Q2 2025 Jack Henry & Associates Inc Earnings Call

February 5, 2025

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Speaker Change: Please note. This event is being recorded I would now like to turn the conference over to Vance Girard, Vice President Investor Relations. Please go ahead.

Speaker Change: Thank you Michael.

Vance Girard: Good morning, and thank you for joining the Jack Henry <unk> second quarter fiscal 2025 earnings call.

Speaker Change: Today, I am joined by President and CEO, Greg Adelson, and CFO and Treasurer Mimi cars Lee.

Speaker Change: Following my opening remarks, Greg will share his insights on the first half of our fiscal year and provide observations on our financial results operational metrics and outlook.

Speaker Change: Jamie will then discuss the financial results in Yesterdays press release, which is available in the Investor Relations section of the Jack Henry website.

He will then discuss the financial results in yesterday's press release, which is available in the Investor Relations section of the Jack Henry website.

Speaker Change: Afterwards, we will open the lines for a Q&A session.

Afterwards, we will open the lines for a Q&A session.

Speaker Change: Please note that this call includes forward looking statements, which involve risks and uncertainties that could cause actual results to differ materially from our expectations.

Please note that this call includes forward looking statements, which involve risks and uncertainties that could cause actual results to differ materially from our expectations.

Speaker Change: Company is not obligated to update or revise these statements for a summary of risk factors and additional information that could cause actual results to differ materially from such forward looking statements refer to yesterday's press release and the risk factors and forward looking statements in our 10-K.

He is not obligated to update or revise these statements for a summary of risk factors and additional information that could cause actual results to differ materially from such forward looking statements refer to yesterday's press release and the risk factors and forward looking statements in our 10-K.

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

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

Greg: Now I will hand, the call over to Greg.

Greg: Thank you Vince good morning, I appreciate each of you joining this morning's call.

Greg: Thank you Ben good morning, and I appreciate each of you joining this morning's call I am pleased to report overall solid financial performance results in the second quarter of our fiscal year 2025, I'd like to begin by thanking our associates for their hard work and commitment to our success by doing whatever it takes and doing the right thing for our clients.

Greg: I'm pleased to report overall solid financial performance results in the second quarter of our fiscal year 2025, I'd like to begin by thanking our associates for their hard work and commitment to our success by doing whatever it takes and doing the right thing for our clients.

Greg: Our focus on our people first culture service excellence technology innovation, and a well defined strategy supported by consistent execution continues to set us apart in the market.

Greg: Our focus on a people first culture service excellence technology innovation, and a well defined strategy supported by consistent execution continues to set us apart in the market.

Greg: I will share three main takeaways from the quarter and then will provide additional detail about our overall business.

Greg: Sure three main takeaways from the quarter, and then will provide additional detail about our overall business.

Greg: First our financial performance, we exceeded our second quarter outlook, we had non-GAAP revenue growth of six 1% in Q2 slightly ahead of the 6% anticipated on the November call.

Greg: Our non-GAAP operating margin of 21, 5% was also slightly better than expected.

Greg: non-GAAP operating margin of 21, 5% was also slightly better than expected.

Greg: We continue to expect results in the second half of our fiscal year that are consistent with full year guidance provided in August.

Greg: Second our sales performance after a record sales attainment in Q1, we continued our positive momentum by setting a sales record in Q2 for the second consecutive year.

Greg: During the quarter, we had 11 competitive core wins and of the 11, three where financial institutions over $1 billion in assets, including $1 $7 5 billion asset. When we also closed 13 deals to move existing clients for in house processing to our private cloud.

Greg: During the quarter, we had 11 competitive core wins and of the 11, three where financial institutions over 1 billion in assets, including 175 billion asset. When we also closed 13 deals to move existing clients, bringing in house processing to our private cloud.

Third and may be as impressive as anything this quarter was our success with client renewals.

Greg: Third and may be as impressive as anything this quarter was our success with client renewals.

Greg: We typically don't spend much time talking about renewals on these calls, but I am making an exception this quarter because of the volume and size of our renewals.

Greg: In Q2, we closed 28 core renewals, bringing on bringing our total for the fiscal year to 46 that is up 21% over the first six months of last year.

Greg: In Q2, we closed 28 core renewals, bringing on bringing our total for the fiscal year and a 46 that is up 21% over the first six months of last year.

Greg: Among those renewals are multiple banks with over $10 billion in assets, including a $17 billion bank that provided a termination notice several years ago, but never D converted to our competitor they.

Greg: Among those renewals are multiple banks with over $10 billion in assets, including a $17 billion bank. They provided a termination notice several years ago, but never D converted to our competitor. They recently determined that the best choice for their go forward technology strategy is Jack Henry and re signed for seven years as <unk>.

Greg: They recently determined that the best choice for their go forward technology strategy is Jack Henry and re signed for seven years as well as move from in house to outsourced processing.

Greg: Well, it's moved from in house to outsourced processing.

Greg: We also re signed our third largest bank and one several mergers of equals that brought us two more banks between 10 and $20 billion in assets.

Greg: We also re signed our third largest bank and one several mergers of equals they brought us two more banks between 10 and $20 billion in assets.

Greg: This success reflects clients' continued confidence in Jack Henry our service quality and our ability to deliver innovation that helps our clients grow and meet the evolving needs of their account holders are core retention rate, excluding M&A remains over 99%.

Greg: Now for more detail on our overall business starting with some recognition for the team.

Greg: We are pleased that for the seventh consecutive year, our scimitar core platform ranked as the largest platform for credit unions and callahan's annual ranking.

Greg: <unk> also remains the most utilized core service platform for credit Union with over $1 billion in assets with nearly 50% of the total market share.

Greg: In addition, we are proud to recently received two prestigious National Workplace Awards.

Greg: In addition, we are proud to recently received two prestigious National Workplace Awards Forbes most trusted companies in America, and Newsweek's greatest workplaces for diversity.

Speaker Change: Orbs, most trusted companies in America, and Newsweek's greatest workplaces for diversity.

Speaker Change: These honors reaffirm our steadfast commitment to doing the right thing for both our employees and our clients.

Greg: These honors reaffirm our steadfast commitment to doing the right thing for both our employees and our clients.

Speaker Change: Now turning to specific products on our technology modernization progress.

Greg: Now turning to specific products on our technology modernization progress.

Speaker Change: And our payment segment, we signed 14, new debit processing clients and two new credit clients in the quarter.

Greg: In our payments segment, we signed 14, new debit processing clients and two new credit clients in the quarter.

Speaker Change: We now have 338 clients on the Zelle platform 357 clients using RTP, representing about 42% of the live RTP clients and 30 and 339 clients using fed now representing approximately 28% of the life fitness pet now.

Greg: We now have 338 clients on the Zelle platform 357 clients using our G P representing about 42% of our lives our G. P clients and 30 and 339 clients using fed now representing approximately 28% of the life fed now, but now apply.

Speaker Change: Jim.

Speaker Change: And our complementary segment, we signed 17, new financial crimes defender contracts in the quarter. In addition, we signed 30 new contracts for the financial crimes defender faster payment fraud module, a real time solution designed to help mitigate fraud and zelle fed now and RTP transactions.

Greg: Yes.

Greg: And our complementary segment, we signed 17, new financial crimes defender contracts in the quarter. In addition, we signed 30 new contracts for the financial crimes defender faster payments fraud module, a real time solution designed to help mitigate fraud and zelle fit now and RTP transactions.

Speaker Change: As of the end of December we have installed 100 for financial crimes defender customers and have another 80 in various stages of implementation.

Greg: As of the end of December we have installed a 100 and for financial crimes defender customers and have another 80 in various stages of implementation.

Speaker Change: Also have 50 for faster payment modules installed in 162 in various stages of implementation.

Greg: Also have 50 for faster payment modules installed in 162 in various stages of implementation.

Speaker Change: Our banner digital platform continues to see very nice growth through competitive wins for the quarter. We signed 18, new clients to the banner retail platform as well as 33, new banner business deals at.

Greg: Our banner digital platform continues to see very nice growth through competitive wins for the quarter, We signed 18, new clients to the banner retail platform as well its 33, new banner business deals.

Speaker Change: At the end of the quarter, we had nearly 1000 banner retail clients, including 212 live with banner business we.

Greg: At the end of the quarter, we had nearly 1000 banner retail clients, including 212 live with banner business we.

Speaker Change: We finished the quarter with $13 2 million registered users on the <unk> platform.

Greg: We finished the quarter with $13 2 million registered users on the bandwidth platform.

Speaker Change: At the end of Q2 last year, we had 11 million registered users a 20% increase over the past 12 months.

Greg: At the end of Q2 last year, we had 11 million registered users a 20% increase over the past 12 months.

Speaker Change: On Monday, we posted a press release and update on our SMB strategy. We've collaborated with visa to provide visa direct through Jack Henry rapid transfers, which is the first phase of our partnership with move.

Greg: On Monday, we posted a press release and update on our SMB strategy, we collaborated with visa to provide visa direct through Jack Henry rapid transfers, which is the first phase of our partnership with move.

Speaker Change: Lisa directly will enable the delivery of funds to eligible cards bank accounts and digital wallets.

Speaker Change: He said direct will enable the delivery of funds to eligible cards bank accounts and digital wallets.

Speaker Change: For example in individuals individuals and Smbs can make real time transfers between linked external accounts to cover same day transaction needs.

Speaker Change: For example in individuals' individuals and Smbs can make real time transfers between linked external accounts to cover same day transaction needs.

Speaker Change: In parallel we are working with Mastercard to facilitate similar transactions using mastercard send part of the Mastercard move platform we.

Speaker Change: In parallel we are working with Mastercard and facilitate similar transactions using mastercard send part of the Mastercard move platform.

Speaker Change: We will begin testing Jack Henry rapid transfers with a small number of clients later this month.

Speaker Change: The rapid transfer service will be closely followed by our unique merchant acquiring solution would move.

Speaker Change: The rapid transfer of service will be closely followed by our unique merchant acquiring solution with mood.

Speaker Change: We are on track to deliver that solution to bandwidth early adopter clients in May 2025.

Speaker Change: We are on track to deliver that solution. The banjo early adopter clients in may in 2025.

Speaker Change: It will be provided exclusively through financial institutions and will include key features for the merchant.

Speaker Change: Decisioning tap to pay for both iOS and Android devices option to receive settlement funds up to eight times per day and continuous account reconciliation to the accounting solution of their choice.

Speaker Change: Instant decisioning tap to pay for both iOS and Android devices option to receive settlement funds up to eight times per day and continuous account reconciliation to the accounting solution of their choice.

