Q4 2025 Jack Henry & Associates Inc Earnings Call

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Jamie: Good morning, everyone. Welcome to the Jack Henry Fourth Quarter and Full Year 2025 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypads. To withdraw your question, you may press star and two. Please also note today's event is being recorded. At this time, I would like to turn the conference call over to Vance Sherard, Vice President, Investor Relations. Please go ahead.

To withdraw your question you May press Star two.

Speaker #1: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

Please also note today's event is being recorded.

At this time I would like to turn the conference call over to Vance Girard, Vice President Investor Relations. Please go ahead.

Speaker #1: To ask a question, you may press star and then one on your telephone keypads. To withdraw your question, you may press star and two.

Thank you Jamie.

Good morning, and thank you for joining the <unk> in the fourth quarter and fiscal 2025 earnings call.

Speaker #1: Please also note today's event is being recorded. At this time, I would like to turn the conference call over to Vance Sherard. Vice President, Investor Relations.

Joining me today are Greg Adelson, President and CEO, <unk>, <unk> CFO and treasurer.

Following my opening remarks, Greg will share his comments on our quarterly and full year financial results operational metrics and the outlook for fiscal 2026.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Jamie. Good morning, and thank you for joining the Jack Henry 4th Quarter and Fiscal 2025 earnings call. Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer.

Vance Sherard: Thank you, Jamie. Good morning, and thank you for joining the Jack Henry fourth quarter and fiscal 2025 earnings call. Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer. Following my opening remarks, Greg will share his comments on our quarterly and full-year financial results, operational metrics, and the outlook for fiscal 2026. Mimi will then discuss the financial results and full-year fiscal 2026 guidance provided in yesterday's press release, which is available in the Investor Relations section of the Jack Henry website. Afterward, we will open the lines for a Q&A session. 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. The company is not obligated to update or revise these statements.

Maybe it will then discuss the financial results and full year fiscal 2026 guidance provided in Yesterdays press release, which is available in the Investor Relations section of the Jack Henry website.

Speaker #2: Following my opening remarks, Greg will share his comments on our quarterly and full-year financial results, operational metrics, and the outlook for Fiscal 2026.

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

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. The 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.

Speaker #2: Mimi will then discuss the financial results and full year Fiscal 2026 guidance, provided in yesterday's press release. Which is available in the Investor Relations section of the JACK HENRY website.

Speaker #2: Afterward, we will open the lines for a Q&A session. 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.

We're looking statements refer to yesterday's press release, and the risk factors and forward looking statements sections in our 10-K.

Speaker #2: The 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 sections in our 10-K.

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.

Vance Sherard: 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 statement sections in our 10K. 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. Now, I will hand the call over to Greg.

Now I will hand, the call over to Greg.

Thank you Vince good morning, everyone I appreciate each of you joining todays call.

Speaker #2: 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.

Like to begin by thanking our associates for their hard work and dedication to our success. They consistently go above and beyond to take care of our clients that combined with our unwavering focus on culture service innovation strategy and execution continues to differentiate us in the market.

Speaker #2: Now, I will hand the call over to Greg.

Speaker #3: Thank you, Vance. Good morning, everyone. I appreciate each of you joining today's call. I'd like to begin by thanking our associates for their hard work and dedication to our success.

Matt Scharf: Thank you, Vance. Good morning, everyone. I appreciate each of you joining today's call. I would like to begin by thanking our associates for their hard work and dedication to our success. They consistently go above and beyond to take care of our clients. That, combined with our unwavering focus on culture, service, innovation, strategy, and execution, continues to differentiate us in the market. I will share three main takeaways from the quarter and fiscal year, and then will provide additional detail about our overall business. First, our financial performance. Our fourth quarter and fiscal year 2025 results reflect solid overall performance. In Q4, our non-GAAP revenue increased 7.5% and our non-GAAP operating margin was 23.2%, representing a strong 146 basis points of margin expansion over last year. For the fiscal year, we again produced record revenue and operating income.

I will share three main takeaways for the quarter and fiscal year and then we will provide additional detail about our overall business.

Speaker #3: They consistently go above and beyond to take care of our clients. That, combined with our unwavering focus on culture, service, innovation, strategy, and execution, continues to differentiate us in the market.

First our financial performance, our fourth quarter and fiscal year 2025 results reflect solid overall performance in Q4, our non-GAAP revenue increased seven 5% and our non-GAAP operating margin was 23, 2% representing a strong 146 basis points of margin expansion.

Speaker #3: I will share three main takeaways from the quarter and fiscal year, and then we'll provide additional detail about our overall business. First, our financial performance.

Speaker #3: Our fourth quarter and fiscal year 2025 results reflect solid overall performance. In Q4, our non-GAAP revenue increased 7.5%, and our non-GAAP operating margin was 23.2%.

Over last year for.

For the fiscal year, we again produced record revenue and operating income are non-GAAP revenue was $2 3 billion and our non-GAAP operating income was $541 1 million.

Speaker #3: Representing a strong 146 basis points of margin expansion over last year. For the fiscal year, we again produced record revenue and operating income. Our non-GAAP revenue was $2.3 billion, and our non-GAAP operating income was $541.1 million.

As you saw on the press release, we shared guidance for fiscal year 2006, we do anticipate some slight revenue headwinds from industry consolidation the impact of renewal pricing pressure and macro economic uncertainty.

Matt Scharf: Our non-GAAP revenue was $2.3 billion, and our non-GAAP operating income was $541.1 million. As you saw in the press release, we shared guidance for fiscal year 2026. We do anticipate some slight revenue headwinds from industry consolidation, the impact of renewal pricing pressure, and macroeconomic uncertainty. However, we remain committed and bullish on continuing to realize solid margin expansion growth along with strong free cash flow metrics for the year. We are confident that our technology innovation and execution will continue to drive our sales engine and position us very well for the long term. Mimi will discuss more of the fiscal 2026 specifics in her comments. In addition, I want to communicate openly regarding the large bank merger that was recently announced and includes a Jack Henry core payment and complimentary solution client.

However, we remain committed and bullish on continuing to realize solid margin expansion growth along with strong free cash flow metrics for the year.

Speaker #3: As you saw in the press release, we shared guidance for Fiscal Year 26. We do anticipate some slight revenue headwinds from industry consolidation, the impact of renewal pricing pressure, and macroeconomic uncertainty.

We are confident that our technology innovation and execution will continue to drive our sales engine and position us very well for the long term.

Speaker #3: However, we remain committed and bullish on continuing to realize solid margin expansion growth along with strong free cash flow metrics for the year. We are confident that our technology innovation and execution will continue to drive our sales engine and position us very well for the long term.

Meaningful to discuss more of the fiscal 'twenty six specifics in her comments.

In addition, I want to communicate openly regarding the large bank merger that was recently announced and includes a Jack Henry core payment and complementary solution clients.

It has been speculated that Jack Henry's technology would not be selected for the combined financial institution after.

Speaker #3: Mimi will discuss more of the Fiscal 26 specifics in her comments. In addition, I want to communicate openly regarding the large bank merger that was recently announced and includes a Jack Henry core payment and complementary solution client.

After conversations with both parties there has been no indication of an intent to terminate any agreements.

Contract changes were to take place they would happen in fiscal 'twenty, seven and not in fiscal 'twenty six.

Speaker #3: It has been speculated that Jack Henry's technology would not be selected for the combined financial institution. After conversations with both parties, there has been no indication of an intent to terminate any agreements.

Matt Scharf: It has been speculated that Jack Henry's technology would not be selected for the combined financial institution. After conversations with both parties, there has been no indication of an intent to terminate any agreements. If contract changes were to take place, they would happen in fiscal 2027 and not in fiscal 2026. Second, continued industry leading sales momentum. For Q4, our sales team had an impressive 23 core wins, topping the 22 wins we had in Q4 at fiscal 2024. For the full fiscal 2025, we signed 51 new core deals, 31 banks, and 20 credit unions. Additionally, we signed 37 contracts to move existing in-house core clients to our private cloud, including 11 in Q4. We now host 77% of our core clients in Jack Henry's private cloud environment. Third, we continue to win larger new core deals.

Second continued industry, leading sales momentum for Q4, our sales team had an impressive 23 core wins topping the 'twenty two wins, we had in Q4 fiscal 'twenty four.

Speaker #3: If contract changes were to take place, they would happen in Fiscal 27 and not in Fiscal 26. Second, continued industry's leading sales momentum. For Q4, our sales team had an impressive 23 core wins, topping the 22 wins we had in Q4 of Fiscal 24.

For the full fiscal 'twenty five we signed 51, new core deals 31 banks and 20 credit unions.

Additionally, we signed 37 contracts to move existing in house core clients to our private cloud, including 11 in Q4.

We now host 77% of our core clients and Jack Henry's private cloud environment.

Speaker #3: For the full fiscal 2025, we signed 51 new core deals: 31 banks and 20 credit unions. Additionally, we signed 37 contracts to move existing in-house core clients to our private cloud, including 11 in Q4.

Third we continue to win larger new core deals over the past three years. The total assets of new core clients one has nearly tripled.

We had 47 wins totaling $19 billion in assets in fiscal 'twenty three.

Speaker #3: We now host 77% of our core clients in Jack Henry's private cloud environment. Third, we continue to win larger new core deals. Over the past three years, the total assets of new core clients won have nearly tripled.

54 wins totaling 39 billion in fiscal 'twenty four.

Matt Scharf: Over the past three years, the total assets of new core clients won has nearly tripled. We had 47 wins totaling $19 billion in assets in fiscal 2023, 54 wins totaling $39 billion in fiscal 2024, and 51 wins totaling $53 billion in fiscal 2025. Of the 51 core wins this fiscal year, 16 were institutions that have over $1 billion in assets. In fiscal 2024 and 2025 combined, we won 31 core deals in this segment as compared to only 16 in fiscal 2022 and 2023 combined. Our strategy is also resonating with the $5 billion to $10 billion asset institutions as well. Of our 16 greater than $1 billion wins, we won four in the $5 billion to $10 billion segment after winning only one in fiscal year 2024 and none in fiscal year 2022 and 2023.

<unk> 51 wins totaling 53 billion in fiscal 'twenty five.

Of the 51 core wins this fiscal year 16, where institutions that have over $1 billion in assets in fiscal 'twenty four and 'twenty five combined we won 31 core deals in this segment as compared to only 16 in fiscal 'twenty, two and 'twenty three combined.

Speaker #3: We had 47 wins totaling $19 billion in assets in Fiscal 2023, 54 wins totaling $39 billion in Fiscal 2024, and 51 wins totaling $53 billion in Fiscal 2025.

Speaker #3: Of the 51 core wins this fiscal year, 16 were institutions that have over $1 billion in assets. In fiscal 2024 and 2025 combined, we won 31 core deals in this segment, compared to only 16 in fiscal 2022 and 2023 combined.

Our strategy is also resonating with a $5 to $10 billion asset institutions as well.

Of our 16 greater than 1 billion wins, we won four in the $5 billion to $10 billion segment after winning only one in fiscal year 'twenty four and none in fiscal year 'twenty, two and 'twenty three.

Speaker #3: Our strategy is also resonating with the $5 to $10 billion asset institutions as well. Of our 16 wins greater than $1 billion, we won 4 in the $5 to $10 billion segment, after winning only 1 in Fiscal Year 24 and none in Fiscal Years 22 and 23.

Now for more detail on our overall business starting with some accolades for the team.

Proud to have recently received recognition in three prominent publications U S News and World Report's best companies to work for time magazine's best mid sized companies and Newsweek's greatest workplaces.

Speaker #3: Now for more detail on our overall business, starting with some accolades for the team. We're proud to have recently received recognition in three prominent publications: U.S. News & World Report's Best Companies to Work For, Time Magazine's Best Midsize Companies, and Newsweek's Greatest Workplaces.

Matt Scharf: Now for more detail on our overall business, starting with some accolades for the team. We're proud to have recently received recognition in three prominent publications: US News & World Report's Best Companies to Work for, Time Magazine's Best Mid-Size Companies, and Newsweek's Greatest Workplaces. These awards are important because they reflect our people-first culture and deep commitment to doing the right thing for our employees and ensuring they are valued. I also want to recognize the tremendous effort of our team and our clients on the highly successful migration of Fedwire funds to ISO 20022 standards on July the 14th. This was a major industry-wide event for the United States' payments infrastructure, aligning it with international standards and enhancing crucial capabilities such as fraud detection and data sharing.

These awards are important because they reflect our people first culture and deep commitment to doing the right thing for our employees and ensuring they are valued.

I also want to recognize the tremendous effort of our team and our clients on a highly successful migration of fed wire funds to ISO 20022 standard on July two 2014.

Speaker #3: These awards are important because they reflect our people-first culture and deep commitment to doing the right thing for our employees and ensuring they are valued.

This was a major industry wide event for the United States payments infrastructure aligning it with international standards and enhancing crucial capabilities, such as fraud detection and data sharing.

Speaker #3: I also want to recognize the tremendous effort of our team and our clients on the highly successful migration of FedWire funds to the ISO 20022 standard on July 14th.

Related to the migration, we had five clients go live with the new wires component of our cloud native Jack Henry platform, including one of our largest credit union clients. They.

Speaker #3: This was a major industry-wide event for the United States payments infrastructure, aligning it with international standards and enhancing crucial capabilities such as fraud detection and data sharing.

They did this at the same time as the migration and it went extremely well.

This is a strong validation of our component strategy for easing concerns about large scale migrations and conversions.

Speaker #3: Related to the migration, we had five clients go live with a new wireless component of our cloud-native Jack Henry platform, including one of our largest credit union clients.

Matt Scharf: Related to the migration, we had five clients go live with a new wireless component of our cloud-native Jack Henry platform, including one of our largest credit union clients. They did this at the same time as the migration, and it went extremely well. This is a strong validation of our component strategy for easing concerns about large-scale migrations and conversions. Next, I will provide a few updates on specific products and new solutions that are part of our technology modernization and SMB strategies. Within our payment segment, we now have 376 clients on the Zelle platform, 414 clients using the Real-Time Payments Network, and 401 clients using FedNow. In our complimentary segment, we added 18 new Financial Crimes Defender contracts in Q4 and 47 for the fiscal year.

Next I will provide a few updates on specific products and new solutions that are part of our technology modernization and SMB strategies.

Speaker #3: They did this at the same time as the migration, and it went extremely well. This is a strong validation of our component strategy for easing concerns about large-scale migrations and conversions.

Within our payment segment, we now have 376 clients on the Zelle platform 414 clients using the real time payments network and 401 clients using fed now.

Speaker #3: Next, I will provide a few updates on specific products and new solutions that are part of our technology modernization and SMB strategies. Within our payments segment, we now have 376 clients on the Zelle platform, 414 clients using the real-time payments network, and 411 clients using FedNow.

And our complementary segment, we added 18, new financial crimes defender contracts in Q4 and 47 for the fiscal year. In addition, we signed 66 new contracts for the financial crimes defender faster payment fraud module in Q4 and 149 for the fiscal year.

Speaker #3: In our complementary segment, we added 18 new Financial Crimes Defender contracts in Q4 and 47 for the fiscal year. In addition, we signed 66 new contracts for the Financial Crimes Defender Faster Payment Fraud module in Q4 and 149 for the fiscal year.

As a reminder, this module is a real time solution designed to help mitigate fraud and zelle fed now and RTP transactions.

Matt Scharf: In addition, we signed 66 new contracts for the Financial Crimes Defender faster payment fraud module in Q4 and 149 for the fiscal year. As a reminder, this module is a real-time solution designed to help mitigate fraud in Zelle, FedNow, and RTP transactions. As of June 30th, we have 136 Financial Crimes installations completed and another 71 in various stages of implementation. We also have 85 faster payment modules installed and 189 in various stages of implementation. Our Banno digital platform continues to experience high demand. For the quarter, we signed 26 new clients to our Banno retail platform, as well as 39 new Banno Business deals. For the full fiscal year, we closed 70 new Banno retail contracts and 106 Banno Business contracts. At the end of June, we had 1,023 clients on the Banno platform, including 344 live with Banno Business.

As of June 30, we have 136 financial crimes installations completed and another 71 in various stages of implementation.

Speaker #3: As a reminder, this module is a real-time solution designed to help mitigate fraud in Zelle, FedNow, and RTP transactions. As of June 30, we have 136 financial crimes installations completed and another 71 in various stages of implementation.

