Jack Henry & Associates Q2 2026 Jack Henry & Associates Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q2 2026 Jack Henry & Associates Inc Earnings Call
Speaker #1: Good morning and welcome to the JACK HENRY & ASSOCIATES Q4, 2026 earnings conference call. Today, I'll participants will be in a listen-only mode. Should you need assistance during today's conference call, please signal for a conference specialist by pressing the star key.
Vance Sherard: Good morning and welcome to the Jack Henry Q2 fiscal 2026 earnings conference call. Today all participants will be in a listen-only mode. Should you need assistance during today's conference call, please signal for 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 one on your telephone keypad. To withdraw your question, please press star then two. Please note that today's event is being recorded. At this time, I would like to turn the conference over to Vance Sherard, Vice President Investor Relations. Please go ahead, sir.
Vance Sherard: Good morning and welcome to the Jack Henry Q2 fiscal 2026 earnings conference call. Today all participants will be in a listen-only mode. Should you need assistance during today's conference call, please signal for 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 one on your telephone keypad. To withdraw your question, please press star then two. Please note that today's event is being recorded. At this time, I would like to turn the conference over to Vance Sherard, Vice President Investor Relations. Please go ahead, sir.
Speaker #1: zero. After Followed by today's presentation, there will be an opportunity to ask questions, to ask a question you may press star one on your telephone keypad, two withdraw your question, please press star, then two.
Speaker #1: Please note that today's event is being recorded. At this time, I would like to turn the conference over to Vance Sherard, Vice President Investor Relations.
Speaker #1: Please go ahead, sir.
Speaker #2: Thank you, Chris. Good morning and thank you for joining the JACK HENRY & ASSOCIATES Q4, 2026 earnings call. Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer.
[Analyst] (Wells Fargo): Thank you, Chris. Good morning, and thank you for joining the Jack Henry Second Quarter Fiscal 2026 Earnings Call. Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer. Following my opening remarks, Greg will provide an overview of our quarterly results and key performance metrics along with updates on our strategic initiatives. Mimi will then discuss the financial results and updated 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.
[Analyst] (Wells Fargo): Thank you, Chris. Good morning, and thank you for joining the Jack Henry Second Quarter Fiscal 2026 Earnings Call. Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer. Following my opening remarks, Greg will provide an overview of our quarterly results and key performance metrics along with updates on our strategic initiatives. Mimi will then discuss the financial results and updated 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.
Vance Sherard: Thank you, Chris. Good morning, and thank you for joining the Jack Henry Second Quarter Fiscal 2026 Earnings Call. Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer. Following my opening remarks, Greg will provide an overview of our quarterly results and key performance metrics along with updates on our strategic initiatives. Mimi will then discuss the financial results and updated 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.
Speaker #2: Following my opening remarks, Greg will provide an overview of our quarterly results and key performance metrics. Along with updates on our strategic initiatives. Mimi will then discuss the financial results and updated 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.
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.
[Analyst] (Wells Fargo): 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. Now I will hand the call over to Greg.
[Analyst] (Wells Fargo): 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. Now I will hand the call over to Greg.
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 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. Now I will hand the call over to Greg.
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.
Speaker #2: Now I will hand the call over to Greg.
Speaker #3: Thank you, Vance. Good morning, and I appreciate each of you joining today's call. As always, I'd like to begin by thanking our associates for their hard work and commitment to our success by doing whatever it takes and doing the right thing for each other and our clients.
[Analyst] (Goldman Sachs): Thank you, Vance. Good morning, and I appreciate each of you joining today's call. As always, I'd like to begin by thanking our associates for their hard work and commitment to our success by doing whatever it takes and doing the right thing for each other and our clients. Our focus on people-first culture, service excellence, technology innovation, and well-defined strategy supported by consistent execution continues to set us apart in the market and is reflected throughout my remarks. I will share three key takeaways from the quarter, then provide additional detail about our overall business. First, our financial performance. We produced record second quarter results with non-GAAP revenue of $611 million, up 6.7% over last year's second quarter. Our non-GAAP operating margin was 25.1%, representing a robust 355 basis points of margin expansion over last year's Q2. Second, our sales performance.
[Analyst] (Goldman Sachs): Thank you, Vance. Good morning, and I appreciate each of you joining today's call. As always, I'd like to begin by thanking our associates for their hard work and commitment to our success by doing whatever it takes and doing the right thing for each other and our clients. Our focus on people-first culture, service excellence, technology innovation, and well-defined strategy supported by consistent execution continues to set us apart in the market and is reflected throughout my remarks. I will share three key takeaways from the quarter, then provide additional detail about our overall business. First, our financial performance. We produced record second quarter results with non-GAAP revenue of $611 million, up 6.7% over last year's second quarter. Our non-GAAP operating margin was 25.1%, representing a robust 355 basis points of margin expansion over last year's Q2. Second, our sales performance.
Greg Adelson: Thank you, Vance. Good morning, and I appreciate each of you joining today's call. As always, I'd like to begin by thanking our associates for their hard work and commitment to our success by doing whatever it takes and doing the right thing for each other and our clients. Our focus on people-first culture, service excellence, technology innovation, and well-defined strategy supported by consistent execution continues to set us apart in the market and is reflected throughout my remarks. I will share three key takeaways from the quarter, then provide additional detail about our overall business. First, our financial performance. We produced record second quarter results with non-GAAP revenue of $611 million, up 6.7% over last year's second quarter. Our non-GAAP operating margin was 25.1%, representing a robust 355 basis points of margin expansion over last year's Q2. Second, our sales performance.
Speaker #3: Our focus on people-first culture, service excellence, technology innovation, and well-defined strategy supported by consistent execution continues to set us apart in the market and is reflected throughout my remarks.
Speaker #3: I will share three key takeaways from the quarter, then provide additional detail about our overall business. First, our financial performance. We produce record-second quarter results with non-GAAP revenue of $611, up 6.7% over last year's second quarter.
Speaker #3: Our non-GAAP operating margin was 25.1%, representing a robust 355 basis points of margin expansion over last year's Q2. Second, our sales performance. Our core sales team delivered an outstanding quarter with 22 competitive core wins.
[Analyst] (Goldman Sachs): Our core sales team delivered an outstanding quarter with 22 competitive core wins. Of the 22 wins, 4 were financial institutions with over $1 billion in assets, and 15 included core digital banking and card solutions. We have continued to see an increase in trifecta wins over the past 12 months. 68% of new core wins this quarter included digital and card processing as compared to 45% in Q2 fiscal year 2025. The recent announcement of core consolidation by one of our competitors has positively impacted our core payment and complementary solution sales pipelines. We expect our historical success rates within this base of clients to continue and most likely accelerate based on what we know today. It's worth noting that given the timing of their core consolidation announcement, our sales success in Q2 was minimally impacted by the news.
[Analyst] (Goldman Sachs): Our core sales team delivered an outstanding quarter with 22 competitive core wins. Of the 22 wins, 4 were financial institutions with over $1 billion in assets, and 15 included core digital banking and card solutions. We have continued to see an increase in trifecta wins over the past 12 months. 68% of new core wins this quarter included digital and card processing as compared to 45% in Q2 fiscal year 2025. The recent announcement of core consolidation by one of our competitors has positively impacted our core payment and complementary solution sales pipelines. We expect our historical success rates within this base of clients to continue and most likely accelerate based on what we know today. It's worth noting that given the timing of their core consolidation announcement, our sales success in Q2 was minimally impacted by the news.
Greg Adelson: Our core sales team delivered an outstanding quarter with 22 competitive core wins. Of the 22 wins, 4 were financial institutions with over $1 billion in assets, and 15 included core digital banking and card solutions. We have continued to see an increase in trifecta wins over the past 12 months. 68% of new core wins this quarter included digital and card processing as compared to 45% in Q2 fiscal year 2025. The recent announcement of core consolidation by one of our competitors has positively impacted our core payment and complementary solution sales pipelines. We expect our historical success rates within this base of clients to continue and most likely accelerate based on what we know today. It's worth noting that given the timing of their core consolidation announcement, our sales success in Q2 was minimally impacted by the news.
Speaker #3: Of the 22 wins, four were financial institutions with over $1 billion in assets, and 15 included core digital banking and card solutions. We have continued to see an increase in trifecta wins over the past 12 months.
Speaker #3: 68% of new core wins this quarter included digital and card processing, as compared to 45% in Q2 fiscal year '25. The recent announcement of core consolidation by one of our competitors has positively impacted our core payment and complementary solution sales pipelines.
Speaker #3: We expect our historical success rates within this base of clients to continue, and most likely accelerate based on what we know today. It's worth noting that, given the timing of their core consolidation announcement, our sales success in Q2 was minimally impacted by the news.
Speaker #3: It had much more to do with our ability to continue demonstrating innovation and service differentiation in the market. Not just relative to that competitor, but across the competitive landscape.
[Analyst] (Goldman Sachs): It had much more to do with our ability to continue demonstrating innovation and service differentiation in the market, not just relative to that competitor, but across the competitive landscape. Third, we continue to win in a consolidating market. We have outpaced our competitors for many years in core market share growth, even as the overall number of financial institutions has declined. Over the past eight years, our core market share among banks has increased by 17% while our credit union market share has expanded by 40%. And among institutions with more than $1 billion in assets, our market share has risen by 32% for banks and 12% for credit unions over that same time period. This growth occurred despite an average overall market contraction of 3% for both banks and credit unions over the past eight years.
[Analyst] (Goldman Sachs): It had much more to do with our ability to continue demonstrating innovation and service differentiation in the market, not just relative to that competitor, but across the competitive landscape. Third, we continue to win in a consolidating market. We have outpaced our competitors for many years in core market share growth, even as the overall number of financial institutions has declined. Over the past eight years, our core market share among banks has increased by 17% while our credit union market share has expanded by 40%. And among institutions with more than $1 billion in assets, our market share has risen by 32% for banks and 12% for credit unions over that same time period. This growth occurred despite an average overall market contraction of 3% for both banks and credit unions over the past eight years.
Greg Adelson: It had much more to do with our ability to continue demonstrating innovation and service differentiation in the market, not just relative to that competitor, but across the competitive landscape. Third, we continue to win in a consolidating market. We have outpaced our competitors for many years in core market share growth, even as the overall number of financial institutions has declined. Over the past eight years, our core market share among banks has increased by 17% while our credit union market share has expanded by 40%. And among institutions with more than $1 billion in assets, our market share has risen by 32% for banks and 12% for credit unions over that same time period. This growth occurred despite an average overall market contraction of 3% for both banks and credit unions over the past eight years.
Speaker #3: Third, we continue to win in a consolidating market. We have outpaced our competitors for many years in core market share growth, even as the overall number of financial institutions has declined.
Speaker #3: Over the past eight years, our core market share among banks has increased by 17%, while our credit union market share has expanded by 40%.
Speaker #3: And among institutions with more than $1 billion in assets, our market share has risen by 32% for banks and 12% for credit unions over that same time period.
Speaker #3: This growth occurred despite an average overall market contraction of 3% for both banks and credit unions over the past eight years. Our market share in asset size growth can be attributed in part to our bank and credit union clients continuing continued growth through M&A.
[Analyst] (Goldman Sachs): Our market share and asset size growth can be attributed in part to our bank and credit union clients' continued growth through M&A, acquiring both Jack Henry and non-Jack Henry institutions, as well as our success the past few years in winning mergers, winning the core merger business when a Jack Henry institution is acquired. Additionally, we have relationships with more than 80% of the financial institutions in the US across our core, complementary, and payment segments. So in most consolidation events, we are already doing business with the acquiring institution, giving us a strong advantage in increasing the likelihood that the combined entity remains on some or most Jack Henry technology. Now for more detail on the overall business, starting with some recognition for the team. We are very proud. I'm sorry.
[Analyst] (Goldman Sachs): Our market share and asset size growth can be attributed in part to our bank and credit union clients' continued growth through M&A, acquiring both Jack Henry and non-Jack Henry institutions, as well as our success the past few years in winning mergers, winning the core merger business when a Jack Henry institution is acquired. Additionally, we have relationships with more than 80% of the financial institutions in the US across our core, complementary, and payment segments. So in most consolidation events, we are already doing business with the acquiring institution, giving us a strong advantage in increasing the likelihood that the combined entity remains on some or most Jack Henry technology. Now for more detail on the overall business, starting with some recognition for the team. We are very proud. I'm sorry.
Greg Adelson: Our market share and asset size growth can be attributed in part to our bank and credit union clients' continued growth through M&A, acquiring both Jack Henry and non-Jack Henry institutions, as well as our success the past few years in winning mergers, winning the core merger business when a Jack Henry institution is acquired. Additionally, we have relationships with more than 80% of the financial institutions in the US across our core, complementary, and payment segments. So in most consolidation events, we are already doing business with the acquiring institution, giving us a strong advantage in increasing the likelihood that the combined entity remains on some or most Jack Henry technology. Now for more detail on the overall business, starting with some recognition for the team. We are very proud. I'm sorry.
Speaker #3: Acquiring both JACK HENRY & non-JACK HENRY institutions. As well as our success the past few years in winning mergers. Winning the core merger business when a JACK HENRY institution is acquired.
Speaker #3: Additionally, we have relationships with more than 80% of the financial institutions in the US across our core complementary and payment segments. So in most consolidation events, we are already doing business with the acquiring institution, giving us a strong advantage in increasing the likelihood that the combined entity remains on some or most JACK HENRY technology.
Speaker #3: Now for more detail on the overall business, starting with some recognition for the team. We are very proud. I'm sorry. JACK HENRY was recently named one of America's Most Loved Workplaces, ranking 12th out of 100 companies.
[Analyst] (Goldman Sachs): Jack Henry was recently named one of America's most loved workplaces, ranking 12 out of 100 companies. We also earned spots on the Forbes list of best companies in America, Computerworld's ranking of best places to work in IT, and Newsweek's list of most responsible companies. These honors reaffirm our unwavering people-first commitment to our associates. Turning to the significant progress we are making on key innovative solutions. We are extremely pleased with the strong reaction to our new cloud-native Tap2Local merchant acquiring solution. Tap2Local is offered exclusively through banks and credit unions, giving the FI a powerful way to win back deposits from small and medium-sized businesses that have shifted their card acceptance activities to other providers.
[Analyst] (Goldman Sachs): Jack Henry was recently named one of America's most loved workplaces, ranking 12 out of 100 companies. We also earned spots on the Forbes list of best companies in America, Computerworld's ranking of best places to work in IT, and Newsweek's list of most responsible companies. These honors reaffirm our unwavering people-first commitment to our associates. Turning to the significant progress we are making on key innovative solutions. We are extremely pleased with the strong reaction to our new cloud-native Tap2Local merchant acquiring solution. Tap2Local is offered exclusively through banks and credit unions, giving the FI a powerful way to win back deposits from small and medium-sized businesses that have shifted their card acceptance activities to other providers.
Greg Adelson: Jack Henry was recently named one of America's most loved workplaces, ranking 12 out of 100 companies. We also earned spots on the Forbes list of best companies in America, Computerworld's ranking of best places to work in IT, and Newsweek's list of most responsible companies. These honors reaffirm our unwavering people-first commitment to our associates. Turning to the significant progress we are making on key innovative solutions. We are extremely pleased with the strong reaction to our new cloud-native Tap2Local merchant acquiring solution. Tap2Local is offered exclusively through banks and credit unions, giving the FI a powerful way to win back deposits from small and medium-sized businesses that have shifted their card acceptance activities to other providers.
Speaker #3: We also earned spots on the Forbes list of best companies in America computer world's ranking of best places to work in IT and Newsweek's list of most responsible companies.
Speaker #3: These honors reaffirm our unwavering people-first commitment to our associates. Turning to the significant progress we are making on key innovative solutions, we are extremely pleased with the strong reaction to our new cloud-native tap-to-local merchant acquiring solution.
Speaker #3: Tap-to-local is offered exclusively through banks and credit unions, giving the FI a powerful way to win back deposits from small and medium-sized businesses that have shifted their card acceptance activities to other providers.
Speaker #3: Built-in partnership with Move tap-to-local delivers differentiated capabilities for SMBs, including easy enrollment, tap-to-pay on both additional hardware, and continuous iOS and Android devices without account reconciliation to the accounting platform of their choice.
[Analyst] (Goldman Sachs): in partnership with Moov, Tap2Local delivers differentiated capabilities for SMBs, including easy enrollment, tap-to-pay on both iOS and Android devices without additional hardware, and continuous account reconciliation to the accounting platform of their choice. We are currently rolling the solution out in waves to all of our Banno clients. We took 300 clients live in November and December and just rolled out another 100 clients last week. We will continue to add 100 to 150 per month and expect to have some nice data points to share on the May earnings call. We're also seeing strong early success with Jack Henry Rapid Transfers, which allows both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets to manage day-to-day transactions and personal finances. We are the first provider to bring this unique capability to community banks and credit unions.
[Analyst] (Goldman Sachs): in partnership with Moov, Tap2Local delivers differentiated capabilities for SMBs, including easy enrollment, tap-to-pay on both iOS and Android devices without additional hardware, and continuous account reconciliation to the accounting platform of their choice. We are currently rolling the solution out in waves to all of our Banno clients. We took 300 clients live in November and December and just rolled out another 100 clients last week. We will continue to add 100 to 150 per month and expect to have some nice data points to share on the May earnings call. We're also seeing strong early success with Jack Henry Rapid Transfers, which allows both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets to manage day-to-day transactions and personal finances. We are the first provider to bring this unique capability to community banks and credit unions.
Greg Adelson: in partnership with Moov, Tap2Local delivers differentiated capabilities for SMBs, including easy enrollment, tap-to-pay on both iOS and Android devices without additional hardware, and continuous account reconciliation to the accounting platform of their choice. We are currently rolling the solution out in waves to all of our Banno clients. We took 300 clients live in November and December and just rolled out another 100 clients last week. We will continue to add 100 to 150 per month and expect to have some nice data points to share on the May earnings call. We're also seeing strong early success with Jack Henry Rapid Transfers, which allows both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets to manage day-to-day transactions and personal finances. We are the first provider to bring this unique capability to community banks and credit unions.
Speaker #3: We are currently rolling the solution out in waves to all of our Bano clients. We took 300 clients live in November and December, and just rolled out another 100 clients last week.
Speaker #3: We will continue to add 100 to 150 per month and expect to have some nice data points to share on the May earnings call.
Speaker #3: We're also seeing strong early success with JACK HENRY rapid transfers, which allows both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets to manage day-to-day transactions and personal finances.
Speaker #3: We are the first provider to bring this unique capability to community banks and credit unions. This offering will help our clients grow deposits and attract younger, digital-native generations like Gen Z.
[Analyst] (Goldman Sachs): This offering will help our clients grow deposits and attract younger digital native generations like Gen Z. Rapid Transfers is now live with 75 clients, with another 180 in various stages of onboarding. We will also share more data on Rapid Transfers on the May earnings call. We are very excited about the development and execution of our stablecoin strategy. As I mentioned on our last earnings call, we leveraged the Jack Henry platform to complete our proof of concept in two weeks. We are now in beta testing with multiple financial institutions to send and receive USDC. In addition, we are evaluating over 20 stablecoin infrastructure, compliance, and payment fintechs to ensure we have best-of-breed partners for this critical initiative. Another important strategy I want to highlight is our focus on embedded payments and banking as a service capabilities.
[Analyst] (Goldman Sachs): This offering will help our clients grow deposits and attract younger digital native generations like Gen Z. Rapid Transfers is now live with 75 clients, with another 180 in various stages of onboarding. We will also share more data on Rapid Transfers on the May earnings call. We are very excited about the development and execution of our stablecoin strategy. As I mentioned on our last earnings call, we leveraged the Jack Henry platform to complete our proof of concept in two weeks. We are now in beta testing with multiple financial institutions to send and receive USDC. In addition, we are evaluating over 20 stablecoin infrastructure, compliance, and payment fintechs to ensure we have best-of-breed partners for this critical initiative. Another important strategy I want to highlight is our focus on embedded payments and banking as a service capabilities.