Speaker Change: Together with move we will enable banks and credit unions to offer innovative digital payment solutions attracted deepen relationships and grow deposits, which remains a top priority.

Speaker Change: Together with move we will enable banks and credit unions to offer innovative digital payment solutions.

Speaker Change: Track to deepen relationships and grow deposits, which remains a top priority.

Speaker Change: I know we have talked a lot on these calls about our technology monetization strategy and the development of our cloud Native API first Jack Henry platform.

Speaker Change: I know you have talked a lot on these calls about our technology monetization strategy and the development of our cloud Native API first Jack Henry platform.

Speaker Change: It is important to point out that none of the work with modern fintech like move or the integration of services such as visa direct would be possible without the cloud native infrastructure, we have built over the past several years.

Speaker Change: It's important to point out that none of the work with modern fintech like move or the integration of services such as visa direct would be possible without the cloud native infrastructure, we have built over the past several years.

Speaker Change: We continue to execute very well on the Jack Henry platform.

Speaker Change: We continue to execute very well on the Jack Henry platform we.

Speaker Change: We are alive with domestic wires international wires data broker, which serves as our centralized data hub for reporting and analysis and entitlements, which manages permissions and access rights for users and systems.

Speaker Change: We are in beta testing with both exception processing and general Ledger.

We are in beta testing with both exception processing and general Ledger.

Speaker Change: We remain on track to deliver the retail and commercial deposit core functionality of the Jack Henry platform in the first half of calendar year 2026.

Speaker Change: Some of you have some of you may have seen cornerstones annual survey of bank and credit Union executives published in late January According to that study, 73% of banks and 79% of credit unions expect to increase their technology spending in 2025.

Speaker Change: Some of you. Some of you may have seen cornerstones annual survey of bank and credit Union executives published in late January According to that study, 73% of banks and 79% of credit unions expect to increase their technology spending in 2025.

Speaker Change: This correlates with information we've seen from other sources, including in American banker survey fielded last fall in which 83% of the respondents said they plan to increase their technology spending in 2025.

Speaker Change: We are in the midst of conducting the annual Jack Henry strategy Benchmark study with our clients and we'll share those results on our May earnings call.

Speaker Change: We're in the midst of conducting the annual Jack Henry strategy Benchmark study with our clients and we'll share those results on our May earnings call.

In closing we are laser focused on second half performance and remain optimistic about our full fiscal year outlook the demand environment, our sales pipeline and the competitive wins, we are seeing this year provide confidence for the future are.

Speaker Change: In closing we are laser focused on second half performance and remain optimistic about our full fiscal year outlook the demand environment, our sales pipeline and the competitive wins, we have seen this year provide confidence for the future are.

Speaker Change: Our customer and prospect conversations continue to validate that Jack Henry's key differentiation. So are key differentiators of culture service innovation strategy and execution have positioned us well for future success.

Speaker Change: Our customer and prospect conversations continue to validate that Jack Henry is key differentiator. So are key differentiators of culture service innovation strategy and execution have positioned us well for future success.

Speaker Change: With that I'll turn it over to <unk> for more detail on the financials.

Thank you, Greg and good morning, everyone.

unknown: Thank you Greg good morning, everyone.

Speaker Change: Jack Henry teams, Keith can you focus on execution.

Speaker Change: Jack Henry teams can use bogey.

Speaker Change: Our community and regional financial institution client resulted in another quarter of solid revenue and earnings growth.

Speaker Change: Houston, bringing our community and regional financial institution client resulted in another quarter of solid revenue and earnings.

Speaker Change: I will discuss the details behind our second quarter and year to date results, then conclude with commentary on our fiscal 'twenty guidance.

Speaker Change: Q2, GAAP and non-GAAP revenue increased 5% and 6%, respectively, consistent with our expectations and providing the base for exceeding our full year guidance.

Speaker Change: Q2, GAAP and non-GAAP revenue increased 5% and 6% respectively consistent with our expectation.

Speaker Change: They are exceeding our full year guidance.

Speaker Change: Quarterly deconversion revenue of approximately 100000, which we released prior to full earnings was down $5 million compared to the same period last year, reflecting minimum consolidation of our clients.

Speaker Change: Quarterly deconversion revenue of approximately 100000, which we released I heard Chipotle Arnie was down 5 million compared to the same period last year.

Speaker Change: I can minimum consolidation of our client.

Speaker Change: We remain confident in our $16 million full year guidance.

Speaker Change: We remain confident in our 16 million full year guidance.

Speaker Change: Well, we see indicators for increasing industry consolidation. This activity will have minimal impact in fiscal 'twenty by the potential for greater impact in fiscal 'twenty.

Speaker Change: Well he indicators for increasing industry consolidation does that cause you will have minimal impact in fiscal 'twenty five.

Speaker Change: So for greater impact in fiscal 'twenty.

Speaker Change: Now taking a closer look at the detail.

Speaker Change: Now, taking a lot closer to lunch.

Speaker Change: In the quarter and for the year, GAAP and non-GAAP services and support revenue increased four 5% respectively.

Speaker Change: Yeah, the processing and hosting continue to dominate services and support revenue growth for both the quarter and year to date.

Speaker Change: Yeah processing and her team continue to dominate services and support revenue growth for both the quarter and year to date.

Speaker Change: <unk> revenue was down 2 million for the quarter and 7 million year to date, creating headwinds for services and support revenue.

Speaker Change: Where revenue was down 2 million for the quarter and 7 million year to date, creating headwinds for services and support revenue.

Speaker Change: As a reminder.

Speaker Change: Hardware revenue is the non reoccurring and low visibility.

Speaker Change: Hardware revenue.

Speaker Change: Non reoccurring and low visibility.

Speaker Change: Our private and public cloud offerings increased 11% in the quarter and year to date, reflecting strong for assisting breath trend.

Speaker Change: Our private and public cloud offerings increased 11% in the quarter and year to date, reflecting strong persisting Brent trend.

Speaker Change: This reoccurring revenue contributor is 33% of our total revenue.

Speaker Change: This reoccurring revenue contributor at 33% of our total revenue.

Speaker Change: He needs to be a double digit growth and yet.

Speaker Change: Used to be a double digit growth.

Speaker Change: Yes.

Moving to processing revenue, which is 44% of total quarterly revenue and is another significant contributor to our long term growth model.

Speaker Change: We named a processing rate, which is 44% of total quarterly revenue and there's another significant contributor to our long term growth path.

We saw strong performance with 7% growth under the GAAP and non-GAAP basis for the quarter and year to date.

Speaker Change: We saw strong performance with 7% growth on both the GAAP and non-GAAP basis for the quarter and year to date.

Speaker Change: Continuing long term trend quarterly and year to date drivers include increased card digital and payments processing revenue.

Speaker Change: Continuing long term trend quarterly and year to date drivers.

Speaker Change: Increased card digital and payments processing right.

Cleaning complementary commentary on revenue I didn't highlight quarterly total reoccurring revenue.

Speaker Change: Leading complementary commentary on revenue I didn't highlight quarterly total reoccurring revenue, leading deconversion revenue with 92%.

Speaker Change: Deconversion revenue with 92%.

Speaker Change: We focus on key revenue a non-GAAP measure.

Speaker Change: We focus on revenue and non-GAAP measure your revenues comprised of our cloud and processing right.

Speaker Change: Revenues comprised of our cloud and processing ready.

<unk> revenue increased product deliveries or on premise annual maintenance and other revenue.

Speaker Change: No I don't see grabbing even creates product deliveries or all of them.

Speaker Change: On premise annual maintenance and other revenue.

Speaker Change: Quarterly key revenue with 70%, 76% of total revenue and grew at 9%.

Speaker Change: Quarterly revenue was 70%, 76% of total revenue and grew at 9%.

Speaker Change: For year to date fee revenue was 74% of total revenue growing at 9%.

Speaker Change: For year to date revenue was 74% total revenue growing 9%.

Speaker Change: Excluding hardware quarterly <unk> revenue decreased 1% year to date increased 1%.

Speaker Change: Excluding hardware quarterly Nike revenue decreased 1% well year to date increased 1%.

Speaker Change: Next moving to expenses.

Speaker Change: Starting with cost of revenue, which increased 4% and then the GAAP and non-GAAP basis for the quarter.

Speaker Change: Starting with cost of revenue, which increased workers that unlike the GAAP and non-GAAP basis for the quarter.

Speaker Change: The quarterly increase was due to higher direct costs and increased personnel costs.

Speaker Change: Quarterly increase was due to higher direct costs and increased personnel.

Speaker Change: For clarification and to assist with <unk>.

Speaker Change: For clarification injury model the amortization of acquisition related intangibles was 6 million in the quarter.

Speaker Change: The amortization of acquisition related intangibles was $6 million in the quarter.

Speaker Change: Next R&D expense increased 16% on both the GAAP and non-GAAP basis for the quarter.

Net R&D expense increased 16% on both a GAAP and non-GAAP basis for the quarter.

Speaker Change: The quarterly increase was primarily related to personnel costs.

Speaker Change: The increase was primarily related to personnel costs.

Speaker Change: And ending with SG&A expense increased 9% for the quarter on both the GAAP and non-GAAP basis.

Speaker Change: And ending with SG&A expense increased 9% quarter on a GAAP and non-GAAP basis.

Speaker Change: This is also related to increased net personnel costs.

Speaker Change: Is this all related increased net personnel costs.

Speaker Change: We remain focused on generating annually compounding margin expansion the quarter delivered 25 basis points increase in non-GAAP margins, 22% and this offset the year to date to 34 basis point decrease non-GAAP margin to 23%.

Speaker Change: We remain focused on generating annually compounding margin expansion quarter delivered 25 basis points increase in non-GAAP margins, 22%.

Asked us a year to date, two and 34 basis point decrease non-GAAP margins of 23%.

Speaker Change: We remain confident in our ability to deliver margin expansion in line with our full year guidance.

Speaker Change: These two our quarterly operating results produced a fully diluted GAAP earnings per share of $1 34 up 6%.

Speaker Change: He used to always quarterly operating results produced a fully diluted GAAP earnings per share of $1 34.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Reviewing the three operating segments, we're pleased by both positive top and bottom line performance across the board.

Speaker Change: Reviewing the three operating segments, we're pleased by the positive top and bottom line performing across the board.

Speaker Change: Water segment revenue increased 6% for the quarter on a non-GAAP basis against a tough comp.

Speaker Change: Core segment revenue increased 6% for the quarter on a non-GAAP basis against a tough comp.

Speaker Change: Performance, primarily came from organic growth in data processing and hosting partly offset by lower software usage revenue and lower maintenance and see the results of our core customers continuing to shift from on premise to private clouds.