We also have 85 faster payment modules installed in 189 in various stages of implementation.

Our <unk> digital platform continues to experience high demand for the quarter, We signed 26, new clients to our banner retail platform as well as 39, new <unk> business deals.

Speaker #3: We also have 85 faster payment modules installed and 189 in various stages of implementation. Our panel digital platform continues to experience high demand. For the quarter, we signed 26 new clients to our banner retail platform, as well as 39 new banner business deals.

For the full fiscal year, we closed 70, new banner retail contracts and 106 <unk> business contracts.

At the end of June we had 1023 clients on the bandwidth platform, including 344 live with banner business.

We finished Q4 was $14 3 million registered users on the <unk> platform and when compared to Q4 of fiscal 'twenty four we experienced a strong 17% increase over the past 12 months.

Speaker #3: For the full fiscal year, we closed 70 new banner retail contracts and 106 banner business contracts. At the end of June, we had 1,023 clients on the banner platform, including 344 live with banner business.

With last week's exciting announcement of the launch of tap to local our merchant acquiring solution developed in collaboration with <unk>. We are leveraging our banner platform as the primary source for delivering this innovative solution to the industry.

Speaker #3: We finished Q4 with 14.3 million registered users on the banner platform, and when compared to Q4 of Fiscal 2024, we experienced a strong 17 percent increase over the past 12 months.

Matt Scharf: We finished Q4 with 14.3 million registered users on the Banno platform, and when compared to Q4 of fiscal 2024, we experienced a strong 17% increase over the past 12 months. With last week's exciting announcement of the launch of Tap to Local, our merchant acquiring solution developed in collaboration with Moov, we are leveraging the Banno platform as the primary source for delivering this innovative solution to the industry. Tap to Local is currently in closed beta testing with several financial institutions. It is on track to be rolled out to the 1,023 banks and credit unions on the Banno platform over the next several months. Unlike most other payment solutions for small businesses, Tap to Local is offered exclusively through financial institutions.

Tap to local is currently in closed beta testing with several financial institutions. It is on track to be rolled out to the 1023 banks and credit unions on the battery platform over the next several months.

Speaker #3: With last week's exciting announcement of the launch of Tap2Local, our merchant acquiring solution developed in collaboration with MOVE, we are leveraging the banner platform as the primary source for delivering this innovative solution to the industry.

Like most other payment solutions for small businesses tapped the local is offered exclusively through financial institutions.

Speaker #3: Tap2Local is currently in closed beta testing with several financial institutions; it is on track to be rolled out to the 1,023 banks and credit unions on the Banner platform over the next several months.

The cloud native solution delivers many distinguishing features for merchants, including easy enrollment the ability to accept debit and credit card payments directly through tap to pay on both iOS and Android devices, thus, eliminating the need for traditional point of sale hardware.

Speaker #3: Unlike most other payment solutions for small businesses, Tap2Local is offered exclusively through financial institutions. The cloud-native solution delivers many distinguishing features for merchants, including easy enrollment and the ability to accept debit and credit card payments directly through Tap2Pay on both iOS and Android devices, thus eliminating the need for traditional point-of-sale hardware.

And continuous account reconciliation to the accounting platform of their choice.

Matt Scharf: The cloud-native solution delivers many distinguishing features for merchants, including easy enrollment, the ability to accept debit and credit card payments directly through Tap to Pay on both iOS and Android devices, thus eliminating the need for traditional point-of-sale hardware and continuous account reconciliations to the accounting platform of their choice. Another solution that we recently launched with Moov is Jack Henry Rapid Transfers. This cloud-native solution enables both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets to manage day-to-day transactions or personal finances. We are collaborating with both Visa and Mastercard to facilitate these transactions through their respective debit rails. Jack Henry Rapid Transfers is now available on the Banno platform, and we are in the process of enrolling more than 50 new clients.

Another solution that we've recently launched with move as Jack Henry Rapid transfers. This cloud native solution enables both smbs and consumers to quickly move funds between external accounts eligible cards and digital wallets to manage day to day transactions our personal finances.

Speaker #3: And continuous account reconciliation to the accounting platform of their choice. Another solution that we recently launched with MOVE is JACK HENRY Rapid Transfers. This cloud-native solution enables both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets to manage day-to-day transactions or personal finances.

We are collaborating with both visa and Mastercard to facilitate these transactions due to their respective debit rails.

<unk> transmitters is now available on the <unk> digital platform and we are in the process of enrolling more than 50 new clients.

Now that we've closed key feature gaps with several competitors and have added advanced functionality that no. Other digital provider has totally has today like Jack Henry rapid transfers and tapped to local we are winning larger competitive takeaways and the digital banking space than in previous quarters.

Speaker #3: We are collaborating with both Visa and MasterCard to facilitate these transactions through their respective debit rails. Rapid Transfers is now available on the Banner digital platform, and we are in the process of enrolling more than 50 new clients.

Speaker #3: Now that we have closed key feature gaps with several competitors and added advanced functionality that no other digital provider has, like JACK HENRY Rapid Transfers and Tap2Local, we are winning larger competitive takeaways in the digital banking space than in previous quarters.

Matt Scharf: Now that we have closed key feature gaps with several competitors and have added advanced functionality that no other digital provider has today, like Jack Henry Rapid Transfers and Tap to Local, we are bringing larger competitive takeaways in the digital banking space than in previous quarters. Another indicator of our progress, Banno Business, was recently named the leading small business digital banking platform for strength and capabilities by Datos Insights, a prominent research firm. The ranking highlighted Banno Business's ease of use, open architecture, and excellent support. We also continue to make excellent progress on our technology modernization strategy. We now have 20 components of the new cloud-native Jack Henry platform live in various stages. While some of these are for internal use, eliminating duplicated development efforts across the company, several components are already benefiting our clients.

Another indicator of our progress and our business was recently named a leading small business digital banking platform for strengthening capabilities by Ddos insights a prominent research firm.

The ranking highlighted banner business is ease of use open architecture and excellent support.

Speaker #3: Another indicator of our progress, Banner business was recently named the leading small business digital banking platform for strength and capabilities by Datos Insights, a prominent research firm.

We also continue to make excellent progress on our technology modernization strategy. We now have 20 components of the new cloud Native Jack Henry platform live in various stages.

Speaker #3: The ranking highlighted the banner business's ease of use, open architecture, and excellent support. We also continue to make excellent progress on our technology modernization strategy.

While some of these are for internal use eliminating duplicated development efforts across the company several components are already benefiting our clients.

These include the wire solution that I mentioned earlier data hub, which provides a centralized hub for reporting and analysis entitlements, which manages permissions and access rights for users and systems and a new general ledger.

Speaker #3: We now have 20 components of the new cloud-native Jack Henry platform live in various stages. While some of these are for internal use, eliminating duplicated development efforts across the company, several components are already benefiting our clients.

All components are receiving very favorable reviews from our clients.

Speaker #3: These include the wire solution that I mentioned earlier, DataHub, which provides a centralized hub for reporting and analysis; entitlements, which manage permissions and access rights for users and systems; and a new general ledger.

Matt Scharf: These include the wire solution that I mentioned earlier, Data Hub, which provides a centralized hub for reporting and analysis, Entitlements, which manages permissions and access rights for users and systems, and a new general ledger. All components are receiving very favorable reviews from our clients. We will promote all of our new technology at the Jack Henry Annual Conference, Jack Henry Connect, in September. This is a great opportunity every year for us to meet with our prospects, clients, and partners. Last year, 20 of our new core wins were with prospects who attended the Jack Henry Connect Conference. Before I wrap up, I want to share an update on our stablecoin strategy.

We will promote all of our new technology at the Jack Henry Annual Conference Jack Henry connect in September. This is a great opportunity every year for us to be with our prospects clients and partners last year 20 of our new core wins with prospects who attended the Jack Henry connect conference.

Speaker #3: All components are receiving very favorable reviews from our clients. We will promote all of our new technology at the JACK HENRY annual conference, JACK HENRY Connect, in September.

Before I wrap up I want to share an update on our stable coin strategy.

While there's a lot of external hype around stable coins, there are still significant industry hurdles to mainstream adoption, including regulations. It must be developed over the next six months to 12 months to implement the stable coin legislation that passed in July known as the genius App.

Speaker #3: This is a great opportunity every year for us to meet with our prospect clients and partners. Last year, 20 of our new core wins were with prospects who attended the Jack Henry Connect conference.

Speaker #3: Before I wrap up, I want to share an update on our stablecoin strategy. While there is a lot of external hype around stablecoins, there are still significant industry hurdles to mainstream adoption, including regulations that must be developed over the next 6 to 12 months to implement the stablecoin legislation that passed in July, known as the Genius Act.

Our plan is to take a strategic phased approach supporting stable coin solutions through our banking credit union clients and not around them.

Matt Scharf: While there is a lot of external hype around stablecoins, there are still significant industry hurdles to mainstream adoption, including regulations that must be developed over the next 6 to 12 months to implement the stablecoin legislation that passed in July, known as the Clarity for Payment Stablecoins Act. Our plan is to take a strategic phased approach, supporting stablecoin solutions through our bank and credit union clients and not around them. This allows us to ensure we do the things the right way while regulations are being written. Unlike many of our competitors, we already have the public cloud-native platform and infrastructure needed for successful stablecoin implementation. Today, our clients can securely integrate with a number of third-party stablecoin providers using our open APIs. We are currently working on enabling stablecoins as a payments rail via our JHA Pay Center.

This allows us to ensure we do the things the right way while regulations are being written.

Unlike many of our competitors, we already have the public cloud native platform and infrastructure needed for a successful stable calling implementation today, our clients can securely integrate with a number of third party stable corn providers using our open API.

Speaker #3: Our plan is to take a strategic, phased approach, supporting stablecoin solutions through our bank and credit union clients, and not around them. This allows us to ensure we do things the right way while regulations are being written.

We are currently working on enabling stable coins as a payments railroad VR JA J pay center. We are also in discussions with regulated stable coin issuers digital asset infrastructure providers and key players to explore additional strategic partnerships.

Speaker #3: Unlike many of our competitors, we already have the public cloud-native platform and infrastructure needed for a successful stablecoin implementation. Today, our clients can securely integrate with a number of third-party stablecoin providers using our open APIs.

We will keep you informed as we have more updates.

Speaker #3: We are currently working on enabling stablecoins as a payments rail via our JHA Pay Center. We are also in discussions with regulated stablecoin issuers, digital asset infrastructure providers, and key players to explore additional strategic partnerships.

In closing, we are very well positioned for the future technology spending by financial institutions remain strong and there is clear demand for our differentiated and innovative technology solutions, we have a robust sales pipeline and a proven ability to attract and win new clients, including larger financial institutions.

Matt Scharf: We are also in discussions with regulated stablecoin issuers, digital asset infrastructure providers, and key players to explore additional strategic partnerships. We will keep you informed as we have more updates. In closing, we are very well positioned for the future. Technology spending by financial institutions remains strong, and there is clear demand for our differentiated and innovative technology solutions. We have a robust sales pipeline and a proven ability to attract and win new clients, including larger financial institutions. Our unwavering focus on culture, service, innovation, strategy, and execution continues to set us apart. These pillars will enable us to drive continued industry-leading revenue growth with strong margin expansion, benefiting our associates, clients, and shareholders. With that, I will turn it over to Mimi for more specifics on our financials.

Speaker #3: We will keep you informed as we have more updates. In closing, we are very well positioned for the future. Technology spending by financial institutions remains strong, and there is clear demand for our differentiated and innovative technology solutions.

Our unwavering focus on culture service innovation strategy and execution continues to set us apart.

These pillars will enable us to drive continued industry, leading revenue growth with strong margin expansion benefiting our associates clients and shareholders.

Speaker #3: We have a robust sales pipeline and an improving ability to attract and win new clients, including larger financial institutions. Our unwavering focus on culture, service, innovation, strategy, and execution continues to set us apart.

With that I will turn it over to meaningful more specifics on our financials.

Thank you, Greg and good morning, everyone.

The relentless dedication of our associates and serving our financial institution clients.

Speaker #3: These pillars will enable us to drive continued industry-leading revenue growth with strong margin expansion, benefiting our associates, clients, and shareholders. With that, I will turn it over to Mimi for more specifics on our financials.

Delivering shareholder value led to another quarter of solid revenue and earnings growth.

We'll begin with fourth quarter and full year results, then conclude with our fiscal 'twenty guidance.

Speaker #4: Thank you, Greg. And good morning, everyone. The relentless dedication of our associates in serving our financial institution clients and delivering shareholder value led to another quarter of solid revenue and earnings growth.

Mimi Carsley: Thank you, Greg, and good morning, everyone. The relentless dedication of our associates in serving our financial institution clients and delivering shareholder value led to another quarter of solid revenue and earnings growth. I will begin with the fourth quarter and full-year results, then conclude with our fiscal 2026 guidance. Q4 GAAP revenue increased 10%, and non-GAAP revenues increased 8%, a continuation of consistently solid performance. Full-year growth was 7% on a GAAP basis and 6% on a non-GAAP basis. Fourth quarter deconversion revenue of approximately $20 million, which we previously announced, was up approximately $14 million, reflecting the increasing phase of M&A activity among financial institutions. Full-year deconversion revenue is $34 million, $17 million more than the prior fiscal year, exceeding guidance. Now let's look more closely at the details. GAAP services and support revenue increased 11% for the quarter, while non-GAAP increased 7%.

Q4, GAAP revenue increased 10% and non-GAAP revenue increased 8%.

Continuation of consistently solid performance.

Speaker #4: I will begin with fourth quarter and full year results, then conclude with our Fiscal 26 guidance. Q4 GAAP revenue increased 10%, and non-GAAP revenues increased 8%.

Full year growth was 7% on a GAAP basis, and 6% on a non-GAAP basis.

Fourth quarter Deconversion revenue of approximately $20 million, which we previously announced with approximately $14 million, reflecting the increasing pace of M&A activity among financial institutions.

Speaker #4: A continuation of consistently solid performance. Full-year growth was 7% on a GAAP basis and 6% on a non-GAAP basis. Fourth-quarter deconversion revenue of approximately $20 million, which we previously announced, was up approximately $14 million, reflecting the increasing pace of M&A activity among financial institutions.

Full year deconversion revenue of $34 million $17 million more than the prior fiscal year exceeding guidance.

Now, let's look more closely at the details.

<unk> services and support revenue increased 11% for the quarter non-GAAP increased 7%.

Speaker #4: Full year deconversion revenue of $34 million, $17 million more than the prior fiscal year, exceeded guidance. Now let's look more closely at the details.

For the year, the increase was a healthy 7%, yeah, and 5% on a non-GAAP basis.

Ever since and support growth during the quarter was the result of volume increases in data processing and hosting revenue consulting work orders and release revenue.

Speaker #4: GAAP services and support revenue increased 11% for the quarter, while non-GAAP increased 7%. For the year, the increase was a healthy 7% for GAAP and 5% on a non-GAAP basis.

Mimi Carsley: For the year, the increase was a healthy 7% for GAAP and 5% on a non-GAAP basis. Services and support growth during the quarter was the result of volume increases in data processing and hosting revenue, consulting work orders, and release revenue. The full-year growth rate for services and support revenue was due to similar drivers partially offset by lower hardware and license revenue. Private and public cloud offerings continue to drive impressive growth. Cloud revenue increased 11% in both the quarter and the year. This recurring revenue contributor is 32% of our total revenue and has a multi-year track record of double-digit growth. Shifting to processing revenue, which is 43% of total revenue and another strategic component of our long-term growth model. It's a healthy performance with 9% non-GAAP growth for the quarter and GAAP growth of 9% for the quarter and 8% for the full year.

The full year growth rate for services and support revenue due to similar drivers, partially offset by lower hardware and license revenue.

Speaker #4: Services and support growth during the quarter was the result of volume increases in data processing and hosting revenue, consulting, work orders, and release revenue.

Private and public cloud offerings continued to drive impressive breadth.

<unk> revenue increased 11% in both the quarter and the year.

Speaker #4: The full-year growth rate for services and support revenue was due to similar drivers, partially offset by lower hardware and license revenue. Driving in public cloud offerings continued to drive impressive growth.

This reoccurring revenue contributor at 32% of our total revenue and has a multiyear track record of double digit right.

Yes.