Greg Adelson: This offering will help our clients grow deposits and attract younger digital native generations like Gen Z. Rapid Transfers is now live with 75 clients, with another 180 in various stages of onboarding. We will also share more data on Rapid Transfers on the May earnings call. We are very excited about the development and execution of our stablecoin strategy. As I mentioned on our last earnings call, we leveraged the Jack Henry platform to complete our proof of concept in two weeks. We are now in beta testing with multiple financial institutions to send and receive USDC. In addition, we are evaluating over 20 stablecoin infrastructure, compliance, and payment fintechs to ensure we have best-of-breed partners for this critical initiative. Another important strategy I want to highlight is our focus on embedded payments and banking as a service capabilities.
Speaker #3: Rapid transfers is now live with 75 clients with another 180 in various stages of onboarding. We will also share more data on rapid transfers on the May earnings call.
Speaker #3: We are very excited about the development and execution of our stablecoin strategy. As I mentioned on our last earnings call, we leveraged the Jack Henry platform to complete our proof of concept in two weeks.
Speaker #3: We are now in beta testing with multiple financial institutions to send and receive USDC. In addition, we are evaluating over 20 stablecoin infrastructure compliance and payment fintechs to ensure we have best-of-breed partners for this critical initiative.
Speaker #3: An important strategy I want to highlight is our continued focus on embedded payments and banking-as-a-service capabilities. Our integration of Victor Technologies, which we acquired on September 30, is progressing extremely well.
[Analyst] (Goldman Sachs): Our integration of Victor Technologies, which we acquired on 30 September, is progressing extremely well. As a reminder, Victor's modern innovative platform with direct-to-core connectivity enables financial institutions to embed payment capabilities into third-party non-bank brands such as fintechs and commercial customers. Victor was already integrated with our SilverLake core banking system and Jack Henry PayCenter prior to the acquisition. We are now extending its capabilities to serve our Symitar credit union clients and to integrate directly with the Jack Henry platform. We also plan to leverage Victor's modern APIs to complement our treasury management offering. Many corporations are seeking no-touch processing and virtual accounts to streamline accounting and reconciliation. This creates an opportunity for financial institutions to deliver embedded payments to their corporate customers, giving them more options for seamlessly integrating payments into their business processes.
[Analyst] (Goldman Sachs): Our integration of Victor Technologies, which we acquired on 30 September, is progressing extremely well. As a reminder, Victor's modern innovative platform with direct-to-core connectivity enables financial institutions to embed payment capabilities into third-party non-bank brands such as fintechs and commercial customers. Victor was already integrated with our SilverLake core banking system and Jack Henry PayCenter prior to the acquisition. We are now extending its capabilities to serve our Symitar credit union clients and to integrate directly with the Jack Henry platform. We also plan to leverage Victor's modern APIs to complement our treasury management offering. Many corporations are seeking no-touch processing and virtual accounts to streamline accounting and reconciliation. This creates an opportunity for financial institutions to deliver embedded payments to their corporate customers, giving them more options for seamlessly integrating payments into their business processes.
Greg Adelson: Our integration of Victor Technologies, which we acquired on 30 September, is progressing extremely well. As a reminder, Victor's modern innovative platform with direct-to-core connectivity enables financial institutions to embed payment capabilities into third-party non-bank brands such as fintechs and commercial customers. Victor was already integrated with our SilverLake core banking system and Jack Henry PayCenter prior to the acquisition. We are now extending its capabilities to serve our Symitar credit union clients and to integrate directly with the Jack Henry platform. We also plan to leverage Victor's modern APIs to complement our treasury management offering. Many corporations are seeking no-touch processing and virtual accounts to streamline accounting and reconciliation. This creates an opportunity for financial institutions to deliver embedded payments to their corporate customers, giving them more options for seamlessly integrating payments into their business processes.
Speaker #3: As a reminder, Victor's modern, innovative platform with direct-to-core connectivity enables financial institutions to embed payment capabilities into third-party non-bank brands such as fintechs and commercial customers.
Speaker #3: Victor was already integrated with our SilverLake core banking system and Jack Henry Pay Center prior to the acquisition. We are now extending this capability to serve our Symitar credit union clients and to integrate directly with the Jack Henry platform.
Speaker #3: We also plan to leverage Victor's modern APIs to complement our treasury management offering. Many corporations are seeking no-touch processing and virtual accounts to streamline accounting and reconciliation.
Speaker #3: This creates an opportunity for financial institutions to deliver embedded payments to their corporate customers, giving them more options for seamlessly integrating payments into their business processes.
Speaker #3: We already had a sales team in place focused on selling embedded payments to financial institutions. To build on upon that momentum, we have added a team that will work directly with fintechs to bring new opportunities to our clients.
[Analyst] (Goldman Sachs): We already had a sales team in place focused on selling embedded payments to financial institutions. To build on that momentum, we have added a team that will work directly with fintechs to bring new opportunities to our clients. This expansion supports our broader strategy to help financial institutions compete and grow revenue. All of these innovative solutions are made possible by our technology modernization strategy and public cloud-native API-first Jack Henry platform. We have developed 22 components on the platform and will have multiple clients testing our new cloud-native deposit-only core functionality in Q2 of this calendar year. I will now provide a few updates on specific products. In our core segment, I talked earlier about our 22 competitive wins in Q2. We also secured 10 on-premise to private cloud contracts, and 5 of those were with institutions that had more than $1 billion in assets.
[Analyst] (Goldman Sachs): We already had a sales team in place focused on selling embedded payments to financial institutions. To build on that momentum, we have added a team that will work directly with fintechs to bring new opportunities to our clients. This expansion supports our broader strategy to help financial institutions compete and grow revenue. All of these innovative solutions are made possible by our technology modernization strategy and public cloud-native API-first Jack Henry platform. We have developed 22 components on the platform and will have multiple clients testing our new cloud-native deposit-only core functionality in Q2 of this calendar year. I will now provide a few updates on specific products. In our core segment, I talked earlier about our 22 competitive wins in Q2. We also secured 10 on-premise to private cloud contracts, and 5 of those were with institutions that had more than $1 billion in assets.
Greg Adelson: We already had a sales team in place focused on selling embedded payments to financial institutions. To build on that momentum, we have added a team that will work directly with fintechs to bring new opportunities to our clients. This expansion supports our broader strategy to help financial institutions compete and grow revenue. All of these innovative solutions are made possible by our technology modernization strategy and public cloud-native API-first Jack Henry platform. We have developed 22 components on the platform and will have multiple clients testing our new cloud-native deposit-only core functionality in Q2 of this calendar year. I will now provide a few updates on specific products. In our core segment, I talked earlier about our 22 competitive wins in Q2. We also secured 10 on-premise to private cloud contracts, and 5 of those were with institutions that had more than $1 billion in assets.
Speaker #3: This expansion supports our broader strategy to help financial institutions compete and grow revenue. All of these innovative solutions are made possible by our technology modernization strategy and public cloud-native API-first JACK HENRY platform.
Speaker #3: We have developed 22 components on the platform and will have multiple clients testing our new cloud-native deposit-only core functionality in the second quarter of this calendar year.
Speaker #3: I will now provide a few updates on specific products. In our core segment, I talked earlier about our 22 competitive wins in Q2. We also secured 10 on-premise to private cloud contracts, and five of those were with institutions that had more than $1 billion in assets.
Speaker #3: In the first six months of this fiscal year, seven of our private cloud contracts were with clients holding over $1 billion in assets compared with just two at this time last year.
[Analyst] (Goldman Sachs): In the first 6 months of this fiscal year, 7 of our private cloud contracts were with clients holding over $1 billion in assets compared with just 2 at this time last year. This is important because we earn an average of approximately 2 times more revenue from clients in the private cloud than those operating on-premise. Today, 78% of our core clients are operating in the private cloud. In our payment segment, we continue to experience outstanding growth in our faster payment solutions. Over the past year, the number of financial institutions using Zelle has grown by 22%, The Clearing House's RTP network by 26%, and FedNow by 32%. In Q2, payment transaction volume through these channels increased by 49% over the prior year same quarter. In our complementary segment, we signed a total of 48 new Financial Crimes Defender and faster payment module contracts in the quarter.
[Analyst] (Goldman Sachs): In the first 6 months of this fiscal year, 7 of our private cloud contracts were with clients holding over $1 billion in assets compared with just 2 at this time last year. This is important because we earn an average of approximately 2 times more revenue from clients in the private cloud than those operating on-premise. Today, 78% of our core clients are operating in the private cloud. In our payment segment, we continue to experience outstanding growth in our faster payment solutions. Over the past year, the number of financial institutions using Zelle has grown by 22%, The Clearing House's RTP network by 26%, and FedNow by 32%. In Q2, payment transaction volume through these channels increased by 49% over the prior year same quarter. In our complementary segment, we signed a total of 48 new Financial Crimes Defender and faster payment module contracts in the quarter.
Greg Adelson: In the first 6 months of this fiscal year, 7 of our private cloud contracts were with clients holding over $1 billion in assets compared with just 2 at this time last year. This is important because we earn an average of approximately 2 times more revenue from clients in the private cloud than those operating on-premise. Today, 78% of our core clients are operating in the private cloud. In our payment segment, we continue to experience outstanding growth in our faster payment solutions. Over the past year, the number of financial institutions using Zelle has grown by 22%, The Clearing House's RTP network by 26%, and FedNow by 32%. In Q2, payment transaction volume through these channels increased by 49% over the prior year same quarter. In our complementary segment, we signed a total of 48 new Financial Crimes Defender and faster payment module contracts in the quarter.
Speaker #3: This is an important because we earn an average of approximately two times more revenue from clients in the private cloud than those operating on-premise.
Speaker #3: Today, 78% of our core clients are operating in the private cloud. In our payment segment, we continue to experience outstanding growth in our faster payment solutions.
Speaker #3: Over the past year, the number of financial institutions using Zelle has grown by 22%. The Clearing House's RTP network by 26%, and FedNow by 32%.
Speaker #3: In Q2, payment transaction volume through these channels increased by 49% over the prior year, same quarter. In our complimentary segment, we signed a total of 48 new financial crimes defender and faster payment module contracts in the quarter.
Speaker #3: As of December 31, we had 164 financial crimes installations completed and another 64 in various stages also have 141 faster payment modules installed and 227 in various stages of implementation.
[Analyst] (Goldman Sachs): As of 31 December, we had 164 financial crimes installations completed and another 64 in various stages of implementation. We also have 141 faster payment modules installed and 227 in various stages of implementation. We had a very strong sales quarter with our Banno digital platform. For the quarter, we signed 84 clients to our Banno platform with several large competitive takeaways. We currently have 1,037 Banno retail clients and 435 live with Banno Business. We now serve 15.2 million registered users on the Banno platform, up 15% from a year ago. A couple of additional items before I wrap up. Some of you may have seen Cornerstone's annual survey of bank and credit union executives published last week. According to the study, 84% of banks and 83% of credit unions expect to increase their technology spending in 2026.
[Analyst] (Goldman Sachs): As of 31 December, we had 164 financial crimes installations completed and another 64 in various stages of implementation. We also have 141 faster payment modules installed and 227 in various stages of implementation. We had a very strong sales quarter with our Banno digital platform. For the quarter, we signed 84 clients to our Banno platform with several large competitive takeaways. We currently have 1,037 Banno retail clients and 435 live with Banno Business. We now serve 15.2 million registered users on the Banno platform, up 15% from a year ago. A couple of additional items before I wrap up. Some of you may have seen Cornerstone's annual survey of bank and credit union executives published last week. According to the study, 84% of banks and 83% of credit unions expect to increase their technology spending in 2026.
Greg Adelson: As of 31 December, we had 164 financial crimes installations completed and another 64 in various stages of implementation. We also have 141 faster payment modules installed and 227 in various stages of implementation. We had a very strong sales quarter with our Banno digital platform. For the quarter, we signed 84 clients to our Banno platform with several large competitive takeaways. We currently have 1,037 Banno retail clients and 435 live with Banno Business. We now serve 15.2 million registered users on the Banno platform, up 15% from a year ago. A couple of additional items before I wrap up. Some of you may have seen Cornerstone's annual survey of bank and credit union executives published last week. According to the study, 84% of banks and 83% of credit unions expect to increase their technology spending in 2026.
Speaker #3: We had a very strong sales quarter with our Bano digital platform. For the quarter, we signed 84 clients to our Bano platform, with several large competitive takeaways.
Speaker #3: We currently have 1,037 Bano retail clients and 435 live with Bano Business. We now serve 15.2 million registered users on the Bano platform, up 15% from a year ago.
Speaker #3: A couple of additional items before I wrap up. Some of you may have seen Cornerstone's annual survey of bank and credit union executives published last week.
Speaker #3: According to the study, 84% of banks and 83% of credit unions expect to increase their technology spending in 2026. That's up from 73% of banks and 79% of credit unions a year ago.
[Analyst] (Goldman Sachs): That's up from 73% of banks and 79% of credit unions a year ago. We are currently conducting our annual Jack Henry strategy benchmark study with our clients and will share those results on our May earnings call. We were honored to celebrate the 40th anniversary of our IPO by ringing the Nasdaq opening bell on 21 November. To put that milestone into perspective, Jack Henry is one of approximately 200 companies out of the 3,400 on Nasdaq that has remained public for four decades. This longstanding stability is the perfect lead into another major milestone this year as we celebrate the 50th anniversary of Jack Henry's founding with associates, clients, and investors. In closing, we are extremely pleased with our first-half performance and remain very optimistic about the rest of our fiscal year based on the strong demand environment, our robust sales pipeline, and our exceptional competitive win rate.
[Analyst] (Goldman Sachs): That's up from 73% of banks and 79% of credit unions a year ago. We are currently conducting our annual Jack Henry strategy benchmark study with our clients and will share those results on our May earnings call. We were honored to celebrate the 40th anniversary of our IPO by ringing the Nasdaq opening bell on 21 November. To put that milestone into perspective, Jack Henry is one of approximately 200 companies out of the 3,400 on Nasdaq that has remained public for four decades. This longstanding stability is the perfect lead into another major milestone this year as we celebrate the 50th anniversary of Jack Henry's founding with associates, clients, and investors. In closing, we are extremely pleased with our first-half performance and remain very optimistic about the rest of our fiscal year based on the strong demand environment, our robust sales pipeline, and our exceptional competitive win rate.
Greg Adelson: That's up from 73% of banks and 79% of credit unions a year ago. We are currently conducting our annual Jack Henry strategy benchmark study with our clients and will share those results on our May earnings call. We were honored to celebrate the 40th anniversary of our IPO by ringing the Nasdaq opening bell on 21 November. To put that milestone into perspective, Jack Henry is one of approximately 200 companies out of the 3,400 on Nasdaq that has remained public for four decades. This longstanding stability is the perfect lead into another major milestone this year as we celebrate the 50th anniversary of Jack Henry's founding with associates, clients, and investors. In closing, we are extremely pleased with our first-half performance and remain very optimistic about the rest of our fiscal year based on the strong demand environment, our robust sales pipeline, and our exceptional competitive win rate.
Speaker #3: We are currently conducting our annual JACK HENRY strategy benchmark study with our clients and will share those results on our May earnings call. We were honored to celebrate the 40th anniversary of our IPO by ringing the NASDAQ opening bell on November 21st.
Speaker #3: To put that milestone into perspective, Jack Henry is one of approximately 200 companies out of the 3,400 on NASDAQ that has remained public for four decades.
Speaker #3: This long-standing stability is the perfect lead-in to another major milestone this year, as we celebrate the 50th anniversary of JACK HENRY's founding with associates, clients, and investors.
Speaker #3: In closing, we are extremely pleased with our first-half performance and remain very optimistic about the rest of our fiscal year based on the strong demand environment, our robust sales pipeline, and our exceptional competitive win rate.
Speaker #3: We will continue to focus on our key differentiators of success: culture, service, innovation, strategy, and execution. All of these position us extremely well for the future.
[Analyst] (Goldman Sachs): We will continue to focus on our key differentiators of success: culture, service, innovation, strategy, and execution. All of these position us extremely well for the future. With that, I'll turn it over to Mimi for more detail on our financials. Thank you, Greg. Good morning, everyone. I would like to begin by thanking our associates who remain focused on serving our financial institution clients. The result is another quarter of solid revenue and earnings growth and continued momentum for a healthy fiscal year. I'll begin with our robust second quarter results, then conclude with our updated fiscal 2026 guidance. Second quarter and fiscal year-to-date GAAP revenue increased 8%. Non-GAAP revenue increased 7% for the quarter and 8% for the year, a continuation of consistently solid performance. Quarterly non-GAAP revenue growth was negatively impacted by the shift of our Connect client conference into Q1 from Q2.
[Analyst] (Goldman Sachs): We will continue to focus on our key differentiators of success: culture, service, innovation, strategy, and execution. All of these position us extremely well for the future. With that, I'll turn it over to Mimi for more detail on our financials. Thank you, Greg. Good morning, everyone. I would like to begin by thanking our associates who remain focused on serving our financial institution clients. The result is another quarter of solid revenue and earnings growth and continued momentum for a healthy fiscal year. I'll begin with our robust second quarter results, then conclude with our updated fiscal 2026 guidance. Second quarter and fiscal year-to-date GAAP revenue increased 8%. Non-GAAP revenue increased 7% for the quarter and 8% for the year, a continuation of consistently solid performance. Quarterly non-GAAP revenue growth was negatively impacted by the shift of our Connect client conference into Q1 from Q2.
Greg Adelson: We will continue to focus on our key differentiators of success: culture, service, innovation, strategy, and execution. All of these position us extremely well for the future. With that, I'll turn it over to Mimi for more detail on our financials.
Speaker #3: With that, I'll turn it over to Mimi for more detail on our financials.
Mimi Carsley: Thank you, Greg. Good morning, everyone. I would like to begin by thanking our associates who remain focused on serving our financial institution clients. The result is another quarter of solid revenue and earnings growth and continued momentum for a healthy fiscal year. I'll begin with our robust second quarter results, then conclude with our updated fiscal 2026 guidance. Second quarter and fiscal year-to-date GAAP revenue increased 8%. Non-GAAP revenue increased 7% for the quarter and 8% for the year, a continuation of consistently solid performance. Quarterly non-GAAP revenue growth was negatively impacted by the shift of our Connect client conference into Q1 from Q2.
Speaker #2: Thank you, Greg. Good morning, everyone. I would like to begin by thanking our associates. You remain focused on serving our financial institution clients. The result is another quarter of solid revenue and earnings growth, and continued momentum for a healthy fiscal year.
Speaker #2: I'll begin with our robust second quarter results, then conclude with our updated fiscal '26 guidance. Second quarter and fiscal year-to-date GAAP revenue increased 8%.
Speaker #2: Non-gap revenue increased 7% for the quarter and 8% for the year, a continuation of consistently solid performance. Quarterly non-gap revenue growth was negatively impacted by the shift of our Connect client conference into Q1 from Q2.
Speaker #2: Without this timing shift, quarterly non-GAAP revenue growth would have been a more pronounced 8%. Second quarter deconversion revenue of approximately $6 million, which we previously announced, was up approximately $6 million for the quarter, reflecting a steady pace of M&A activity among financial institutions.