Speaker Change: Performance, primarily came from organic growth in data processing and hosting partly offset that we're somewhere of usage revenue and lower maintenance fee. The results of our core customers continue interest yet.

Speaker Change: On premise private cloud.

Speaker Change: non-GAAP operating margin for the core segment increased 139 basis points from increased operating leverage.

Speaker Change: David segment quarterly revenue increased 6% on a non-GAAP basis.

Speaker Change: Hey, Good segment quarterly revenue increased 6% on a non-GAAP basis.

Speaker Change: Adding private non-GAAP operating margin growth of 177 basis points.

Speaker Change: This segment had impressive non-GAAP operating margins were at 177 basis points.

Speaker Change: Performance was due to continued higher card revenue from volume increased payment processing revenue.

Speaker Change: What makes this J J continued higher card revenue from volume increased payment processing revenue.

Speaker Change: They have now RTP yeah.

Speaker Change: And now I P. P M.

Speaker Change: EPS.

Speaker Change: D E P S.

Speaker Change: Margins in the payments segment also benefited from ongoing improvements to operating leverage.

Speaker Change: Margins in the payments segment also benefited from ongoing improvement operating leverage.

Speaker Change: And finally complementary segment quarterly non-GAAP revenue increased 6%.

Speaker Change: And finally complementary segment quarterly non-GAAP revenue increased 6% from strong product met with hosting and digital driving consistent Brett.

Speaker Change: Strong product met with hosting and digital driving consistent growth there.

Speaker Change: Margin expanded 270 basis points.

Speaker Change: Segment margin expanded 270 basis points.

Speaker Change: Now, let's turn to a review of cash flow and capital allocation.

Speaker Change: Now, let's turn to review of cash flow and capital allocation.

Speaker Change: Second quarter operating cash were 90 million 8 million increase over the prior year period strong cash flow reflects higher profitability increase receivables collection, lower prepaid, partly offset by tax payments.

Speaker Change: Second quarter operating cash were 90 million 8 million increase over the prior year period.

Speaker Change: Cash flow reflects higher profitability increase receivables collection, lower prepaid partly offset by taxing.

Speaker Change: Trailing 12 month free cash flow was $296 million, resulting in a 73% conversion in line with full year guidance range.

Trailing 12 month free cash flow was 296 million, resulting in a 73% conversion in line with full year guidance range.

Speaker Change: Our dedication to value creation resulted in a trailing 12 month return on invested capital of 20%.

Speaker Change: Our dedication to value creation resulted in a trailing 12 month return on invested capital at 21st half.

Speaker Change: And for the quarter, we repurchased $17 million, Jack Henry shares aligned with our intact onset duration from Dot com.

Speaker Change: For the quarter, we repurchased $72 million, Jack Henry shares aligned with our intact onset duration.

Speaker Change: As we move into the back half of fiscal 'twenty five I will conclude with comments on full year guidance metrics.

Speaker Change: Uh huh.

Speaker Change: As we move into the back half of fiscal 'twenty five I will conclude with comments on full year guidance metrics.

Speaker Change: Yesterday's press release, including fiscal 2025 full year GAAP guidance, along with a reconciliation to our non-GAAP guidance metrics all of which we are reiterating.

Speaker Change: Yesterday's press release, including fiscal 2025, well your GAAP guidance, along with a reconciliation to our non-GAAP guidance metrics all of which we are reiterating.

Speaker Change: And while the press release also includes a fiscal 'twenty non-GAAP EPS metrics. This is not intended to be a new guidance metric. The purpose is to provide additional clarity on our numbers and it should be noted that a 24% tax rate with you.

Speaker Change: And while the press release also includes a fiscal 'twenty non-GAAP EPS metric. This is not intended to be a new guidance metric purposes to provide additional clarity on our numbers and it should be noted that the 24% tax rate with you.

Speaker Change: All of the current fiscal year guidance metrics are aligned with our near term targets as the business operations remain healthy and on track.

Speaker Change: All of the current fiscal year guidance metrics are aligned with our near term target is the business operations remain healthy and on track.

Speaker Change: Our outlook for the financial performance remains positive with continued expectations for a strong second half it will be more pronounced than typical.

Speaker Change: Our outlook for the financial performance remains positive.

Can you the expectations for a strong second half it will be more pronounced.

Speaker Change: The appropriate performance and you figure for our business.

Speaker Change: The appropriate performance and do you think of our business.

Speaker Change: Full year financial herself.

Speaker Change: Fiscal year financial herself.

Speaker Change: In conclusion, the positive first half of fiscal 'twenty five is consistent with our expectations and provides the base for full year aligned to our stated long term targets.

Speaker Change: In conclusion, our positive first half of fiscal 'twenty five.

Speaker Change: With our expectation and provides the base for full year aligned to our stated long term target.

Speaker Change: Our focus remains on delivering long term profitability growth at scale through compounding revenue growth and margin expansion.

Speaker Change: Our focus remains on delivering long term profitability growth at scale.

Speaker Change: Compounding revenue growth and margin expansion.

Speaker Change: In pursuing these goals we appreciate the achievements of our more than 7200 dedicated associates.

Speaker Change: In pursuing these goals. We appreciate the achievements of our more than 7200 dedicated associates and our investors for their ongoing cockpit.

Speaker Change: And our investors for their ongoing content.

Speaker Change: Michael Please open the line for questions.

Speaker Change: Michael Please open the line.

Speaker Change: For questions.

Speaker Change: Okay.

Speaker Change:

Speaker Change: Yes.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.

Speaker Change: Yeah.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we'll pause momentarily to assemble our roster.

Speaker Change: To withdraw your question. Please press Star then two at this time, we'll pause momentarily to assemble our roster.

Speaker Change: Okay.

Speaker Change: The first question comes from Reena Kumar with Oppenheimer. Please go ahead.

Speaker Change: The first question comes from <unk> Kumar with Oppenheimer. Please go ahead.

Reena Kumar: Good morning. Thanks for taking my question can you just talk a little bit about what gives you confidence on the back half of revenue acceleration and what the key drivers will be.

Kumar: Good morning. Thanks for taking my question can you just talk a little bit about what gives you confidence on the back half of revenue acceleration and what the key drivers will be.

Reena Kumar: Okay.

Speaker Change: Good morning Rehan.

Speaker Change: Okay.

Rehan: Good morning Rehan.

Reena Kumar: Yes.

Reena Kumar: The competence we have comes from two things one is the confidence we have in the results for the we've just delivered through the first half.

Rehan: The competence we have comes from two things one is the confidence we have in the results for the said we've just delivered through the first half.

Reena Kumar: And then through the metrics and drivers we've previously talked about which are consistent.

Rehan: And then what are the metrics and drivers we've previously talked about which are consistent.

Reena Kumar: And those are the ones, we men change on last quarter's call.

And those are the ones, who men change on last quarter's call.

Reena Kumar: Let me see cloud continuing to ground with the card ramping up in the back half.

Rehan: They see cloud continuing she ground with the card ramping up in the back half.

Reena Kumar: The installation of new product and consulting for things like financial crimes defender and we see digital continuing to be strong.

Rehan: We see the installation of new products and consulting for things like financial crimes defender and we see it at all.

Rehan: It should be strong on top of that we're now past some of the headwinds like the hardware headwinds you saw.

Reena Kumar: On top of that we're now past some of the headwinds like some hardware headwind you saw.

Reena Kumar: And I will mention that how loud growth now we're over in the back half we're gonna grow over a lower comp. So the combination of those factors gives us confidence.

Rehan: And I will mention that how loud right now were over in the back half, we're gonna grow over a lower cost.

Rehan: Combination of those factors gives us confidence. In addition, she has seen the execution on the operational side of our business.

Reena Kumar: In addition, she has seen the execution on the operational side of our business.

Reena Kumar: Yeah.

Reena Kumar: Thanks, that's very helpful and as a follow up are you seeing any increased competition at the low end of the market from a large competitor that's been calling out these wins. Unlike specifically are you seeing any pricing pressure.

Rehan: Yeah.

Speaker Change: Thanks, that's very helpful and as a follow up are you seeing any increased competition at the low end of the market from a large competitor that's been calling out these wins like specifically are you seeing any pricing pressure.

Reena Kumar: Hey, Ryan this is Greg. Thanks for the question. So yeah, I mean, we're not seeing anything different than we had before.

Speaker Change: Hey, Ryan this is Greg Thanks for the question. So yeah. I mean, we're we're not seeing anything different than we had before you know I know that those have been called out we haven't really seen much on our side unless they're taking them from somebody else but.

Reena Kumar: I know that those who have been called out.

Reena Kumar: We haven't really seen much on our side unless theyre, taking them from somebody else but.

Reena Kumar: From our.

From our.

Reena Kumar: The part that we have seen a little bit of a difference as their approach on some of the clients that they are trying to keep.

Speaker Change: The part that we have seen a little bit of a difference as their approach on some of the clients that they're trying to keep less than what we're seeing in the clients that they're trying to win and so I think part of the question would be is are some of the references to clients that they've actually range maintained from a renewal standpoint.

Reena Kumar: And what we're seeing in the clients that they are trying to win.

Reena Kumar: And so I think part of the question would be is are some of the references to clients that they've actually range maintained from a renewal standpoint.

Reena Kumar: We're not so.

Speaker Change: Or not so I you know I.

Reena Kumar: Talk about renewals today, but of course, they're not in the 11 competitive wins that we talked about.

Speaker Change: I talked about renewals today, but of course, they're not in the 11th competitive wins that we talk about I just wanted to reference. The fact that we had a lot of large institutions that renewed with us as well as institutions that were winning and a win of mergers now related to what I would call mergers of equals by the way some of those mergers.

Reena Kumar: I just wanted to reference the fact that we had a lot of large institutions that renewed with us as well as institutions that we're winning in the win of mergers now related to what I would call mergers of equals by the way some of those mergers of equals are coming from that same competitor.

Speaker Change: The vehicles are coming from that same competitor. So it's interesting to see some of the comments, but we're not seeing anything different than what we've seen in years past.

Reena Kumar: So it's interesting to see some of the comments, but we're not seeing anything different than what we've seen in years past.

Reena Kumar: Yes.

Reena Kumar: Very helpful. Appreciate the color.

Very helpful. Appreciate the color.

Reena Kumar: Sure.

Speaker Change: Sure.

Reena Kumar: Yes.

Speaker Change: Yeah.

Reena Kumar: Okay.

Reena Kumar: The next question comes from Kartik Mehta with Northcoast Research. Please go ahead.

Speaker Change: Okay.