Do you think the processing revenue, we get 43% intermodal revenue and then now they're strategic component of our long term growth model.

Speaker #4: Cloud revenue increased 11% in both the quarter and the year. This reoccurring revenue contributor is 32 percent of our total revenue, and has a multi-year track record of double-digit growth.

We've got a healthy performance with 9% non-GAAP rate for the quarter.

<unk>, 9% for the quarter and 8% for the full year.

Speaker #4: Shifting to processing revenue, which is 43 percent of total revenue, and another strategic component of our long-term growth model. We saw a healthy performance with 9 percent non-GAAP growth for the quarter, and GAAP growth of 9 percent for the quarter and 8 percent for the full year.

Consistent with recent trends quarterly drivers, including increased card and.

And payment processing revenue.

Completing commentary on revenue I would highlight total reoccurring revenue exceeded 91%.

Now moving to expenses.

Speaker #4: Consistent with recent trends, quarterly drivers included increased car digital and payment processing revenue. Completing commentary on revenue, I would highlight total recurring revenue exceeded 91 percent.

Mimi Carsley: Consistent with recent trends, quarterly drivers included increased card, digital, and payment processing revenue. Including commentary on revenue, I would highlight total recurring revenue exceeded 91%. Next, moving to expenses, giving the cost of revenue, which increased 5% on both a GAAP and non-GAAP basis for the quarter and full year. Drivers for the quarter and full year were consistent and include higher direct costs and higher personnel costs. Next, R&D expense increased 7% on both a GAAP and non-GAAP basis for the quarter and 10% for the year for both GAAP and non-GAAP. The quarterly and full-year increase was primarily due to the higher net personnel costs, increased internal license, and fees. Ending with SG&A expense for the quarter non-GAAP GAAP basis, it increased 8% and 9% on a GAAP basis. For the year, the increase was 7% on a non-GAAP basis and 2% under GAAP.

Anyway, prompter revenue, which increased 5% and that's a GAAP and non-GAAP basis for the quarter and full year.

Drivers for the quarter and full year were consistent and included higher direct costs and higher personnel cost.

Speaker #4: Next, moving to expenses. Beginning with cost of revenue, which increased 5% on both a GAAP and non-GAAP basis for the quarter and full year.

Next R&D expense increased 7% and both GAAP and non-GAAP basis for the quarter.

Intense or it's actually a good year for that.

Both GAAP and non-GAAP.

Speaker #4: Drivers for the quarter and full year were consistent and included higher direct costs and higher personnel costs. Next, R&D expense increased 7% on both a GAAP and non-GAAP basis for the quarter, and 10% for the year, for both GAAP and non-GAAP.

The quarterly and full year increase was primarily due to the higher net personnel cost increased internal license empty.

Anything with SG&A spend for the quarter, non-GAAP GAAP basis increased 8% and 9% on a GAAP basis.

Speaker #4: The quarterly and full-year increase was primarily due to the higher net personnel costs, increased internal licenses, and fees. Ending with SG&A expense for the quarter, non-GAAP basis increased by 8% and 9% on a GAAP basis.

For the year, the increase was 7% on a non-GAAP basis and 2% under GAAP.

The quarterly increase was due to higher net personnel costs increased professional services and higher conversion costs, partially offset by the gain on asset versus previous loss on assets in the prior quarter Airport.

Speaker #4: For the year, the increase was 7% on a non-GAAP basis and 2% under GAAP. The quarterly increase was due to higher net personnel costs, increased professional services, and higher deconversion costs, partially offset by a gain on assets versus a previous loss on assets for the prior quarter, year four.

The full year increase included all of the previous factor plus higher travel and contract labor costs.

Mimi Carsley: The quarterly increase was due to higher net personnel costs, increased professional services, and higher deconversion costs, partially offset by gain on assets versus previous loss on assets for the prior quarter, year four. The full-year increase included all of the previous factors, plus higher travel and contract labor costs. We remain committed to generating annual compounding margin expansion. Q4 delivered 146 basis points, increasing non-GAAP margins 23%, resulting in a notable 70 basis point non-GAAP margin of 23% for the full year. Non-GAAP margin benefited from a continuing focus on cost management and leveraging existing workforce. For the year, headcount increased a net 72% position or 1%. For the last five years, excluding the payroll backup issue, we have added less than 1% annually, showing a continued commitment to efficiency. These strong quarterly results produced a fully diluted GAAP earnings per share of $1.75, up 26%.

We remain committed to generating annual compounding margin expansion.

<unk> delivered 146 basis point increase in non-GAAP margins, 23%, resulting in a notable 70 basis points non-GAAP margin of 23%. So that's full year.

Speaker #4: The full-year increase included all of the previous factors, plus higher travel and contract labor costs. We remain committed to generating annual compounding margin expansion.

Yeah margin benefited from our continuing focus on cost management and leveraging an existing workforce.

Speaker #4: Q4 delivered a 146 basis point increase in non-GAAP margins, resulting in a notable 70 basis point non-GAAP margin of 23% for the full year.

For the year head count increased a net 72% position or 1% for.

For the last five years, excluding the <unk> acquisition added less than 1% annually during the continued commitment to efficiency.

Speaker #4: Non-GAAP margin benefited from a continuing focus on cost management and leveraging the existing workforce. For the year, headcount increased a net 72 percent, or 1 percent.

These strong quarterly results produced fully diluted GAAP earnings per share of $1 75.

26%.

Speaker #4: For the last five years, excluding the payroll acquisition, we've added less than 1% annually, showing a continued commitment to efficiency. These strong quarterly results produced a fully diluted GAAP earnings per share of $1.75, up 26%.

Fiscal 'twenty five fully diluted EPS of $6 24 up 19.

19% benefiting from strong operational results and the higher <unk> conversion activity.

Breaking down the results into the three operating segments. We're pleased.

Performance across the board for both the quarter and the full year.

Speaker #4: Fiscal 25 fully diluted EPS was $6.24, up 19%, benefiting from strong operational results and higher deconversion activity. Breaking down results into the three operating segments, we are pleased to see positive performance across the board for both the quarter and the full year.

Mimi Carsley: Fiscal 25 fully diluted EPS was $6.24, up 19%, benefiting from strong operational results and higher deconversion activity. Breaking down the results into the three operating segments, we are pleased to see positive performance across the board for both the quarter and the full year. Our core non-GAAP segment revenue increased 7% for the quarter, with operating margin increasing a robust 274 basis points. We continue to gain benefits from private cloud trends and disciplined cost management. Full-year non-GAAP core segment revenue growth was 6%, and the associated margin increased 113 basis points. Payments non-GAAP segment quarterly revenue increased 6%. The segment again had strong non-GAAP operating margin growth of 99 basis points. Full-year non-GAAP revenue growth was 6%, with non-GAAP margin expansion of 109 basis points.

Our core non-GAAP segment revenue increased 7% for the quarter.

With operating margin, increasing a robust 274 basis points.

We continue to gain benefits from private cloud trend and disciplined cost management.

Full year non-GAAP core segment revenue growth was 6% and associated margin increased 113 basis points.

Speaker #4: Our core non-GAAP segment revenue increased 7% for the quarter, with operating margin increasing a robust 274 basis points. We continue to gain benefits from private cloud trends and disciplined cost management.

Payments non-GAAP segment quarterly revenue increased 6% as segment again had strong non-GAAP operating margin growth of 99 basis points.

Speaker #4: Full-year non-GAAP core segment revenue growth was 6%, and the associated margin increased 113 basis points. Payments non-GAAP segment quarterly revenue increased 6%, and the segment again had strong non-GAAP operating margin growth of 99 basis points.

Full year non-GAAP revenue.

Or is that with non-GAAP margin expansion of 191.

Revenue growth was due to the continued growth in our card related services Etfs and a large percent growth on draft opinion granted on a smaller dollar amount.

Speaker #4: Full year non-GAAP revenue growth was 6%, with non-GAAP margin expansion of 109 basis points. Revenue growth was due to the continued growth in our card-related services, EPS, and a large percent growth in faster payments, granted on a smaller dollar amount.

Margin benefited from operational efficiencies and disciplined cost management.

Finally complementary segment non-GAAP quarterly revenue increased an impressive 11% with 155 basis points of margin expansion.

Mimi Carsley: Revenue growth was due to the continued growth in our card-related services, EPS, and a large percent growth on faster payments, granted on a smaller dollar amount. Margin benefited from operational efficiency and disciplined cost management. Finally, complimentary segment non-GAAP quarterly revenue increased an impressive 11% with 155 basis points of margin expansion. Fiscal year non-GAAP revenue and margin strongly increased 9% and 117 basis points respectively. Both quarterly and full-year revenue growth continue to reflect digital solution demand, beneficial product mix sales, sources from both core wins and non-core financial institutions. Now, a review of cash flow and capital allocation. Fiscal 2025 operating cash flow was a record $642 million, a $73 million increase over the prior fiscal year. Excluding proceeds from sale of assets in both fiscal years, free cash flow was $410 million, significantly more than the $336 million last year.

Fiscal year, non-GAAP revenue and margin strongly increased 9%.

Speaker #4: Margin benefited from operational efficiencies and disciplined cost management. Finally, complementary segment non-GAAP quarterly revenue increased an impressive 11%, with 155 basis points of margin expansion.

117 basis points, respectively.

Both quarterly and full year revenue growth continued to reflect digital solution demand beneficial product mix down.

Speaker #4: Fiscal year non-GAAP revenue and margins strongly increased by 9% and 117 basis points, respectively. Both quarterly and full year revenue growth continued to reflect digital solution demand, beneficial product mix, and sales sources from both core wins and non-core financial institutions.

So where things are in Portland, and noncore financial institution.

Now a review of cash flow and capital allocation.

Fiscal 'twenty five operating cash flow was a record $642 million.

The $3 million increase over the prior fiscal year.

Excluding proceeds from sale of assets in both fiscal years free cash flow like $410 million significantly more than the $336 million.

Speaker #4: Now, a review of cash flow and capital allocation. Fiscal 2025 operating cash flow was a record $642 million, a $73 million increase over the prior fiscal year.

Yes.

Full year free cash flow was positive.

Impacted by timing of certain contract payments.

Speaker #4: Excluding proceeds from the sale of assets in both fiscal years, free cash flow was $410 million, significantly more than the $336 million from last year.

Tax payments unrelated to reason tax legislative changes.

Free cash flow conversion was an impressive 90% and I will provide more detail when discussing our full year guidance.

Speaker #4: Full-year free cash flow was positively impacted by the timing of certain contract payments and tax payments unrelated to recent tax legislative changes. Free cash flow conversion was an impressive 90 percent, and I will provide more details when discussing the full-year price.

Mimi Carsley: Full-year free cash flow was positively impacted by timing of certain contract payments and tax payments unrelated to recent tax legislative changes. Free cash flow conversion was an impressive 90%, and I will provide more details when discussing the full-year guidance. Our consistent dedication to value creation resulted in a trailing 12-month return on invested capital of 22%. Additionally, I would highlight other notable return of capital metrics for the year, including $35 million in share repurchases, more than offsetting annual dilution, $150 million in debt reduction, and $165 million in dividends. We are pleased to announce zero debt at fiscal year end, providing us with maximum flexibility for future of capital deployment. For modeling purposes, our amortization of acquisition-related intangibles was $6 million for the fiscal quarter. Heading into a new fiscal year, I will conclude with guidance.

Our consistent dedication to value creation resulted in a trailing 12 month return on invested capital of 22%.

Additionally, I would highlight other notable return of capital metrics for the year, including $35 million share repurchases more than offsetting annual dilution.

Speaker #4: Our consistent dedication to value creation resulted in a trailing 12-month return on invested capital of 22%. Additionally, I would highlight other notable return of capital metrics for the year, including $35 million in share repurchases, more than offsetting annual dilution, $150 million in debt reduction, and $165 million in dividends.

<unk> hundred 50 million in debt reduction and 165 now and get it.

We're pleased to announce the euro debt at fiscal year end, providing us with maximum flexibility for future capital deployment.

For modeling purposes, our amortization of acquisition related intangible was $6 million for the fiscal cliff.

Heading into our new fiscal year, I will conclude with guidance.

Speaker #4: We're pleased to announce zero debt at fiscal year-end, providing us with maximum flexibility for future capital deployment. For modeling purposes, our amortization of acquisition-related intangibles was $6 million for the fiscal quarter.

As Youre aware of yesterday's press release included fiscal 2025th full year GAAP guidance.

He conversion guidance will continue to follow the conservative methodology introduced and difficult 24.

Speaker #4: Heading into a new fiscal year, I will conclude with guidance. As you're aware, yesterday's press release included Fiscal 2026 full-year GAAP guidance. Deconversion guidance will continue to follow the conservative methodology introduced in Fiscal 24.

It goes 26, deconversion revenue guidance, it's $10 million.

Mimi Carsley: As you are aware, yesterday's press release included fiscal 2026 full-year GAAP guidance. Deconversion guidance will continue to follow the conservative methodology introduced in fiscal 2024. Fiscal 2026 deconversion revenue guidance is $16 million, and as we confirm more activity during the year, we will update the quarter outcome. For the full-year GAAP revenue growth guidance is 4.2% to 5.4%. This is understated due to the conservative deconversion revenue guidance. Non-GAAP revenue growth guidance is 5.8% to 7%. Based on the above revenue growth and our predominantly SaaS-like operations, we expect to again generate sustainable, accretive sources of margin. We are guiding for the third year in a row to annual non-GAAP margin expansion of 20 to 40 basis points. All of the above are indicative that our business operations remain healthy and consistent. The full-year GAAP tax rate estimate for fiscal 2026 is 23.75%.

And as we confirmed more activity during the year, we will update this quarter.

For the full year GAAP revenue growth guidance is four six to five 4%.

Speaker #4: Fiscal 2026 deconversion revenue guidance is $16 million, and as we confirm more activity during the year, we will update the quarter outlook. For the full year, GAAP revenue growth guidance is 4.2% to 5.4%.

Is understated due to the conservative deconversion revenue guidance.

non-GAAP revenue growth guidance is five 8%.

Eight on the above revenue growth and a predominantly SaaS like operations, we expect to again generate sustainable accretive sources of margin here.

Speaker #4: This is understated due to the conservative deconversion revenue guidance. Non-GAAP revenue growth guidance is 5.8% to 7%. Based on the above revenue growth and our predominantly FastLike operations, we expect to again generate sustainable, accretive sources of margin.

We are guiding for the third year in a row.

All non-GAAP margin expansion of 20 to 40 basis points.

All of the above are indicative that our business operations remained healthy and consistent.

Full year GAAP tax rate estimate for fiscal 'twenty thick is $23 75 per cent.

Speaker #4: We are guiding for the third year in a row to annual non-GAAP margin expansion of 20 to 40 basis points. All of the above are indicative that our business operations remain healthy and consistent.

The above guidance metrics result in a full year outlook for GAAP EPS of $6.32.

And 44 cents per share a growth of 1% to 3%.

Speaker #4: The full-year GAAP tax rate estimate for Fiscal 2026 is 23.75 percent. The above guidance metrics result in a full-year outlook for GAAP EPS of $6.32 to $6.44 per share, a growth of 1 to 3 percent.

As a reminder, due to the conservative deconversion that the new guidance at the beginning of the year GAAP EPS growth is understated as a result.

Mimi Carsley: The above guidance metrics result in a full-year outlook for GAAP EPS of $6.32 to $6.44 per share, a growth of 1% to 3%. As a reminder, due to the conservative deconversion revenue guidance at the beginning of the year, GAAP EPS growth is understated as a result. Fiscal 2026 is expected to have a strong free cash flow conversion due to the recently passed tax legislation. Highlights of the tax legislation include total expensing of R&D costs from Section 174, and bonus tax depreciation will have a meaningfully positive impact. We will be making an election in the coming months on how we will implement the tax law changes resulting in one of the following two scenarios.

It's still 26 is expected to have a strong free cash flow conversion due to the recently passed legislation.

Speaker #4: As a reminder, due to the conservative deconversion revenue guidance at the beginning of the year, GAAP EPS growth is understated as a result. Fiscal 2026 is expected to have a strong free cash flow conversion, due to the recently passed tax legislation.

The tax legislation and quit.

Expensing of R&D Gasp in section 174, and bonus tax depreciation will have a meaningfully positive impact.

We will be making an election in the coming months on Hollywood implement the tax law changes, resulting in one of the following scenario.