[Analyst] (Goldman Sachs): Without this timing shift, quarterly non-GAAP revenue growth would have been a more pronounced 8%. Q2 deconversion revenue of approximately $6 million, which we previously announced, was up approximately $6 million for the quarter, reflecting a steady pace of M&A activity among financial institutions. It should be noted that the dollar amount of deconversion revenue has little correlation with the number of transactions or annual revenue impact. We continue to see industry consolidation as largely neutral to slightly positive for our business. Now let's look more closely at the details. GAAP services and support revenue increased 7% for the quarter, while non-GAAP increased 6%. Services and support growth during the quarter was primarily driven by strengthened data processing and hosting revenue for both private and public cloud. Private and public cloud offerings continue to drive strong growth. Cloud revenue increased 8% in the quarter.
[Analyst] (Goldman Sachs): Without this timing shift, quarterly non-GAAP revenue growth would have been a more pronounced 8%. Q2 deconversion revenue of approximately $6 million, which we previously announced, was up approximately $6 million for the quarter, reflecting a steady pace of M&A activity among financial institutions. It should be noted that the dollar amount of deconversion revenue has little correlation with the number of transactions or annual revenue impact. We continue to see industry consolidation as largely neutral to slightly positive for our business. Now let's look more closely at the details. GAAP services and support revenue increased 7% for the quarter, while non-GAAP increased 6%. Services and support growth during the quarter was primarily driven by strengthened data processing and hosting revenue for both private and public cloud. Private and public cloud offerings continue to drive strong growth. Cloud revenue increased 8% in the quarter.
Mimi Carsley: Without this timing shift, quarterly non-GAAP revenue growth would have been a more pronounced 8%. Q2 deconversion revenue of approximately $6 million, which we previously announced, was up approximately $6 million for the quarter, reflecting a steady pace of M&A activity among financial institutions. It should be noted that the dollar amount of deconversion revenue has little correlation with the number of transactions or annual revenue impact. We continue to see industry consolidation as largely neutral to slightly positive for our business. Now let's look more closely at the details. GAAP services and support revenue increased 7% for the quarter, while non-GAAP increased 6%. Services and support growth during the quarter was primarily driven by strengthened data processing and hosting revenue for both private and public cloud. Private and public cloud offerings continue to drive strong growth. Cloud revenue increased 8% in the quarter.
Speaker #2: noted that the dollar amount of It should be deconversion revenue has little correlation with the number of transactions or annual revenue impact. We continue to see industry consolidation as largely neutral to slightly positive for our business.
Speaker #2: Now, let's look more closely at the details. GAAP service and support revenue increased 7% for the quarter, while non-GAAP increased 6%. Services and support growth during the quarter was primarily driven by strength in data processing and hosting revenue for both private and public cloud.
Speaker #2: Private and public cloud offerings continue to drive strong growth. Cloud revenue increased 8% in the quarter. This recurring revenue contributor is 33% of our total revenue.
[Analyst] (Goldman Sachs): This recurring revenue contributor is 33% of our total revenue. Shifting to processing revenue, which is 44% of total revenue and another strategic component of our long-term growth model. We saw robust performance with 9% GAAP and 8% non-GAAP growth for the quarter. Consistent with recent results, quarterly drivers include increased digital, card, and faster payment processing revenue. Completing commentary on revenue, I would highlight total recurring revenue exceeded 92%. Next, moving to expenses, beginning with cost of revenue, which increased a modest 5% on a GAAP and non-GAAP basis for the quarter. Drivers for the quarter included higher direct costs consistent with growth in lines of revenue, higher personnel costs partly offset by lower benefits costs, and increased amortization of intangible assets, which have been consistent throughout the first half of the year. For modeling purposes, amortization of acquisition-related intangibles was $6 million for the quarter.
[Analyst] (Goldman Sachs): This recurring revenue contributor is 33% of our total revenue. Shifting to processing revenue, which is 44% of total revenue and another strategic component of our long-term growth model. We saw robust performance with 9% GAAP and 8% non-GAAP growth for the quarter. Consistent with recent results, quarterly drivers include increased digital, card, and faster payment processing revenue. Completing commentary on revenue, I would highlight total recurring revenue exceeded 92%. Next, moving to expenses, beginning with cost of revenue, which increased a modest 5% on a GAAP and non-GAAP basis for the quarter. Drivers for the quarter included higher direct costs consistent with growth in lines of revenue, higher personnel costs partly offset by lower benefits costs, and increased amortization of intangible assets, which have been consistent throughout the first half of the year. For modeling purposes, amortization of acquisition-related intangibles was $6 million for the quarter.
Mimi Carsley: This recurring revenue contributor is 33% of our total revenue. Shifting to processing revenue, which is 44% of total revenue and another strategic component of our long-term growth model. We saw robust performance with 9% GAAP and 8% non-GAAP growth for the quarter. Consistent with recent results, quarterly drivers include increased digital, card, and faster payment processing revenue. Completing commentary on revenue, I would highlight total recurring revenue exceeded 92%. Next, moving to expenses, beginning with cost of revenue, which increased a modest 5% on a GAAP and non-GAAP basis for the quarter. Drivers for the quarter included higher direct costs consistent with growth in lines of revenue, higher personnel costs partly offset by lower benefits costs, and increased amortization of intangible assets, which have been consistent throughout the first half of the year. For modeling purposes, amortization of acquisition-related intangibles was $6 million for the quarter.
Speaker #2: Shifting to processing revenue which is 44% of total revenue and another strategic component of our long-term growth model. We saw robust performance with 9% gap and 8% non-gap growth for the quarter.
Speaker #2: Consistent with recent results, quarterly drivers include increased digital, card, and faster payment processing revenue. Completing commentary on revenue, I would highlight total reoccurring revenue exceeded 92%.
Speaker #2: Next, moving to expenses. Beginning with cost of revenue which increased a modest 5% on a gap and non-gap basis for the quarter. Drivers for the quarter included higher direct costs, consistent with growth in lines of revenue, higher personnel costs, partly offset by lower benefits costs, and increased amortization of intangible assets which have been consistent throughout the first half of the year.
Speaker #2: Remodeling purposes, amortization of acquisition-related intangibles was 6 million for the quarter. Next, R&D expense increased 3% on a gap and 2% on a non-gap basis for the quarter.
[Analyst] (Goldman Sachs): Next, R&D expense increased 3% on a GAAP and 2% on a non-GAAP basis for the quarter. The quarter minimal increase was primarily due to tempered net personnel costs, which has also been consistent year-to-date. Ending with SG&A expense for the quarter on a GAAP basis, it decreased 13% and it decreased 10% on a non-GAAP basis. Results reflect the timing of our client conference moving into Q1 in conjunction with our continued focus on managing costs. Aided by our consistent revenue growth, we remain focused on generating annual compounding margin expansion. Q2 delivered 355 basis point increase in non-GAAP margin to 25%. This contributed to year-to-date non-GAAP margin improvement of 291 basis points and a non-GAAP margin of 26%.
[Analyst] (Goldman Sachs): Next, R&D expense increased 3% on a GAAP and 2% on a non-GAAP basis for the quarter. The quarter minimal increase was primarily due to tempered net personnel costs, which has also been consistent year-to-date. Ending with SG&A expense for the quarter on a GAAP basis, it decreased 13% and it decreased 10% on a non-GAAP basis. Results reflect the timing of our client conference moving into Q1 in conjunction with our continued focus on managing costs. Aided by our consistent revenue growth, we remain focused on generating annual compounding margin expansion. Q2 delivered 355 basis point increase in non-GAAP margin to 25%. This contributed to year-to-date non-GAAP margin improvement of 291 basis points and a non-GAAP margin of 26%.
Mimi Carsley: Next, R&D expense increased 3% on a GAAP and 2% on a non-GAAP basis for the quarter. The quarter minimal increase was primarily due to tempered net personnel costs, which has also been consistent year-to-date. Ending with SG&A expense for the quarter on a GAAP basis, it decreased 13% and it decreased 10% on a non-GAAP basis. Results reflect the timing of our client conference moving into Q1 in conjunction with our continued focus on managing costs. Aided by our consistent revenue growth, we remain focused on generating annual compounding margin expansion. Q2 delivered 355 basis point increase in non-GAAP margin to 25%. This contributed to year-to-date non-GAAP margin improvement of 291 basis points and a non-GAAP margin of 26%.
Speaker #2: The quarter minimal increase was primarily due to tempered net personnel costs which is also been consistent year to date. Ending with SG&A expense for the quarter on a gap basis it decreased 13% and it decreased a 10% on a non-gap basis.
Speaker #2: Results reflect the timing of our client conference moving into Q1 in conjunction with our continued focus on managing costs. Aided by our consistent revenue growth, we remain focused on generating annual compounding margin expansion.
Speaker #2: Q2 delivered 355 basis point increase in non-gap margin to 25%. This contributed to year to date non-gap margin improvement of 291 basis points and a non-gap margin of 26%.
Speaker #2: Non-gap margin benefited in the quarter and year to date from inherent leverage in our business model strategic cost management and leveraging existing workforce as we continue to focus on enterprise process improvement and AI utilization.
[Analyst] (Goldman Sachs): Non-GAAP margin benefited in the quarter and year-to-date from inherent leverage in our business model, strategic cost management, and leveraging existing workforce as we continue to focus on enterprise process improvement and AI utilization, and further aided by lowered self-insured medical costs, which we anticipate to be non-sustainable. We are focusing on a normalized benefit growth trajectory in the second half of the year, which is expected to noticeably impact results. These strong quarterly results produced a fully diluted GAAP earnings per share of $1.72, up 29%. For the first half of the fiscal year, GAAP earnings per share was $3.70, an increase of 24%. Reviewing the three operating segments, we see positive performance across the board. Core segment non-GAAP revenue increased 7% for the quarter, with operating margin increasing 5 basis points. Payment segment quarterly non-GAAP revenue increased 6%.
[Analyst] (Goldman Sachs): Non-GAAP margin benefited in the quarter and year-to-date from inherent leverage in our business model, strategic cost management, and leveraging existing workforce as we continue to focus on enterprise process improvement and AI utilization, and further aided by lowered self-insured medical costs, which we anticipate to be non-sustainable. We are focusing on a normalized benefit growth trajectory in the second half of the year, which is expected to noticeably impact results. These strong quarterly results produced a fully diluted GAAP earnings per share of $1.72, up 29%. For the first half of the fiscal year, GAAP earnings per share was $3.70, an increase of 24%. Reviewing the three operating segments, we see positive performance across the board. Core segment non-GAAP revenue increased 7% for the quarter, with operating margin increasing 5 basis points. Payment segment quarterly non-GAAP revenue increased 6%.
Mimi Carsley: Non-GAAP margin benefited in the quarter and year-to-date from inherent leverage in our business model, strategic cost management, and leveraging existing workforce as we continue to focus on enterprise process improvement and AI utilization, and further aided by lowered self-insured medical costs, which we anticipate to be non-sustainable. We are focusing on a normalized benefit growth trajectory in the second half of the year, which is expected to noticeably impact results. These strong quarterly results produced a fully diluted GAAP earnings per share of $1.72, up 29%. For the first half of the fiscal year, GAAP earnings per share was $3.70, an increase of 24%. Reviewing the three operating segments, we see positive performance across the board. Core segment non-GAAP revenue increased 7% for the quarter, with operating margin increasing 5 basis points. Payment segment quarterly non-GAAP revenue increased 6%.
Speaker #2: And further aided by lower self-insured medical costs which we anticipate to be non-sustainable. We are focusing on normalized benefit growth trajectory in the second half of the year which is expected to noticeably impact results.
Speaker #2: These strong quarterly results produced a fully diluted GAAP earnings per share of $1.72, up 29%. For the first half of the fiscal year, GAAP earnings per share was $3.70 and increased 24%.
Speaker #2: Reviewing the three operating segments, we see positive performance across the board. Core segment non-gap revenue increased 7% for the quarter with operating margin increasing 5 basis points.
Speaker #2: Payment segment quarterly non-gap revenue increased 6%. The segment again had outstanding non-gap operating margin growth with quarterly results of 200 basis points. Revenue growth was due to the resilience in our card-related services consistent growth in the EPS business and continuing a large percent growth from faster payments I'll bet on a smaller dollar base.
[Analyst] (Goldman Sachs): The segment again had outstanding non-GAAP operating margin growth with quarterly results of 200 basis points. Revenue growth was due to the resilience in our card-related services, consistent growth in the EPS business, and continuing a large percent growth from faster payments, albeit on a smaller dollar base. Finally, complementary segment quarterly non-GAAP revenue growth increased an impressive 9% with healthy 58 basis points of non-GAAP margin expansion. Quarterly revenue growth continued to reflect digital solution demand and beneficial product mix and sales sourced from both new core wins, existing core customers, and non-core financial institutions. Now a review of cash flow and capital allocation. Q2 operating cash flow was $153 million, a $63 million increase over the prior fiscal year Q2. Quarterly free cash flow of $103 million delivered a $74 million increase over the prior fiscal year second quarter.
[Analyst] (Goldman Sachs): The segment again had outstanding non-GAAP operating margin growth with quarterly results of 200 basis points. Revenue growth was due to the resilience in our card-related services, consistent growth in the EPS business, and continuing a large percent growth from faster payments, albeit on a smaller dollar base. Finally, complementary segment quarterly non-GAAP revenue growth increased an impressive 9% with healthy 58 basis points of non-GAAP margin expansion. Quarterly revenue growth continued to reflect digital solution demand and beneficial product mix and sales sourced from both new core wins, existing core customers, and non-core financial institutions. Now a review of cash flow and capital allocation. Q2 operating cash flow was $153 million, a $63 million increase over the prior fiscal year Q2. Quarterly free cash flow of $103 million delivered a $74 million increase over the prior fiscal year second quarter.
Mimi Carsley: The segment again had outstanding non-GAAP operating margin growth with quarterly results of 200 basis points. Revenue growth was due to the resilience in our card-related services, consistent growth in the EPS business, and continuing a large percent growth from faster payments, albeit on a smaller dollar base. Finally, complementary segment quarterly non-GAAP revenue growth increased an impressive 9% with healthy 58 basis points of non-GAAP margin expansion. Quarterly revenue growth continued to reflect digital solution demand and beneficial product mix and sales sourced from both new core wins, existing core customers, and non-core financial institutions. Now a review of cash flow and capital allocation. Q2 operating cash flow was $153 million, a $63 million increase over the prior fiscal year Q2. Quarterly free cash flow of $103 million delivered a $74 million increase over the prior fiscal year second quarter.
Speaker #2: Finally, complementary segment quarterly non-gap revenue growth increased an impressive 9% with healthy 58 basis points of non-gap margin expansion. Quarterly revenue growth continued to reflect digital solution demand and beneficial product mix and sales source from both new core wins existing core customers and non-core financial institutions.
Speaker #2: Now a review of cash flow and capital allocation. Q2 operating cash flow was $153 million a $63 million increase over the prior fiscal year Q2.
Speaker #2: Quarterly free cash flow of $103 million delivered $74 million increase over the prior fiscal year second quarter. Our consistent dedication to value creation resulted in a trailing 12-month non-pot return on invested capital of 23% compared to 19% in the second quarter of prior year.
[Analyst] (Goldman Sachs): Our consistent dedication to value creation resulted in a trailing 12-month non-GAAP return on invested capital of 23% compared to 19% in the second quarter of the prior year. We're very proud of the durability of this metric and how it reflects our high-quality allocation of capital for our shareholders. Additionally, I would highlight the following significant capital decisions: $125 million in share repurchases, $84 million in dividends paid through the end of the calendar year 2025, plus asset acquisition of Victor Technologies. The average purchase price of shares repurchased was $157. We ended the quarter with minimal amount of debt consistent with our normal course revolver line usage but expect to exit the year debt-free, barring acquisitions or other opportunities. I will now discuss our second consecutive increase to full-year guidance. As you're aware, yesterday's press release included updated increases to fiscal 2026 full-year GAAP guidance.
[Analyst] (Goldman Sachs): Our consistent dedication to value creation resulted in a trailing 12-month non-GAAP return on invested capital of 23% compared to 19% in the second quarter of the prior year. We're very proud of the durability of this metric and how it reflects our high-quality allocation of capital for our shareholders. Additionally, I would highlight the following significant capital decisions: $125 million in share repurchases, $84 million in dividends paid through the end of the calendar year 2025, plus asset acquisition of Victor Technologies. The average purchase price of shares repurchased was $157. We ended the quarter with minimal amount of debt consistent with our normal course revolver line usage but expect to exit the year debt-free, barring acquisitions or other opportunities. I will now discuss our second consecutive increase to full-year guidance. As you're aware, yesterday's press release included updated increases to fiscal 2026 full-year GAAP guidance.
Mimi Carsley: Our consistent dedication to value creation resulted in a trailing 12-month non-GAAP return on invested capital of 23% compared to 19% in the second quarter of the prior year. We're very proud of the durability of this metric and how it reflects our high-quality allocation of capital for our shareholders. Additionally, I would highlight the following significant capital decisions: $125 million in share repurchases, $84 million in dividends paid through the end of the calendar year 2025, plus asset acquisition of Victor Technologies. The average purchase price of shares repurchased was $157. We ended the quarter with minimal amount of debt consistent with our normal course revolver line usage but expect to exit the year debt-free, barring acquisitions or other opportunities. I will now discuss our second consecutive increase to full-year guidance. As you're aware, yesterday's press release included updated increases to fiscal 2026 full-year GAAP guidance.
Speaker #2: We're very proud of the durability of this metric and how it reflects our high-quality allocation of capital for our shareholders. Additionally, I would highlight the following significant capital decision.
Speaker #2: million in share repurchases $125 $84 million in dividends paid through the end of the calendar year 2025 plus an asset acquisition of Victors Technology.
Speaker #2: The average purchase price of shares repurchased was $157. We ended the quarter with minimal amount of debt consistent with our normal course revolver line usage that expected to enter exit the year debt-free barring acquisitions or other opportunities.
Speaker #2: I will now discuss our second consecutive increase to full-year guidance. As you're aware, yesterday's press release included updated increases to fiscal 2026 full-year GAAP guidance.
Speaker #2: The conversion guidance will continue to follow the conservative methodology introduced in fiscal '24. Fiscal '26 deconversion revenue guidance has been increased to $28 million.
[Analyst] (Goldman Sachs): Deconversion guidance will continue to follow the conservative methodology introduced in fiscal 2024. Fiscal 2026 deconversion revenue guidance has been increased to $28 million. Aligned with our guidance methodology, we will update the outlook as we confirm more activity throughout the year. Full-year GAAP revenue growth guidance increased to a range of 5.6% to 6.3%. For emphasis, GAAP revenue remains understated due to the conservative deconversion revenue guidance. Based on our strong year-to-date results, we have increased and tightened the range of non-GAAP annual revenue growth guidance, resulting in a new outlook of 6.4% to 7.1%. The second half of the fiscal year will see relatively lower non-GAAP revenue growth compared to the first half. Drivers include projected cloud revenue showing continued strength, offset by anticipated slower momentum in one-time revenue and card.
[Analyst] (Goldman Sachs): Deconversion guidance will continue to follow the conservative methodology introduced in fiscal 2024. Fiscal 2026 deconversion revenue guidance has been increased to $28 million. Aligned with our guidance methodology, we will update the outlook as we confirm more activity throughout the year. Full-year GAAP revenue growth guidance increased to a range of 5.6% to 6.3%. For emphasis, GAAP revenue remains understated due to the conservative deconversion revenue guidance. Based on our strong year-to-date results, we have increased and tightened the range of non-GAAP annual revenue growth guidance, resulting in a new outlook of 6.4% to 7.1%. The second half of the fiscal year will see relatively lower non-GAAP revenue growth compared to the first half. Drivers include projected cloud revenue showing continued strength, offset by anticipated slower momentum in one-time revenue and card.