Speaker Change: The next question comes from Kartik Mehta with Northcoast Research. Please go ahead.

Kartik Mehta: Hey, good morning, Greg in the past we've talked about when we've talked about market share you usually reference are usually on average 200 deals and maybe a 100 come to market and that Jack Henry usually wins their.

Kartik Mehta: Hey, good morning, Greg in the past, we've talked about well when we've talked about market share you usually reference are usually on average 200 deals and maybe 100 come to market and that Jack Henry usually wins.

Reena Kumar: Their fair share if not more.

Speaker Change: Their fair share if not more.

Speaker Change: Is there a difference in that environment at all in terms of number of deals coming to market and also maybe the number of deals youre winning.

Kartik Mehta: It's a great question Kartik, thanks, but I don't think Theres anything thats changed significantly yet I do believe that some of the numbers could change based on M&A and we are seeing an increase based on our customers and as I mentioned before several of these merchants of mergers that have already occurred.

Kartik Mehta: You know, it's a great question Kartik, thanks, but I don't think there's anything that's changed significantly yet I do believe that some of the numbers could change based on M&A and you know we are seeing an increase based on our customers and as I mentioned before several of these merchants that mergers that have already occurred.

Kartik Mehta: So that may lower the overall number but we are still tracking to our traditional 50 ish with.

Kartik Mehta: They lowered the overall number but we are still tracking to our traditional 50 ish wins, we still feel very confident about that and the good news is also we're continuing to win larger deals for the second quarter in a row I referenced a almost $8 billion a win for us and again.

Kartik Mehta: We still feel very confident about that.

Kartik Mehta: The good news is also we're continuing to win larger deals for the second quarter in a row I referenced a almost $8 billion a win for us.

Kartik Mehta: And again, we have seven over a 1 billion already this year so.

Kartik Mehta: We have seven over 1 billion already this year so.

Kartik Mehta: Tracking very nicely there I just think the only thing that is yet to be determined is some of the decisions that could have been made do they get wrapped up in a in an M&A.

Kartik Mehta: We're tracking very nicely there I just think the only thing that is yet to be determined is some of the decisions that could have been made do they get wrapped up in a in an M&A.

Kartik Mehta: And then just moving over to your partnership with move I know you were very excited about that seems like that's moving in the right direction, especially with the recent visa direct and I'm wondering.

Kartik Mehta: When you would expect.

Kartik Mehta: Revenue from that partnership to have an impact.

Kartik Mehta: Revenue from that partnership to have an impact on Jack Henry growth.

Kartik Mehta: Jack Henry growth.

Kartik Mehta: Yes, I would expect that in fiscal year 'twenty six.

Kartik Mehta: Yeah, I would expect that in fiscal year 'twenty six.

Kartik Mehta: We might see some small.

Kartik Mehta: We might see some small piece.

Kartik Mehta: Pieces of that still in fiscal year 'twenty five depending on.

Kartik Mehta: How how things go but the reality is I would expect anything meaningful that happened in 2020.

Kartik Mehta: Perfect. Thank you very much appreciate it.

Kartik Mehta: Yes. Thank you.

Kartik Mehta: Yes.

Kartik Mehta: Yeah.

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

Speaker Change: The next question comes from John Davis with Raymond James. Please go ahead.

John Davis: Hey, good morning, guys, Greg I wanted to touch on the renewals for a minute you called out the outside number maybe talk a little bit about the pricing dynamic.

John Davis: Hey, good morning, guys, Greg I wanted to touch on the renewals for a minute you called out the outsized number maybe talk a little bit about the pricing dynamic.

Kartik Mehta: Hand, you usually get they get a better price as they grow.

John Davis: Hans you usually get they get a better price as they grow so on the other hand, you have the opportunity to sell them and bundle more product.

Kartik Mehta: With the opportunity to sell them and bundle more product.

Speaker Change: On average maybe talk a little bit about you expect more revenue from those customers going forward or is that peripheral headwind in the back half of this year and then Lynne pointed out.

John Davis: Oh, the average maybe talk a little bit about you expect more revenue from those customers going forward or is that a potential headwind in the back half of this year and then pointed out.

Kartik Mehta: Yes, good question, Jamie Thanks, Tom.

Speaker Change: Yeah. Good question, Jason Thanks, No I don't think there's anything that is we haven't already planned into the forecast that we're giving for the guidance. So we knew exactly who is going to renew and win.

Kartik Mehta: There is anything that is we haven't already planned into the forecast that we're giving for the guidance. So we didn't exactly who is going to renew and win.

Kartik Mehta: But yes to your to answer your question directly there's always some.

Speaker Change: But yes to your to answer your question directly there's always some.

Kartik Mehta: Potential for early.

Speaker Change: Potential for early.

Kartik Mehta: <unk>.

Kartik Mehta: Some level of price compression that happens, but what we typically do is we offset that with additional product sets that we have so some of it is the timing of when those products actually come on do they come on at the exact same time as any level of price compression or do they happen in a year or two later based on.

Speaker Change: Uh huh.

Speaker Change: Some level of price compression that happens, but what we typically do is we offset that with additional product sets that we have so some of its the timing of when those products actually come on you know did they come on at the exact same time as any level of price compression or do they happen in a year or two later based on you know lets just say it is.

Kartik Mehta: I'll just say, it's a card deal and they have a couple more years left on their card.

Speaker Change: Card deal and there are a couple more years left on their card contract and you have to wait for that too was to expire but all of that is factored into what we are planning to do for the back half of the year, but what I wanted to call out really what's the point of yes. There was a significant number but again just showing the strength of what.

Kartik Mehta: Contract and you have to wait for that too to expire, but all of that is factored into what we are planning to do for the back half of the year, but what I wanted to call out really was the point of yes. There was a significant number but again just showing the strength of what we are doing to be able to.

Speaker Change: We are doing to be able to you know.

Kartik Mehta: At a time when a lot of our competition is talking about things that they are doing to win deals.

Speaker Change: At a time when a lot of our competition is talking about things that they are doing to win deals you know they haven't been winning them from us.

Kartik Mehta: Haven't been winning them from us.

Speaker Change: Okay, Great and then.

Jamie just on the shape of.

Speaker Change: I mean, just on the shameful.

Speaker Change: The top half of the viewer, we expecting you need about 300 basis points or so of acceleration one half to half.

Speaker Change: Ballpark when you were we expecting you'll need about 300 basis points or so of acceleration.

Speaker Change: But that more <unk> weighted or any color you can give us there on the on the cadence of a backup.

Speaker Change: The two half, but you know is that more <unk> weighted or any color you can give us there on the on the cadence in the back half.

Jacob: Thanks Jacob.

Speaker Change: Yeah.

Jacob: I wouldn't say at this point.

Speaker Change: Thanks, Jason for the question I would say at this point, we continue to expect an acceleration throughout the year, but we're not going to give specific color on any particular quarter. You know some things whether it be installation dates or other things can swing from quarter to quarter, we feel good about the full year and I would continue.

Jacob: We continue to expect an acceleration throughout the year, but we're not going to give specific color on any particular quarter.

Jacob: Some things whether it be installation dates or other things can swing from quarter to quarter. We feel good about the full year and I would continue to point people in the direction of full year guidance.

Speaker Change: He's quite people in that direction.

Jacob: But let me say acceleration E <unk> should be higher than pretty good.

Speaker Change: Yeah.

Speaker Change: But let me say acceleration E sports you should be higher than pretty good.

Jacob: Correct.

Speaker Change: Correct.

Jacob: Okay. Thanks, guys.

Speaker Change: Thanks, guys.

Speaker Change: The next question comes from Chris Kennedy with William Blair. Please go ahead.

Chris Kennedy: Good morning, Thanks for taking the question can you just talk about the current operating environment for your customers you do have a new head of the FDIC, who has made some comments just broad comments would be great.

Chris Kennedy: Yeah, I mean, I think at this point based on I was just with two clients last week. I mean, everybody is still remains very optimistic I think the biggest thing that we've seen is well.

Speaker Change: Yeah, I mean, I think at this point based on I was just with two clients last week I mean everybody's still remains very optimistic I think the biggest thing that we've seen is you know.

Speaker Change: Will there be any lessening of some level of regulatory scrutiny.

Chris Kennedy: At least for us and in some cases our institutions.

Speaker Change: At least for us and in some cases our institutions.

Chris Kennedy: Folks like the CFPB and others have been involved but there hasnt been anybody that's raised any concern and honestly.

Speaker Change: Folks like the CFPB and others had been involved but there hasnt been anybody that's raised any concern and honestly anybody that I've been with so far this year has been nothing but optimistic about the environment. The demand environment for us remains really strong and their willingness and need to continue to buy the product set.

Chris Kennedy: Anybody that I've been with so far this year has been nothing but optimistic.

Chris Kennedy: The environment the demand environment for us remains really strong and their willingness and need to continue to buy the products that we are focused on to help them increase deposits in their loans and build efficiency all of those things remain top of top of mind.

Speaker Change: We are focused on you know to help them increase deposits in their loans and build efficiency all of those things remain top of top of mind.

Chris Kennedy: Great. Thank you for that and then any update on your efforts to rationalize the number of products that you guys service. Thank you.

Speaker Change: Great. Thank you for that and then any update on your efforts to rationalize the number of products that you guys service. Thank you.

Chris Kennedy: Yeah. Thanks for that Chris Yeah. So absolutely right now we are I would say that we are in <unk>.

Speaker Change: Yeah. Thanks for that Chris Yeah, So absolutely right now where I would say that we are in.

Chris Kennedy: Progress of all three things that I've mentioned, we have things that we are considering.

Speaker Change: Progress of all three things that I've mentioned, we have things that we are considering the best thing we have things that we are looking at sun setting and we have things that we are looking at cash counting so all three of those are in progress right now.

Chris Kennedy: The best thing, we have things that we're looking at sunsetting and we have things that we're looking at cash counting so all three of those are in progress right now.

Chris Kennedy: Yes.

Chris Kennedy: Thank you.

Speaker Change: Thank you.

Speaker Change: The next question comes from Peter Heckmann with D. A Davidson. Please go ahead.

Speaker Change: Hey, good morning, everyone. Maybe just one quick more housekeeping question, but in terms of getting to the $16 million of deconversion fees for the year would you.

Hey, good morning, everyone. Maybe just one quick more housekeeping question, but in terms of getting to the $16 million of deconversion fees for the year would you.

Speaker Change: At this point should we just kind of think about that as a equally.

Speaker Change: At this point should we just kind of think about that as a equally weighted between the third quarter and the fourth quarter or should we expect a bigger step up in the fourth quarter.