Speaker #4: Highlight that the tax legislation includes bonus expensing of R&D costs from Section 174, and bonus tax depreciation will have a meaningfully positive impact. We will be making an election in the coming months on how we will implement the tax law changes, resulting in one of the following two scenarios.

We could see a more significant impact in fiscal 'twenty.

A limited nonrecurring impact in fiscal 'twenty, seven or we could elect to take the benefit spread across the fiscal year was 26 basis points up.

Overall this legislation will allow for free cash flow conversion of approximately 85.

Speaker #4: We could see a more significant impact in Fiscal 2026, with limited non-recurring impact in Fiscal 2027, or we could elect to take the benefits spread across the fiscal years 2026 and 2027.

Mimi Carsley: We could see a more significant impact in fiscal 2026 with limited non-reoccurring impact in fiscal 2027, or we could elect to take the benefits spread across the fiscal years 2026 and 2027. Overall, this legislation will allow for free cash flow conversion of approximately 85% to 100% in future years. Our current view has a cadence of fiscal 2026 non-GAAP revenue being strongest in Q1, lower in Q2, and increasing on a reported basis for quarters three and four. Our annual customer conference, Jack Henry Connect, will be held in Q1 this year, partially driving higher revenue during that quarter and the lower performance in Q2. Absent the timing switch of this revenue growth in quarters one and two, would result in the first three quarters showing similar growth and Q4 showing moderate sequential increase.

Or is that in future years.

Our current view hesitate into fiscal 'twenty, six non-GAAP revenue being strongest in Q1 lower than Q2, and increasing on a reported basis or quarters three and four.

Speaker #4: Overall, this legislation will allow for free cash flow conversion of approximately 85% to 100% in future years. Our current view has the cadence of Fiscal 2026 non-GAAP revenue being strongest in Q1, lower in Q2, and increasing on a reported basis for quarters Q3 and Q4.

Our annual customer conference <unk> Interconnects will be held in Q1, this year, partially driving higher revenue during that quarter and the lower performance in Q2.

Absent the timing switch at this revenue growth in quarters, one and two with results in the first three quarters, showing similar growth and Q4 showing moderate sequential increase.

Speaker #4: Our annual customer conference, JACK HENRY Connect, will be held in Q1 this year, partially driving higher revenue during that quarter and the lower performance in Q2.

Yes, Henry at the next conference will revert back to Q2 and fiscal 2007 and staying in that quarter for several years ending this occasional timing mismatch.

Speaker #4: Absent the timing switch of this revenue growth in Q1 and Q2, it would result in the first three quarters showing similar growth and Q4 showing a moderate sequential increase.

Consequently.

Q1 estimation for non-GAAP revenue growth is approximately seven to seven 5%.

Speaker #4: Our Jack Henry Connect conference will revert back to Q2 in fiscal 2027 and stay in that quarter for several years, ending with occasional timing mismatches.

Mimi Carsley: Our Jack Henry Connect conference will revert back to Q2 in fiscal 2027 and stay in that quarter for several years, ending this occasional threatening mismatch. Consequently, Q1's estimation for non-GAAP revenue growth is approximately 7% to 7.5%. As a reminder, we see fluctuations in quarterly results relating to software usage license components, along with the timing of implementation. Therefore, the correct performance indicator of our business is the consistently strong fiscal year financial results. In conclusion, Q4 and full-year results reflect solid performance and meeting or exceeding provided guidance. We enter fiscal 2026 with positive momentum and high expectations to deliver on our full-year guidance targets. Demand for our solutions and the fiscal strength of our clients remain strong, which we expect to drive superior shareholder value. We appreciate the contributions of our dedicated associates that achieve these strong results and our investors for their ongoing confidence.

As a reminder, we see fluctuations in quarterly.

Relating to software usage license component.

Along with the timing of implementation.

Speaker #4: Consequently, Q1 estimation for non-GAAP revenue growth is approximately 7% to 7.5%. As a reminder, we see fluctuations in quarterly results relating to software usage, license components, along with the timing of implementation.

Therefore, the correct book earnings indicator of our business is a consistently strong fiscal year financial results.

In conclusion.

Four and full year results reflect solid performance and meeting or exceeding provided guidance.

We entered fiscal 'twenty with positive momentum and high expectations to deliver on our full year guidance targets.

Speaker #4: Therefore, the correct performance indicator of our business is a consistently strong fiscal year financial result. In conclusion, Q4 and full-year results reflect solid performance and meeting or exceeding provided guidance.

Demand for our solutions and the strength of our clients remain strong, which we expect to drive superior shareholder value.

We appreciate the contributions of our dedicated associates that achieved these strong results and our investors for their ongoing combat.

Speaker #4: We anchor Fiscal 2026 with positive momentum and high expectations to deliver on our full-year guidance targets. Demand for our solutions and the fiscal strength of our clients remain strong, which we expect to drive superior shareholder value.

Jamie Please open the lines for question.

Yes.

Ladies and gentlemen at this time, we'll begin the question and answer session. Once again to ask a question you May Press Star and then one using a touchtone telephone to withdraw your question you May Press Star two.

Speaker #4: We appreciate the contributions of our dedicated associates that achieve these strong results and our investors for their ongoing confidence. Jamie, please open the line for questions.

If you are using a speaker phone we do ask you. Please pick up the handset prior to pressing the keys to ensure the best sound quality.

Mimi Carsley: Jamie, please open the line for questions.

Speaker #1: Ladies and gentlemen, at this time, we'll begin the question and answer session. Once again, to ask a question, you may press star and then one using a touch-tone telephone.

Jamie: Ladies and gentlemen, at this time, we will begin that question and answer session. Once again, to ask a question, you may press star and then one using a touchstone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Again, that is star and then one to join the question queue. Our first question today comes from Dan Perlin from RBC. Please go ahead with your question.

Again that is star and then one to join the question queue.

Our first question today comes from Dan Perlin from RBC. Please go ahead with your question.

Speaker #1: To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality.

Thanks, Good morning, everyone.

I wanted to circle back maybe on the.

Speaker #1: Again, that is star and then one to join the question queue. Our first question today comes from Dan Perlin from RBC. Please go ahead with your question.

If the aggregate demand environment, coupled with kind of our expectations.

Expectations around implementation cycles, so Greg.

Clearly the demand you 151 quarters. So that's very much on track with I think the expected run rate you guys had been putting up for a number of years and it sounds like youre talking about.

Speaker #5: Thanks. Good morning, everyone. I wanted to kind of circle back, maybe on the, I guess, the aggregate demand environment, but coupled with kind of expectations around implementation cycles.

Dan Perlin: Thanks. Good morning, everyone. I wanted to kind of circle back maybe on the, I guess, the aggregate demand environment, but coupled with kind of expectations around implementation cycles. Greg, clearly the demand, you know, you won 51 cores, so that is very much on track with, I think, the expected run rate that you guys have been putting up for a number of years. It sounds like you are talking about larger wins, obviously. I am just wondering, you know, to try and reconcile that with maybe last quarter's commentary around some large capital purchase delays and maybe some implementation cycles for non-core projects. I am wondering if those two are still kind of at odds with one another, or has that gap closed a little bit?

Larger wins, obviously I'm, just wondering to try and reconcile that with maybe last quarter's commentary around some large capital purchase delays and maybe some implementation cycles for non core projects I'm wondering if those two are still kind of.

Speaker #5: So, Greg, clearly the demand—you know, you won 51 cores, so that's very much on track with, I think, the expected run rate that you guys have been putting up for a number of years.

At odds with one another or has that gap closed a little bit.

Speaker #5: And it sounds like you're talking about larger wins, obviously. I'm just wondering, you know, to try and reconcile that with maybe last quarter's commentary around some large capital purchase delays and maybe some implementation cycles for non-core projects. I'm wondering if those two are still kind of at odds with one another, or has that gap closed a little bit?

Yeah, Dan. Thanks, Thanks for the question, yes, so a couple of things so one from the sales demand and our ability to continue to go up market I think.

Hopefully you were able to hear all my comments on that so that's definitely happening and definitely something that is a huge focus of ours from back to your question from last quarter. Some of that gap significantly improved I would say, mostly on the consulting side and things along that line. Some implementation is still a little.

Speaker #2: Yeah, Dan, thanks for the question. So, a couple of things. One, from the sales demand and our ability to continue to go up-market, I think, you know, hopefully you were able to hear all my comments on that.

Vance Sherard: Yeah, Dan, thanks for the question. A couple of things. One, from the sales demand and our ability to continue to go up market, I think, hopefully you were able to hear all my comments on that. That is definitely happening and definitely something that is a huge focus of ours. Back to your question from the last quarter, yes, some of that gap has significantly improved. I would say mostly on the consulting side and things along that line. Some implementations still a little bit delayed, but nothing, I guess, to the same level they were last quarter. But if you remember, I also pointed out that there were some delays on some of our consulting engagements, especially around our Financial Crimes Defender solution and things like that, that have all now finally caught back up again.

Speaker #2: So, that's definitely happening and definitely something that is a huge focus of ours. From back to your question from the last quarter, yeah, I saw that gap is significantly improved.

Bit delays, but nothing I guess to the same level they were last quarter, but if you remember I also pointed out that there were some delays on some of our consulting engagement, especially around our financial crimes defender solution and things like that that have all now finally caught back up again, so and as I indicated that happens occasionally.

Speaker #2: I would say mostly on the consulting side, and things along that line. Some implementation is still a little bit delayed, but nothing, I guess, to the same level they were last quarter.

Throughout the year, but because it was more pronounced than it would be kind of be part of our key end of <unk>.

Speaker #2: But if you remember, I also pointed out that there were some delays on some of our consulting engagements, especially around our financial crimes defender solution and things like that, which have all now finally caught back up again.

Our quarter.

It ended up pushing it into this fiscal year. So that's also part of the part of that.

Why I called it out.

Speaker #2: So, and as I indicated, that happens occasionally throughout the year, but because it was more pronounced and it was the, you know, kind of big part of our the end of our quarter, it ended up pushing it into this fiscal year.

Vance Sherard: As I indicated, that happens occasionally throughout the year, but because it was more pronounced and it was kind of being part of the end of our quarter, it ended up pushing it into this fiscal year. That is also part of the part of that, the why I called it out.

Got it okay. That's great to hear and then maybe just this is maybe nuanced a little bit but like the revenue guidance range is a little bit wider than it is to 120 basis points relative to 100 for the past several years and so I'm just wondering what kind of drove that decision.

Speaker #2: So, that's also part of the reason why I called it out.

I don't think it's a function of.

Speaker #5: Got it. Okay, that's great to hear. And then, Mimi, just this is maybe nuanced a little bit, but like the revenue guidance range is a little bit wider than its 120 basis point fell into 100 for the past several years.

Dan Perlin: Got it. Okay, that's great to hear. Mimi, just this is maybe nuanced a little bit, but the revenue guidance range is a little bit wider. I think it's 120 basis points relative to 100 for the past several years. I am just wondering what kind of drove that decision. I do not think it is a function of the deconversion revenue, but I just wanted to make sure I understood what was driving the wider range. Thank you.

The deconversion revenue, but I just wanted to make sure I understood what was driving the wider range. Thank you.

Thanks for the question Dan.

I think overall as we set our budgeting process and we look at the macroeconomic variables that are beyond our control and.

Speaker #5: And so I'm just wondering, what kind of drove that decision? I don't think it's a function of, you know, the deconversion revenue, but I just wanted to make sure I understood what was what was driving the wider range.

And as we get to just larger total revenue size, having a 1% historical spread in the guidance.

Speaker #5: Thank you.

Speaker #4: Thanks for the question, Dan. Yeah, I think overall, as we set our budgeting process and look at the macroeconomic variables that are beyond our control, and as we get to just larger total revenue sizes, having a 1 percent historical spread in the guidance felt a little bit constricting.

Mimi Carsley: Thanks for the question, Dan. I think overall, as we get our budgeting process and we look at the macroeconomic variables that are beyond our control, and as we get to just larger total revenue size, having a 1% historical spread in the guidance, we felt was a little bit constricting. We wanted to make sure we are very much committed to hitting the guidance and executing on that. So, just giving us a little bit more flexibility, as we collaborate with sales and operations, just to think about the risks and opportunities before us. Not much, I would not call it anything structurally different, just providing more operational flexibility.

We felt slipped a little bit constricting, we wanted to make sure we're very much committed to hitting the guidance.

At executing on that.

Just giving us are a little bit more flexibility as we can.

Robert with sales and operations just to think about the risks and opportunities before us.

Speaker #4: We wanted to make sure we're very much committed to hitting the guidance and executing on that. So, just giving us a little bit more flexibility, you know, as we collaborate with sales and operations, just to think about the risks and opportunities before us.

Not much I wouldnt call into anything structurally different just to provide us more operational flexibility.

Yep completely prudent okay. Thank you so much.

Our next question comes from Nick.

<unk> from UBS. Please go ahead with your question.

Speaker #4: So, not much; I wouldn't call it anything structurally different, just providing more operational flexibility.

Hey, good morning, and thanks for taking my questions first I just wanted to circle back to the fiscal 2026 revenue outlook.

Speaker #5: Yep. Completely prudent. Okay, thank you so much.

Dan Perlin: Yep, completely prudent. Okay, thank you so much.

Should we think about growth between the various segments on a relative basis I know that.

Speaker #1: Our next question comes from Nick Cremo from UVS. Please go ahead with your question.

Jamie: Our next question comes from Nick Cremo from UBS. Please go ahead with your question.

The payments segment was.

Called out to have some headwinds and it looks like the number of new <unk> wins in fiscal 'twenty five versus fiscal 'twenty four it was a little bit lower so maybe a little Florida complementary segment relative to the core segment. Thank you.

Speaker #6: Hey, good morning. Thanks for taking my questions. First, I just wanted to circle back to the fiscal 2026 revenue outlook. How should we think about growth between the various segments on a relative basis?

Will Nance: Hey, good morning, and thanks for taking my questions. First, I just wanted to circle back to the fiscal 2026 revenue outlook. How should we think about growth between the various segments on a relative basis? I know that the payment segment was called out to have some headwinds, and it looks like the number of new Banno platform wins in fiscal 2025 versus fiscal 2024 was a little bit lower, so maybe a little slower in the complimentary segment relative to the core client segment. Thank you.

Speaker #6: I know that the payments segment was called out to have some headwinds, and it looks like the number of new banner wins in Fiscal 2025 versus Fiscal 2024 was a little bit lower, so maybe a little slower than the complementary segment relative to the core segment.

Yeah. So as we think about 'twenty I think some of it is going to be trends that are continuing recently are we at.

That's it certainly core will remain solid again payment.

Speaker #6: Thank you.

Related to the long term growth algorithm is probably slightly below or towards the bottom end of that range of the near term targets. A couple of extra room, we actually expect solid credits for.

Speaker #4: Yeah, so as we think about 2026, I think some of it is going to be trends that are continuing recently. We expect that certainly core will remain solid again, with payments related to the long-term growth algorithm probably slightly below or towards the bottom end of that range, of the near-term targets. Additionally, we actually expect solid growth for 2026.

Mimi Carsley: As we think about 26, I think some of it is going to be trends that are continuing recently. We expect that certainly core will remain solid again. Payments, I rotated to the long-term growth algorithm, probably slightly below or towards the bottom end of that range of the near-term target. Complimentary, we actually expect solid growth for 26 closer to the higher end of that growth algorithm range.

For 2000 and set.

Closer to the higher end of that growth algorithm range.

Yes.

Great. Thank you.

Our next question comes from Vasu <unk> from <unk>. Please go ahead with your question.

Hi, Thanks for taking my questions I guess, just the first one.

Speaker #4: Closer to the higher end of that growth algorithm range.

Guys called out short term revenue headwinds from bank M&A.

Speaker #5: Great, thank you.

Will Nance: Great, thank you.

Any way to quantify how much that's weighing on the 26 outlook and then Greg I know you called out the large bank Moores are you willing to do it in your comments not baked into this year's outlook. So are you, saying that that's going to be a had been following me or if not this year and then more broadly is bank M&A continues at an accelerated pace are we potentially.

Speaker #1: Our next question comes from Vasu Gaval from KBW. Please go ahead with your question.

Jamie: Our next question comes from Vasu Govil from KBW. Please go ahead with your question.