Mimi Carsley: Deconversion guidance will continue to follow the conservative methodology introduced in fiscal 2024. Fiscal 2026 deconversion revenue guidance has been increased to $28 million. Aligned with our guidance methodology, we will update the outlook as we confirm more activity throughout the year. Full-year GAAP revenue growth guidance increased to a range of 5.6% to 6.3%. For emphasis, GAAP revenue remains understated due to the conservative deconversion revenue guidance. Based on our strong year-to-date results, we have increased and tightened the range of non-GAAP annual revenue growth guidance, resulting in a new outlook of 6.4% to 7.1%. The second half of the fiscal year will see relatively lower non-GAAP revenue growth compared to the first half. Drivers include projected cloud revenue showing continued strength, offset by anticipated slower momentum in one-time revenue and card.
Speaker #2: Aligned with our guidance methodology, we will update the outlook as we confirm more activity throughout the year. Full year gap revenue growth guidance increased to a range of 5.6% to 6.3% for emphasis gap revenue remains understated due to the conservative deconversion revenue guidance.
Speaker #2: Based on our strong year to date results, we've increased and tightened the range of non-gap annual revenue growth guidance. Resulting in a new outlook of 6.4% to 7.1%.
Speaker #2: The second half of the fiscal year will see relatively lower non-gap revenue growth compared to the first half. Drivers include projected cloud revenue showing continued strength, offset by anticipated slower momentum in one-time revenue and card.
Speaker #2: Expenses during the second half are expected to reflect the relatively higher pressure from medical cost benefits returning to historical levels, cloud migration infrastructure expense, and commissions.
[Analyst] (Goldman Sachs): Expenses during the second half are expected to reflect the relatively higher pressure for medical cost benefits, returning to historical levels, cloud migration infrastructure expense, and commissions. Our expectations on the second half revenue are consistent with our current analyst consensus. As a reminder, fiscal 2026 and the first quarter of fiscal 2027, Victor acquisition-related financial impacts will be excluded as part of non-GAAP reporting. Based on the above revenue growth in our resilient financial model, we expect to, again, generate sustainable accretive sources of margin. We're increasing full-year guidance for non-GAAP margin expansion to a range of 50 to 75 basis points. Margins are projected to contract in the back half of the year due to the benefits cost returning to normalized levels and the timing of workforce expense increases.
[Analyst] (Goldman Sachs): Expenses during the second half are expected to reflect the relatively higher pressure for medical cost benefits, returning to historical levels, cloud migration infrastructure expense, and commissions. Our expectations on the second half revenue are consistent with our current analyst consensus. As a reminder, fiscal 2026 and the first quarter of fiscal 2027, Victor acquisition-related financial impacts will be excluded as part of non-GAAP reporting. Based on the above revenue growth in our resilient financial model, we expect to, again, generate sustainable accretive sources of margin. We're increasing full-year guidance for non-GAAP margin expansion to a range of 50 to 75 basis points. Margins are projected to contract in the back half of the year due to the benefits cost returning to normalized levels and the timing of workforce expense increases.
Mimi Carsley: Expenses during the second half are expected to reflect the relatively higher pressure for medical cost benefits, returning to historical levels, cloud migration infrastructure expense, and commissions. Our expectations on the second half revenue are consistent with our current analyst consensus. As a reminder, fiscal 2026 and the first quarter of fiscal 2027, Victor acquisition-related financial impacts will be excluded as part of non-GAAP reporting. Based on the above revenue growth in our resilient financial model, we expect to, again, generate sustainable accretive sources of margin. We're increasing full-year guidance for non-GAAP margin expansion to a range of 50 to 75 basis points. Margins are projected to contract in the back half of the year due to the benefits cost returning to normalized levels and the timing of workforce expense increases.
Speaker #2: Our expectations on the second half revenue are consistent with our current analyst consensus. As a reminder, fiscal 26 and the first quarter of fiscal 27 Victor acquisition related financial impacts will be excluded as part of non-gap reporting.
Speaker #2: Based on the above revenue growth and our resilient financial model, we expect to gain again generate sustainable accretive sources of margin. We're increasing full year guidance for non-gap margin expansion to a range of 50 to 75 basis points.
Speaker #2: Margins are projected to contract in the back half of the year due to the benefits cost returning to normalized levels and the timing of workforce expense increases.
Speaker #2: 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 consistently strong fiscal year financial results.
[Analyst] (Goldman Sachs): As a reminder, we see fluctuations in quarterly results relating to software usage license components along with the timing at implementation. Therefore, the correct performance indicator of our business is consistently strong fiscal year financial results. All of the presented results and guidance metrics are indicative that our business operation remains healthy and sound with near-term growth opportunities across all three operating segments. The full-year GAAP tax rate estimate for fiscal 2026 is 23.25%. The above increased guidance metrics result in a stronger full-year outlook for GAAP EPS of $6.61 to $6.72 per share, growth of 6% to 8%. As a reminder, even updated conservative deconversion revenue guidance likely understates GAAP EPS growth. Full-year free cash flow conversion outlook is for 90% to 100% for fiscal 2026, matching our expected range target, but with a bias to the higher end of the range.
[Analyst] (Goldman Sachs): As a reminder, we see fluctuations in quarterly results relating to software usage license components along with the timing at implementation. Therefore, the correct performance indicator of our business is consistently strong fiscal year financial results. All of the presented results and guidance metrics are indicative that our business operation remains healthy and sound with near-term growth opportunities across all three operating segments. The full-year GAAP tax rate estimate for fiscal 2026 is 23.25%. The above increased guidance metrics result in a stronger full-year outlook for GAAP EPS of $6.61 to $6.72 per share, growth of 6% to 8%. As a reminder, even updated conservative deconversion revenue guidance likely understates GAAP EPS growth. Full-year free cash flow conversion outlook is for 90% to 100% for fiscal 2026, matching our expected range target, but with a bias to the higher end of the range.
Mimi Carsley: As a reminder, we see fluctuations in quarterly results relating to software usage license components along with the timing at implementation. Therefore, the correct performance indicator of our business is consistently strong fiscal year financial results. All of the presented results and guidance metrics are indicative that our business operation remains healthy and sound with near-term growth opportunities across all three operating segments. The full-year GAAP tax rate estimate for fiscal 2026 is 23.25%. The above increased guidance metrics result in a stronger full-year outlook for GAAP EPS of $6.61 to $6.72 per share, growth of 6% to 8%. As a reminder, even updated conservative deconversion revenue guidance likely understates GAAP EPS growth. Full-year free cash flow conversion outlook is for 90% to 100% for fiscal 2026, matching our expected range target, but with a bias to the higher end of the range.
Speaker #2: All of the presented results and guidance metrics are indicative that our business operation remains healthy and sound with near-term growth opportunities across all three operating segments.
Speaker #2: The full year gap tax rate estimate for fiscal 26 is 23.25%. The above increased guidance metrics result in a stronger full year outlook for gap EPS of $6.61 to $6.72 per share.
Speaker #2: Growth of 6% to 8%. As a reminder, even updated conservative deconversion revenue guidance likely understates gap EPS growth. Full year free cash flow conversion outlook is for 90% to 100% for fiscal 26, matching our expected range target but with a bias to the higher end of the range.
Speaker #2: Concluding, Q2 results reflect another outstanding performance from our associates leading to increased guidance. We're pleased by the continued performance momentum and remain positive on the financial year outlook.
[Analyst] (Goldman Sachs): Concluding, Q2 results reflect another outstanding performance from our associates, leading to increased guidance. We're pleased by the continued performance momentum and remain positive on the financial year outlook. Demand for our solutions, aligned with continued technology spend by our clients and prospects, will drive superior shareholder value. We appreciate the contributions of our dedicated associates that have produced these superior results and our investors for their ongoing confidence. Chris, will you please open the line for questions?
[Analyst] (Goldman Sachs): Concluding, Q2 results reflect another outstanding performance from our associates, leading to increased guidance. We're pleased by the continued performance momentum and remain positive on the financial year outlook. Demand for our solutions, aligned with continued technology spend by our clients and prospects, will drive superior shareholder value. We appreciate the contributions of our dedicated associates that have produced these superior results and our investors for their ongoing confidence. Chris, will you please open the line for questions?
Mimi Carsley: Concluding, Q2 results reflect another outstanding performance from our associates, leading to increased guidance. We're pleased by the continued performance momentum and remain positive on the financial year outlook. Demand for our solutions, aligned with continued technology spend by our clients and prospects, will drive superior shareholder value. We appreciate the contributions of our dedicated associates that have produced these superior results and our investors for their ongoing confidence. Chris, will you please open the line for questions?
Speaker #2: Demand for our solutions, aligned with continued technology spend by our clients and process, will drive superior shareholder value. We appreciate the contributions of our dedicated associates that have produced these superior results, and our investors for their ongoing confidence.
Speaker #2: Chris, will you please open the line for questions? Thank you. We will now begin the question and answer session. As a reminder to ask a question, you may press star, then one on your telephone keypad.
Operator: Thank you. We will now begin the question and answer session. As a reminder, to ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If your question has been addressed and you would like to withdraw it, please press star, then two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Rayna Kumar with Oppenheimer. Please proceed.
Operator: Thank you. We will now begin the question and answer session. As a reminder, to ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If your question has been addressed and you would like to withdraw it, please press star, then two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Rayna Kumar with Oppenheimer. Please proceed.
Operator: Thank you. We will now begin the question-and-answer session. As a reminder, to ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If your question has been addressed and you would like to withdraw it, please press star, then two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Rayna Kumar with Oppenheimer. Please proceed.
Speaker #2: If you are using a speakerphone, please pick up your handset before pressing the keys. If your question has been addressed and you would like to withdraw it, please press star, then two.
Speaker #2: At this time, we will pause momentarily to assemble our roster. And today's first question comes from Rena Kumar with Oppenheimer. Please proceed.
Speaker #3: Good morning. Good results here. It sounds like the second quarter sales results were very strong, and I'm just wondering based off of what you're seeing, do you expect three Q sales results to come in better?
Mimi Carsley: Good morning. Good results here. It sounds like the Q2 sales results were very strong. I'm just wondering, based off of what you're seeing, do you expect Q3 sales results to come in better? Are you starting to see the impact from the core consolidation you used from one of your competitors at this point?
Mimi Carsley: Good morning. Good results here. It sounds like the Q2 sales results were very strong. I'm just wondering, based off of what you're seeing, do you expect Q3 sales results to come in better? Are you starting to see the impact from the core consolidation you used from one of your competitors at this point?
Rayna Kumar: Good morning. Good results here. It sounds like the Q2 sales results were very strong. I'm just wondering, based off of what you're seeing, do you expect Q3 sales results to come in better? Are you starting to see the impact from the core consolidation you used from one of your competitors at this point?
Speaker #3: And are you starting to see the impact from the core consolidation news from one of your competitors at this point?
Speaker #4: Yeah, Rena, thanks for the on whether Q3 will be comments. Yeah, a couple of things. So I can't comment better. Q3 is starting off very well.
Greg Adelson: Yeah, Rayna, thanks for the comments. Yeah, a couple of things. So I can't comment on whether Q3 will be better. Q3 is starting off very well. Don't know where we're going to end up at this point in time. As I mentioned, the Q2 results, which were significant, really had very little impact on the announcement just because all those deals were kind of in the timing of expectation to be done, and we're already in motion. As you know, a lot of these core deals can take up to a year or longer to actually secure. I will tell you, the pipeline is growing, not just in core opportunities but across all of our complementary and payment products as well. So we're continuing to see some nice uptick there.
Greg Adelson: Yeah, Rayna, thanks for the comments. Yeah, a couple of things. So I can't comment on whether Q3 will be better. Q3 is starting off very well. Don't know where we're going to end up at this point in time. As I mentioned, the Q2 results, which were significant, really had very little impact on the announcement just because all those deals were kind of in the timing of expectation to be done, and we're already in motion. As you know, a lot of these core deals can take up to a year or longer to actually secure. I will tell you, the pipeline is growing, not just in core opportunities but across all of our complementary and payment products as well. So we're continuing to see some nice uptick there.
Greg Adelson: Yeah, Rayna, thanks for the comments. Yeah, a couple of things. So I can't comment on whether Q3 will be better. Q3 is starting off very well. Don't know where we're going to end up at this point in time. As I mentioned, the Q2 results, which were significant, really had very little impact on the announcement just because all those deals were kind of in the timing of expectation to be done, and we're already in motion. As you know, a lot of these core deals can take up to a year or longer to actually secure. I will tell you, the pipeline is growing, not just in core opportunities but across all of our complementary and payment products as well. So we're continuing to see some nice uptick there.
Speaker #4: Don't know where we're going to end up at this point in time. As I mentioned, the Q2 results, which were significant, really had very little impact on the announcement just because all those deals were kind of in the timing of expectation to be done, and we're already in motion.
Speaker #4: As you know, a lot of these core deals can take up to a year or longer to actually secure. I will tell you the pipeline is growing.
Speaker #4: Not just in core opportunities, but across all of our complementary and payment products as well. So we're continuing to see some nice uptick there.
Speaker #4: And so I'll be able to report more definitively obviously at the end of the quarter, but we are seeing some nice uptick in the pipelines and in the opportunities with some larger opportunities as
Greg Adelson: And so I'll be able to report more definitively, obviously, at the end of the quarter, but we are seeing some nice uptick in the pipelines and in the opportunities with some larger opportunities as well.
Greg Adelson: And so I'll be able to report more definitively, obviously, at the end of the quarter, but we are seeing some nice uptick in the pipelines and in the opportunities with some larger opportunities as well.
Greg Adelson: And so I'll be able to report more definitively, obviously, at the end of the quarter, but we are seeing some nice uptick in the pipelines and in the opportunities with some larger opportunities as well.
Speaker #4: well. That's
Speaker #3: helpful. And just staying on the competitive environment, can you talk a little bit about what you're seeing out there in terms of pricing for core systems and ancillary services?
Mimi Carsley: That's helpful. Just staying on the competitive environment, can you talk a little bit about what you're seeing out there in terms of pricing for core systems and ancillary services? Any changes you're seeing in pricing?
Mimi Carsley: That's helpful. Just staying on the competitive environment, can you talk a little bit about what you're seeing out there in terms of pricing for core systems and ancillary services? Any changes you're seeing in pricing?
Rayna Kumar: That's helpful. Just staying on the competitive environment, can you talk a little bit about what you're seeing out there in terms of pricing for core systems and ancillary services? Any changes you're seeing in pricing?
Speaker #3: Any changes you're seeing in pricing?
Speaker #4: No, not really. I think it’s been very consistent to what it’s been over the last couple of years. So, I wouldn’t say anything has been significantly changed as a byproduct of the announcement or what we had been seeing within the rest of the competition over the last couple of years.
Greg Adelson: No, not really. I think it's been very consistent to what it's been over the last couple of years. So I wouldn't say anything has been significantly changed as a byproduct of the announcement or what we had been seeing within the rest of the competition over the last couple of years. Pretty consistent. And the fact that we won 22 of them in the quarter is pretty good indication because we're never the lowest cost provider. So I think that's a pretty strong statement as well.
Greg Adelson: No, not really. I think it's been very consistent to what it's been over the last couple of years. So I wouldn't say anything has been significantly changed as a byproduct of the announcement or what we had been seeing within the rest of the competition over the last couple of years. Pretty consistent. And the fact that we won 22 of them in the quarter is pretty good indication because we're never the lowest cost provider. So I think that's a pretty strong statement as well.
Greg Adelson: No, not really. I think it's been very consistent to what it's been over the last couple of years. So I wouldn't say anything has been significantly changed as a byproduct of the announcement or what we had been seeing within the rest of the competition over the last couple of years. Pretty consistent. And the fact that we won 22 of them in the quarter is pretty good indication because we're never the lowest cost provider. So I think that's a pretty strong statement as well.
Speaker #4: Pretty consistent. And the fact that we won 22 of them in the quarter is pretty good indication because we're never the lowest cost provider.
Speaker #4: So I think that's a pretty strong statement as
Speaker #4: well. Good stuff.
Mimi Carsley: Good stuff. Thank you.
Mimi Carsley: Good stuff. Thank you.
Rayna Kumar: Good stuff. Thank you.
Speaker #3: Thank
Speaker #3: you. Thank
Greg Adelson: Thank you.
Greg Adelson: Thank you.
Greg Adelson: Thank you.
Speaker #2: And the you. next question is from Vasu Goval with KBW. Please
Speaker #2: And the you. next question is from Vasu Goval with KBW. Please proceed. Hi, thanks for taking my
Operator: The next question is from Vasu Govil with KBW. Please proceed.
Operator: The next question is from Vasu Govil with KBW. Please proceed.
Operator: The next question is from Vasu Govil with KBW. Please proceed.
Vance Sherard: Hi. Thanks for taking my question and congratulations on a really solid print here. Greg, maybe just the first one. There's been a lot of investor focus on how AI could reshape software economics across industries. And we've seen that concern reflected in pretty meaningful stock moves in the last few days and weeks. So maybe you could talk about how you think about AI's impact on your business model over the long term and where you see it as an opportunity versus a risk.
Vance Sherard: Hi. Thanks for taking my question and congratulations on a really solid print here. Greg, maybe just the first one. There's been a lot of investor focus on how AI could reshape software economics across industries. And we've seen that concern reflected in pretty meaningful stock moves in the last few days and weeks. So maybe you could talk about how you think about AI's impact on your business model over the long term and where you see it as an opportunity versus a risk.
Vasu Govil: Hi. Thanks for taking my question and congratulations on a really solid print here. Greg, maybe just the first one. There's been a lot of investor focus on how AI could reshape software economics across industries. And we've seen that concern reflected in pretty meaningful stock moves in the last few days and weeks. So maybe you could talk about how you think about AI's impact on your business model over the long term and where you see it as an opportunity versus a risk.
Speaker #5: question and congratulations on a really solid print here. Greg, maybe just the first one. There's been a lot of investor focus on how AI could reshape software economics across industries.
Speaker #5: And we've seen that concern reflected in pretty meaningful stock moves in the last few days, weeks. So maybe you could talk about how you think about AI's impact on your business model over the long term and where you see it as an opportunity versus a risk.
Speaker #4: Yeah, I'm really glad you asked that question because of what happened yesterday. So yeah, so a couple of things. One, from a standpoint of affecting companies not just Jack Henry, but others in our space, I think it's really a misinformation because when you think about what AI does in the development of technology and the development of building whether that be a core system or other very complex solutions that we support in this industry, it's not just as simple as doing things faster.
Greg Adelson: Yeah. I'm really glad you asked that question because of what happened yesterday. So yeah. So a couple of things. One, from a standpoint of affecting companies, not just Jack Henry, but others in our space, I think it's really misinformation because when you think about what AI does in the development of technology and the development of building, whether that be a core system or other very complex solutions that we support in this industry, it's not just as simple as doing things faster. It's way more complicated than that. It creates some concerns for maybe some of the other areas where people are doing seat licenses and other stuff, so some of the other larger enterprise-wide solution sets. But as you know, we don't do seat licenses here, so we don't have that challenge.
Greg Adelson: Yeah. I'm really glad you asked that question because of what happened yesterday. So yeah. So a couple of things. One, from a standpoint of affecting companies, not just Jack Henry, but others in our space, I think it's really misinformation because when you think about what AI does in the development of technology and the development of building, whether that be a core system or other very complex solutions that we support in this industry, it's not just as simple as doing things faster. It's way more complicated than that. It creates some concerns for maybe some of the other areas where people are doing seat licenses and other stuff, so some of the other larger enterprise-wide solution sets. But as you know, we don't do seat licenses here, so we don't have that challenge.