Speaker Change: Equally weighted between the third quarter and the fourth quarter or should we expect a bigger step up in the fourth quarter.

Speaker Change: First of all I would just reiterate we are we are affirming the full year 2016.

Speaker Change: And first of all I would just reiterate we are we are affirming the full year 16 and.

Speaker Change: And that May look a little odd given the low number in Q2, but we feel comfortable based on the calendar. We see the slots that are already taken to the line of sight. We have gives us confidence for the 16 I think it's fair to assume kind of even ish waiting.

Speaker Change: Look a little odd given the low number in Q2, but we feel comfortable based on the calendar. We see there's lots that have already taken the lineup. We have gives us confidence for the 16 I think it's fair to say I know that even waiting but you never know kind of some date. He was named between them things that are on the calendar, but I think pretty.

Speaker Change: We're now kind of some date news named between things that are on the calendar, but I think pretty safe to say even across the remaining quarters.

Speaker Change: Dave just a even across the remaining quarters.

Speaker Change: Okay. Thanks, and then Greg can you talk a little bit about them real time payment volume set of Jack Henry.

Speaker Change: Okay. Thanks, and then Greg can you talk a little bit about our real time payment volume set of Jack Henry.

Speaker Change: Done a real good job of bringing advanced institutions live on on the different platforms, but what are you seeing in terms of volumes and then can you tell.

Speaker Change: <unk> done a real good job of bringing your peer institutions live on on the different platforms.

Speaker Change: But what are you seeing in terms of volumes and then you can you tell us where those volumes are coming from are they primarily coming from yep.

Speaker Change: Where those volumes are coming from are they primarily coming from <unk>.

Speaker Change: Same D. C. H are you seeing maybe some migration from card volumes can you just talk about kind of the composition of payments.

Speaker Change: H M. D. C. H are you seeing maybe some migration from card volumes can you just talk about kind of the composition of payments and what's really working in real time.

Speaker Change: What's really working in real time.

Speaker Change: Yeah. Thanks for the question I think the biggest thing is is that we're not seeing anything moving.

Speaker Change: Yeah. Thanks. Thanks for the question I think the biggest thing is is that we're not seeing anything moving at.

Speaker Change: At this point really from card to real time, Theres, some things that we're actually doing with the move partnership that will help facilitate.

Speaker Change: At this point really from card to real time, there's some things that we're actually doing with the move partnership that will help facilitate the replacement of a C H and the ability to move funds to the Smbs and a real time fashion, that's using the eight settlement window. So there are some components of that that will be utilized.

Speaker Change: The replacement of ACTH and the ability to move funds to the Smbs and a real time fashion thats using the eight settlement window. So there are some components of that that will be utilized in our faster payments group, what we call pay center, we've seen very meaningful growth in that group over the last quarter.

Speaker Change: Our faster payments group, what we call pay center, we've seen very meaningful growth in that group over the last quarter a lot of that's attributed to some of the work that we're doing with a few of our banks on some sand transactions that were now.

Speaker Change: A lot of that's attributed to some of the work that we're doing with a few of our banks on some send transactions that we're now utilizing so we did a pretty large number of sent transactions in the quarter.

Speaker Change: Utilizing so we did a pretty large number of send transactions in the quarter, which provide a little bit more meaningful revenue growth for us you.

Speaker Change: Provide a little bit more meaningful revenue growth for us.

Speaker Change: The use cases still are really the key and.

Speaker Change: The use cases still are really the key and in the amount of fraud, but people are still concerned about so that's why we're excited to get our faster payments fraud module out from financial crimes, because we're already seeing the customers that are installing that are having less fraud on a faster pace.

Speaker Change: The amount of fraud that people are still concerned about so that's why we're excited to get our faster payments fraud module out from financial crimes, because we're already seeing the customers that are installing that are having less broad on the faster payment networks. So I think that will continue to evolve.

Speaker Change: And the networks, so I think that will continue to evolve.

Speaker Change: Candidly I really don't think there is anything in the near term that you'll see that that's truly taken away from card volume that's anything thats meaningful it's going to be really more about some of the edge use cases that we can use.

Speaker Change: But candidly I really don't think there is anything in the near term that you'll see that that's truly taken away from card volume. That's anything that's meaningful it's going to be really more about some of the edge use cases that we can use both oh with.

Speaker Change: <unk> both with the.

Speaker Change: The small businesses and with some retail consumers as well and if I may add on to that.

Speaker Change: Small businesses and with some retail consumers as well.

Speaker Change: If I may add onto that Greg just.

Speaker Change: Just in terms of I mean.

I like that in the release yesterday under processing in one of the drivers we did call out in kind of the first time nowadays.

Speaker Change: Let me highlight that in our release yesterday under processing in one of the drivers we did call out the first time.

Speaker Change: That processing, the payment processing area, which falls into arrangements for the just for clarity was one of the drivers of that strong processing being up staffing for that.

Speaker Change: That processing, the payment processing area, which falls into arrangements for the.

Speaker Change: Yeah, well, it's one of the drivers of that strong processing being up staffing for that Oh that is Hey center are related to some of these use cases, we're starting to really not.

Speaker Change: That is paid center are related to some of these use cases, we're starting to really volume related.

Related to faster payment and Pete we're really focused with what's driving a lot of these use cases, we work very regularly with the fed and the clearinghouse.

Speaker Change: Related to faster.

Speaker Change: Yeah, Pete where we're really focused with what's driving a lot of these use cases, we work very regularly with the fed and the clearinghouse and have conversations about things that we could be out in the forefront and doing.

Speaker Change: And have conversations about things that we could be in the forefront and doing.

Speaker Change: Okay. That's helpful. Thanks.

Speaker Change: Thank you.

Speaker Change: The next question comes from Jason Kupferberg.

Speaker Change: With Bank of America. Please go ahead.

Jason Kupferberg: Good morning, guys could speak with you again I wanted to ask about free cash flow conversion just visibility on the full year target.

Jason Kupferberg: Maybe any thoughts on how the back half may trend there and then just the visibility on it. Thanks.

Jason Kupferberg: I mean me any thoughts on how the back half may trend there and then just the visibility on it. Thanks.

Jason Kupferberg: Yeah. Thanks for the question, Jason it's been nice to have two solid quarters of free cash flow returning to more of a normalized type of range. We think there's further to go in the out years, but for this year. We are in line with guidance full year guidance. So I think that's back half, we'll continue to see some stress.

Jason Kupferberg: Yeah. Thanks for the question James and it's been nice to have two solid quarters of free cash returning to more of a normalized type of range. We think there's further to go in the out years, but here. We are in line with guidance full year guidance. So I think the back half will continue to see them.

Jason Kupferberg: And the range that we've kind of been operating thus far this year.

Jason Kupferberg: Some strength.

Jason Kupferberg: That we've got the operating that garden this year.

Jason Kupferberg: Pretty confident in our ability to hit the range for free cash flow conversion, which we said was 65% to 75%.

Jason Kupferberg: We're pretty confident in our ability to hit the range for free cash flow conversion, which means that the 65% to 75%.

Jason Kupferberg: Okay understood and then I wanted to ask about.

Jason Kupferberg: Okay understood and then I wanted to ask about the the trend of our private cloud within core I think you guys talked about you know a bunch of F is moving from in house to private cloud curious to get an update on where do we stand now how many core clients are on a private cloud and and you know do you see that trend accelerating.

Speaker Change: The trend of private cloud within core I think you guys talked about a bunch of <unk> moving from in house to private cloud curious to get an update on where do we stand now how many core clients are on private cloud and do you see that trend accelerating through the back half of this year and just anything we should.

Jason Kupferberg: You go through the back half of this year and just anything we should be thinking about in terms of whether or not that impacts the margin profile of your business at all.

Speaker Change: Are we thinking about in terms of whether or not that impacts the margin profile of your business at all.

Speaker Change: Yes. Thanks, Jason This is Greg I'll take that one so we're at 75% right now in the private cloud number so.

Jason Kupferberg: Yeah. Thanks, Jason This is Greg I'll take that one so yeah, we're at 75% right now in the private cloud number.

Speaker Change: So we continue to grow we are on pace to hit the targets that we thought we'd hit we've been averaging between $40 and 45 a year. We're on pace to do that this year and expect to do that.

Jason Kupferberg: So we continue to grow we are on pace to hit the targets that we thought we did you know we've been averaging between 40 and 45 a year. We're on pace to do that this year and expect to do that so no no changes in this fiscal year at all and we continue to drive towards what we've talked about them in other settings, where when you look.

Speaker Change: So no no changes in this fiscal year at all and we continue to drive towards what we've talked about and in other settings, where.

Speaker Change: When you look at the folks that you know at the very end, we may not get 100% right can we get about 90% 95% of folks that ended up moving theres going to be some holdouts to wait to move directly to the public cloud and.

Jason Kupferberg: At the folks that you know at the very end, we may not get 100% right. You know it can we get about 90% 95% of folks that ended up moving there's going be some holdouts to wait to move directly to the public cloud.

Speaker Change: And as I mentioned earlier, we're on pace to deliver a R. R.

Jason Kupferberg: And as I mentioned earlier, you know we're on pace to deliver our our retail deposits are commercial and consumer core in the first half of 2026. So we will start to see some movement. There are folks that want to want to just wait so but we've got several more years as we've said.

Speaker Change: Our retail deposits are commercial and consumer core in the first half of 2026. So we will start to see some movement. There are folks that want to want to just wait so but we've got several more years as we've said.

Speaker Change: Room to go do what we need to do in fact, I was with a very large customer this week, who said they plan to move in 2026.

Jason Kupferberg: A room to go do what we need to do in fact, I was with a very large customer. This week, who said they plan to move in 2026 and they've been a long term hold out of ours to move to private cloud. So we're still we're still moving moving them at the pace that we have done and what we said previously and some of the catalysts to this decision.

Speaker Change: Been a long term hold out of ours to move to private cloud. So we're still we're still moving moving them at the pace that we have been and what we've said previously and some of the catalyst.

Speaker Change: <unk> tends to be internal to the eye.

Jason Kupferberg: It tends to be internal to the eye is that around their ability to recruit talent.

Speaker Change: Is that around their ability to recruit talent.

Speaker Change: They need it for their hardware refreshes, so there's kind of an individual choice.

Jason Kupferberg: They need it for their hardware refreshes that was kind of an individual.

Speaker Change: Choice and kind of bring them up on that line. If you will but it's a multiyear trend that we've seen continue at a nice healthy pace.

Jason Kupferberg: Choice that kind of brings them up on that line if you will.

Jason Kupferberg: The multiyear trend that we've seen continue at a nice healthy pace.