Speaker #7: Hi, thanks for taking my questions. I guess just the first one: you guys called out short-term revenue headwinds from bank M&A. Any way to quantify how much that's weighing on the 2026 outlook?

Matt Scharf: Hi, thanks for taking my questions. I guess just the first one, you guys called out short-term revenue headwinds from bank M&A. Any way to quantify how much that's weighing on the 2026 outlook? Greg, I know you called out the large bank merger you alluded to in your comments, not baked into this year's outlook. Are you saying that that's going to be a headwind the following year, if not this year? More broadly, if bank M&A continues at an accelerated pace, are we potentially looking at multiple years of maybe slightly softer top-line growth than the 7% to 8% we're used to seeing from you guys?

Looking at multiple years of maybe slightly softer top line than the 7% to 8% of where it used to seeing from you guys.

Speaker #7: And then, Greg, I know you called out the large bank merger; you alluded to it in your comments, but it is not baked into this year's outlook.

Speaker #7: So, are you saying that that's going to be a headwind the following year? If not this year, and then more broadly, if bank M&A continues at an accelerated pace, are we potentially looking at multiple years of maybe slightly softer top line growth than the 7% to 8% we're used to seeing from you guys?

Yes, So let me answer.

The middle question first so.

What I am stating emphatically is that we have not received any guidance that.

What will happen in fact, we've had really good conversations with both parties.

Speaker #2: Yeah, so let me answer the middle question first. What I am stating, emphatically, is that we have not received any guidance on what will happen.

Vance Sherard: Yeah, so let me answer the middle question first. What I am stating emphatically is that we have not received any guidance of what will happen. In fact, we have had really good conversations with both parties. There hasn't been any indication that Jack Henry will not have an opportunity to either win the overall deal or continue to have additional products in the solution set that even if it isn't our core. All those conversations are really actually happening now. The short answer is yes. I do not expect anything in fiscal year 2026, but I do not know what will happen yet and what the impact will be. Again, as we have reiterated several times, we do not have any client that is a substantial amount of our revenue. This client is actually an in-house client.

And so there isn't been any indication that Jack Henry will not have an opportunity.

To either when the overall deal or continue to have additional products in the solution set that.

Speaker #2: In fact, we've had really good conversations with both parties, and so there hasn't been any indication that Jack Henry will not have an opportunity to either win the overall deal or continue to have additional products in the solution set that, even if it isn't our core.

Even if it is in our core so all of those conversations are under really actually happening now.

So short answer is yes, so I don't expect anything in fiscal year, 2006, and but I don't know what will happen yet and so what the impact will be.

And again.

We reiterated several times.

Speaker #2: So, all those conversations are really actually happening now. So, the short answer is yes. I don't expect anything in fiscal year 2026, but I don't know what will happen yet and what the impact will be. And again, as we've reiterated several times, we don't have any client that constitutes a substantial amount of our revenue, so this client is actually an in-house client.

We don't have any client that has a substantial amount of our revenue. So this client is actually a in house clients. So from a revenue perspective, it actually will probably have less impact than some of our outsourced clients. If they were to leave so.

It isn't as substantial as maybe some maybe project.

Number two is is that from a headwind standpoint, and an M&A. It really is about the fact that.

Speaker #2: So, from a revenue perspective, it actually will probably have less impact than some of our outsourced clients if they were to leave. So, it isn't as substantial as maybe some other projects.

Vance Sherard: From a revenue perspective, it actually will probably have less impact than some of our outsourced clients if they were to leave. It is not as substantial as maybe some may project. Number two is that from a headwind standpoint and an M&A, it really is about the fact that we have, if you look at the balance of what has happened so far, it is basically equal, almost in exact numbers, of how many have been Jack Henry to Jack Henry and how many have been Jack Henry to have been acquired by a competing core. What ends up happening is, as you can imagine, a lot of the deconversion revenue is mostly predicated on how much time is left on the agreement. Not every deal is actually equal. You could have a deal that has less than a year.

We have if you look at the balance of what's happened so far it's basically equal.

Almost exact numbers of how many have been Jack Henry that Jack Henry and how many have been Jack Henry to.

Speaker #2: Number two is that from a headwind standpoint in an M&A, it really is about the fact that we have, if you look at the balance of what's happened so far, it's basically equal – almost in exact numbers – of how many have been Jack Henry that Jack Henry and how many have been Jack Henry to have been acquired by a competing core.

Two had been acquired by <unk>.

Competing core.

But what ends up happening is as you can imagine a lot of the deconversion revenue is mostly predicated on how much time is left on the agreement.

So not every deal is actually equal you can have a deal that has less than a year you got a deal that's got five or six years and that's a more substantial impact so even some of our Jack Henry that Jack Henry deals because of the way the pricing was set up or the size of the actual acquisition it.

Speaker #2: But what ends up happening is, as you can imagine, a lot of the deconversion revenue is mostly predicated on how much time is left on the agreement.

Speaker #2: And so, not every deal is actually equal. You could have a deal that has less than a year, you've got a deal that's got five or six years, and that's a more substantial impact.

It Didnt hit the next level of the trigger for us to get an immediate impact on revenue growth. So it makes not the growth for a short period of time.

Vance Sherard: You got a deal that has got five or six years, and that is a more substantial impact. Even so, our Jack Henry to Jack Henry deals, because of the way the pricing was set up or the size of the actual acquisition, it did not hit the next level of the trigger for us to get an immediate impact on revenue growth. It may stunt the growth for a short period of time, but it is not a long-term thing. I guess, most people are viewing this M&A market, you have to put all of those factors into play, meaning that not every loss or every win is created equal depending on turn. Again, some of that based on what has happened is creating some short-term revenue.

Speaker #2: So, even some of our Jack Henry to Jack Henry deals, because of the way the pricing was set up or the size of the actual acquisition, it didn't hit the next level of the trigger for us to get an immediate impact on revenue growth.

But it isn't a long term thing so I guess you know.

Most people are viewing this M&A market.

You have to put all of those factors in the play meaning that not every.

Every loss or every win is created equal depending on term.

Speaker #2: So, it may stunt the growth for a short period of time, but it isn't a long-term thing. So, I guess, you know, most people are viewing this M&A market; you have to put all of those factors into play, meaning that not every loss or every win is created equal, depending on term.

So again, so some of that based on what has happened is creating some short term revenue.

And I think still as we stated last time and as I will continue to state that I think it's a balanced if you look at over the last several years of the number.

Even when M&A was more prevalent in a few years ago.

Speaker #2: So again, some of that, based on what has happened, is creating some short-term revenue. I think, as we stated last time, and as I will continue to state, that I think it's a balance.

We continue to grow at pretty nice numbers and if you look at what we're guiding to the not to right now it's still significantly higher than the competition is.

Vance Sherard: I think still, as we have stated last time and as I will continue to state, that I think it is a balance. If you look at over the last several years of the number, even when M&A was more prevalent a few years ago, we continued to grow at pretty nice numbers. If you look at what we're guiding to right now, it's still significantly higher than the competition is. I continue to believe that that will only be advanced as we get through some of these short-term headwinds.

Speaker #2: If you look at over the last several years, of the number even, you know, when M&A was more prevalent a few years ago, we continue to grow at pretty nice numbers. If you look at what we're guiding to right now, it's still significantly higher than the competition is.

And I continue to believe that that will only be advanced as we get through some of the short term.

Headwinds if I can just add on to that relative to the third part of your question that we see no structural change in the long term.

Arctic opportunities for the company the company is solid and extremely healthy we expect if we think about the three year Tiger versus the algorithm targets are still very much Dallas.

Speaker #2: And, you know, I continue to believe that that will only, you know, be advanced as we get through some of these short-term headwinds.

Speaker #4: And if I could just add on to that relative to the third part of your question, we see no structural change in the long-term opportunities for the company.

Mimi Carsley: If I could just add on to that. Relative

Jamie: To the third part of your question, we see no structural change in the long-term opportunities for the company. The company is solid and extremely healthy. We expect, if we think about the three-year CAGR versus the algorithm targets, they are still very much valid and intact. It is great you talked about it. We have a lot of exciting new opportunities before us that we think we will leverage to future growth.

And intact and as Greg talked about it we have a.

A lot of exciting new opportunities before us that we think will leverage.

Speaker #4: The company is solid and extremely healthy. We expect that if we consider the three-year CAGR versus the algorithm targets, they are still very much valid.

Peter Brett Yeah. So if you don't mind me just adding one other point just in case it doesn't come up I think it's really important that we also talked about some renewals and some of the pricing piece just to put this in perspective.

Speaker #4: And, in fact, as Greg talked about, we have a lot of exciting new opportunities before us that we think will leverage future growth.

We did from a renewal standpoint, we did 12% increase in overall renewals for the year. Some of those are actually predicated a little bit earlier than we would originally expect because it is a Jack Henry to Jack Henry.

Speaker #2: Yeah, Vasu, if you don't mind me just adding one other point, just in case it doesn't come up. I think it's really important that we also talk about some renewals in some of the pricing pieces.

Greg Adelson: Yeah, Vance, if you do not mind me just adding one other point just in case it does not come up. I think it is really important that we also talked about some renewals and some of the pricing piece. Just to put this in perspective, we did, from a renewal standpoint, we did a 12% increase in overall renewals for the year. Some of those are actually predicated a little bit earlier than we would originally expect because it is a Jack Henry & Associates to Jack Henry & Associates conversion or migration, and the particular acquiring entity wants to renew ahead of the game. So there are some things that become a little bit more unplanned. But what I really wanted to emphasize was that in fiscal year 2024, of all the renewals we did, it totaled $94 billion in assets.

Conversion or migration and the particular acquiring entity wants to renew.

Ahead of the game and so there's some things that become a little bit more on plan, but what I really wanted to emphasize was that in fiscal year 'twenty for of all the renewals. We did it totaled $94 billion in assets, but for fiscal year 'twenty fives. It totaled $223 billion in assets. So they were a lot of our larger.

Clients.

And so we were able to renew them.

Obviously, there is some sort of short term price compression, we sell them new products. So it takes a couple of years for those to get implemented.

Greg Adelson: For fiscal year 2025, it totaled $223 billion in assets. So they were a lot of our larger clients. We were able to renew them. Obviously, there is some short-term price compression. You know, we sell them new products, so it takes a couple of years for those to get implemented and things along that line. But that is part of the reason. I would say that that is probably a little more prevalent than even the deconversion component.

And things along that line, but that's part of the reason and I would say that that's probably a little more prevalent than even the deconversion component.

I appreciate all the color and all the detail that was very very helpful. I guess, just my quick follow up one of the other things you guys mentioned there really is it's just a slower account growth and that is something we've heard from some of your peers as well. So hoping you can give a little bit more color on you know what kind of change you have seen them, they're trying to line any demand.

Vance Sherard: I appreciate all the color and all the detail. That was very, very helpful. I guess just my quick follow-up. One of the other things you guys mentioned in the release is just the slower account growth. That is something we have heard from some of your peers as well. So hoping you can give a little bit more color on what kind of change you have seen in the trend line, any dimensionalization of what the magnitude of that change is, and expectations going forward.

Proliferation of what the magnitude, even if that changes and expectations going forward.

Yeah, it's really started over.

Over the last several years in the credit Union part of our market and I think it's there's a lot of reports that have actually shown that.

And I think just one or two of our competitors pointed it out as well on the banking side I think some of it is predicated on what's happening with the neo banks and some lost accounts that are going there. Some of it also is predicated just on how pricing occurs.

Greg Adelson: Yeah, it has really started over the last several years in the credit union part of our market. I think it is, you know, there are a lot of reports that have actually shown that. I think, yes, one or two of our competitors pointed it out as well on the banking side. I think some of it is predicated on what is happening with the neobanks and, you know, some lost accounts that are going there. Some of it also is predicated just on how pricing occurs. You know, some of the institutions, as they change their deposit growth strategies and things along that line, sometimes they end up purging accounts that are not really growing or would be more of what I would call dormant accounts. So a lot of them change their strategies because they do not want to pay for those.

Some of the.

Institutions.

As they change their deposit growth strategies and things along that line, sometimes they end up purging accounts that aren't really growing or are would be more what I would call dormant accounts.

And so a lot of them change their strategy because they don't want to pay for those so there is some of that from a from an organic growth some of it go into neo banks.

That's why we've been so focused on our SMB strategy to bring those deposits back into <unk>.

Into our financial institutions to allow that.

Whats going out to the stripes in the squares and.

Greg Adelson: So there is some of that from an organic growth, some of it going to neobanks. That is why we have been so focused on our SMB strategy to bring those deposits back into our financial institutions to allow that, you know, what is going out to the stripes and the squares and into the chimes and others to be able to stay within our financial institutions. Again, that is a big part of our overall strategy.

And of the times and others to be able to stay within our financial institution. So again, that's a big part of our overall strategy.

Yeah.

Thank you very much.

Our next question comes from Kartik Mehta from Northcoast Research. Please go ahead with your question.

Hey, good morning, Greg.

Greg I know just in the previous question you talked a little bit about pricing pressure related to renewals and I'm wondering is is the pricing pressure, you're seeing just related to factor renewing and that's just.

Vance Sherard: Thank you very much.

Matt Scharf: Our next question comes from Kartik Mehta from Northcoast Research. Please do hold your question.

The way business is done or are you seeing any incremental pricing pressure.

Mimi Carsley: Hey, good morning, Greg and Mimi. Greg, I know just in the previous question, you talked a little bit about pricing pressure related to renewals. I am wondering, is the pricing pressure you are seeing just related to the fact of renewing and that is just the way business is done? Or are you seeing any incremental pricing pressure on new or renewals?

On new.

Or renewals.

Good question Carter, Yes, I mean, it's happening in both I mean, there is theirs.

I won't say that it's really <unk>.

That much.

It's new.

Pricing pressure on renewals as always I mean, theres only a handful as we've talked about before roughly 100 opportunities a year, where people really are making decisions. So those get to be pretty competitive.

Greg Adelson: Good question, Kartik. It is happening in both. There is, and it has been, but I will not say that it is really that much new. Pricing pressure on renewals is always, there are only a handful, as you know, we have talked about before, roughly 100 opportunities a year where people really are making decisions. So those get to be pretty competitive out in the market as people start to talk through. Again, candidly, we are as transparent as anybody in the industry by sharing the number of core wins. You do not really hear our competitors do that. I think we do it because we have been very successful and continue to do that and, again, continue to go up market. The pricing pressure itself, there is always, it is always going to occur. Everybody wants something for less. We have done a really good job.

Out in the market as people start to talk through it and you know and again candidly.

We're as transparent as anybody in the industry by sharing the number of core wins, you don't really hear our competitors do that.

And I think.

We do it because we've been very successful and continue to do that in.

And again continue to go up market, but the pricing pressure itself, you know theres always its always going to occur.

Everybody wants something for less.

We've done a really good job honestly one of the things that we were really focused on this year that I think will help us in the future is to get really get more.

Granular on how we look at renewals so both the pricing approach the timing of how we handle compression even how we compensate our sales team.

Greg Adelson: Honestly, one of the things that we were really focused on this year that I think will help us in the future is to get, really get more granular on how we look at renewals. So both the pricing approach, the timing of how we handle compression, even how we compensate our sales team, we changed all that in the back half of this last fiscal year. We saw some of the improvements in the fourth quarter. That will continue. I think that is going to help us with kind of our process and approach going forward. There will always be pricing pressure because, again, everybody is trying to go after the same 100 opportunities.

Changed all of that in the back half of this last fiscal year and we saw some of the improvements in the in the fourth quarter and that will continue in and I think thats going to help us.

With kind of our process and approach going forward, but but there'll always be pricing pressure because again everybody is trying to go after the same 100 opportunities.

And just one follow up Greg your partnership with move I think.

And I think that's going to help us.

Obviously last fiscal year.

With kind of our process and approach going forward, but but there'll always be pricing pressure because again everybody is trying to go after the same 100 opportunities.

I'm wondering how it is progressing in line kind of.

As opposed to your expectations is it more in line with your expectations or is it any different than you expected.

And just one follow up Greg your partnership with move I think.

Mimi Carsley: One follow-up, Greg. Your partnership with Moov, I think it started last fiscal year. I am wondering how it is progressing in line, as opposed to your expectations. Is it falling in line with your expectations, or is it any different than you expected?

Yeah. Appreciate the question because actually it has succeeded.

Obviously last fiscal year.

My expectations were.