Greg Adelson: Yeah. I'm really glad you asked that question because of what happened yesterday. So yeah. So a couple of things. One, from a standpoint of affecting companies, not just Jack Henry, but others in our space, I think it's really misinformation because when you think about what AI does in the development of technology and the development of building, whether that be a core system or other very complex solutions that we support in this industry, it's not just as simple as doing things faster. It's way more complicated than that. It creates some concerns for maybe some of the other areas where people are doing seat licenses and other stuff, so some of the other larger enterprise-wide solution sets. But as you know, we don't do seat licenses here, so we don't have that challenge.
Speaker #4: It's way more complicated than that. It creates some concerns for maybe some of the other areas where people are doing seat licenses and other stuff.
Speaker #4: So, some of the other larger enterprise-wide solution sets. But as you know, we don't do seat licenses here, so we don't have that challenge.
Speaker #4: Building the technology and restructuring technology is use cases that we can, whether that's taking code and moving it or things along that line. But it's not as straightforward as it might be in some other industries.
Greg Adelson: Building the technology and restructuring technology is use cases that we can, whether that's taking code and moving it or things along that line. But it's not as straightforward as it might be in some other industries. The other component that I'll say is that we at Jack Henry have been spending a lot of time in using AI both in the back office and in our product set. All of our new platform products do contain some form of AI. And then a lot of the things that we're doing to control our headcount costs, to do improvements and things along that line, are all byproducts of AI. So from our standpoint, and I think honestly from an industry standpoint, it's a much different perspective than what I believe that is being kind of played out there in the space, specifically with some other enterprise-wide solution sets.
Greg Adelson: Building the technology and restructuring technology is use cases that we can, whether that's taking code and moving it or things along that line. But it's not as straightforward as it might be in some other industries. The other component that I'll say is that we at Jack Henry have been spending a lot of time in using AI both in the back office and in our product set. All of our new platform products do contain some form of AI. And then a lot of the things that we're doing to control our headcount costs, to do improvements and things along that line, are all byproducts of AI. So from our standpoint, and I think honestly from an industry standpoint, it's a much different perspective than what I believe that is being kind of played out there in the space, specifically with some other enterprise-wide solution sets.
Greg Adelson: Building the technology and restructuring technology is use cases that we can, whether that's taking code and moving it or things along that line. But it's not as straightforward as it might be in some other industries. The other component that I'll say is that we at Jack Henry have been spending a lot of time in using AI both in the back office and in our product set. All of our new platform products do contain some form of AI. And then a lot of the things that we're doing to control our headcount costs, to do improvements and things along that line, are all byproducts of AI. So from our standpoint, and I think honestly from an industry standpoint, it's a much different perspective than what I believe that is being kind of played out there in the space, specifically with some other enterprise-wide solution sets.
Speaker #4: The other component that I'll say is that we at Jack Henry have been spending a lot of time in using AI both in the back office and in our product set, all of our new platform products do contain some form of AI.
Speaker #4: And then a lot of the things that we're doing to control our headcount costs, to do improvements and things along that line are all byproducts of AI.
Speaker #4: So from our standpoint, and I think honestly from an industry standpoint, it's a much different perspective than what I believe that is being kind of played out there in the space, specifically with some other enterprise-wide solution
Speaker #4: So from our standpoint, and I think honestly from an industry standpoint, it's a much different perspective than what I believe that is being kind of played out there in the space, specifically with some other enterprise-wide solution sets.
Speaker #3: Great, thank you for that, Greg. And then I know you touched on this a little bit before, but just bank M&A—that's continuing at an accelerated pace.
Vance Sherard: Great. Thank you for that color. And then I know you touched on this a little bit before, but just bank M&A, that's continuing at an accelerated pace, including some deal announcements involving some of your larger clients recently. So just curious if you're still feeling good that bank M&A will still be a net neutral to maybe even a positive as we move forward from here and that the conversion-merge activity will sort of increase and will offset any deconversion revenue. Just curious on your latest thoughts there.
Vance Sherard: Great. Thank you for that color. And then I know you touched on this a little bit before, but just bank M&A, that's continuing at an accelerated pace, including some deal announcements involving some of your larger clients recently. So just curious if you're still feeling good that bank M&A will still be a net neutral to maybe even a positive as we move forward from here and that the conversion-merge activity will sort of increase and will offset any deconversion revenue. Just curious on your latest thoughts there.
Vasu Govil: Great. Thank you for that color. And then I know you touched on this a little bit before, but just bank M&A, that's continuing at an accelerated pace, including some deal announcements involving some of your larger clients recently. So just curious if you're still feeling good that bank M&A will still be a net neutral to maybe even a positive as we move forward from here and that the conversion-merge activity will sort of increase and will offset any deconversion revenue. Just curious on your latest thoughts there.
Speaker #3: Including some deal announcements involving some of your larger clients recently. So just curious if you're still feeling good that bank M&A will still be a net neutral to maybe even a positive as we move forward from here.
Speaker #3: And that the convert merge activity will sort of increase and will offset any deconversion revenue. Just curious on your latest thoughts
Speaker #4: Yes, absolutely. I mean, we've already seen it. So as I kind of mentioned a little bit in my opening remarks, I mean, not only have we seen significant market share growth during this last eight years where there's been 3% decline overall, we're seeing it across opportunities today.
Greg Adelson: Yes, absolutely. I mean, we've already seen it. So as I kind of mentioned a little bit in my opening remarks, I mean, not only have we seen significant market share growth during this last 8 years where there's been 3% decline overall, we're seeing it across opportunities today. Even in one very large one that was announced a year ago or close to a year ago, then we're having opportunities for other products within that set. And in some cases, these other products can be even more valuable than the core itself. So we are very bullish on what we're doing, how we're doing it, and the opportunities that continue to come our way even when an acquisition of one of our accounts has taken place. We're right in there, in some cases, winning the overall core deal prior to the conversion.
Greg Adelson: Yes, absolutely. I mean, we've already seen it. So as I kind of mentioned a little bit in my opening remarks, I mean, not only have we seen significant market share growth during this last 8 years where there's been 3% decline overall, we're seeing it across opportunities today. Even in one very large one that was announced a year ago or close to a year ago, then we're having opportunities for other products within that set. And in some cases, these other products can be even more valuable than the core itself. So we are very bullish on what we're doing, how we're doing it, and the opportunities that continue to come our way even when an acquisition of one of our accounts has taken place. We're right in there, in some cases, winning the overall core deal prior to the conversion.
Greg Adelson: Yes, absolutely. I mean, we've already seen it. So as I kind of mentioned a little bit in my opening remarks, I mean, not only have we seen significant market share growth during this last 8 years where there's been 3% decline overall, we're seeing it across opportunities today. Even in one very large one that was announced a year ago or close to a year ago, then we're having opportunities for other products within that set. And in some cases, these other products can be even more valuable than the core itself. So we are very bullish on what we're doing, how we're doing it, and the opportunities that continue to come our way even when an acquisition of one of our accounts has taken place. We're right in there, in some cases, winning the overall core deal prior to the conversion.
Speaker #4: Even in one very large one that was announced a year ago, or close to a year ago, then we're having opportunities for other products within that set.
Speaker #4: And in some cases, these other products can be even more valuable than the core itself. So we are very bullish on what we're doing, how we're doing it, and the opportunities that continue to come our way even when an acquisition of one of our accounts has taken place.
Speaker #4: We're right in there in some cases winning the overall core deal, prior to the conversion. In other cases, having conversations post as we talk about complementary payment and potentially our digital core products as part of their long-term
Greg Adelson: In other cases, having conversations post, as we talk about complementary payment and potentially our digital core products as part of their long-term strategy.
Greg Adelson: In other cases, having conversations post, as we talk about complementary payment and potentially our digital core products as part of their long-term strategy.
Greg Adelson: In other cases, having conversations post, as we talk about complementary payment and potentially our digital core products as part of their long-term strategy.
Speaker #4: strategy. Great.
Vance Sherard: Great. Thank you for the color.
Vance Sherard: Great. Thank you for the color.
Vasu Govil: Great. Thank you for the color.
Speaker #3: Thank you for the color.
Speaker #2: The next question is from Jason Kupferberg with Wells Fargo. Please
Operator: The next question is from Jason Kupferberg with Wells Fargo. Please proceed.
Operator: The next question is from Jason Kupferberg with Wells Fargo. Please proceed.
Operator: The next question is from Jason Kupferberg with Wells Fargo. Please proceed.
Speaker #2: proceed. Hey, guys.
[Analyst] (Wells Fargo): Hey, guys. Thank you. I wanted to start on the revenue side. I was curious which segments exceeded expectations, perhaps, in the quarter, I mean, versus our model. There was some nice upside on the complementary side, so would love to hear about product drivers there. Then if you can just comment on how we should think about second-half growth rates by segment and maybe hone in on the payments piece a little bit. I think that's maybe tracking a little bit below the medium-term guide halfway through the year. So should we expect any acceleration there?
[Analyst] (Wells Fargo): Hey, guys. Thank you. I wanted to start on the revenue side. I was curious which segments exceeded expectations, perhaps, in the quarter, I mean, versus our model. There was some nice upside on the complementary side, so would love to hear about product drivers there. Then if you can just comment on how we should think about second-half growth rates by segment and maybe hone in on the payments piece a little bit. I think that's maybe tracking a little bit below the medium-term guide halfway through the year. So should we expect any acceleration there?
Jason Kupferberg: Hey, guys. Thank you. I wanted to start on the revenue side. I was curious which segments exceeded expectations, perhaps, in the quarter, I mean, versus our model. There was some nice upside on the complementary side, so would love to hear about product drivers there. Then if you can just comment on how we should think about second-half growth rates by segment and maybe hone in on the payments piece a little bit. I think that's maybe tracking a little bit below the medium-term guide halfway through the year. So should we expect any acceleration there?
Speaker #6: Thank you. I wanted to start on the revenue side. I was curious which segments exceeded expectations. Perhaps in the quarter, I mean, versus our model, there were some nice upside on the complementary side.
Speaker #6: So we'd love to hear about product drivers there. And then if you can just comment on how we should think about second-half growth rates by segment and maybe hone in on the payments piece a little bit.
Speaker #6: I think that's maybe tracking a little bit below the medium-term guide, halfway through the year. So should we expect any acceleration
Speaker #6: there? Jason, I would say
Mimi Carsley: Jason, I would say, first off, we continue to be pleased by the across-the-board performance across all three segments, both quarter and year to date. Let's roll through each one of them. I would say most of the performance that we've seen above and beyond our expectations in the first half. You saw a decent card performance relative to the more modest expectations we had going into the year. We do think that the back half will be a little bit more challenging relative to the first half in payments. So even though that is a touch below historical our growth algorithm expectations, that segment's doing really well. And we have some strong resuscitation of our bill payments business. We've talked about the contribution from our faster payments, even on a smaller-dollar revenue, but great growth rates and healthiness in card.
Mimi Carsley: Jason, I would say, first off, we continue to be pleased by the across-the-board performance across all three segments, both quarter and year to date. Let's roll through each one of them. I would say most of the performance that we've seen above and beyond our expectations in the first half. You saw a decent card performance relative to the more modest expectations we had going into the year. We do think that the back half will be a little bit more challenging relative to the first half in payments. So even though that is a touch below historical our growth algorithm expectations, that segment's doing really well. And we have some strong resuscitation of our bill payments business. We've talked about the contribution from our faster payments, even on a smaller-dollar revenue, but great growth rates and healthiness in card.
Mimi Carsley: Jason, I would say, first off, we continue to be pleased by the across-the-board performance across all three segments, both quarter and year to date. Let's roll through each one of them. I would say most of the performance that we've seen above and beyond our expectations in the first half. You saw a decent card performance relative to the more modest expectations we had going into the year. We do think that the back half will be a little bit more challenging relative to the first half in payments. So even though that is a touch below historical our growth algorithm expectations, that segment's doing really well. And we have some strong resuscitation of our bill payments business. We've talked about the contribution from our faster payments, even on a smaller-dollar revenue, but great growth rates and healthiness in card.
Speaker #7: First off, we continue to be pleased by the across-the-board performance across all three segments, both quarter and year to date. Let's roll through each one of them.
Speaker #7: I would say most of the performance that we've seen above and beyond our expectations in the first half, you saw a decent card performance relative to the more modest expectations we had going into the year.
Speaker #7: We do think that the back half will be a little bit more challenging relative to the first half in payments. So even though that is a touch below historical, our growth algorithm expectations, that segment is doing really well.
Speaker #7: And we have some strong resuscitation of our bill payments business. We've talked about the contribution from our faster payments, even on a smaller dollar revenue, but great growth rates.
Speaker #7: And healthiness in card. But we do expect that to slow a little bit in the back half, just as a bit of a you have both weather at the beginning of the calendar year, but then just the natural seasonality of as you climb into the back half, it's just getting a little bit higher.
Mimi Carsley: But we do expect that to slow a little bit in the back half, just as a bit of a you have both weather at the beginning of the calendar year, but then just the natural seasonality of as you climb into the back half, it's just getting a little bit higher, and you have some comps from a year-over-year perspective. Complementary is doing great. We continue to see success in the newer products, things like Financial Crimes Defender, our treasury management products, our digital products, all being continued strong drivers. And we would expect that to continue. And then in core, core has been great the last couple of years, in fact, even stronger growing than the growth algorithm.
Mimi Carsley: But we do expect that to slow a little bit in the back half, just as a bit of a you have both weather at the beginning of the calendar year, but then just the natural seasonality of as you climb into the back half, it's just getting a little bit higher, and you have some comps from a year-over-year perspective. Complementary is doing great. We continue to see success in the newer products, things like Financial Crimes Defender, our treasury management products, our digital products, all being continued strong drivers. And we would expect that to continue. And then in core, core has been great the last couple of years, in fact, even stronger growing than the growth algorithm.
Mimi Carsley: But we do expect that to slow a little bit in the back half, just as a bit of a you have both weather at the beginning of the calendar year, but then just the natural seasonality of as you climb into the back half, it's just getting a little bit higher, and you have some comps from a year-over-year perspective. Complementary is doing great. We continue to see success in the newer products, things like Financial Crimes Defender, our treasury management products, our digital products, all being continued strong drivers. And we would expect that to continue. And then in core, core has been great the last couple of years, in fact, even stronger growing than the growth algorithm.
Speaker #7: And you have some comps from a grow over perspective. Complementary is doing great. We continue to see success in the newer products, things like financial crimes defender, our treasury management products, our digital products.
Speaker #7: All being continued strong drivers. And we would expect that to continue. And then in core, core has been great the last couple of years.
Speaker #7: In fact, even stronger growing than the growth algorithm. Part of that is based on the success that Greg talked about, the multi-year success from new core wins.
Mimi Carsley: Part of that is based on the success that Greg talked about, the multi-year success from new core wins and the organic growth of our clients, and just that continued shift from on-premise to private cloud. This quarter, we also saw a little bit of the convert-merge benefit and other one-times that I would say drove up some of the core revenue that we don't necessarily expect in the same pace in the back half.
Mimi Carsley: Part of that is based on the success that Greg talked about, the multi-year success from new core wins and the organic growth of our clients, and just that continued shift from on-premise to private cloud. This quarter, we also saw a little bit of the convert-merge benefit and other one-times that I would say drove up some of the core revenue that we don't necessarily expect in the same pace in the back half.
Mimi Carsley: Part of that is based on the success that Greg talked about, the multi-year success from new core wins and the organic growth of our clients, and just that continued shift from on-premise to private cloud. This quarter, we also saw a little bit of the convert-merge benefit and other one-times that I would say drove up some of the core revenue that we don't necessarily expect in the same pace in the back half.
Speaker #7: And the organic growth of our clients and just that continued shift from on-premise to private cloud. This quarter, we also saw a little bit of the convert merge benefit and other one-times that I would say drove up some of the core revenue that we don't necessarily expect in the same pace in the back half.
Speaker #6: Okay, that's all good color. And maybe I just want to ask you a follow-up on margins. I know you guys called out the lower medical insurance claims cost.
[Analyst] (Wells Fargo): Okay. That's all good color. And Mimi, I just want to ask you a follow-up on margins. I know you guys called out the lower medical insurance claims cost. Can you just quantify that piece? I mean, the margin beat was huge, for lack of a better word, versus consensus. I know you guys don't guide it for the quarter, but just trying to get a sense of how big that benefit was. And is that something that reverses out in the second half, or is that a full year? How much of a full-year tailwind is that?
[Analyst] (Wells Fargo): Okay. That's all good color. And Mimi, I just want to ask you a follow-up on margins. I know you guys called out the lower medical insurance claims cost. Can you just quantify that piece? I mean, the margin beat was huge, for lack of a better word, versus consensus. I know you guys don't guide it for the quarter, but just trying to get a sense of how big that benefit was. And is that something that reverses out in the second half, or is that a full year? How much of a full-year tailwind is that?
Jason Kupferberg: Okay. That's all good color. And Mimi, I just want to ask you a follow-up on margins. I know you guys called out the lower medical insurance claims cost. Can you just quantify that piece? I mean, the margin beat was huge, for lack of a better word, versus consensus. I know you guys don't guide it for the quarter, but just trying to get a sense of how big that benefit was. And is that something that reverses out in the second half, or is that a full year? How much of a full-year tailwind is that?
Speaker #6: Can you just quantify that piece? I mean, the margin was huge for lack of a better word versus consensus. I know you guys don't guide it for the quarter, but just trying to get a sense of how big that benefit was.
Speaker #6: And is that something that reverses out in the second half, or is that a full year? How much of a full year tailwind is that?
Speaker #7: Well, Jason, I appreciate you acknowledging the importance of full-year versus quarterly guidance. I continue to encourage everyone to look at our performance on a consistent annual basis, not just quarterly.
Mimi Carsley: Well, Jason, I appreciate you acknowledging the importance of full-year versus quarterly guide. I continue to encourage everyone to look at our performance on the consistent annual basis, not the quarterly. Sometimes, you just have kind of quarters that, either from a year-over-year perspective, or a cohort perspective, or conference timing perspective, just may create a picture that is less than consistent with kind of the full year. But if we look at margins on the full year, increasing our full-year guide from the 30 to 50 to now the 50 to 70 is indicative of our belief of just delivering in totality. It was very front-end heavy. Part of that is some cost savings. Part of that is some cost timing.
Mimi Carsley: Well, Jason, I appreciate you acknowledging the importance of full-year versus quarterly guide. I continue to encourage everyone to look at our performance on the consistent annual basis, not the quarterly. Sometimes, you just have kind of quarters that, either from a year-over-year perspective, or a cohort perspective, or conference timing perspective, just may create a picture that is less than consistent with kind of the full year. But if we look at margins on the full year, increasing our full-year guide from the 30 to 50 to now the 50 to 70 is indicative of our belief of just delivering in totality. It was very front-end heavy. Part of that is some cost savings. Part of that is some cost timing.
Mimi Carsley: Well, Jason, I appreciate you acknowledging the importance of full-year versus quarterly guide. I continue to encourage everyone to look at our performance on the consistent annual basis, not the quarterly. Sometimes, you just have kind of quarters that, either from a year-over-year perspective, or a cohort perspective, or conference timing perspective, just may create a picture that is less than consistent with kind of the full year. But if we look at margins on the full year, increasing our full-year guide from the 30 to 50 to now the 50 to 70 is indicative of our belief of just delivering in totality. It was very front-end heavy. Part of that is some cost savings. Part of that is some cost timing.
Speaker #7: Sometimes you just have kind of quarters that either from a year-over-year perspective or a cohort perspective, or conference timing perspective, just may create a picture that is less than consistent with kind of the full year.
Speaker #7: But if we look at margins on the full year, increasing our full year guide from the 30 to 50 to now the 50 to 70 is indicative of our belief of just delivering in totality.
Speaker #7: It was very front-end heavy. Part of that is some cost savings. Part of that is some cost timing. So, some of the lower-than-expected benefits cost related to our self-insured medical plans is a savings, but a savings that we don't necessarily expect to continue in the second half.
