getting fintech referenced cooperation not typically

much few can little you some too loan a helpful. of whether not That's haven't your and hear there the about Can we terms over -- bit then Okay. thoughts something might about talked side that little talk solutions that's And lending on of you just years? in a the bit origination about more next the you platform.

hear Yes. And I in more you starting in to XXXX. expect

on to And into solution. now OpenAnywhere, that commercial been taken single we've call, what combining we've we've consumer and built we loan has account platform. a So the vantage software, and been working opening -- the added platform be the

So it's Enterprise now Account called Opening.

in have us. so coming But continue kind our of -- so start else working nicely adopter we the will we out to are And our bring of in we'll to anybody through it with will what and up, it with today. market be institutions. it or that customers to call that financial in competes allow XXXX, very And will and to opportunities January what it's early -- we very about the excited some are institution we

strategic priority our the [indiscernible] from top it is And benchmark service.

The next question comes from Chris Kennedy with William Blair.

broker Greg, that us rule the drives how there? just you Can the a open just is you And of times. that? couple CFPB talk data and banking what and mentioned maybe about remind of opportunity

Yes.

start let CFPB with the rule. So me

some only our that where had we the Banno comments provider have So digital to we eliminated eliminated platform. in prior We're the back XXXX, XXX% if scraping. that's screen screen made in of quarters you scraping remember

So was financial are there already we knowing with that leading be have API ahead And the of something. into what to X data going now out of aggregators. we was integrations direct coming XXXX

but heard that others. I there several and full in you've Finicity do API. names like think more we have are the of, to big the or And Yodle X So like X queue

Core. So -- and does this not as impacts is rule -- impact digital It banking providers. a this really reminder, really

XXXX. for we anybody for in are significantly that of -- ahead So today space the

to that third Henry bring digital live testing use repository, early we Related a single their as clients to core is Data a repository in Jack that as have this party our in to adopter. bringing access whoever well. are the are But data that we in have their to that able parties their lending Data as be data, data, our payments so fraud get few data, they well Broker, for data ability the a from their Broker, reality are all single been data, third into giving to that we data, their customers

that the we course, do things all to got need to make and of And we've that guardrails happens. sure that,

stages of the in in. early So of some just bringing we're groups

in today. core there have we So

We'll we'll first in the the quarter have calendar end of the the have We of end of in have digital and XXXX. in payments fraud by there by year, today.

we it there. occur, more of out. get It's we've really more sales going So and expect obviously, been more to the in But data testing you as well.

be help that not we in do XXXX. in will but XXXX, uptick as to drive far As revenue, much probably something expect it

Davis from Raymond question next with the James. And John comes

a half wanted call accelerating, but front comps, margins half lot you else margins will about second back the Mimi, right anything to the revenue implies margin points up on be of touch have XXX only Obviously, close the on talked basis now? somewhere to guide the we easier to in year.

Yes.

is say pronounced call a the replacement. had a out year QX the I not little is both the usage, bit half comp impact. we've headwinds and the bit more would of departures from would first the additionally, QX, but I was So -- has a last We tough software immediate seen

be so a going roughly grow-over a heads bit from 'XX versus from to And of QX a the headcount that XXX are like 'XX. that's QX

the second a half. make those to bit little the think we half, certainly to as I it challenging growth. in So our first things aligns But get revenue

comfortable guide the pretty year of So full XX with the basis to points. I XX feel

for users to out well called safe to that? growing Great. so, Banno business, you XX% meaningful contributor is Banno growth user then, that is Okay. XX% Banno revenue that in Is if And it increase number? Greg, above year-over-year. a And assume

-- as platform. is yes, and can not is has users. some retail The so business growth, a really our there contributor more be and add growth Yes. customers, about Banno it truly But XX% Business is of far been more But it meaningful a that contributor. additional been as the as through numbers, the we implementation driven

to fee to many customer, how -- pay continue that amount they and the Business same price regardless is of they we kind have, add-on the is. piece add, that remember, retail an customers if of retail it's way we as But retail Banno the -- of what they

we've So growth, remember, year than X continue more far actually Banno. just we've growth and the digital over and revenue we to is But get that or things I as revenue the been adoption more think penetration And that consistent digital in kind years on the meaningful. do the more of where been on become last as number side. activities, to we more some that, are doing as will

Morgan comes Stanley. question next the with James And from Faucette

expansion Wanted up and potential those about takes puts just speed additional Greg, queues. you're thinking help those versus how implementation delivering to margin the right now how to really implementations? ask, the are And you allocation broadly the mentioned trending quickly, wondering are between for you and resource

look our thanks James. that what reviews of our during at with discussions them. teams as with we every Yes, part month we literally do variance Yes,

Financial to so do honestly, We've well. last we Crimes that. added in number, Group year, very a that And significant balance Defender people our

take cases, to some financial of especially are because crimes, months implementations that in they needs get is transferred X Some data to in of that the up over. can

people a just isn't it thing. of some So

of it just Some purely waiting. is

delayed a as thing be that Core until a the other implementation, tied done Core they these well. of is gets so lot to The get can

So operating against balance and it -- revenue the but we the need expedite margin. absolutely flow the evaluate to

-- that do every month. So but we literally

both been And it. It it's wondering, a I'm Got Jack since product announced then for seems like Jack Henry as few the Moov. Henry's well potential as customers. with you partnership interesting an months

there market of commercially? and see kind any we that to progress when the update on Just enter may start

Yes.