I'm wondering how it is progressing in line kind of.

We were told a year ago, when we actually announced this at Investor day that it would take both visa and Mastercard and Apple and others have told US. It usually takes 18 to 24 months to get fully certified.

As opposed to your expectations is it more in line with your expectations or is it any different than you expected.

Yeah I appreciate the question because actually it has exceeded my expectations.

Greg Adelson: Yeah, I appreciate the question because actually, it has exceeded my expectations. You know, we were told a year ago when we actually announced this at Investor Day that it would take both Visa and Mastercard, and others had told us it usually takes 18 to 24 months to get fully certified through all of the various things. We did it in 10 months. Both Visa and Mastercard told us they had never seen that before. They both have seen the transactions, and they have seen the live demos, and they have been blown away by what we are able to do. There is significant interest and excitement, and we will be blowing it out at Jack Henry Connect by, you know, really doing some really cool things on stage with our clients. We are purposely holding off rolling this out until after Connect.

Through all of the various things that we did it in 10 months.

Both both visa and Mastercard told us they've never never seen that before they both have seen the transactions and they've seen the the live demos and they've been blown away by what we're able to do.

We're told a year ago, when we actually announced this at Investor day, but it would take both visa and Mastercard and Apple and others have told US. It usually takes 18 to 24 months to get fully certified them through all of the various things that we did it in 10 months, both both visa and Mastercard told us they've never never seen that before.

So there is significant interest and excitement and we will be blowing it out at Jack Henry connect.

Really doing some really cool things on stage with our clients, we're purposely holding off rolling this out until after connect but we planned as I mentioned to roll it out over the next two to three months to all 1000 bandwidth clients.

They both have seen the transactions and they've seen the live demos and they've been blown away by what we're able to do.

So there is significant interest and excitement and we will be blowing it out at Jack Henry connect.

And we're already like I said the people that are already having it had been very excited and we're seeing some nice nice numbers now it'll take a few months for us to get some real.

Really doing some really cool things on stage with our clients, we're purposely holding off rolling this out until after connect but we planned as I mentioned to roll it out over the next two to three months to all 1000 bandwidth clients and.

Greg Adelson: But we planned, as I mentioned, to roll it out over the next two to three months to all 1,000 Banno platform clients. We are already, like I said, the people that are already having it have been very excited, and we have seen some nice numbers. Now, it will take a few months for us to get some real traction and to have the, you know, kind of a guide on what we are seeing. But both our development teams have candidly exceeded, you know, my expectations.

Real traction and to have that kind of a guide on what we're seeing but.

Both both our development teams have candidly exceeded my expectations.

We're already like I said the people that are already having it had been very excited and we're seeing some nice nice numbers now it'll take a few months for us to get some real.

Thank you very much appreciate it.

Sure.

Yes.

Our next question comes from James Faucette from Morgan Stanley. Please go ahead with your question.

Real traction and to have the kind of a guide on what we're seeing but.

Okay.

Both both our development teams have candidly exceeded my expectations.

Hey, good morning, guys appreciate the time.

Just ask quickly on margin expansion for 2006 can you walk us through kind of what the key levers or I know.

Mimi Carsley: Perfect. Thank you very much. Appreciate it.

Thank you very much appreciate it.

Sure.

Greg Adelson: Sure.

Our next question comes from James Faucette from Morgan Stanley. Please go ahead with your question.

Matt Scharf: Our next question comes from James Faucette from Morgan Stanley. Please go ahead with your question.

You guys always highlight many including today tough how you've been able to drive improved efficiencies through hiring et cetera, but just wondering if we get a little more detail on kind of what you think the key components are et cetera.

Okay.

Hey, Good morning, guys. Appreciate the time just ask quickly on margin expansion for 2006 can you walk us through kind of what the key levers are I know.

Mimi Carsley: Hey, good morning, guys. Appreciate the time. I want to just ask quickly on margin expansion for 2026. Can you walk us through kind of what the key levers are? I know you guys always highlight, Mimi Carsley, including today, how you've been able to drive improved efficiencies through hiring, et cetera. But just wondering if we can get a little more detail on kind of what you think the key components are, et cetera.

Thanks, James for the question, it's one of the metrics.

You guys always highlight many including today how are you.

Greg and I monitor quite closely.

<unk> been able to drive improved efficiencies through hiring et cetera, but just wondering if we can get a little more detail on kind of what you think the key components or et cetera.

Well that had very high regard.

We know that that's a key part of the thing that's fair story is that.

Nature of the business itself inherently lends itself to margin expansion.

Thanks, James for the question, it's one of the metrics, Greg and I admire quite closely.

Jamie: Thanks, James, for the question. It is one of the metrics Greg and I monitor quite closely and, you know, hold in very high regard. We know that that is a key part of investor story is that the nature of the business itself inherently lends itself to margin expansion. I would say it is a couple of things. One is the continued culture around process improvement, efficiency. Greg will probably talk a little bit more about what we are doing in AI. But trying to, as I call down in some of my commentaries, we have really managed the headcount growth through that, both zero-based budgeting, but looking for opportunities to drive efficiency throughout the organization, not just in shared services, but in product and development as well. That is a large part of it. One of our largest expense lines is just headcount.

It's a couple of things one is the continued culture around process improvement efficiency, Greg I'll, probably talk a little bit more about what we're doing in AI.

That's a very high regard, we know that that's a key part of the thing that strikes the worry is that it.

Nature of the business.

But trying to you as I called out in my commentary, we really manage the head count growth.

South inherently lends itself to margin expansion.

A couple of things one is it continued culture around process improvement and efficiency.

Or any of that.

As these by chain, but looking for opportunities to drive efficiency throughout the organization not just in shared services and product development as well. So that's a large part of it one of our largest expense line is just head count.

I will probably talk a little bit more about what we're doing in AI are.

But trying to you as I called out in my commentary is really manage the head count growth.

So by keeping some of that head count.

We're ahead of that.

I changed but looking for opportunities to drive efficiency throughout the organization not just in shared services and product about that as well. So that's a large part of it one of our largest expense line is just head count and thereby keeping some of that head count.

Much tighter at the way, we open utilization the way we manage positions we've been able to you over the last several years.

Our margin expansion, but then theres other structural trends that we see continuing Greg mentioned that the number of ways, we have from a migration perspective.

Jamie: By keeping some of that headcount much tighter in the way we open new positions, the way we manage positions, we have been able to, over the last several years, deliver margin expansion. But then there are other structural trends that we see continuing. Greg mentioned the number of wins we have from a migration perspective. Continuing to move to private cloud helps us. We are further in the journey of our public cloud migration. From an infrastructure cost, we are starting to see kind of the plateaus of some of, for a while, we had some dual costs as we were migrating some of those products into the public cloud space. Those are some of the drivers as a whole to margin expansion.

Tiger and the way he obeyed digitization the way, we manage position we've been able to you over the last several years are delivering margin expansion, but then theres other structural trends that we see continuing great maintenance that the number of ways. We have from a migration perspective, continuing to me too.

<unk> committed to private cloud.

Where they are in the journey of our public cloud migration. So from an infrastructure cost we're starting to see kind of does that plateau at some of them for a while we had some dual class as we are migrating some of those products into the public cloud space. So those are some of the drivers out of the hall.

Private cloud helps us where they are in the journey of our public cloud migration stuff from an infrastructure cost or starting to see kind of does that plateau at some of them for a while you got to do work on.

To margin expansion.

Yes, James I'll, just add just as being you mentioned around AI, but we've had a significant focus on process improvement for years around here Russ.

Roughly 35% of our staff are green belts.

As we are migrating some of those products into the public cloud and say that those are some of the drivers as a whole.

<unk> trained and taught in the classroom. So we started that many years ago and that continues today. We also take a very unique approach I think to how we handle both.

The margin expansion.

Greg Adelson: Yeah, James, I will just add, just as Mimi mentioned around AI, but you know, we have had a significant focus on process improvement for years around here. You know, roughly 35% of our staff are green belts and trained and taught in the classroom. We started that many years ago, and that continues today. We also take a very unique approach, I think, to how we handle both process improvement and AI initiatives by giving a mantra of doing more with the same instead of doing more with less. That really enables our associates to have more of a focus, not thinking that they are immediately going to lose their job because they came up with a great idea or better utilization of a tool.

Yes, James I'll, just add just as being you mentioned around <unk>, but we've had a significant focus on process improvement for years around here roughly 35% of our staff are green belts and trained and taught in the classroom. So we started that many years ago and that continues today. We also take a very unique.

Both process improvement nai initiatives by giving our mantra of doing more with the same instead of doing more with less and that really enables our associates to have more of a focus not thinking that they are immediately going to lose their jobs because they came up with a great idea or a better utilization of the tool. So that's why we've been able to minimize the amount.

Approach I think to how we handle both process improvement and AI initiatives by giving our mantra of doing more with the same instead of doing more with less and that really enables our associates to have more of a focus not thinking that they are immediately going to lose their jobs, because they came up with a great idea or a better utilization of the tools.

Out of head count that we've had over.

Over the last several years with that focus and that will continue but we have a lot of things that we have going on not only in development, but also in it seems like HR and how do you know how we hire our legal approach.

Greg Adelson: That is why we have been able to minimize the amount of headcount that we have had over the last several years with that focus, and that will continue. We have a lot of things that we have going on, not only in development, but also in things like HR and how we hire, our legal approach, finance. Really, all of our groups have really embraced the AI component. Lastly, I think, you know, I mentioned this in my script, but around the work that we are doing in our tech modernization platform has allowed us to lessen the amount of people we need in certain areas because we are not duplicating efforts anymore in building out the same things. I mentioned authorization or entitlements. Those used to be built in all the products individually. Now they are built once and utilized across the organization.

So that's why we've been able to minimize the amount of head count that we've had.

Finance I mean really all of our groups have really embraced the AI.

Hi.

Over the last several years with that focus and that'll continue but we have a lot of things that we have going on not only in development, but also in it seems like HR and how you know how we hire our legal approach.

<unk>.

And then lastly, I think I mentioned this in my script, but around the work that we're doing in our tech modernization platform has allowed us to lessen the amount of people we need in certain areas, because we're not duplicating efforts anymore and building out the same things.

Finance I mean really all of our groups have really embraced the AI component and then lastly, I think I mentioned this in my script, but around the work that we're doing in our tech modernization platform has allowed us to lessen the amount of people we need in certain areas because we're not duplicating efforts.

So I mentioned authorization or entitlements those used to be built and all of the products individually now theres no once and utilized across the organization.

Yes.

Great and then I wanted to just touch quickly on on <unk> and just dig.

Anymore and building out the same things so.

Dig in a little bit there I'm wondering how has early transaction trended with Benno business can you update us on the go to market motion, particularly given some of the implications on the competition front with some of the competing for platforms.

So I mentioned authorization or entitlements those used to be built and all of the products individually now they've built once and utilized across the organization.

Great and then I wanted to just touch quickly on on banjo and just.

Mimi Carsley: Great. I wanted to just touch quickly on Banno and just dig in a little bit there. Wondering how has early transaction trended with Banno Business? Can you update us on the go-to-market motion, particularly given some of the implications on the competition front with some of the competing core platforms?

Yes.

Yes, I mean, so banner business as I mentioned, just want to really nicely award from from Ddos insights.

Digging a little bit there I'm wondering how that's early transaction trended with panel business and can you update us on the go to market motion, particularly given some of the implications on the competition front with some of the competing for platforms.

<unk>.

We're starting to get a lot of the as I mentioned I guess it was last year at Investor day, but also throughout our meetings that we were kind of in a catch up mode.

Yeah, I mean, so banner business as I mentioned, you know just wanted really nice award from from Datas insights.

Greg Adelson: Yeah, I mean, so Banno Business, as I mentioned, you know, just won a really nice award from Data Insights. You know, we are starting to get a lot of the, as I mentioned, I guess, at the last year at Investor Day, but also throughout our meetings that we were kind of in a catch-up mode with some of the key features with some of our key competitors. You know, we are almost there. As a byproduct of that, we are starting to win some of those deals from them where we were not previously because we were behind on the business front. So from a revenue standpoint, you know, it is obviously contributing to the growth of the Banno platform in general and in our digital.

With some of the key features with some of our key competitors.

We're almost there and as a byproduct of that we are starting to win some of those deals from them.

We're starting to get a lot of the as I mentioned I guess it was last year at Investor day, but also throughout our meetings that we were kind of in a catch up mode.

Where we Werent previously because we were we were behind on the business front. So from a from a revenue standpoint, obviously contributing to the growth of the <unk> platform in general and our digital but theres other things that we built as well that are helping to contribute as.

With some of the key features with some of our key competitors, we're almost there and as a byproduct of that we are starting to win some of those deals from them.

As part of what we call add ons and panel business would be considered one of those.

Where we Werent previously because we were we were behind on the business front. So from a from a revenue standpoint, you know, it's obviously contributing to the growth of the ban on platform in general and our digital but theres other things that we built as well that are helping to contribute as.

But I'll be really really Frank with you James is that I think the things that we're adding within tap to local and Jack Henry rapid transfers tied with the banner business application is going to allow us to really differentiate in the market because nobody has the tap to local and Jack Henry rapid transfers at this point in time.

Greg Adelson: But there are other things that we have built as well that are helping to contribute as part of what we call add-ons. Banno Business would be considered, you know, one of those. But I will be really, really frank with you, James, is that I think the things that we are adding within Tap to Local and Jack Henry Rapid Transfers tied with the Banno Business application is going to allow us to really differentiate in the market because nobody has the Tap to Local and Jack Henry Rapid Transfers at this point in time.

As part of what we call add ons and panel business would be considered one of those but I'll be really really Frank with you. James is that I think the things that we're adding within tap to local and Jack Henry rapid transfers tied with the banner business application.

Yes.

Thank you.

Sure.

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

Is going to allow us to really differentiate in the market because nobody has the tap to local and Jack Henry rapid transfers at this point in time.

Hey, guys. Thanks, so much and I guess first of all.

The change in contract with a third party provider.

Thank you.

Mimi Carsley: Thank you.

Sure.

Greg Adelson: Sure.

Matt Scharf: Our next question comes from Dave Koenig from Baird. Please go ahead with your question.

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

Dan Perlin: Hey, guys. Thanks so much. First of all, the change in contract with the third-party provider, that $16 million headwind, that is pretty big in context of I do not think many of your clients are over 1%. So that is close to 1% revenue headwind. Maybe describe a little more. I assume it is a reseller partner with revenue shares maybe going down a little, but maybe describe that. Then, are we right about $12 million in Q1 and then $16 million headwind starting in Q2?

Yeah, Hey, guys. Thanks, so much and I guess first of all the.

The change in contract with a third party provider <unk>.

That 16 million headwind, that's pretty big in context of I don't think many of your clients are over 1%. So that's you know that's close to 1% revenue headwind maybe describe a little more I assume it's a a reseller partner with revenue shares may be going down a little but maybe describe that and then are we right about $12 million.

Q1, and then 16 million headwind starting in Q2.

Yeah, I can answer that a little bit more of a day. So we just didn't think it was that contract when needed where actually the reseller.

Jamie: I can answer that a little bit more, Dave. In this instance, it was a contract renewed. We are actually the reseller of the product. It is a bundle of products. Essentially, the way I would think about it is the economics, the net economic impact is unchanged. It is just the revenues received as a royalty bundle under the contract. You are accurate in stating the $16 million in totality. $12 million of that will occur in Q1. Just for a little extra color, that is within the core segment.

Ah is a bundle of products said essentially the way I would think about it is the economic the net economic impact is unchanged.

It's just the revenues received a royalty pinedale under the contract and you're accurate in saying that $16 million in totality 12 million of that will occur in Q1, and just for a little extra color that's it and of course.

Yeah.

Dan Perlin: Okay. Okay. Thank you. That is great. Then, I guess secondly, the gain that you are getting during 2026, which quarter is that in? Just so we get the EPS cadence correct.

Okay. Okay. Thank you.

That's great and then I guess secondly, the gain that you're getting during 'twenty, six which quarter is that in just so we get the the EPS cadence correct.

Is it mostly in Q1 be a little bit of perhaps the ear will give more color at near goes on is around some larger app itself.

Jamie: is mostly in Q1, but it is a little bit across the year. We will give more color as the year goes on. It is around some larger asset sales.

Gotcha, great. Thank you.

Dan Perlin: Gotcha. Great. Thank you.