Mimi Carsley: So some of the lower-than-expected benefits cost related to our self-insured medical plans is a savings, but a savings that we don't necessarily expect to continue in the second half. Other things, we just naturally, as part of our plan, we expect higher to be in the second half than the first half. So if I think about just the pace of some of the commissions, as I think about some of the infrastructure costs as we move more migration loads and planning for our data center, longer-term initiatives, some of that spend is higher in the second half than the first half. So yes, we're pleased by the incredible performance and margin in the first half, but more so, we're really proud of the three-year compounding margins that we've been able to deliver and our ability to increase the guide for the full year.
Mimi Carsley: So some of the lower-than-expected benefits cost related to our self-insured medical plans is a savings, but a savings that we don't necessarily expect to continue in the second half. Other things, we just naturally, as part of our plan, we expect higher to be in the second half than the first half. So if I think about just the pace of some of the commissions, as I think about some of the infrastructure costs as we move more migration loads and planning for our data center, longer-term initiatives, some of that spend is higher in the second half than the first half. So yes, we're pleased by the incredible performance and margin in the first half, but more so, we're really proud of the three-year compounding margins that we've been able to deliver and our ability to increase the guide for the full year.
Mimi Carsley: So some of the lower-than-expected benefits cost related to our self-insured medical plans is a savings, but a savings that we don't necessarily expect to continue in the second half. Other things, we just naturally, as part of our plan, we expect higher to be in the second half than the first half. So if I think about just the pace of some of the commissions, as I think about some of the infrastructure costs as we move more migration loads and planning for our data center, longer-term initiatives, some of that spend is higher in the second half than the first half. So yes, we're pleased by the incredible performance and margin in the first half, but more so, we're really proud of the three-year compounding margins that we've been able to deliver and our ability to increase the guide for the full year.
Speaker #7: Other things we just naturally, as part of our plan, we expect first half. So if I think about just higher to be in the second half than the the pace of some of the commissions as I think about some of the infrastructure costs as we move more migration loads and planning for our data center longer-term initiatives, some of that spend is higher in the second half than the first half.
Speaker #7: So yes, we're pleased by the incredible performance in margin in the first half, but more so we're really proud of the three-year compounding margins that we've been able to deliver.
Speaker #7: And our ability to increase the guide for the full
Speaker #7: year. Thank
Speaker #6: you.
[Analyst] (Wells Fargo): Thank you.
[Analyst] (Wells Fargo): Thank you.
Jason Kupferberg: Thank you.
Speaker #7: Welcome.
Mimi Carsley: Welcome.
Mimi Carsley: Welcome.
Mimi Carsley: Welcome.
Speaker #2: Our next question is from Will Nance with Goldman Sachs. Please proceed.
Operator: Our next question is from Will Nance with Goldman Sachs. Please proceed.
Operator: Our next question is from Will Nance with Goldman Sachs. Please proceed.
Operator: Our next question is from Will Nance with Goldman Sachs. Please proceed.
Speaker #8: Hey, good morning. Nice result. And I appreciate you taking the question. I wanted to circle back to the question on AI and was wondering if we could put more of a positive spin on the AI theme for this space.
[Analyst] (Goldman Sachs): Hey. Good morning. Nash is off, and I appreciate you taking the question. I wanted to circle back to the question on AI and was wondering if we could put more of a positive spin on the AI theme for this space. I think the core processing space is kind of known for having fairly outdated code bases, a lot of COBOL around, not a lot of programmers who can actually maintain it. And AI is one of those things that could actually accelerate the modernization of the code bases, which has been a process that you guys have been on for a long time now. So maybe can you talk about that in the context of your next-gen platform and the journey that you've been on for the last couple of years?
[Analyst] (Goldman Sachs): Hey. Good morning. Nash is off, and I appreciate you taking the question. I wanted to circle back to the question on AI and was wondering if we could put more of a positive spin on the AI theme for this space. I think the core processing space is kind of known for having fairly outdated code bases, a lot of COBOL around, not a lot of programmers who can actually maintain it. And AI is one of those things that could actually accelerate the modernization of the code bases, which has been a process that you guys have been on for a long time now. So maybe can you talk about that in the context of your next-gen platform and the journey that you've been on for the last couple of years?
Will Nance: Hey. Good morning. Nash is off, and I appreciate you taking the question. I wanted to circle back to the question on AI and was wondering if we could put more of a positive spin on the AI theme for this space. I think the core processing space is kind of known for having fairly outdated code bases, a lot of COBOL around, not a lot of programmers who can actually maintain it. And AI is one of those things that could actually accelerate the modernization of the code bases, which has been a process that you guys have been on for a long time now. So maybe can you talk about that in the context of your next-gen platform and the journey that you've been on for the last couple of years?
Speaker #8: I think the core processing space is kind of known for having fairly outdated code bases, a lot of cold ball around, not a lot of programmers who can actually maintain it.
Speaker #8: And AI is one of those things that could actually accelerate the modernization of the codebases, which has been a process that you guys have been on for a long time now.
Speaker #8: So maybe can you talk about that in the context of your next-gen platform and the journey that you've been on for the last couple of years and how do you see AI as an accelerant to that strategy?
[Analyst] (Goldman Sachs): How do you see AI as an accelerant to that strategy and something that could perhaps even improve the competitive positioning of what historically has been thought of as a good industry with low switching costs but a lot of software that may be in need of some modernization?
[Analyst] (Goldman Sachs): How do you see AI as an accelerant to that strategy and something that could perhaps even improve the competitive positioning of what historically has been thought of as a good industry with low switching costs but a lot of software that may be in need of some modernization?
Will Nance: How do you see AI as an accelerant to that strategy and something that could perhaps even improve the competitive positioning of what historically has been thought of as a good industry with low switching costs but a lot of software that may be in need of some modernization?
Speaker #8: And something that could perhaps even improve the competitive positioning of what historically has been thought of as a good industry with low switching costs, but a lot of software that may be in need of some modernization.
Speaker #3: Yeah. So good question. Appreciate the follow-up. So I mean, obviously, Will, we've been involved with AI for many years as part of this not only what we're building with our new platform, but what we've been doing on the back end to move some of our foundational cores and foundational code over to other ways of doing things.
Greg Adelson: Yeah. So good question. Appreciate the follow-up. So I mean, obviously, Will, we've been involved with AI for many years as part of this not only what we're building with our new platform, but what we've been doing on the back end to move some of our foundational cores and foundational code over to other ways of doing things. And we've been able to do it faster, but also with less people. When you look at the number of initiatives that we have going on with some significant technology innovation and still look at our headcount growing at less than 1% over the last several years during that timeframe, that's all apparent because it's being done with utilization of AI and other tools. So that's been a big part of our strategy for a long time and continues to be.
Greg Adelson: Yeah. So good question. Appreciate the follow-up. So I mean, obviously, Will, we've been involved with AI for many years as part of this not only what we're building with our new platform, but what we've been doing on the back end to move some of our foundational cores and foundational code over to other ways of doing things. And we've been able to do it faster, but also with less people. When you look at the number of initiatives that we have going on with some significant technology innovation and still look at our headcount growing at less than 1% over the last several years during that timeframe, that's all apparent because it's being done with utilization of AI and other tools. So that's been a big part of our strategy for a long time and continues to be.
Greg Adelson: Yeah. So good question. Appreciate the follow-up. So I mean, obviously, Will, we've been involved with AI for many years as part of this not only what we're building with our new platform, but what we've been doing on the back end to move some of our foundational cores and foundational code over to other ways of doing things. And we've been able to do it faster, but also with less people. When you look at the number of initiatives that we have going on with some significant technology innovation and still look at our headcount growing at less than 1% over the last several years during that timeframe, that's all apparent because it's being done with utilization of AI and other tools. So that's been a big part of our strategy for a long time and continues to be.
Speaker #3: And we've been able to do it faster, but also with less people. When you look at the number of initiatives that we have going on with some significant technology innovation, and still look at our headcount growing at less than 1% over the last several years during that timeframe, that's all apparent because it's being done with utilization of AI and other tools.
Speaker #3: So that's been a big part of our strategy for a long time and continues to be. We have some of the top-notch talent in this industry that we've brought in that are helping push that across the entire organization, not just in certain aspects of our business.
Greg Adelson: We have some of the top-notch talent in this industry that we've brought in that are helping push that across the entire organization, not just in certain aspects of our business. The other thing is on what I was referring to earlier from the question from, I believe it was either Rayna or Vasu, but around the complexity of building out cores. It's not just the ability to move foundational core stuff to something else. By the way, it's taken us almost 5 years to get where we are. So if you haven't started, you're a little behind.
Greg Adelson: We have some of the top-notch talent in this industry that we've brought in that are helping push that across the entire organization, not just in certain aspects of our business. The other thing is on what I was referring to earlier from the question from, I believe it was either Rayna or Vasu, but around the complexity of building out cores. It's not just the ability to move foundational core stuff to something else. By the way, it's taken us almost 5 years to get where we are. So if you haven't started, you're a little behind.
Greg Adelson: We have some of the top-notch talent in this industry that we've brought in that are helping push that across the entire organization, not just in certain aspects of our business. The other thing is on what I was referring to earlier from the question from, I believe it was either Rayna or Vasu, but around the complexity of building out cores. It's not just the ability to move foundational core stuff to something else. By the way, it's taken us almost 5 years to get where we are. So if you haven't started, you're a little behind.
Speaker #3: The other thing is what I was referring to earlier, from the question from, I believe it was either Raynor or Vasu, but around the complexity of building out cores, it's not just the ability to move foundational core stuff to something else.
Speaker #3: And by the way, it's taken us almost five years to get where we are. So if you haven't started, you're a little behind. But from where we are today, and the work that we've done when you look at a lot of the international cores that have tried to come into the United States and haven't been very successful, it's because of the level of complexity that you need to build.
Greg Adelson: But from where we are today and the work that we've done, when you look at a lot of the international cores that have tried to come into the United States and haven't been very successful, it's because of the level of complexity that you need to build and not just the core itself. Because again, you can build some headless core that has components on it, but it's the full integration and it's the full suite of connections to the payment networks and everything else that goes with that that really makes it complex. And that isn't just done with AI. Some of that's done with a lot of hard work and people. And like our team likes to say, it's dirt digging. And so that stuff is where the complexity really makes it more difficult.
Greg Adelson: But from where we are today and the work that we've done, when you look at a lot of the international cores that have tried to come into the United States and haven't been very successful, it's because of the level of complexity that you need to build and not just the core itself. Because again, you can build some headless core that has components on it, but it's the full integration and it's the full suite of connections to the payment networks and everything else that goes with that that really makes it complex. And that isn't just done with AI. Some of that's done with a lot of hard work and people. And like our team likes to say, it's dirt digging. And so that stuff is where the complexity really makes it more difficult.
Greg Adelson: But from where we are today and the work that we've done, when you look at a lot of the international cores that have tried to come into the United States and haven't been very successful, it's because of the level of complexity that you need to build and not just the core itself. Because again, you can build some headless core that has components on it, but it's the full integration and it's the full suite of connections to the payment networks and everything else that goes with that that really makes it complex. And that isn't just done with AI. Some of that's done with a lot of hard work and people. And like our team likes to say, it's dirt digging. And so that stuff is where the complexity really makes it more difficult.
Speaker #3: And not just the core itself, because again, you can build some core headless core that has components on it, but it's the full integration and it's the full suite of connections to the payment networks and everything else that goes with that that really makes it complex.
Speaker #3: And that isn't just done with AI. Some of that's done with a lot of hard work and people. And like our team likes to say, it's dirt digging.
Speaker #3: And so that stuff is where the complexity really makes it more difficult. So I think what we have done where we have gone and been able to utilize AI as part of our overall strategy, is what differentiates us not just from innovation, but from speed of
Greg Adelson: So I think what we have done, where we have gone and been able to utilize AI as part of our overall strategy, is what differentiates us not just from innovation but from speed of innovation.
Greg Adelson: So I think what we have done, where we have gone and been able to utilize AI as part of our overall strategy, is what differentiates us not just from innovation but from speed of innovation.
Greg Adelson: So I think what we have done, where we have gone and been able to utilize AI as part of our overall strategy, is what differentiates us not just from innovation but from speed of innovation.
Speaker #3: innovation. And if
Mimi Carsley: If I could add on to that, Greg, I would say that because of the investment we've made and started making over five years ago of moving our infrastructure to the public cloud, allows us to take advantage of the DevOps environment. So if we think about something like Banno and the number of new feature releases we're able to do on that, and now similarly with the Jack Henry platform being API-first, digital cloud-native, we'll be able to increase that velocity of solution enhancements for our clients that others cannot because they're still on that journey to public cloud.
Mimi Carsley: If I could add on to that, Greg, I would say that because of the investment we've made and started making over five years ago of moving our infrastructure to the public cloud, allows us to take advantage of the DevOps environment. So if we think about something like Banno and the number of new feature releases we're able to do on that, and now similarly with the Jack Henry platform being API-first, digital cloud-native, we'll be able to increase that velocity of solution enhancements for our clients that others cannot because they're still on that journey to public cloud.
Speaker #7: I could add on to that, Greg. I would say that because of the investment we've made—and started making over five years ago—of moving our infrastructure to the public cloud, it allows us to take advantage of the DevOps environment.
Mimi Carsley: If I could add on to that, Greg, I would say that because of the investment we've made and started making over five years ago of moving our infrastructure to the public cloud, allows us to take advantage of the DevOps environment. So if we think about something like Banno and the number of new feature releases we're able to do on that, and now similarly with the Jack Henry platform being API-first, digital cloud-native, we'll be able to increase that velocity of solution enhancements for our clients that others cannot because they're still on that journey to public cloud.
Speaker #7: So if we think about something like Dano, and the number of new feature releases we're able to do on that, and now similarly with the Jack Henry platform being API-first, digital, cloud-native, we'll be able to increase that velocity of solution enhancements for our clients.
Speaker #7: That others cannot, because they're still on that journey to public cloud.
Speaker #3: Yeah. And just one other point, just because I know this is a big topic for probably everybody, is that as they say, no data, no AI, right?
Greg Adelson: Yeah. And just one other point, just because I know this is a big topic for probably everybody, is that, as they say, no data, no AI, right? So the things that we have been doing and focused on, so not just what Mimi is referring to with various product sets, but what we've been focused on with our data has allowed us to take more advantage of AI as well. And again, in our industry, there's a lot of complexity and a lot of differentiation on how pricing and everything else is orchestrated versus what I think is being thrown into these other enterprise providers where they're selling seat licenses and we're pricing by transaction or active user or asset size or whatever it is. It's a whole different model.
Greg Adelson: Yeah. And just one other point, just because I know this is a big topic for probably everybody, is that, as they say, no data, no AI, right? So the things that we have been doing and focused on, so not just what Mimi is referring to with various product sets, but what we've been focused on with our data has allowed us to take more advantage of AI as well. And again, in our industry, there's a lot of complexity and a lot of differentiation on how pricing and everything else is orchestrated versus what I think is being thrown into these other enterprise providers where they're selling seat licenses and we're pricing by transaction or active user or asset size or whatever it is. It's a whole different model.
Greg Adelson: Yeah. And just one other point, just because I know this is a big topic for probably everybody, is that, as they say, no data, no AI, right? So the things that we have been doing and focused on, so not just what Mimi is referring to with various product sets, but what we've been focused on with our data has allowed us to take more advantage of AI as well. And again, in our industry, there's a lot of complexity and a lot of differentiation on how pricing and everything else is orchestrated versus what I think is being thrown into these other enterprise providers where they're selling seat licenses and we're pricing by transaction or active user or asset size or whatever it is. It's a whole different model.
Speaker #3: So the things that we have been doing and focused on, so not just what Mimi is referring to with various product sets, but what we've been focused on with our data has allowed us to take more advantage of AI as well.
Speaker #3: And again, in our industry, there's a lot of complexity and a lot of differentiation on how pricing and everything else is orchestrated versus what I think is being thrown in to these other enterprise providers where they're selling seat licenses and we're pricing by transaction or active user or asset size or whatever it is.
Speaker #3: It's a whole different
Speaker #3: model. That's great.
[Analyst] (Goldman Sachs): That's great. Appreciate the really thorough answer. And just if I could switch gears and ask about the payment side, I was wondering if you could talk around competitive dynamics on payments and card. There's just been, I think, a resurgence in chatter on new entrants in that space and the community bank space, maybe evaluating beyond the kind of traditional competitive set. Just wondering if you could talk about anything that you've seen recently. Thank you.
[Analyst] (Goldman Sachs): That's great. Appreciate the really thorough answer. And just if I could switch gears and ask about the payment side, I was wondering if you could talk around competitive dynamics on payments and card. There's just been, I think, a resurgence in chatter on new entrants in that space and the community bank space, maybe evaluating beyond the kind of traditional competitive set. Just wondering if you could talk about anything that you've seen recently. Thank you.
Will Nance: That's great. Appreciate the really thorough answer. And just if I could switch gears and ask about the payment side, I was wondering if you could talk around competitive dynamics on payments and card. There's just been, I think, a resurgence in chatter on new entrants in that space and the community bank space, maybe evaluating beyond the kind of traditional competitive set. Just wondering if you could talk about anything that you've seen recently. Thank you.
Speaker #8: Appreciate the really thorough answer. And just if I could switch gears and ask about the payment side, I was wondering if you could talk around competitive dynamics on payments and car.
Speaker #8: There's just been I think a resurgence in chatter on new entrants in that space and the community bank space, maybe evaluating beyond the kind of traditional competitive set.
Speaker #8: Just wondering if you could talk about anything that you've seen recently. Thank you.
Speaker #3: Yeah, yeah. I mean, I don't—I know, I mean, there's a couple of them. I'll call out there's a couple of names that have presented themselves in the space, but they're really more, I would say, compartmentalized offerings.
Greg Adelson: Yeah. I mean, I know there's a couple of them. I'll call out. There's a couple of names that have presented themselves into space, but they're more, I would say, compartmentalized offerings. They're not full-suite debit and credit offers. Most of the ones that I think you're referring to are more on the commercial card side, and I think have limited availability on the debit side as of today. And so, as you know, that is the stronger part of our particular card processing today, even though we've had a lot more success on credit deals lately than in years past because of some changes we've made.
Greg Adelson: Yeah. I mean, I know there's a couple of them. I'll call out. There's a couple of names that have presented themselves into space, but they're more, I would say, compartmentalized offerings. They're not full-suite debit and credit offers. Most of the ones that I think you're referring to are more on the commercial card side, and I think have limited availability on the debit side as of today. And so, as you know, that is the stronger part of our particular card processing today, even though we've had a lot more success on credit deals lately than in years past because of some changes we've made.
Greg Adelson: Yeah. I mean, I know there's a couple of them. I'll call out. There's a couple of names that have presented themselves into space, but they're more, I would say, compartmentalized offerings. They're not full-suite debit and credit offers. Most of the ones that I think you're referring to are more on the commercial card side, and I think have limited availability on the debit side as of today. And so, as you know, that is the stronger part of our particular card processing today, even though we've had a lot more success on credit deals lately than in years past because of some changes we've made.
Speaker #3: They're not full suite debit and credit offers. Most of the ones that I think you're referring to are more on the commercial card. And I think have limited availability on the debit side as of today.
Speaker #3: And so as you know, that is the stronger part of our particular card processing today, even though we've had a lot more success on credit deals lately than in years past because of some changes we've made.
Speaker #3: But I will tell you that one of the reasons why I wanted to call out the number of what we call trifecta wins around here is because we are seeing more and more opportunities in this space because of the solution set that we built to allow us to sell digital and card as part of a core deal, or sell digital and card individually.