Speaker Change: Excellent. Thank you guys.

Speaker Change: Thank you.

Jason Kupferberg: Thank you.

Speaker Change: Yes.

Speaker Change: The next question comes from James Faucette with Morgan Stanley. Please go ahead.

Jason Kupferberg: The next question comes from James Faucette with Morgan Stanley.

Hanley: Hanley. Please go ahead.

James Faucette: Good morning, Thanks, guys I wanted to follow up on the cloud discussion.

Speaker Change: Good morning, Thanks, guys I wanted to follow up on the cloud discussion.

Speaker Change: Greg I guess, maybe just a question for you, but some of the investor concern that we've heard regarding technology modernization.

Speaker Change: Greg I guess, maybe just a question for you, but some of the investor concern that we've heard regarding technology modernization, especially as we take the next step to public cloud is that you know maybe you're.

James Faucette: As we take the next step to public cloud is that you know.

James Faucette: Maybe your.

James Faucette: Development initiatives with the origin strategy are ahead of where regulators are likely to be in the next few years or at least that's been the thought with the change in administration do you think that.

Speaker Change: Our development initiatives with the origin strategy. We're ahead of where regulators are likely to likely to be in the next few years or at least that's been the thought with the change in administration do you think that.

James Faucette: Within the timeframe regulators will be more comfortable with broad based financial <unk> in a cloud such that the investments in your such that the investments you're making your origin platform better aligns up with likely regulatory timeframe. So just wondering if you think that we could bring those forward in.

Speaker Change: Within the timeframe regulators will be more comfortable with broad based financial P. I N a cloud such that the investments in your such that the investments, you're making or origin platform.

Speaker Change: The winds up with likely regulatory timeframe. So just wondering if do you think that we can bring those forward in and see that move to public cloud start to accelerate.

Speaker Change: See that move to public cloud start to accelerate.

James Faucette: Yes, Hey, James good to hear from you.

Speaker Change: Yeah.

Yeah, Hey, James Good to hear from you I I think the short answer is I don't believe there's way more.

Speaker Change: I think the short answer is I wouldn't believe it's way more.

James Faucette: Of a possibility then it would've been two months ago.

Speaker Change: Of a possibility then it would've been two months ago, and so you know I don't know what I don't know, but I would say based on our conversations with regulators, which I think we've said on this call and in other meetings that we literally meet with the FDA on a monthly basis here just because of the number of products. So we have a chance to have.

James Faucette: And so I don't know what I don't know, but I would say based on our conversations with regulators.

James Faucette: I think we've said on this call and other meetings that we literally meet with the FDA on a monthly basis here just because of the number of products. So we have a chance to have a lot of conversations on what we're doing with not only the public cloud core but also what we've done with other public cloud products and so we've been able to edge.

Speaker Change: A lot of conversations on what we're doing with not only the public cloud core but also what we've done with other public cloud.

Speaker Change: And so you know we've been able to educate them just as a reminder, banjo was the very first digital platform to be public cloud native so we've been educating them for six years on what we've done around here. So I think we have as good a chance as anybody to get them comfortable with just because we have so much experience doing.

James Faucette: Okay, then just as a reminder.

James Faucette: Tinder banjo was the very first digital platform to be public cloud native so we've been educating them for six years on what we've done around here. So I think we have as good a chance as anybody to get them comfortable with just because we have so much experience doing it but.

James Faucette: But the rest of it I can't answer definitively other than I think youre right that we're going to Trump in office and other changes that are being made I think we have a better chance of making that happen.

Speaker Change: But you know the rest of it I can't answer definitively other than I think you're right that we're going to win with the Trump in office and and other changes that are being made I think we have a better chance of making that happen.

Speaker Change: Great and then wanted to touch on banner or just get a sense from you given your strategic and how the strategy may be evolving how we should be thinking about the mix between retail and panel business and how that's likely to evolve over the next few years. Thanks.

Speaker Change: Right and then wanted to touch on piano, there just get a sense from you.

Speaker Change: Given your strategic Kevin and you know how the strategy may be evolving how we should be thinking about the mix between banner retail and panel business and how that's likely to evolve over the next few years. Thanks.

James Faucette: Okay, Yeah, I think you know obviously.

Speaker Change: Okay. Yeah, I think you know obviously right now we're about 20% penetrated are as I mentioned earlier, we have roughly a thousand banner retail clients and 212 banjo business clients.

James Faucette: Right now we're about 20% penetrated as I mentioned earlier, we have roughly 1000 banner retail clients and 212 banner business clients.

James Faucette: And we continue to see just based on the on the install queue, which was about 115 and install key right now.

Speaker Change: And we continue to see just based on the on the install queue, which was about 115 in the installed to you right now.

Speaker Change: Mentioned I think it was Dave's last call.

Speaker Change: Mentioned I think it was Dave's last call you know he and I've talked about this in kind of joke I still think there'll be 65% to 70% penetration potentially you know higher but that's kind of what we think there'll be from banner business into the retail platform, but one thing that could really drive those numbers up is is what we're dealing with.

Speaker Change: <unk> talked about this in kind of joke I still think there'll be 65% to 70% penetration potentially higher but that's kind of what we think there'll be from van business into the retail platform, but one thing that could really drive those numbers up is is what we're doing with <unk>.

Speaker Change: Move and the SMB because of how we're rolling that out.

Speaker Change: And we're kind of pushing that offering out to all of our <unk> clients at one time. So if they have they don't have to have banner business to actually have this application, which is something to note.

Speaker Change: And we're kind of pushing that offering out to all of our abanto clients at one time. So they have they don't have to have banner business to actually have this application, which is something to note, but as we continue to build out feature parity and don't nobody brought that up yet I'm going to go ahead and bring it up because it was something I talked about at the <unk>.

Speaker Change: As we continue to build out feature parity and nobody brought that up yet I'm going to go ahead and bring it up because it was something I talked about at the Investor day.

Speaker Change: Yesterday.

Speaker Change: We are on track to do what I said, we were going to do back in September to have feature parity with with our largest digital competitors by this summer.

Speaker Change: We are on track to do what I said, we were going to do back in September to have feature parity with with our largest digital competitors by this summer and we're actually ahead already on some things that I've seen, especially especially as it goes to open banking fintech integration native apps.

Speaker Change: And we're actually ahead already on some things that I've seen, especially especially as it goes to open banking Fintech integration.

Speaker Change: Native apps are back office applications and of course now what we're doing in the SMB space. So all of those are going to continue to be a huge drivers for us with banjo and applications like the animal business.

Speaker Change: Our back office applications and of course now what we're doing in the SMB space. So all of those are going to continue to be a huge drivers for us with with banjo and applications like dental business.

Speaker Change: That's great. Thanks, guys.

Speaker Change: Yeah.

Speaker Change: That's great. Thanks, guys.

Speaker Change: Yeah. Thanks James.

Speaker Change: Yep Thanks, Jamie.

Speaker Change: Yes.

Speaker Change: The next question comes from Dominic Gabriel with Compass point. Please go ahead.

Dominic Gabriel: Hey, good morning, everybody. Thanks for taking the questions.

Dominic Gabriel: Just first what are some of the underlying factors at your partners that could accelerate the demand for your products and is there a shift in where your clients are putting incremental dollars to work on expanding their solution. So that you can provide.

Speaker Change: Just first what.

What are some of the underlying factors at your partners that could accelerate the demand for your products and is there a shift in where your clients are putting incremental dollars to work on expanding their solution set that you can provide.

Dominic Gabriel: Okay.

Dominic Gabriel: Sure.

Speaker Change: Because I sort of follow up.

Speaker Change: So Dominic just to make sure I'm clear on the question. When you said partners do you mean third party partners.

Chris Kennedy: So Dominic just to make sure I'm clear on the question. When you said partners do you mean third party partners.

Speaker Change: I'm, sorry, the banks and credit unions. So so what does that accelerate the demand for your products among the banks and credit unions.

Chris Kennedy: I'm, sorry, the banks and credit unions, so what dollar rate the demand for your products among the banks and credit unions.

Speaker Change: Yeah, I mean, I think the demand is there I mean some of it is as you can imagine some of its resources to implement on their side, because there's a lot of reeducation and theres.

Yeah, I mean, I think the demand is there I mean some of it is as you can imagine some of its resources to implement on their side because there's a lot of reeducation and you know, there's there's timing of things theres contract timing of actually like I said I've mentioned two customers I was with last week one of them doesn't.

Speaker Change: Theres timing of things Theres contract timing.

Speaker Change: Actually like I said I've mentioned two customers I was with last week one of them doesn't have.

Chris Kennedy: Have our digital product and we had a really long conversation about that and I think theyre more interested than they've ever been but it's a timing thing right because they're already in a contract and they've got to get out of it but some of it is our ability to show the level of innovation and the level of execution and some of it is just timing on contracts.

Speaker Change: Our digital product and we had a really long conversation about that and I think theyre more interested than they've ever been but it's a timing thing right because they're already in a contract and they've got to get out of it but some of it is our ability to show.

Speaker Change: The level of innovation and the level of execution and some of it is just timing on contracts and resources on their end and things like that but there isn't anything inhibiting us from being successful.

Chris Kennedy: And resources on their end and things like that but there isn't anything inhibiting us from being successful you know other than Tom and so but the things we are doing in the messaging that we are getting from our clients and consultants are candidly continues to be very very positive. So.

Speaker Change: You know other than time, and so but the things we are doing in the messaging that we're getting from our clients and consultants are candidly.

Speaker Change: Continues to be very very positive. So we're just putting the pedal to the metal continuing to work on our level of execution and continuing to have that as a big differentiator.

Chris Kennedy: We're just putting the pedal to the metal are continuing to work on our level of execution and continuing to have that as a big differentiator.

Speaker Change: And I agree that there is opportunity for additional kind of demand we've seen stabilization over the last three years from our survey results. That's what are the priorities.

I agree there's opportunity for additional kind of demand we've seen stabilization over the last three years from our survey of yourself what are the priorities.

Speaker Change: And that continues to be getting deposit loan that they shouldn't be so all of our solutions certainly meet the sweet spot of those needs but.

Chris Kennedy: And that continues to be you know getting deposit loan that they shouldn't be so all of our solutions certainly meet the sweet spot of those needs but.

Speaker Change: You know as they learn more about the administration, where their focus is could we see even a an increased need for digital Entertainment Center. If the administration continues to kind of question that interaction.

Chris Kennedy: You know as they learn more about the administration, whether that's P. E. Then an increased need for digital Entertainment Center. If the administration continues to kind of push in this direction.

Speaker Change: Yeah, Perfect and then just lastly, just talk about the pace of innovation in this space.