Very welcome.

Jamie: You're welcome.

Our next.

Matt Scharf: Our next question is from Goldman Sachs. Please go ahead with your question.

Will nance from Goldman Sachs. Please go ahead with your question.

Hey, guys. Good morning, I wanted to come back to the free cash flow topic, I mean, you've had several years, where you know free cash flow was negatively impacted and as you look out. The next couple of years with a better cash flow outlook.

Will Nance: Hey, guys. Good morning. I wanted to come back to the free cash flow topic. You have had several years where free cash flow was negatively impacted. As you look out the next couple of years with a better cash flow outlook, just looking for your updated thoughts on capital allocation. If there is anything that is top of mind for you, as you kind of come into this new degree of flexibility on the free cash flow side.

Looking for your updated thoughts on capital allocation and and you know if there's anything that's sort of top of mind for you as you kind of come into this this new degree of flexibility on the free cash flow side.

Thanks for the question well, it's certainly been a journey, it's looking back three years, when we were at 55% free cash flow conversion it firsthand with the legislative change.

Jamie: Thanks for the question, Will. It has certainly been a journey looking back three years when we were 55% free cash flow conversion and first hit with the legislative change. It is quite the journey back to 90% that we are at and then guidance of that 85% to 100% in the future. I think there is no reason that that 85% to 100% is not going to be where we consistently land year to year. We are just excited to get this new legislative change kind of both from a certainty perspective that it is not just short-term, but just a clarity now to move forward and have strong cash flow.

Change is a quite a journey back to 90% that the art that and then died in that.

That 85 to 100 direct firsthand in the future.

I think there there's no reason that that 80 by 200, it is not going to be wherever you consistently land ear to ear.

We're just excited to get the new legislative change.

So from a certainty perspective that it's not just short term.

Like clarity now to me his board and have strength strong cash flow.

As to your second part of your question from a capital allocation.

Jamie: As to the second part of your question from a capital allocation, as I said, my comment, having a much stronger free cash flow position and zero debt, which is a pretty remarkable balance sheet from a mortgage perspective, does allow more flexibility. We think that our intention is to be able to increase the size of our share repurchases. We have had to constrain them over the last couple of years as we focus more on it creatively paying down the debt. That now, as we have zero debt, if I had to say, we probably would likely have the ability to ramp up share repurchases of at least $100 million, hopefully more, and still remain open to M&A opportunities. Again, always looking to have strong growth in our internal development efforts as well.

My kind of you know, having a much stronger free cash flow position and zero of that which is a pretty remarkable balance sheet perspective does allow more flexibility.

We think that our intention is to be able to increase the size of our share repurchases.

We had to constrain them over the last couple of years as we focus more on accretive when we pay down the debt that.

Now as we had to deal with that.

So I had to say that probably likelihood that they'll need to ramp up share repurchases that completes the hundred million hopefully more.

And still remain open to M&A opportunities and again always looking he has a strong growth in our in our internal development as well.

Yeah.

Got it that's helpful and then.

Will Nance: Got it. That is helpful. Greg, I wanted to ask, I recall when you took over the CEO role, a big part of your priorities centered around looking at some of the assets that you have from either a divestiture perspective or an efficiency perspective. You were trying to, I will just say, maybe clean house a little bit. I am just wondering if you could give an update or your latest thinking on any opportunities internally to increase efficiencies, any assets that you have contemplated, or any thoughts on cost savings and margin structure outlook as you are coming up on a couple of years on the job. Thanks.

Greg I wanted to ask I, you know I recall when when you took over the CEO role you know a big part of sort of your priorities centered around looking at some of the assets that you have from either a divestiture perspective or an efficiency perspective.

And you know trying to you know I'll, just say, maybe clean house, a little bit and I'm. Just wondering if you could give an update or your kind of latest thinking on a you know any opportunities internally to increase efficiencies.

The asset sales that you have contemplated or any thoughts on kind of cost savings and margin structure outlook as you're coming up on a couple of years on the job.

Yeah. Thanks for asking the question and yeah. So that is absolutely still remains a priority.

Greg Adelson: Yeah, thanks for asking the question. That has absolutely still remained a priority. We had a couple of assets that we are strongly considering that potentially could be part of a sale. At this point, we're still evaluating a couple of opportunities there. We have announced the end of life of nine different small, very small products. One of those that isn't as small is our Neteller product. So we have announced that to our client. We have all but one of our very small cores, and there's some specifics to why that particular core hasn't been sunset yet. Our two bigger banking cores and our credit union core have been announced. So that's another big one, and that will continue. We're looking at opportunities. We, again, started the communications. We give our customers roughly 24 months as part of our end-of-life process.

Had a couple of assets that we are strongly considering that potentially it could be part of a of other sale at this point, we're still evaluating a couple of opportunities there.

We have announced the end of life of nine different small very small products. What we one of those is that isn't as small as our net seller products. So we have announced that to our clients. We have all but one of our very small floors and there's some specifics to why that particular.

Or hasn't been sunset, yet, but are too big or banking cores in our credit Union core have been announced so that that's another big one and that will continue so we're looking at opportunities.

Again started the communications, but you know we give our customers a roughly 24 months as part of our end of life process and so you know we will transfer some of our assets over to newer products or it will just shut down some functionality that we were actually.

Greg Adelson: So we'll transfer some of our assets over to newer products, or we'll just shut down some functionality that we were actually paying and investing in that we no longer do. That was also a big part of our budget process this year where we approached all of our teams with the same light of, "Hey, we're not going to be investing in some of these products that we're at a point where we don't think they're going to be long-term players for us." So I appreciate the question, and that will continue, and we can continue to update you on that.

And investing in that we no longer do that was also a big part of our budget process. This year, where we approached all of our teams with the same light of Hey, we're not going to be investing in some of these products that.

We're at a point, where we don't think they're going to be long term players for us. So appreciate the question and that that will continue and we can continue to update you on that.

Will Nance: That's great. Appreciate that, Greg. Thanks for taking the questions.

That's great I appreciate that Greg Thanks for taking the questions.

Our next question comes from Ken.

Matt Scharf: Our next question comes from Ken Mikhailski from Autonomous Research. Please go ahead with your question.

Okay I'll keep from Autonomous research. Please go ahead with your question.

Hey, good morning, Thanks for taking the question if we could just revisit the quarterly cadence on an non-GAAP revenue growth and maybe you could touch on the cadence in the back half of fiscal year 'twenty six because I think there were some comments for fiscal <unk> would be in that seven to seven 5% range I think fiscal Q2, a little softer and then.

Will Nance: Hey, good morning. Thanks for taking the question. Could we just revisit the quarterly cadence on non-GAAP revenue growth? Maybe we could touch on the cadence in the back half of fiscal year 2026 because I think there were some comments that the fiscal Q1 would be in that 7% to 7.5% range. I think fiscal Q2 a little softer and then increasing on a reported basis for Q3 and Q4. I just wanted to confirm that is on a non-GAAP basis because I think the press release said fiscal Q3 is slightly weaker. We are just trying to figure out if that is relative to the full year or fiscal Q2. Thank you.

Increasing on a reported basis.

For for <unk> and <unk>. So just wanted to confirm that's on a non-GAAP.

Basis, because I think the press release said fiscal <unk> was slightly weaker. So we're just trying to figure out if that's relative to the full year or our fiscal two chip.

Yes.

Thank you for the questions and the opportunity to clarify it is on a non-GAAP basis. That's the way we manage the business and you're accurate in your summary of Q1 being a stronger than Q2, a little weaker and then increasing from three to four for the remainder of the year.

Jamie: Thank you for the questions and the opportunity to clarify. It is on a non-GAAP basis. That is the way we manage the business, and you are accurate in your summary of it. Q1 being the strongest, then Q2 a little weaker, and then increasing from Q3 to Q4 for the remainder of the year.

Okay. That's that's helpful. And then maybe just a higher level one on I know it was asked about earlier, but just on the pricing dynamics in the industry I think you've talked about one of your competitors.

Will Nance: Okay. That is helpful. Then maybe just a higher-level one. I know it was asked about earlier, but just on the pricing dynamics in the industry. I think you have talked about one of your competitors becoming increasingly aggressive on pricing. Could you just talk about where they are pricing more aggressively, whether that is on the core itself or is it the surrounding solutions? I am curious, in your opinion, what changed in the industry that led to this? I know Jack Henry has typically commanded premium pricing versus peers. It is a concentrated industry. I am just curious how you are thinking about that. Thank you.

Becoming increasingly aggressive on pricing.

Could you just talk about where they are pricing more aggressively whether that's on the core itself or is it the surrounding solutions.

And I'm curious.

Opinion, what what changed in the industry that led to this I know Jack Henry is typically commanded premium pricing.

Versus peers, it's a constant engine concentrated industry. So I'm just curious how you're how you're thinking about that thank you.

Greg Adelson: Yeah. Yeah. Ken, thanks for the question. A couple of things. One, I would say that both of our primary competitors have had that approach, maybe one longer while the other one was a little bit distracted. That distraction is now more gone. But most of the competitive pricing that we see is candidly in them keeping their own customers as we are going after new core wins. We see some of that competitive pricing obviously in our own renewals, as I mentioned. But because we have a lot more leverage and the ability to showcase what we have done for those particular clients over whatever term of agreement they have been with us, we still demand or command the highest pricing in the industry.

Yeah, Ken Thanks for the question. So a couple of things one I would say that both of our primary competitors have have had that approach maybe one longer.

Yeah, Ken Thanks for the question. So a couple of things one I would say that both of our primary competitors have have had that approach maybe one longer.

While the other one was a little bit distracted that that distraction is now more gone, but most of the competitive pricing that we see is is candidly in them keeping their own customers as we're going after new core wins, we see some of that competitive pricing, obviously and I remember duals.

As I mentioned.

But you know because we have a lot more leverage in and the ability to showcase what we've done for those particular clients over whatever term of agreement they've been with US, we still demand or command.

The highest pricing in the industry, we hear that from consultants all the time that that we still so there's when you look at the overall pricing even if the 51 core wins that we mentioned.

Greg Adelson: We hear that from consultants all the time that we still, so there is, when you look at the overall pricing, even of the 51 core wins that we mentioned, I can guarantee we were never the lowest price in any of those 51. So that is just part of it. But it ends up being a decision based on price sensitivity or technology innovation. I tell CEOs of institutions all the time, you got to decide what is more important. Do you want the long-term growth and ability for us to take you into the future with what we are doing with tech modernization and a lot of our innovative products like Tap to Local and others? Or do you want the short-term win, while others are trying to figure it out? So obviously, you get a mixed bag.

Can't guarantee we were nevertheless price in any of those 51.

So that that is just part of it but it ends up being a decision based on price sensitivity our technology innovation.

And I.

Until Ceos of institutions of all the time you got to decide what's more important and you know do you want the long term growth and ability for us to take you into the future with what we're doing with tech modernization in a lot of our innovative products like tap the local and and others or do you want to short term win.

While others are trying to figure it out. So you know obviously you get a mixed bag, but but as you know we want our fair share and continued to wait up market, but I would say that dynamic isn't that much different and it's mostly all of them protecting what they do have today.

Greg Adelson: But as you know, we have won our fair share and continue to win at market. But I would say the dynamic is not that much different. It is mostly on them protecting what they do have today.

Will Nance: Great. Thanks, Greg. Thanks, Mimi.

Great. Thanks, Greg Thanks Man.

Greg Adelson: Sure.

Sure.

Yeah.

Our next question comes from Dominic Gabriel from Oppenheimer. Please go ahead with your question.

Matt Scharf: Our next question comes from Dominic Gabriel from Oppenheimer. Please go ahead with your question.

Hey, Thanks Compass point I.

Mimi Carsley: Hey, thanks. Compass Point. I really appreciate the question. I just wanted to go back to the account growth at your partners. You mentioned some neobanks there. Are there any other factors besides just maybe takeaways from, you know, what some may say traditional finance companies to neobanks? Are there any other dynamics that play into why account growth could be slowing, say, 1% to 2% versus 23%?

Really appreciate it.

Good question. So I just wanted to go back to the account growth.

At your partners and you mentioned some neo banks there are there any other factors. Besides just may be takeaways from.

What some may say traditional finance.

Company's two neo banks is there any other dynamics that play into why account growth could be slowing say, 1% to 2% versus 23.

Okay.

Greg Adelson: Yeah, I mean, I think a lot of it is, it is not just the neobanks, but as I mentioned before, it is also some of the SMBs taking their products to other providers that are offering solutions. I think I referenced this early on, or maybe it was even at Investor Day a year ago, that only about 16% of folks that have retail accounts at the community and regional banks actually have their business account there. So, another reason why we are continuing to really push our SMB strategy to keep those deposits and accounts at those institutions.

Yeah, I mean, I think a lot of it is it's.

It's not just the neo banks, but as I mentioned before it's also some of the smbs taking their products to other to other providers that are offering solutions sets I think I've referenced this early on or maybe it was even at Investor day, a year ago that only about 16%.

<unk> of folks that have retail accounts at the community and regional banks actually have their business account there. So.

The other reason why we're continuing to really push our SMB strategy to keep those those deposits and accounts at those institutions, but between New York banks between digital wallets between opportunities for folks to keep money in other places dormant accounts as I mentioned, where if those accounts there.

Greg Adelson: Between neobanks, between digital wallets, between opportunities for folks to keep money in other places, dormant accounts, as I mentioned, where if those accounts, if they are paying for that particular account for a period of time, but there really is not any activity there, then they want to cancel that account. That slows the actual growth of what maybe we had experienced in years prior. I assume that is very similar to what our competition is experiencing as well. Those are some of the highlighted things.

Paying for that particular account.

For a period of time, but there really isn't any activity there than they wanted to cancel that account so that slows the actual growth of what we had experienced in.

In years prior I assume that's very similar to what our competition is experiencing as well.

But those are some of the some of the highlights.

Jamie: would like to add on as well, this is not a Jack Henry specific, but maybe you will see across the industry. Until recently, you are not seeing a ton of new car sales, which will lead to loans and autos. With the housing market kind of being brazen and not seeing a lot of transactions in real estate, that has been a national issue. Again, less mortgages, less account opening. So we are seeing some of that tied to lending volumes as well.

Check it out on as well this is not a Jack Henry specific but I think you'll see across the industry, but yeah until recently, you're not seeing a ton of new car sales, which already.

Loans in autos.

You know where the housing market.

Pros and had not been a lot of transactions in real estate and that's been a national issue again left mortgages last account opening.

Some of that type of lending volumes as well.

Mimi Carsley: We are certainly not a Jack Henry only issue. Sorry, go ahead.

Generally not a Jack Henry only issue.

Sorry go ahead, yeah, no I'm, sorry to interrupt you I just was going to say it. We also have a mixed bag of clients that have asset based pricing and some that have for account pricing. So you know it really depends but you know us as the customers get larger and it really dependent on whether they are more business focused our retail focus that has.

Greg Adelson: No, I'm sorry to interrupt you. I just was going to say, you know, we also have a mixed bag of clients that have asset-based pricing and some that have per account pricing. You know, it really depends. But, you know, as the customers get larger and really dependent on whether they're more business-focused or retail-focused, that has a stronger indicator of what type of pricing that, you know, we would have in place with them.

Indeed, a stronger indicator of what type of pricing.

We would have in place with them.

Alright.

Mimi Carsley: Right. No, thank you so much. Maybe just lastly, the complimentary business, really some pretty stunning growth this quarter. Maybe just talk about, I know you said that you are going to see a near high end of the range for that business. Could you just remind us what that range is and then how you think about the fourth quarter grow over since this quarter was just so good? Thanks on the revenue.

Thank you so much maybe just lastly.

Maybe the complementary business.

Really some pretty stunning growth this quarter, maybe just talk about you know.

I know you said that it should.

You're going to see them near high end of the range.

Where that business could you just remind us what that range is and then how you think about the fourth quarter.

<unk> grow over since this quarter was just so good thanks on the revenue yeah.

Jamie: Yeah. So, Dan, it is a great question. As you recall, the complimentary segment is a whole portfolio of products. You have some anchor tenants like Digital that continue to have impressive growth. Then you have other things like Financial Crimes Defender, which is really leading to some strong momentum. Some of the fraud-related solutions as it relates to faster payments are also another driver of growth. So, those trends we think are going to continue. That is why we expect to see, you know, that continuation for next year. If you think about that range, about 8% to 9%, just as a reminder from the growth algorithm perspective.