Greg Adelson: But I will tell you that one of the reasons why I wanted to call out the number of what we call trifecta wins around here is because we are seeing more and more opportunities in this space, because of the solution set that we built to allow us to sell digital and card as part of a core deal or sell digital and card individually outside of a core deal. And that's been a big part of our strategy and will continue to be. But I haven't seen anybody that's come into the market that I would say has disrupted the market. There's a lot of names that are saying they're doing things, but the level of success into our space, we just haven't seen it yet.
Greg Adelson: But I will tell you that one of the reasons why I wanted to call out the number of what we call trifecta wins around here is because we are seeing more and more opportunities in this space, because of the solution set that we built to allow us to sell digital and card as part of a core deal or sell digital and card individually outside of a core deal. And that's been a big part of our strategy and will continue to be. But I haven't seen anybody that's come into the market that I would say has disrupted the market. There's a lot of names that are saying they're doing things, but the level of success into our space, we just haven't seen it yet.
Greg Adelson: But I will tell you that one of the reasons why I wanted to call out the number of what we call trifecta wins around here is because we are seeing more and more opportunities in this space, because of the solution set that we built to allow us to sell digital and card as part of a core deal or sell digital and card individually outside of a core deal. And that's been a big part of our strategy and will continue to be. But I haven't seen anybody that's come into the market that I would say has disrupted the market. There's a lot of names that are saying they're doing things, but the level of success into our space, we just haven't seen it yet.
Speaker #3: Outside of a core deal, and that's been a big part of our strategy and will continue to be but I haven't seen anybody that's come into the market that I would say has disrupted the market.
Speaker #3: There's a lot of names that are saying they're doing things, but the level of success into our space, we just haven't seen it yet.
Speaker #8: Got it. Appreciate you taking the question today. Nice results.
[Analyst] (Goldman Sachs): Got it. Appreciate you taking the question today. Nice results.
[Analyst] (Goldman Sachs): Got it. Appreciate you taking the question today. Nice results.
Will Nance: Got it. Appreciate you taking the question today. Nice results.
Speaker #3: Sure. Thank you.
Greg Adelson: Sure. Thank you.
Greg Adelson: Sure. Thank you.
Greg Adelson: Sure. Thank you.
Speaker #9: The next question is from Darren Peller with Wolf Research. Please proceed.
Operator: The next question is from Darrin Peller with Wolfe Research. Please proceed.
Operator: The next question is from Darrin Peller with Wolfe Research. Please proceed.
Operator: The next question is from Darrin Peller with Wolfe Research. Please proceed.
Speaker #10: Hey, guys. Thanks. Nice quarter. I just wanted to touch again on the core wins. You highlighted another strong quarter of '22. I know you had about 11, I think it was, this time last year's quarter.
[Analyst] (Wolfe Research): Hey, guys. Thanks. Nice quarter. I just wanted to touch again on the core wins. You highlighted another strong quarter at 22. I know you had about 11, I think it was, this time last year's quarter. So just that includes some of the larger institutions. Maybe just help us understand how we should think about the near-term versus long-term revenue cadence around some of those. And I know it takes time to really come into the run rate. But just as importantly, I mean, what are you seeing that's giving you the right to win in these banks at maybe a slightly accelerated rate as well as the larger as you move up market and you've been having more and more success? So maybe just help us understand what's going well there.
[Analyst] (Wolfe Research): Hey, guys. Thanks. Nice quarter. I just wanted to touch again on the core wins. You highlighted another strong quarter at 22. I know you had about 11, I think it was, this time last year's quarter. So just that includes some of the larger institutions. Maybe just help us understand how we should think about the near-term versus long-term revenue cadence around some of those. And I know it takes time to really come into the run rate. But just as importantly, I mean, what are you seeing that's giving you the right to win in these banks at maybe a slightly accelerated rate as well as the larger as you move up market and you've been having more and more success? So maybe just help us understand what's going well there.
Darrin Peller: Hey, guys. Thanks. Nice quarter. I just wanted to touch again on the core wins. You highlighted another strong quarter at 22. I know you had about 11, I think it was, this time last year's quarter. So just that includes some of the larger institutions. Maybe just help us understand how we should think about the near-term versus long-term revenue cadence around some of those. And I know it takes time to really come into the run rate. But just as importantly, I mean, what are you seeing that's giving you the right to win in these banks at maybe a slightly accelerated rate as well as the larger as you move up market and you've been having more and more success? So maybe just help us understand what's going well there.
Speaker #10: So just that includes some of the larger institutions. Maybe just help us understand how we should think about the near-term versus long-term revenue cadence around some of those.
Speaker #10: And I know it takes time to really come into the run rate, but just as importantly, I mean, what do you see that's giving you the right to win in these banks at maybe in a slightly accelerated rate as well as the larger, as you move up market?
Speaker #10: And you've been having more and more success. So maybe just help us understand what's going well there. And if this is a better run rate that we can see in terms of cores, maybe given industry dynamics.
[Analyst] (Wolfe Research): If this is a better run rate that we can see in terms of cores, maybe given industry dynamics. Thanks, guys.
[Analyst] (Wolfe Research): If this is a better run rate that we can see in terms of cores, maybe given industry dynamics. Thanks, guys.
Darrin Peller: If this is a better run rate that we can see in terms of cores, maybe given industry dynamics. Thanks, guys.
Speaker #10: Thanks, guys.
Speaker #3: Yeah, thanks for the comments. Yeah, I mean, you were right. We did 11 last second quarter. As we like to...
Greg Adelson: Yeah. Thanks for the comments. Yeah. I mean, you were right. We did 11 last second quarter. As we like to say, same thing with everything else. It's fiscal year results, right? So some quarters are bigger than normal. Q2 and Q4 typically are largest quarters, our fiscal quarters. That's just the end of the year for the customer, the end of the year for us just tends to have a lot more activity, even though we try to spread it more evenly than that. As I mentioned before, the pipelines are growing fast with a lot of the news that's happened in the space, not just core, but across all of our channels. We're pretty excited about some things that we can't announce yet just because of the timing. But the reality is we're continuing to move the needle in all of those products at a pretty fast pace.
Greg Adelson: Yeah. Thanks for the comments. Yeah. I mean, you were right. We did 11 last second quarter. As we like to say, same thing with everything else. It's fiscal year results, right? So some quarters are bigger than normal. Q2 and Q4 typically are largest quarters, our fiscal quarters. That's just the end of the year for the customer, the end of the year for us just tends to have a lot more activity, even though we try to spread it more evenly than that. As I mentioned before, the pipelines are growing fast with a lot of the news that's happened in the space, not just core, but across all of our channels. We're pretty excited about some things that we can't announce yet just because of the timing. But the reality is we're continuing to move the needle in all of those products at a pretty fast pace.
Greg Adelson: Yeah. Thanks for the comments. Yeah. I mean, you were right. We did 11 last second quarter. As we like to say, same thing with everything else. It's fiscal year results, right? So some quarters are bigger than normal. Q2 and Q4 typically are largest quarters, our fiscal quarters. That's just the end of the year for the customer, the end of the year for us just tends to have a lot more activity, even though we try to spread it more evenly than that. As I mentioned before, the pipelines are growing fast with a lot of the news that's happened in the space, not just core, but across all of our channels. We're pretty excited about some things that we can't announce yet just because of the timing. But the reality is we're continuing to move the needle in all of those products at a pretty fast pace.
Speaker #1: To say same thing with everything else . It's fiscal year results , right ? So some quarters are bigger than normal . Q2 and Q4 are typically our largest quarters .
Speaker #1: Our fiscal quarters . That's just , you know , the end of the year for the customer , the end of the year for us .
Speaker #1: Q2 and Q4 are typically our largest quarters . Our fiscal quarters . That's know , the just , you end of the year for the end of the customer , the us .
Speaker #1: You know , just tends to have a lot more activity , even though we try to more evenly than that . You know , mentioned as I before , the pipelines are growing fast .
Speaker #1: You know , with with a lot of the news that's happened in the space , not just core , but across all of our , channels pretty excited we're we're our .
Speaker #1: we're You know , that we can things yet announce about some just because of the But the timing . reality is we're continuing to to move the needle in all of those products at a pretty fast pace .
Greg Adelson: What I would say from a core standpoint, though, to answer your question, we're winning really. Even on some of these deals that were referenced earlier that our customer was purchased, we're in there already talking to them about a variety of products. We're hearing some really positive news on what we are doing differently than our competition. And it really starts with our ability to, what I say all the time on these calls, our culture comes through on those meetings very fast, and people that are there; there's a lot of people that want a partner that has a similar culture. I just met with a bank this week that that was their comment. They said, "The first thing we noticed was your culture and alignment in culture." Obviously, our service reputation is 50 years of doing the right thing and doing whatever it takes.
Greg Adelson: What I would say from a core standpoint, though, to answer your question, we're winning really. Even on some of these deals that were referenced earlier that our customer was purchased, we're in there already talking to them about a variety of products. We're hearing some really positive news on what we are doing differently than our competition. And it really starts with our ability to, what I say all the time on these calls, our culture comes through on those meetings very fast, and people that are there; there's a lot of people that want a partner that has a similar culture. I just met with a bank this week that that was their comment. They said, "The first thing we noticed was your culture and alignment in culture." Obviously, our service reputation is 50 years of doing the right thing and doing whatever it takes.
Greg Adelson: What I would say from a core standpoint, though, to answer your question, we're winning really. Even on some of these deals that were referenced earlier that our customer was purchased, we're in there already talking to them about a variety of products. We're hearing some really positive news on what we are doing differently than our competition. And it really starts with our ability to, what I say all the time on these calls, our culture comes through on those meetings very fast, and people that are there; there's a lot of people that want a partner that has a similar culture. I just met with a bank this week that that was their comment. They said, "The first thing we noticed was your culture and alignment in culture." Obviously, our service reputation is 50 years of doing the right thing and doing whatever it takes.
Speaker #1: What I would say from a core standpoint , though , your to answer question , you know , we're really winning . And even on some of these deals that were referenced earlier that our customer was purchased , we're in there already talking to them about a variety of products know , we're .
Speaker #1: some really positive news on what we You are differently doing than our competition . And it really starts with our ability to what I say all the time on these calls , our culture comes through on those those meetings very fast and people that are there's a lot of people that want to that want to partner , that has a similar culture .
Speaker #1: I just met with a bank this week that that was their comment . They said the first thing we noticed was your culture and alignment in culture .
Greg Adelson: The level of innovation that we built over the last five years is not matched by anybody in the industry. We've said that multiple times. When people are able to see what we are able to already compete and do with a lot of these innovative things, not just Tap2Local and rapid transfers, but stablecoin, things that we've done with the platform, things along that line, it just shows that level. If you want to grow your institution and you want to make sure that you got deposits, lending capabilities, or building efficiency, which are their three most talked about things that they want to do, Jack Henry has been the provider and is the provider that can make that happen. We don't change our strategy. We've been very focused on our strategy, and our execution is second to none.
Greg Adelson: The level of innovation that we built over the last five years is not matched by anybody in the industry. We've said that multiple times. When people are able to see what we are able to already compete and do with a lot of these innovative things, not just Tap2Local and rapid transfers, but stablecoin, things that we've done with the platform, things along that line, it just shows that level. If you want to grow your institution and you want to make sure that you got deposits, lending capabilities, or building efficiency, which are their three most talked about things that they want to do, Jack Henry has been the provider and is the provider that can make that happen. We don't change our strategy. We've been very focused on our strategy, and our execution is second to none.
Greg Adelson: The level of innovation that we built over the last five years is not matched by anybody in the industry. We've said that multiple times. When people are able to see what we are able to already compete and do with a lot of these innovative things, not just Tap2Local and rapid transfers, but stablecoin, things that we've done with the platform, things along that line, it just shows that level. If you want to grow your institution and you want to make sure that you got deposits, lending capabilities, or building efficiency, which are their three most talked about things that they want to do, Jack Henry has been the provider and is the provider that can make that happen. We don't change our strategy. We've been very focused on our strategy, and our execution is second to none.
Speaker #1: Obviously , our service reputation is 50 years of doing the right thing and doing whatever it The level of takes . innovation that we built over the last five years is , is not matched anybody in the by industry .
Speaker #1: And we've said that multiple And when times . people are able to see what we are able to to already compete and do with a lot of these innovative things , not just tap to local and rapid transfers , but stablecoin things that we've done with the platform , things along that line .
Speaker #1: It just shows that level . If you want to , if you want to grow your institution and you want to make sure that you got deposits and building or lending efficiency , which are their three most talked about things that they want to do .
Speaker #1: Jack Henry has been the provider and is the provider that can make that happen. And then, you know, we don't change our strategy.
Greg Adelson: So when you take those five words that I say all the time, honestly, those are the reasons why we win. And it comes through with the products and the level of innovation we show them.
Greg Adelson: So when you take those five words that I say all the time, honestly, those are the reasons why we win. And it comes through with the products and the level of innovation we show them.
Greg Adelson: So when you take those five words that I say all the time, honestly, those are the reasons why we win. And it comes through with the products and the level of innovation we show them.
Speaker #1: We've been very focused on our strategy and our execution is second to none . So when you take those five words that I say all the time , honestly , those are the reasons why we win .
[Analyst] (Wolfe Research): That's helpful. And then, guys, I just want to follow up one more time on the way we think about guidance for this year and even an early thought in terms of what's trending for next year, just fiscal year. You've been inching up your guide now. You're obviously having success with the SMB initiatives that's starting to early but show results and numbers. And I think that's a key factor to getting back to that 78% range. So I mean, is your confidence growing into fiscal 2027 even that we can get back to that 78% again based on everything you're seeing in the run rate and some of your results from investments?
[Analyst] (Wolfe Research): That's helpful. And then, guys, I just want to follow up one more time on the way we think about guidance for this year and even an early thought in terms of what's trending for next year, just fiscal year. You've been inching up your guide now. You're obviously having success with the SMB initiatives that's starting to early but show results and numbers. And I think that's a key factor to getting back to that 78% range. So I mean, is your confidence growing into fiscal 2027 even that we can get back to that 78% again based on everything you're seeing in the run rate and some of your results from investments?
Darrin Peller: That's helpful. And then, guys, I just want to follow up one more time on the way we think about guidance for this year and even an early thought in terms of what's trending for next year, just fiscal year. You've been inching up your guide now. You're obviously having success with the SMB initiatives that's starting to early but show results and numbers. And I think that's a key factor to getting back to that 78% range. So I mean, is your confidence growing into fiscal 2027 even that we can get back to that 78% again based on everything you're seeing in the run rate and some of your results from investments?
Speaker #1: And it comes through with the products and the level of innovation we've shown.
Speaker #2: That's helpful . And then , guys , I just want to follow up one more time on on the way we think about guidance for this year and even a early thought in terms of what's trending for next year .
Speaker #2: Just fiscal year , just given you've been inching up your guide , now you're obviously having success with the SMB initiatives . That's starting to early .
Speaker #2: show , But show results in numbers . And I think factor to that's a key getting back to that 7 to 8% range .
Speaker #2: So I mean , is your confidence growing into fiscal 27 even that we can get back to that 7 to 8% again , based on everything you're seeing the run in rate and results some of your investments from .
Mimi Carsley: Darrin, I love your long-term view there. Just a little too premature from our perspective. We are heads down focused on executing in 2026. We're starting to have budgetary conversations and strategy conversations about 2027. But I think it's sticking to the fundamentals, really. It's about the execution. It's about every day coming in and hitting the singles and just continuing to execute. So yeah, we're super excited about the onboarding progress from our SMB offerings. We're super excited about the feedback we're getting from customers that are validating the direction that we've talked about. But I would say for this year, it's about continuing to drive on the implementations from the sales pipeline of closures. And it's about card and payments. And it's about continuing traction on the complementary side on some of our newer products.
Mimi Carsley: Darrin, I love your long-term view there. Just a little too premature from our perspective. We are heads down focused on executing in 2026. We're starting to have budgetary conversations and strategy conversations about 2027. But I think it's sticking to the fundamentals, really. It's about the execution. It's about every day coming in and hitting the singles and just continuing to execute. So yeah, we're super excited about the onboarding progress from our SMB offerings. We're super excited about the feedback we're getting from customers that are validating the direction that we've talked about. But I would say for this year, it's about continuing to drive on the implementations from the sales pipeline of closures. And it's about card and payments. And it's about continuing traction on the complementary side on some of our newer products.
Mimi Carsley: Darrin, I love your long-term view there. Just a little too premature from our perspective. We are heads down focused on executing in 2026. We're starting to have budgetary conversations and strategy conversations about 2027. But I think it's sticking to the fundamentals, really. It's about the execution. It's about every day coming in and hitting the singles and just continuing to execute. So yeah, we're super excited about the onboarding progress from our SMB offerings. We're super excited about the feedback we're getting from customers that are validating the direction that we've talked about. But I would say for this year, it's about continuing to drive on the implementations from the sales pipeline of closures. And it's about card and payments. And it's about continuing traction on the complementary side on some of our newer products.
Speaker #3: Darren , I love I love your long term view . There just a little too premature for from our perspective , we are heads down focused on executing in 26 .
Speaker #3: We're starting to have budgetary conversations and strategy conversations about 27 , but I think it's you know , it's sticking to the , really .
Speaker #3: It's about the fundamentals of execution. It's about every day, you coming in and, you know, hitting the singles and just continuing to execute.
Speaker #3: So yeah, we're super excited about the onboarding progress from our SMB offerings. We're super excited about the feedback we're getting from customers that are validating the direction that we've talked about.
Speaker #3: I But would say , you know , for this year , it's about continuing to to drive on the implementations from the sales pipeline of closures .
Speaker #3: And it's about card and payments, and it's about traction on the continuing complementary side on some of our newer products. As we look into '27, I think certainly we will be past some of those potholes that we've talked about previously that that deconversion created, and our growth rate on some of these new wins of sizable institutions that Greg mentioned will be coming into the fold from an implementation perspective.
Mimi Carsley: As we look into 2027, I think certainly we will be past some of those potholes that we've talked about previously that the deconversion created. Our growth rate on some of these new wins of sizable institutions that Greg mentioned will be coming into the folds from an implementation perspective. That is super exciting.
Mimi Carsley: As we look into 2027, I think certainly we will be past some of those potholes that we've talked about previously that the deconversion created. Our growth rate on some of these new wins of sizable institutions that Greg mentioned will be coming into the folds from an implementation perspective. That is super exciting.
Mimi Carsley: As we look into 2027, I think certainly we will be past some of those potholes that we've talked about previously that the deconversion created. Our growth rate on some of these new wins of sizable institutions that Greg mentioned will be coming into the folds from an implementation perspective. That is super exciting.
Greg Adelson: One other point, I mentioned earlier on that we had made a lot of strides in changing how we go about our renewal processes and things along that line. Those changes are starting to pay significant dividends for us. So it's been a big part of the strategy and focal point, but also another reason why we're very bullish on where we're going.
Greg Adelson: One other point, I mentioned earlier on that we had made a lot of strides in changing how we go about our renewal processes and things along that line. Those changes are starting to pay significant dividends for us. So it's been a big part of the strategy and focal point, but also another reason why we're very bullish on where we're going.
Greg Adelson: One other point, I mentioned earlier on that we had made a lot of strides in changing how we go about our renewal processes and things along that line. Those changes are starting to pay significant dividends for us. So it's been a big part of the strategy and focal point, but also another reason why we're very bullish on where we're going.
Speaker #3: And that is super exciting.
Speaker #1: One other point , you know , I we've mentioned earlier on that we had made a lot of strides in changing how we go about our renewal processes and things along that line and that those changes are starting to pay significant dividends for us .
Speaker #1: And and so it's been a big part of the strategy and focal point . But also another reason why we we're very bullish on on where we're going .
Operator: Our next question is from Madison Schor with Raymond James. Please proceed.