Chris Kennedy: Yeah, Perfect and then just lastly, just talk about the pace of innovation in this space are you and your peers.

Speaker Change: And your peers.

Speaker Change: And then what products are you seeing the most investment dollars to stay ahead of competition that Jack Henry Thanks, So much.

Speaker Change: And what products are seeing but most investment dollars to stay ahead of competition that Oh, Jack Henry Thanks, So much.

Speaker Change: Yes. Thank you for the question I can't really speak for the competition. So I mean, just they'll have to speak to whatever innovation that they're focused on.

Speaker Change: Yeah. Thank you for the question I can't really speak for the competition. So you know I mean, you know just they'll have to speak to whatever innovation that they're focused on you know what we've continued to see is that the things that we have spent our time and money on and we talked earlier about the public cloud and the work that we're doing with.

Speaker Change: What we continue to see is that the things that we have spent our time and money on and we talked earlier about the public cloud and the work that we're doing with that but the real part that we've seen big Differentiators in a level of innovation is in our digital platform is in our account.

Speaker Change: With that but the real part that we've seen big Differentiators in the level of innovation is in our digital platform is in our.

Account opening platform in our patient or our payments.

Speaker Change: Account opening platform in our pay center our payments.

Our faster payments module, what we're doing in lending and our loan manage solution.

Speaker Change: Our faster payments module, what we're doing and lending and our loan vantage our solution in a you know one other note of that we are actually launching the first phase of our enterprise account origination solution. This month something that we'd been working on for the last two and a half years. So you know that's where a lot of us.

Speaker Change: One other note of that we are actually launching the first phase of our enterprise account origination solution. This month something that we've been working on for the last two and a half year or so.

Speaker Change: That's where a lot of this innovation is happening fraud, obviously in financial crime.

Speaker Change: Innovation is happening fraud, obviously in financial crimes, but when you think about you know digital lending fraud payments that really are the big drivers are things that everybody is looking to do and usually it starts with payments because payments.

Speaker Change: When you think about you know digital lending fraud payments that really are the big drivers are things that everybody is looking to do and usually it starts with payments because payments.

Speaker Change: We've actually been educating our customers a lot on payment strategy and allowing them to see what payments can really do for <unk>.

Speaker Change: And we've actually been educating our customers a lot of them on payment strategy and allowing them to see what payments can really do for for them, especially noninterest fee income type opportunity. So.

Speaker Change: For them, especially noninterest fee income type opportunity itself.

Speaker Change: That's really where the focus has been for Jack Henry and will continue to be driving things through those solutions much like the move.

Speaker Change: That's really where the focus has been for Jack Henry and will continue to be driving things through those solutions much like the move applications and Greg If I may add on you know what are the areas I think around it.

Speaker Change: Implication will and Greg if I may add on you know what are the areas I think around it.

Nation and differentiation protect Henry not something one would traditionally think about around innovation, but the continued work around the one Jack Henry.

Speaker Change: Innovation and differentiation for Jack Henry not something one would traditionally think about around innovation, but the continued work around one Jack Henry I think CRM is driving a better experience for our eyes and our partners just to see seamless net.

Speaker Change: CRM is driving a better experience for RFID in our partners just to see Seamlessness.

Speaker Change: And the efficiency that we're getting out of an organization that will enhance our service quality is.

Speaker Change: You can see that we're getting out of an organization that will enhance our service quality is a real differentiation from that experience relative to our competitors and we're seeing even more and more of the focus on that as one of the key determinant.

Speaker Change: Is it a real differentiation from that experience relative to our competitors and we're seeing even more and more of the focus on that as one of the key determinant.

Speaker Change: Other vendor selection yeah, that's a great point, we had a recent meeting with both the ICB Anda and they both commented that service is being much more valued than in years past.

Speaker Change: The vendor selection yeah, that's a great point, we had a recent meeting with both the ICB a M. B a b a and they both commented that service is being much more valued than in years past.

Because there is a little bit more of a level playing field. They view, an API and things like that so it's a really good point and our one Jack Henry initiative has really changed the dynamic of that I would also throw in AI just while we're on the subject and the things that we're doing internally with AI and in some of our products.

Speaker Change: Because there's a little bit more of a level playing field they view and a P is and things like that so it's a really good point and one Jack Henry initiative has really changed the dynamic of that I would also throw in AI just while we're on the subject and the things that we're doing internally with AI and in some of our crops.

Speaker Change: Thank you both.

Speaker Change: The next question comes from Andrew Schmidt with Citi. Please go ahead.

Moderator: The next question comes from Andrew Schmidt with Citi. Please go ahead.

Andrew Schmidt: Hi, Greg Hi, Amy Good morning, Thank you for taking my questions.

Andrew Schmidt: Hi, Greg Hi, Amy Good morning, Thanks for taking my questions.

Andrew Schmidt: I wanted to just dig in to M&A for a second I guess first.

Andrew Schmidt: I wanted to just dig in to M&A for a second I guess first I mean.

Andrew Schmidt: And end market M&A I guess first is there any convert merge revenue in the back half outlook.

Andrew Schmidt: And then I think when we think about just ongoing revenues.

Andrew Schmidt: And then I think you know when we think about just ongoing revenues.

Andrew Schmidt: Maybe you could talk about what you're seeing just from your customer base, how convert merge balances deconversion that theres a lot of questions around.

Andrew Schmidt: Maybe you could talk about what you're seeing just from your customer base, how convert merge balances deconversion that theres a lot of questions around you know the burner.

Andrew Schmidt: The bench.

Andrew Schmidt: Benefits.

Andrew Schmidt: <unk>.

Andrew Schmidt: OS and cons of.

Andrew Schmidt: In market consolidation, if you could speak to those things that would be helpful. Thanks, So much.

Andrew Schmidt: In market consolidation, if he can speak to those things that would be helpful. Thanks, So much.

Andrew Schmidt: Sure Good morning, Andrew.

Speaker Change: Sure Good morning, Andrew.

Andrew Schmidt: We do have a modest amount a convert merge them you've seen a little bit of a tumor merge and consulting this ear and helping some of our clients are riding around their strategy and prepare for what we believe will be an increased pace of consolidation within our industry I think more you'll see the impact in FY 'twenty.

We do have a modest amount a convert merch you've seen a little bit of a tumor merch and consulting this ear and helping some of our clients riding around their strategy and prepare for what we believe will be an increased pace of consolidation within our industry I think more you'll see the impact in FY 'twenty.

Andrew Schmidt: In FY 'twenty five.

Speaker Change: In FY 'twenty five I'm, just based on the timing of our fiscal year.

Andrew Schmidt: Based on the timing or boxes, a year and when we think things will really start to get ramp it'll be interesting to see over the next quarter.

Speaker Change: And when we think things will really start to get ramp it'll be interesting to see over the next quarter that piece of it.

Andrew Schmidt: The pace.

Andrew Schmidt: Proof approval from.

Speaker Change: Proof approvals.

Andrew Schmidt: From the administration and the regulatory bodies, and I think that would be more of a telling sign.

Speaker Change: From the administration and the regulatory bodies and I think that would be more of a Italian sign them up that needs to come yeah, and I again, I referenced meeting with some customers, but one of the customers I met with was a win a merger that we had that is now a $20 billion institution with after the merge.

Andrew Schmidt: That needs to come in.

Andrew Schmidt: Again, I referenced meeting with some customers, but one of the customers I met with was a win a merger that we had that is now a $20 billion institution with after the merger and they they told me point blank that they plan to do three more acquisitions in the next two years and so those are opportunities that as we.

Speaker Change: And they they told me point blank that they plan to do three more acquisitions in the next two years and so you know those are opportunities that you know as we win the win a merger you know we're in the catbird seat obviously to continue to add on to that so we we we think they'll continue to be a fairly significant amount of.

Andrew Schmidt: When the win a merger we're in the catbird seat obviously to continue to add on to that so we think they'll continue to be a fairly significant amount of M&A in the banking and credit Union space for the next couple of years and again as we always do we're gearing up for that and have conversations with.

Speaker Change: M&A in the in the banking and credit Union space. After the next couple of years and again as we always do we're gearing up for that and have conversations with our customers and we actually get a lot of notifications before those happen not necessarily who the institution is they're requiring but the kind of the profile of that institution.

Andrew Schmidt: Our customers and we actually get a lot of notifications before those happen not necessarily who the institution as their acquiring but the kind of the profile of that institution.

Andrew Schmidt: Yeah.

Speaker Change: Got it Super helpful. Thank you for that and then.

Speaker Change: Got it Super helpful. Thank you for that and then maybe we could go back to your just your wins the move up market and I know we've talked about this in the past, but if you could talk about just the conversations with there was a large large banks and credit unions that you're winning yeah, what what's driving those wins have the converse.

Speaker Change: Maybe you could go back to your just your wins the move up market and I know we've talked about this in the past, but if you talk about just the conversations with those large large banks and credit unions that youre winning.

Speaker Change: What's driving those wins have the conversations evolved from our more recently I know, obviously business banking and Treasury is when you move up market is a bigger component, but but.

Speaker Change: Patients are all somewhat more recently I know, obviously business banking and Treasury is when you move up market is bigger component, but but other are there larger factors in terms of what's driving this conversations thanks a lot.

Speaker Change: Are there larger factor in terms of what's driving this conversations thanks a lot.

Speaker Change: Yeah. Thank you I think you're right on on the product mix, but it really is back to what we've been talking about.

Speaker Change: You know when I keep saying it but I want to make sure that you understand that there is a level of of the fact that we are winning these deals based on culture service.

Speaker Change: You know and I keep saying it but I want to make sure that you understand that there is a level of of the fact that we are winning these deals based on culture service.

Speaker Change: Innovation.

Speaker Change: Strategy and execution those five factors then it.

Speaker Change: Strategy and execution those five factors there.

Speaker Change: It just isn't happening in the industry right now and so people when they see what we're building and what we've been able to show from a level of execution with a roadmap execution, which is close to 90% now on a roadmap execution. There just isn't anybody in the industry, that's doing what they say, they're going to do and then so.

Speaker Change: It just isn't happening in the industry right now and and so people when they see what we're building and what we've been able to show from a level of execution with a roadmap execution, which is close to 19% now I'm on a roadmap execution. There just isn't anybody in the industry, that's doing what they say, they're going to do and then so.

Speaker Change: There's others that are that are getting there are trying to get there what strategies, but.

Speaker Change: There's others that are that are getting there are trying to get there what strategies, but you know we're executing on those strategies very well I think the other big thing is when you look at the level of of innovation in the complementary and payment products.