Yeah, John It's a great question as you recall the complementary segment as is our whole portfolio.

You had some anchor tenants like didn't show that continued see habit and practice growth.

Then you have other things like financial crisis defender, which is really leading to sound and strong momentum.

And some of the broad relate installations as it relates to faster payments are also another driver right that those trends, we think are going to continue.

And that's why we we expect to see that continuation for next year.

And if you think about that range of about 89% just as a reminder, from the the breadth of algorithms.

Perfect. Thanks, so much.

Mimi Carsley: Perfect. Thanks so much.

Jamie: Of course.

Of course.

Yeah.

Our next question comes from Chris Kennedy from William Blair. Please go ahead with your question.

Matt Scharf: Our next question comes from Chris Kennedy from William Blair. Please go ahead with your question.

Dan Perlin: Good morning. Thanks for taking the question. Greg, just wanted to follow up. It is clear you are excited about Banno Business and Tap to Local. Can you just kind of give an update on the SMB strategy, kind of where you are relative to your initial expectations?

Good morning, Thanks for.

Taking the question Craig just wanted to follow up I mean, it's clear you're excited about fan out for business and tap to local can you just kind of give an update on the SMB strategy kind of where you are relative to your initial expectations.

Yeah, Thanks for asking Chris Yeah, I like I said I am I.

Greg Adelson: Yeah, thanks for asking, Chris. Like I said, I am extremely excited. I would say we are ahead of where I expected us to be just because as we really got into building everything out and were told it would be an 18 to 24-month process, our team was able to complete it with Moov in 10 months. That is significantly ahead of where we thought we were going to be. As I mentioned, we are going to start rolling this out in a heavy, heavy way post our client conference in early September. Early indications from the card associations and from the clients that have been in our closed beta have been tremendous. Excited is an understatement.

Im extremely excited and where I would say, we're ahead of where I expected us to be just because as we really got into building everything out and were told it would be an 18 to 24 month process, but our team was able to complete it would move in 10 months.

So that is significantly ahead of where we thought we were going to be and as I mentioned, we're going to start rolling this out in a heavy heavy way post our client conference in early September. So early indications from the card associations ample declines that have been in our closed beta has been tremendous.

So excited is an understatement.

Greg Adelson: The entire SMB strategy, we actually have a roadmap that we have created that will cover over the next 18 to 24 months of a variety of different activities that we will be adding to the overall solutions set. Some are actually kind of point-to-point solutions that we have today at Jack Henry that have not been positioned as well as maybe we should have in the past to put them in this SMB strategy. Others are things that we are working again independently and with Moov that we will be rolling out. Candidly, my big message to our team is that nobody is going to care about the next solution until the first one is successful. We are highly focused on making sure that that is the case.

The entire SMB strategy, we're actually have a roadmap that we've created that will cover over the next 18 to 24 months of a variety of different activities.

That we will be adding to the overall solution set some are actually a kind of point to point solutions that we have today, a jack Henry that hasnt been position as well as maybe we should have in the past to put them in this SMB strategy others are things that we're working again independently and with move.

That will be rolling out, but you know candidly my big message to our team is is that nobody's going to care about the next solution until the first one is.

As successful.

So we are highly focused on making sure that that is the case.

Great. Thanks for taking the question.

Dan Perlin: Great. Thanks for taking the question.

Sure.

Greg Adelson: Sure.

And our next question for John.

Matt Scharf: Our next question from James. Please go ahead with your question.

James. Please go ahead with your question.

Hey, Good morning, guys, Greg just wanted to take a big step back here. If we think about the 26 the revenue outlook, it's about 100 basis points at the midpoint and below what I.

Mimi Carsley: Hey, good morning, guys. Greg, just want to take a big step back here. If we think about the 2026 revenue outlook, it is about 100 basis points at the midpoint below what, you know, I think normalized growth. You said you have not really seen, you do not consider any real structural changes in the Jack Henry growth rate. You are winning larger banks, which I think would accelerate growth. You call out the industry headwinds. Is there any change in guidance philosophy, you know, understanding, you know, first year a little bit below revenue? Just trying to think about the puts and takes. Are these industry headwinds more than 100 basis points? That is offsetting some of the larger bank wins? Is there added conservatism?

I think normalized growth and you said you haven't really seen you don't consider any real structural changes in the Jack Henry growth rate.

You're winning larger banks, which I think would accelerate growth you called out the industry headwinds.

Is there any change in guidance philosophy.

So first year, a little bit below revenue just trying to think about the puts and takes are these industry headwinds more than 100 basis points and that's offsetting some of the larger bank wins is there added conservatism I'm just trying to think through the puts and takes of the guide and 26 versus how you think about normalized growth of Jack Henry.

Mimi Carsley: Just trying to think through the puts and takes of the guide in 2026 versus how you think about normalized growth of Jack Henry.

Yeah, that's a great question and so no there isn't anything as we said that structurally different there isn't anything that makes it up 100 basis point of concern.

Greg Adelson: It is a great question. There is not anything, as we said, that is structurally different. There is not anything that makes up the 100 basis point of concern. What it is, is some level of us being, there are macro things that we are still not sure about, that we are still kind of hedging on because we are not really sure. But the bigger part is what we talked about with the renewals and the M&A activity. Though we tend to win more than we lose, as I mentioned, it does not really matter from that perspective. It is really about the timing of the activity, the M&A activity, and what is left on that particular contract.

What it is is some level of of us being.

Yeah, there's nothing macro things that we're still not sure about that we're still.

Kind of quote hedging on because we're not really sure but the bigger part is is what we talked about with the renewals and and the M&A activity. So, though we tend to win more than we lose as I mentioned it doesn't really matter from that perspective. It it's really about the timing of the of the activity of the M.

<unk> activity and what was what is left on that particular contract or is the Jack Henry the Jack Henry deals happen are they actually going to be accretive for us because some of them haven't hit their next tier level of pricing through that acquisition. So all of those are parts of running the business and doing the day to day activities.

Greg Adelson: Or if the Jack Henry deals happen, are they actually going to be accretive for us because some of them have not hit their next tier level of pricing through that acquisition? All of those are parts of running the business and doing the day-to-day activity that we do. But there is not anything in that. To your point about us winning larger deals, a lot of those will start to come on in the back half of the year, the ones that we won last year. As I mentioned before, us winning these larger deals has really only happened over the last two fiscal years. We are starting, we will start to see, it takes anywhere from typically 15 to 24 months before core activity actually comes on board. Obviously, you get drag along with other payment and complimentary products with that as well.

We do but there isn't anything in that and to your point about us winning larger deals.

All of those will start to come on in the back half.

The year you know the ones that we won last year as I mentioned before US winning these larger deals is really only happened over the last two fiscal years. So you know we're starting we will start to see that.

Takes anywhere from typically 15 to 24 months before a core activity actually comes onboard.

Honestly, you get dragged along with other payment and complimentary products with that as well, but so that will really start to happen from two fiscal years ago or I guess fiscal year distributions from fiscal year 'twenty four happening at the back half of this year.

Greg Adelson: That will really start to happen from two fiscal years ago, or I guess fiscal year, just to be specific, from fiscal year 2024 happening at the back half of this year in fiscal year 2025, and then ongoing. That is why we remain bullish on where we are going, what we are doing, the activities that we have related to SMB, and other tangential things like even stablecoin stuff that I mentioned before. Hopefully, I answered your question, but I wanted to make sure I covered a couple of parts of that.

In fiscal year 'twenty, five and then I am going so that's why we remain bullish on where we're going what we're doing the activities that we have related to SMB.

And other tangential things like even stable coin stuff that I mentioned before so.

Hopefully I answered your question, but I wanted to make sure I cover a couple of parts of that.

Mimi Carsley: Yeah, the only thing I want to follow up on a little bit is, given a little bit more uncertainty this year, given the M&A environment, given some of the industry slowdowns, you also gave a wider range. After missing the initial guide last year, is maybe there is a little bit more conservatism given a little bit more uncertainty coming into this year. Any change in guidance philosophy in year two since you have taken over?

Yeah, the only thing I want to follow up on a little bit as you've given a little bit more uncertainty this year, given the M&A environment given.

Some of the industry slowdowns.

Also you gave a wider range.

After missing kind of the initial guide last year. It was maybe there a little bit more conservatism, given a little bit more uncertainty coming into this year, just any change in guidance philosophy in year or two since you've taken over.

No no no real I mean, not in philosophy at all I mean, obviously, we did you know extend by you know a little bit from a.

Greg Adelson: No, no, no real, I mean, not in philosophy at all. I mean, obviously, we did, you know, extend by, you know, a little bit from a, you know, 20 basis points perspective. But I mean, you know, we've been talking about that. You know, when you look at our company, 1% is $23 million. You know, half a percent is, you know, $11.5 million. There's not a lot of, you know, flexibility in that range. So that was something that we looked at. We'll continue to look at, to be candid, in future years. But we thought we'd start off there and kind of go with that approach. But other than that, as Mimi Carsley, you know, articulated, and I've been trying to articulate here too, nothing else fundamentally has changed.

20 basis points perspective, but I mean, you know we've been talking about that when you look at our company, 1% is $23 million you know a half a percent is $11 5 million you're not there's not a lot of.

Flexibility in that range. So that was something that we looked at and we will continue to look at to be candid in future years, but but we thought we'd start off there and kind of go with that approach, but other than that as many of you know articulated.

And I've been trying to articulate here to nothing else fundamentally has changed.

Mimi Carsley: Okay. Then just one last quick one, if I can, on complimentary. Now that Banno platform is product parity plus Tap to Local, Jack Henry Rapid Transfers, where are we in kind of selling that outside the base? Also maybe just quickly, complimentary outside of Banno platform, what are the puts and takes there? What is going well? What is maybe, I know you are sunsetting some products there, just trying to think about kind of the ex-Banno platform growth and also kind of where we are selling Banno platform outside the base. Thanks, guys.

Okay, and then just one last quick one if I can on complementary so now they're ban O is product parity plus tapped the local rapid transfers where are we in kind of selling that outside the base and then also maybe just quickly you know complementary outside of ban Oh, you know what are the puts and takes there whats going well what's maybe.

I know you have some cited some products there just trying to think about kind of <unk>.

Growth and then also kind of where we are selling outside the base. Thanks, guys. Yeah. I'm glad you asked that I was prepared and was hoping somebody would ask me if I'm not I was going to bring it up myself. Yeah. We're very excited and very focused on continuing to work as I mentioned before we've taken a couple of different paths for outside the base I won't get into all the specific.

Greg Adelson: I am glad you asked that. I was prepared and was hoping somebody would ask me. If not, I was going to bring it up myself. We are very excited and very focused on continuing to work. As I mentioned before, we have taken a couple of different paths for outside the base. I will not get into all the specifics. There are opportunities like today. We can actually sell, and we will sell Tap to Local and Jack Henry Rapid Transfers outside of the Jack Henry base, but we can do that today. We actually are also going to increase the TAM over the next couple of years by providing some opportunities for even our key digital competitors to sell that and for us to be part of the equation there.

There are opportunities like today, we can actually sell and we will sell tap to local and rapid transfers outside of the Jack Henry.

Base, but we can do that today, we actually are also going to increase the Tam over the next couple of years by.

Providing some opportunities for even our key digital competitors to sell that and for us to be part of the equation there.

Greg Adelson: By the end of this calendar year, our teams will start selling opportunities outside of the Jack Henry core base and with the belief that we could start implementing the latter part of our fiscal year. In the May-June timeframe, we would hope to have a couple of beta clients that would be live. That is the approach. We are actually taking two different approaches and kind of doing them both using some of the technology that we have built on the Banno platform, as well as technology that we are building through core integrations with some outside providers. All of that is in play specifically for Banno, but other products will follow suit as well over time. Banno will be the first one of the ones that are not outside the base today.

But by the end of this calendar year, our teams will start selling opportunities outside of the Jack Henry core base.

And with the belief that we can start implementing the latter part of our fiscal year. So in the May June timeframe, we would hope to have a couple of beta clients that would be live but that is the approach we're actually taking two different approaches and kind of doing them both.

Using some of the technology that we built on the platform as well as technology that where we're building through core integrations with some outside providers, but all of that is in place specifically for banjo, but other products will follow suit as well.

Overtime, but banner will be the first one of the ones that are not outside the base today.

Great. Thanks, guys.

Mimi Carsley: Great. Thanks, guys.

Greg Adelson: Sure.

Sure.

Once again, if you would like to ask a question. Please press star and one to withdraw your question you May Press Star two.

Matt Scharf: Once again, if you would like to ask a question, please press star and one. To withdraw your questions, you may press star and two. Our next question comes from Rayna Kumar from Oppenheimer. Please go ahead with your question.

Our next question comes from Reena Kumar from Oppenheimer. Please go ahead with your question.

Hi, everyone. This is IV.

Mimi Carsley: Hi, everyone. This is Abigail on for Rayna. I just wanted to talk about hardware revenue, which faced some persistent headwinds in FY25. What does this outlook look like as we enter FY26, and what is the impact on guidance, do you think? Can you help us also look at the size and the decline in hardware revenue from delayed sales and implementations versus just the clients that are migrating to the cloud?

Onshore arena.

I just wanted to talk about hardware revenue, which supposed to ask some persistent headwinds in FY 'twenty five.

This outlook outlook look like as we enter FY 'twenty six and what's the impact on guidance do you think and then can you help US also I'm looking at the site.

Given the decline in hardware revenue from blade sales and implementations versus just the clients are migrating to the cloud.

Sure. So Abigail I would say as it pertains to the upcoming fiscal year 'twenty that because we've had such a headwind in 'twenty five Grand a.

Jamie: Sure. I would say as it pertains to the upcoming fiscal year 2026, because we've had such headwinds in 2025 growth due to lower hardware sales, it'll be less of an impact in 2026. We do not expect a massive rebound by any means in hardware, but we do not expect it to be as much of a material headwind because we are going from a lower base of FY25. That is all built into the guidance. As to the latter half of your question, as we continue to see clients migrating from on-premise to private cloud, there are less hardware purchase needs in the future. That said, most of the wins we get today are in the cloud. Very few new client wins are ever on-premise.

Due to lower hardware sales it'll be less of an impact in 'twenty stacks that we don't expect a massive rebound by any means and hardware, but we don't expect it to be a contract that may carry out headwinds because we're going from a lower base of FY 'twenty.

So that's correct and that is all built into our guide them as.

As to the latter half of your question you know as we continue to see clients migrating from on premise private cloud there's glass hardware purchases.

In the future that sad most days when we get today are in the class Berry Hill, it new client win or ever on premise. So we are not a from a hardware demand perspective, I think those trends will continue because.

Jamie: We are not, from a hardware demand perspective, I think those trends will continue because of it correlated to now being 77% private cloud.

Is correlated to now being 77 per cent a private cloud.

Perfect Super helpful. Thank you.

Mimi Carsley: Perfect. Super helpful. Thank you.

Jamie: You're welcome.

Youre welcome.

Ladies and gentlemen, with that we'll conclude.

Matt Scharf: Ladies and gentlemen, with that, we will conclude. I am going to turn it back over to Matt Scharf for any closing remarks.

You can turn it over to Matt Szot for any closing remarks.

Thank you Jamie and.

Matt Scharf: Thank you, Jamie. In the remainder of our first quarter, we will host approximately 3,000 clients at our upcoming Jack Henry Connect Conference, and management will be participating in investor meetings across various U.S. cities and internationally at the end of the month. We would like to thank all Jack Henry & Associates for their efforts and commitment, which contributed to another successful fiscal year. Thank you for joining us today. Jamie, please provide the replay number.

And the remainder of our first quarter, we will host approximately 3000 clients that are upcoming Jack Henry connect conference and management will be participating in investor meetings across various U S cities and internationally at the end of the month.

We would like to thank all Jack Henry Associates for their efforts and commitment which contributed to another successful fiscal year.

Thank you for joining us today, Jamie please provide the replay number.

Yeah.

The replay number for today's call is 877.

Matt Scharf: The replay number for today's call is 877-344-7529, and the access code is 3201054. The conference has now concluded. We thank you for attending today's presentation. You may now disconnect your line.

344.

Seven five to nine and the access code is 320.

1054.

The conference has now concluded we thank you for attending today's presentation. You may now disconnect your lines.