So of We Day, publicly announced of demo progress. being honestly at the lot Investor for client we reviews them full a and our of rate that made lots did able We've were in see this X,XXX it. since when conference front even to a advancement of people there that. got

track to on as timing, do our of time and as this deliver XXXX, be adopter we're early to far that. May announced, we're to I in to able Banno on As so clients

Research. Autonomous The next question Suchoski comes from with Ken

cloud wanted migration. I to the on back circle

said I of cloud XX% was digits. revenue think low you growing revenue double

side runway have is Can a I private you for us just XX% rates? how any Just as XX%, traction revenue the double-digit segments give well? continue cloud grow at that seeing to cloud there and cloud. these revenue for up sense think cloud Are of shows much clients to yet? the in the where on you on to across get the a sense for growth trying you public the maybe sustainable how is

with of through the component then start private let it. just are now XX% Ken, and I'll so the of right Yes. -- kind the in revenue cloud. migration Mimi But at go we

of And this XX-ish to to out. year just move. years. to several get to be in customers just don't want to -- to We're somewhere and normal be because expect low- to that the have the still an don't we there'll we in so our from And we expecting some XXX%, expect but do mid-XXs

a those last And number. very really similar where had, happening we of the first we're year, that's to to versus in that And thing there'll of ins be numbers. some quarter out is our down of clients. other track. was in so We quarter lot based this on year on are larger And first our

are in well. just we if average, and larger impact or even credit unions, on an they clients typically reminder, more that move as between a about fewer banks as So a increase. bring less are of quarter, X.XX And

where So part that are. of we is

only years of X, away, be some to at about X time, deposit in run we ready as X, far of but more years expect at Core the same I XXXX. pace, the that being As earlier announced

So or will we the folks as from point public out be being to directly from could build see we in moving some a to Core deposit-only cloud cloud both because XXXX components. in-house lift either the or it of at private that Core public time the in of the rest the cloud in

we So more but have some to still come on and larger that, runway they are customers.

our to points Also, still with grow all grow. Yes. potentially I are I our salient The they on think we clients as that there's clients Greg go. hit grow, larger. clients runway the mean,

So had even growth as cloud they ones to environment going with we're accounts, early them. in private they grow get more that revenue expand as to our continue the and are

out future. would So other I from in strong to growth -- for us the just call that's engine only it's be the thing a continuing

revenue non-GAAP X%? get Can said that I you just would grow you X% the remind as second segment of the And blocks, in to Great. Okay. quarter. by to just us guess, building

Yes.

from don't for a on in I But a QX be going changes of QX. momentum QX think can to terms expect little for than like think of in in follow-up I different cards, just bit lot the would still is had we offline that better terms the the see a to we segment. say We of components. I whole,

probably expectation. We Hardware -- QX, still modest as in a less feel quarter drag it's cloud has a QX. well. spend QX But than of still in our but a as slowest drag is

us small off to back X% from some have and you think then and So center taking the that's there and I half. -- So leading processing some in things in that drag solidly like call what's

comes from Baird. question Koning with the next And Dave

things. of A couple

X% out there just and that like anything a card you to all, X% of were growth, networks was call growth. that last And growth. decelerated release press the the there put was quarter stuff Was why processing, pretty First in I in stable bit? know

Yes.

transaction would much and grower on off. in seen line, faster positive than say, it where The we've really I a our the seen business, was prior bill spend, but pay pretty year, a think volume from modest the modest taking of the a we've growth. payment is that's slower I little ramp of from from rest higher side, kind

much in that's think I line. pretty So

[indiscernible].

thing, some ramp And of remains you really about And quarter, than X income high you've kind lot Okay. a -- I would this of in created ramp of a stable of Does up later and -- now. And kind a -- had while last that? X.X the in you ramped high. other a interest was ago, guys QX. years-or-so that in that the then talked last I too, ramp kind but through had we lot say guess later or really what stay year-or-so stay again, a the the And does little it that year? other

terms to was say, the negotiations yield interest just of It counter-parties rates. I have on of with bank some does balances. correlation it timing of Mostly, those with in would getting attractive some more due our

I and in do. would see Fed some rates does So what with for correlation it's of the We'll interest the stable income. I say think QX. back the half see But what they and year you'll interest pretty pace

Vance like would the turn for to session. question-and-answer closing over to This any I back concludes remarks. our Sherard conference

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