Speaker Change: We're executing on those strategies very well I think the other big thing is.

Speaker Change: When you look at the level of of.

Speaker Change: Innovation in the complementary and payment products.

Speaker Change: Sure isn't always the driver of the core when it's usually the things that go around the core that ultimately become the driver and and so that's why I think we've been very successful over the last several years as those products are developed and really started to get ahead of our competition.

Speaker Change: Or isn't always the driver of the core when it's usually the things that go around the core that ultimately become the driver and and so you know that's why I think we've been very successful over the last several years as those products that are developed and it really started to get ahead of our competition.

Speaker Change: Yeah.

Speaker Change: Absolutely, yes, I know that our product road map meets a lot. So thank you very much I appreciate the comments.

Speaker Change: Yeah.

Speaker Change: Absolutely Yeah, I know that our product roadmap and meets a lot. So thank you very much I appreciate the comments.

Speaker Change: Sure. Thank you.

Speaker Change: The next question comes from Ken to Chomsky with Autonomous Research. Please go ahead.

Ken Chomsky: The next question comes from Ken to Chomsky with Autonomous Research. Please go ahead.

Speaker Change: Hey, good morning, Greg and thanks for taking the question I just wanted to circle back on the back half Rev.

Speaker Change: Hey, good morning, Greg and thanks for taking the question I just wanted to circle back on the back half.

Speaker Change: Revenue growth guidance I think the implied growth is somewhere around 9%, which I think is the strongest fiscal second half growth rate that we've seen over the last handful of years. Yeah. So is there anything different that stands out this year versus prior years that that drives that stronger growth in the second half.

Speaker Change: Our revenue growth guidance I think the implied growth is somewhere around 9%, which I think is the strongest for the fiscal second half growth rate that we've seen over the last handful of years. Yeah. So is there anything different that stands out this year versus prior years that that drives that stronger growth in the second half.

Speaker Change: And I guess from a modeling perspective, any sense of or which segments are going to see the most acceleration. Thank you.

Speaker Change: And I guess from a modeling perspective, any sense of which segments are going to see the most acceleration. Thank you.

Speaker Change: Sure Ken So as you said there was a couple of things that are test relative to comp. So if we think about cloud for example back half.

Speaker Change: Sure. So as you said there was a couple of things that are test relative to comp. So if we think about cloud for example back half where we're growing over part here just the way the year's playing out I wouldn't read too much into changing the color and pattern of the year.

Speaker Change: Growing over part here just.

Speaker Change: The year is playing out and I wouldn't read too much into changing the color and pattern of the years going forward.

Speaker Change: Selling board is here, we just continue to see a back half acceleration. We think things like are you seeing volumes pick up we think that he said and health of the U S. Consumer well will continue to be a healthy not people rank, but healthy and that'll lead to increase.

Speaker Change: This year, we just continue to see a back half acceleration, we think things like card we've seen volumes pick up we think the pieces and health of the U S consumer will continue to be healthy.

Healthy.

Speaker Change: Frank but healthy and that'll lead to increased payment volumes and then just some of it is around the installation.

Speaker Change: Payment volumes.

Speaker Change: And then just some of it is around the installation.

Speaker Change: The timing of some of our newer products. So you have things like financial crime surrender, the consulting and installations that go on around that.

Speaker Change: Timing of some of our newer products that you can have things like financial crime surrender, the consulting and installations that go on around that it continued success around did you at all.

Speaker Change: The continued success around did you do that.

Speaker Change: You know that that Greg talked about the number of wins and the pipeline that's kind of in progress, particularly around battlefront fan out business that didnt close that ticked out there makes us feel very comfortable about affirming the guidance I know on paper it looks like a very large number kind of in the back half, but that we built.

Speaker Change: That Greg talked about the number of wins and the pipeline that's kind of in progress, particularly around battery business that I think all of that together makes us feel very comfortable about affirming the guidance I know on paper it looks like a very large number kind of in the back half, but that we feel comfortable.

Speaker Change: After all.

Speaker Change: Yes.

Speaker Change: Okay, Great. That's really helpful. And then maybe just a question on the payments business because we're getting some questions on it when you look at the network volumes in some of the large banks. They showed a couple hundred basis points of accelerating volume growth in the U S and for calendar <unk> versus calendar <unk>.

Speaker Change: Okay, Great. That's really helpful. And then maybe just a question on the payments business, because we're getting some questions on it.

Speaker Change: When you look at the network volumes in some of the large banks. They showed a couple hundred basis points of accelerating volume growth in the U S and for calendar <unk> versus calendar <unk>.

Speaker Change: Looking at the payment segment I think it accelerated about 30 basis points on a non-GAAP revenue growth basis over.

Speaker Change: Just looking at the payment segment I think it accelerated about 30 basis points on a non-GAAP revenue growth basis over.

Speaker Change: Over that same period, so I guess should we think about that line, maybe being less correlated with overall market in network volume growth or maybe that ticks higher in the back half of the year any any detail.

Over that same period, so I guess should we think about that line, maybe being less correlated with overall market in network volume growth or you know maybe that ticks higher in the back half of the year I mean any detail.

Speaker Change: Detail on that would be super helpful. Thank you.

Ken: Sure Ken I would just remind everyone on the call. The current is just one of the three components of payments and say, while it is almost 60% of its it's still only one of a three.

Speaker Change: Sure Ken I would just remind everyone on the call. The Carnegie is just one of the three components of pain medicines and while it is almost 60%. It's it's still only one of three so the volumes. We're seeing in card are certainly consistent with U S. Debit trends, we've also seen strong.

Ken: So the volumes, we're seeing in card or are certainly consistent with U S. Debit trends. We've also seen strong related solutions that complement the card transaction itself.

Speaker Change: <unk> related solutions that complement the card transaction it sounds that way.

Ken: You need to expect that in the back half of the year pay center that we've already talked about a little bit on this call and the peanut processing them through the acceleration of the new rails and innovation efforts, we're continuing to see strong.

Speaker Change: You need to expect that in the back half of the year pay center that we've already talked about a little bit on this call the peanut processing them through the acceleration of the new rails and innovation efforts, we're continuing to see a strong progress now as it is a meaningful but on a smaller number Vegas and then you have things like.

Ken: Strong progress now as it is a meaningful but on a smaller number.

Ken: David and then you have things like Bill pay there that are doing fine at 15% of the total segment, but or.

Speaker Change: Okay.

Speaker Change: There that are doing fine at 15% of the total segment, but or not a huge part of our kind of affirm that makes your business perspective.

Ken: We're not kind of a huge grower kind of from that makes your business perspective.

Ken: I'd just remind people that it's not just all car transaction volume.

Speaker Change: Just remind people from that it's not just all a card transaction.

Speaker Change: Okay. Thanks Kim.

Speaker Change: Yeah.

Kim: Okay. Thanks Kim.

Speaker Change: Okay and if you have a question. Please press Star then one.

Kim: Again, if you have a question. Please press Star then one.

Speaker Change: Our next question comes from Dave Koning with Baird. Please go ahead.

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

Dave Koning: Yeah, Hey, guys. Thank you and I guess my question I guess, it's along some of the same lines you know when I look at payments. Historically Q3 has been flat to down I think in the Covid year. It was up but almost every every quarter in Q3, it's flat to down sequentially.

Dave Koning: And then and then Q4 is up a decent amount maybe three 4% whatever it seems like this year, you're talking about a little more acceleration than normal is is there something different about this year sequentially. Like are you know normally Q3 would be flat to down just because retail does debit is just down a little bit in calendar Q1, but is there something different about the products.

Dave Koning: And then and then Q4 is up you know a decent amount maybe three four per cent whatever it seems like this year, you're talking about a little more acceleration than normal is is there something different about this year sequentially. Like are you know normally Q3 would be flat to down just because retail debit is just down a little bit in calendar Q1, but is there something different.

Dave Koning: Being added or.

Dave Koning: About the products being added or different things that are kind of differently affecting the sequential this year.

Dave Koning: Different things that are kind of differently affecting the sequential this year.

Dave Koning: Yes, Dave this is Greg so good observation and I think that the.

Dave Koning: Yes, Dave This is Greg. So you know good good observation and you know I think the part that I would emphasize is really where me and he was leading on the last question. It's card is going to Theres nothing substantial about card being different in Q3, it's probably fairly on pace.

Speaker Change: Part that I would emphasize is really where mimi was leading on the last question.

<unk> card is going but there's nothing substantial about card being different in Q3, it's probably fairly on pace to.

So what we typically see it really is the other products that are driving a lot of that.

Dave Koning: What we typically see it really is the other products that are driving a lot of that.

Opportunity and so you know pay center is getting is getting to the point to be very meaningful for us.

Dave Koning: Opportunity and so you know pay center is getting is getting to the point to be very meaningful for us as I mentioned before about what we're doing not only with the rollout of clients, but also what we're doing on the send side of transactions and you know we have a couple of very large clients that were doing a law.

Speaker Change: As I mentioned before about what we're doing not only with the rollout of clients, but also what we're doing on the send side.

Speaker Change: Transactions and we have a couple of very large clients that were doing a large number of central transactions now so.

Large number of send transactions now so I would you know I would just really more looking at the balance of what's happening or maybe the shift of the balance of what's happening in our payments segment.

Speaker Change: I would I would just really more look at the balance of what's happening or maybe the shift of the balance of what's happening in our payments segment.

Speaker Change: Gotcha, Alright, well. Thank you that's helpful.

Speaker Change: Okay. Thank you.

Dave Koning: Okay. Thank you.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Vance Gerard for any closing remarks.

Dave Koning: This concludes our question and answer session I would like to turn the conference back over to Vance Gerard for any closing remarks.

Vance Gerard: Thank you Michael.

Speaker Change: Thank you Michael in the upcoming weeks maintenance, we will attend investor events, including availability, but those bids for in person meetings.

Vance Gerard: Coming weeks management will attend investor events, including availability, but those events for reimbursement meetings.

Speaker Change: We would like to thank all Jack Henry Associates for their efforts and dedication which have contributed to our solid results. Thank.

Speaker Change: We'd like to thank all Jack Henry Associates for their efforts and dedication which have contributed to our solid results. Thank.

Vance Gerard: Thank you for joining us today.

Speaker Change: Thank you for joining us today.

Speaker Change: Please provide the replay number.

Vance Gerard: Yes.

Vance Gerard: The replay number for today's call is 870 734475 to nine and the access code is 4886307.

Speaker Change: The replay number for today's call is 870 734475 to nine and the access code is 4886307.

Vance Gerard: Conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change: Conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Q2 2025 Jack Henry & Associates Inc Earnings Call

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