Operator: Our next question is from Madison Schor with Raymond James. Please proceed.
Operator: Our next question is from Madison Schor with Raymond James. Please proceed.
Speaker #2: Great , great . All right . Thanks , guys . Thanks , Greg . Mimi Thanks ,
Speaker #2: .
Speaker #2: .
Speaker #3: course next .
Speaker #3: course next .
[Analyst] (Wolfe Research): Hi. Good morning, everybody, and thanks for taking the questions. I also wanted to start on the SMB strategy with rapid transfer and Tap2Local. I guess more broadly, what are you seeing in terms of adoption for those products? What's the longer-term opportunity look like? And maybe any color on how the competitive set may differ from a traditional Jack Henry competitor?
[Analyst] (Wolfe Research): Hi. Good morning, everybody, and thanks for taking the questions. I also wanted to start on the SMB strategy with rapid transfer and Tap2Local. I guess more broadly, what are you seeing in terms of adoption for those products? What's the longer-term opportunity look like? And maybe any color on how the competitive set may differ from a traditional Jack Henry competitor?
Madison Suhr: Hi. Good morning, everybody, and thanks for taking the questions. I also wanted to start on the SMB strategy with rapid transfer and Tap2Local. I guess more broadly, what are you seeing in terms of adoption for those products? What's the longer-term opportunity look like? And maybe any color on how the competitive set may differ from a traditional Jack Henry competitor?
Speaker #4: Our question is from Madison, sir Raymond, with James. Please proceed.
Speaker #5: Hi . Good morning , everybody , and thanks for taking the I also questions . wanted to start on the SMB strategy with rapid transfer and tap to local .
Speaker #5: I guess, more broadly, what are you seeing in terms of adoption for those products? What's the longer-term opportunity look like?
Greg Adelson: Yeah, Madison, thanks for the question. I have some data, but as I said, I'd prefer to really talk more about it in May when I have more data months because it's still very early. As I said, we rolled out 300 customers in two months, and we just rolled out another 100. So as people are starting to ramp up, I'll give you one anecdote, though. We had a client that wasn't sure they wanted to keep it on, and they called as soon as it was turned on. Two hours later, they asked us to turn it off. And we said, "Did you know that you already had 30 people sign up for it?" And they said, "No." And they said, "Okay, keep it on." So my point is that there's that type of opportunity that's forming.
Greg Adelson: Yeah, Madison, thanks for the question. I have some data, but as I said, I'd prefer to really talk more about it in May when I have more data months because it's still very early. As I said, we rolled out 300 customers in two months, and we just rolled out another 100. So as people are starting to ramp up, I'll give you one anecdote, though. We had a client that wasn't sure they wanted to keep it on, and they called as soon as it was turned on. Two hours later, they asked us to turn it off. And we said, "Did you know that you already had 30 people sign up for it?" And they said, "No." And they said, "Okay, keep it on." So my point is that there's that type of opportunity that's forming.
Greg Adelson: Yeah, Madison, thanks for the question. I have some data, but as I said, I'd prefer to really talk more about it in May when I have more data months because it's still very early. As I said, we rolled out 300 customers in two months, and we just rolled out another 100. So as people are starting to ramp up, I'll give you one anecdote, though. We had a client that wasn't sure they wanted to keep it on, and they called as soon as it was turned on. Two hours later, they asked us to turn it off. And we said, "Did you know that you already had 30 people sign up for it?" And they said, "No." And they said, "Okay, keep it on." So my point is that there's that type of opportunity that's forming.
Speaker #5: And maybe any color on how the competitive set may differ from a traditional Jack Henry competitor ?
Speaker #1: Yeah . Madison , thanks for the question . I , I have some data , but I would , as I said , I'd to prefer really talk more about it in a , in a in May when have I more data months because it's still very early .
Speaker #1: As I said , we out rolled 300 customers in two months and we just rolled out another 100 . So as people are starting to ramp up , you know , I'll give you one anecdote , though , there was a we had a client that wasn't sure they keep it wanted to on , and they called us as soon as it was turned on .
Speaker #1: And two hours later they asked us to turn it off and we said , did you know that you already had 30 people sign up for it ?
Speaker #1: And they said , no . And they said , okay , keep it on . So my point is , is that there's that type of of opportunity .
Greg Adelson: And we're just now really working with them on the marketing. So there's a whole aspect of this that we think we'll have a lot better data points. To answer your question on the level of differentiation, though, it's significant to what a Stripe or Square is doing in the space. And I'll make it very short. First of all, Stripe and Square are taking deposits away from our institutions, and they're not getting them back because then they're lending to them or they're doing other things. And so once those deposits go, they're gone. The other part is that the level of sophistication that we're able to give these sole proprietors or very small SMBs with not only instant account approval where we're approving about 75% of everybody instantaneously in the market, that's a 2- to 3-day process, if not longer.
Greg Adelson: And we're just now really working with them on the marketing. So there's a whole aspect of this that we think we'll have a lot better data points. To answer your question on the level of differentiation, though, it's significant to what a Stripe or Square is doing in the space. And I'll make it very short. First of all, Stripe and Square are taking deposits away from our institutions, and they're not getting them back because then they're lending to them or they're doing other things. And so once those deposits go, they're gone. The other part is that the level of sophistication that we're able to give these sole proprietors or very small SMBs with not only instant account approval where we're approving about 75% of everybody instantaneously in the market, that's a 2- to 3-day process, if not longer.
Greg Adelson: And we're just now really working with them on the marketing. So there's a whole aspect of this that we think we'll have a lot better data points. To answer your question on the level of differentiation, though, it's significant to what a Stripe or Square is doing in the space. And I'll make it very short. First of all, Stripe and Square are taking deposits away from our institutions, and they're not getting them back because then they're lending to them or they're doing other things. And so once those deposits go, they're gone. The other part is that the level of sophistication that we're able to give these sole proprietors or very small SMBs with not only instant account approval where we're approving about 75% of everybody instantaneously in the market, that's a 2- to 3-day process, if not longer.
Speaker #1: That's that's forming . And , you know , we're just now really working with them on the marketing . So there's a whole aspect of this that we think we'll have a lot better data points .
Speaker #1: To answer your question on the level of differentiation , though , it's significant to what a stripe or square is doing in the space .
Speaker #1: And I'll make it very short. First of all, Stripe and Square are taking deposits away from our institutions, and they're not getting them back because then they're lending to them or they're doing other things.
Speaker #1: And so once those deposits go , they're gone . The other part is , is that the level of sophistication that we're able to give these sole proprietors , or very small SMEs , with not only instant account approval , where we're approving about 75% of everybody instantaneously in the market .
Greg Adelson: We're able to do both iOS and Android devices for Tap to Pay. Very few people in the United States are doing that today. Stripe and Square are, but very few others. But the biggest one is our patent-pending account reconciliation component where the actual SMB can upload all their transactions onto their device and hit a button and upload it into QuickBooks, Xero, or any of their accounting package choices instantaneously. Those are all things that can happen today in the market.
Greg Adelson: We're able to do both iOS and Android devices for Tap to Pay. Very few people in the United States are doing that today. Stripe and Square are, but very few others. But the biggest one is our patent-pending account reconciliation component where the actual SMB can upload all their transactions onto their device and hit a button and upload it into QuickBooks, Xero, or any of their accounting package choices instantaneously. Those are all things that can happen today in the market.
Greg Adelson: We're able to do both iOS and Android devices for Tap to Pay. Very few people in the United States are doing that today. Stripe and Square are, but very few others. But the biggest one is our patent-pending account reconciliation component where the actual SMB can upload all their transactions onto their device and hit a button and upload it into QuickBooks, Xero, or any of their accounting package choices instantaneously. Those are all things that can happen today in the market.
Speaker #1: That's a 2 to 3 day process , if not longer . And then , you know , we're able to do both iOS and Android devices for tap to pay .
Speaker #1: Very few people in the United States are doing that today . Stripe and square are . But but very few others . And then but the biggest one is our patent pending account reconciliation component , where the actual SMB can upload all their transactions onto their device and hit a button and upload it into QuickBooks or Xero or any of their accounting package choices instantaneously .
Mimi Carsley: I would add on to that that the knowledge we have from the core systems really enable us to have a frictionless experience from the get-go of sign-on all the way to the account reconciliation that Greg mentioned. So we really believe in this case, it's a fragmented industry, and we believe that small businesses should be multi-acquirer the same way a sophisticated treasury customer has more than one bank account. It's just smart business. We think that small and sole entrepreneurs will be multi-acquiring.
Mimi Carsley: I would add on to that that the knowledge we have from the core systems really enable us to have a frictionless experience from the get-go of sign-on all the way to the account reconciliation that Greg mentioned. So we really believe in this case, it's a fragmented industry, and we believe that small businesses should be multi-acquirer the same way a sophisticated treasury customer has more than one bank account. It's just smart business. We think that small and sole entrepreneurs will be multi-acquiring.
Mimi Carsley: I would add on to that that the knowledge we have from the core systems really enable us to have a frictionless experience from the get-go of sign-on all the way to the account reconciliation that Greg mentioned. So we really believe in this case, it's a fragmented industry, and we believe that small businesses should be multi-acquirer the same way a sophisticated treasury customer has more than one bank account. It's just smart business. We think that small and sole entrepreneurs will be multi-acquiring.
Speaker #1: Those are all things that can happen today in the market .
Speaker #3: I would add on to that that the knowledge we have from the core systems really enable us a to have frictionless from the get experience go of sign on all the way to the account reconciliation that Greg mentioned .
Speaker #3: We really so believe, in this case, it's a fragmented industry, and we small—that is, we believe businesses should be acquirer-multi the same way a sophisticated Treasury customer has more than one bank account.
Speaker #3: It's just business . smart We think that small and soul entrepreneurs will be multi acquiring .
[Analyst] (Wolfe Research): Okay. That's very helpful, Colbert.
[Analyst] (Wolfe Research): Okay. That's very helpful, Colbert.
Madison Suhr: Okay. That's very helpful color.
Greg Adelson: Yeah. Yeah, Madison, one other point. We have a very long roadmap for SMB. This is not just a one-hit wonder with Tap2Local and Rapid Transfers. We have a lot of things we're going to be rolling out over the next 18 months, and some of them are already done. We're just waiting to put them into play.
Greg Adelson: Yeah. Yeah, Madison, one other point. We have a very long roadmap for SMB. This is not just a one-hit wonder with Tap2Local and Rapid Transfers. We have a lot of things we're going to be rolling out over the next 18 months, and some of them are already done. We're just waiting to put them into play.
Greg Adelson: Yeah. Yeah, Madison, one other point. We have a very long roadmap for SMB. This is not just a one-hit wonder with Tap2Local and Rapid Transfers. We have a lot of things we're going to be rolling out over the next 18 months, and some of them are already done. We're just waiting to put them into play.
Speaker #5: That's very helpful Okay . . Yeah .
Speaker #1: Yeah . Another point . We have a long . We very have a very long roadmap for SMB . This is not just AA1 hit wonder with tap to local and and rapid transfers .
Speaker #1: We have a lot of things we're going to be rolling out over the next 18 months . And some of them are already done .
[Analyst] (Wolfe Research): Certainly. Seems like an interesting opportunity for you guys. Just brief follow-up here on capital allocation. I mean, maybe just talk to the priorities right now, appetite for buybacks, and just anything to call out in terms of M&A pipeline. Thanks, guys.
[Analyst] (Wolfe Research): Certainly. Seems like an interesting opportunity for you guys. Just brief follow-up here on capital allocation. I mean, maybe just talk to the priorities right now, appetite for buybacks, and just anything to call out in terms of M&A pipeline. Thanks, guys.
Madison Suhr: Certainly. Seems like an interesting opportunity for you guys. Just brief follow-up here on capital allocation. I mean, maybe just talk to the priorities right now, appetite for buybacks, and just anything to call out in terms of M&A pipeline. Thanks, guys.
Speaker #1: We're just waiting to put them into play.
Speaker #5: Certainly seems like a interesting and opportunity for you guys . Just brief follow up here on on capital allocation . maybe just talk I mean , to the now .
Mimi Carsley: Of course. First and foremost, we're super excited to get back to the very strong free cash flow and the very high free cash flow conversion of 90 to 100, to be on the other side of the tax legislation and have certainty, and to have a year where a pretty significant contribution of roughly, we'd call it $100 million from clearing up that tax uncertainty and kind of clarifying from a go-forward perspective. From a capital allocation, our priorities remain consistent. We have a longstanding dividend policy that we are committed to. We are always looking at M&A prospects and opportunities, although we have left gaps strategically. We're always looking for things that may be an accelerant or enhancement to solutions and our ways of meeting customer needs. We continue to invest significantly in internal development and moving our strategies and innovations forward. Then share repurchases.
Mimi Carsley: Of course. First and foremost, we're super excited to get back to the very strong free cash flow and the very high free cash flow conversion of 90 to 100, to be on the other side of the tax legislation and have certainty, and to have a year where a pretty significant contribution of roughly, we'd call it $100 million from clearing up that tax uncertainty and kind of clarifying from a go-forward perspective. From a capital allocation, our priorities remain consistent. We have a longstanding dividend policy that we are committed to. We are always looking at M&A prospects and opportunities, although we have left gaps strategically. We're always looking for things that may be an accelerant or enhancement to solutions and our ways of meeting customer needs. We continue to invest significantly in internal development and moving our strategies and innovations forward. Then share repurchases.
Mimi Carsley: Of course. First and foremost, we're super excited to get back to the very strong free cash flow and the very high free cash flow conversion of 90 to 100, to be on the other side of the tax legislation and have certainty, and to have a year where a pretty significant contribution of roughly, we'd call it $100 million from clearing up that tax uncertainty and kind of clarifying from a go-forward perspective. From a capital allocation, our priorities remain consistent. We have a longstanding dividend policy that we are committed to. We are always looking at M&A prospects and opportunities, although we have left gaps strategically. We're always looking for things that may be an accelerant or enhancement to solutions and our ways of meeting customer needs. We continue to invest significantly in internal development and moving our strategies and innovations forward. Then share repurchases.
Speaker #5: Appetite for buybacks and just anything to in terms call out of M&A pipeline . Thanks guys .
Speaker #3: Of course , first and foremost we're we're super get excited to back to the very strong free cash flow and the very high free cash flow conversion of 90 to 100 to be on the other side of the tax legislation certainty and have and to have a year where , you know , a pretty significant contribution of roughly call it $100 million from clearing up that tax uncertainty and kind of a clarifying from a go forward perspective from a capital allocation .
Speaker #3: Our priorities remain consistent. We have a long-standing dividend policy that we are committed to. We are always looking at M&A prospects and opportunities.
Speaker #3: Although we have less gaps strategically , we're looking for always maybe things that an accelerant or enhancement to solutions and our ways of meeting of needs customer .
Speaker #3: We continue to invest to significantly internal in development our and strategies and innovations forward . And then share repurchases . We were excited by the $125 million of shares we purchased thus far .
Mimi Carsley: We were excited by the $125 million of shares we purchased thus far, year to date. We said previously we'd feel comfortable if that went to 200 or more this year. It sort of depends on purchase price and what M&A opportunities come into the marketplace. We will be dynamic capital allocators but continue with our conservative balance sheet.
Mimi Carsley: We were excited by the $125 million of shares we purchased thus far, year to date. We said previously we'd feel comfortable if that went to 200 or more this year. It sort of depends on purchase price and what M&A opportunities come into the marketplace. We will be dynamic capital allocators but continue with our conservative balance sheet.
Mimi Carsley: We were excited by the $125 million of shares we purchased thus far, year to date. We said previously we'd feel comfortable if that went to 200 or more this year. It sort of depends on purchase price and what M&A opportunities come into the marketplace. We will be dynamic capital allocators but continue with our conservative balance sheet.
Speaker #3: Year to date , and we've said , you know , previously we would feel comfortable if that went to 200 or more this year .
Speaker #3: So it sort of really depends on purchase and what M&A price opportunities come into the marketplace . But we will be dynamic capital allocators but continue with our conservative balance sheet .
Operator: The next question today comes from Karthik Mehta with Northcoast Research. Please proceed.
Operator: The next question today comes from Karthik Mehta with Northcoast Research. Please proceed.
Operator: The next question today comes from Karthik Mehta with Northcoast Research. Please proceed.
Greg Adelson: Hey, good morning. Greg, one of the strategies you implemented was going about pricing renewals differently. I'm wondering if that's gained traction, and are you seeing it manifest in the financial results yet, or will that take a little bit more time? Yeah, great question. Appreciate you bringing that up. Yeah, we are starting to see it in our financial results and on our approach for the percentages of new versus renewals in our wins, and our overall numbers for the team. Congrats to the entire sales team for embracing what we've put in place because it was a change, and it's working very well. The percentage of new versus renewals is significant as compared to last year, which is obviously great for a lot of reasons. But the other part is that it's allowing us to hold much more steady in the market.
Greg Adelson: Hey, good morning. Greg, one of the strategies you implemented was going about pricing renewals differently. I'm wondering if that's gained traction, and are you seeing it manifest in the financial results yet, or will that take a little bit more time? Yeah, great question. Appreciate you bringing that up. Yeah, we are starting to see it in our financial results and on our approach for the percentages of new versus renewals in our wins, and our overall numbers for the team. Congrats to the entire sales team for embracing what we've put in place because it was a change, and it's working very well. The percentage of new versus renewals is significant as compared to last year, which is obviously great for a lot of reasons. But the other part is that it's allowing us to hold much more steady in the market.
Kartik Mehta: Hey, good morning. Greg, one of the strategies you implemented was going about pricing renewals differently. I'm wondering if that's gained traction, and are you seeing it manifest in the financial results yet, or will that take a little bit more time? Yeah, great question. Appreciate you bringing that up. Yeah, we are starting to see it in our financial results and on our approach for the percentages of new versus renewals in our wins, and our overall numbers for the team. Congrats to the entire sales team for embracing what we've put in place because it was a change, and it's working very well. The percentage of new versus renewals is significant as compared to last year, which is obviously great for a lot of reasons. But the other part is that it's allowing us to hold much more steady in the market.
Speaker #4: In the next question today comes from Kartik Mehta with Northcoast Research . Please proceed .
Speaker #6: Hey , good morning , Greg . One of the strategies you implemented was going about pricing renewals And I'm wondering if traction gained that's .
Speaker #6: Are you seeing it manifest in financial results yet, or will that take a little bit more time?
Speaker #1: Yeah . Great question . Appreciate you bringing that up . Yeah . We we are starting to see it in our financial results and on our approach for the percentages of new versus renewals in our wins and our overall numbers for for the team .
Speaker #1: So congrats to the entire sales team for embracing what we've put in place . Because of that , it was , you know , it was a change and it it's working very well .
Speaker #1: So we the are really percentage of new versus renewals is significant as compared to last year , which is , you know , which is obviously great for a lot of reasons .
Greg Adelson: One of the questions early on was pricing pressures. And we've been negotiating more at a position of strength than I think we have in years past. And then just to follow up, Greg, early on, you talked about bank spending and maybe a couple of the reports that have come out that say bank spending should continue or is expected to continue in 2026. Is there a difference, at least as you're talking to clients from an asset size and what they want to spend? And the reason I'm asking is there's so much talk about consolidation and maybe consolidation happening with smaller banks, smaller asset-sized banks. So I'm wondering if there's any hesitation for those banks to spend money or if you're seeing any kind of bifurcation. Yeah.
Greg Adelson: One of the questions early on was pricing pressures. And we've been negotiating more at a position of strength than I think we have in years past. And then just to follow up, Greg, early on, you talked about bank spending and maybe a couple of the reports that have come out that say bank spending should continue or is expected to continue in 2026. Is there a difference, at least as you're talking to clients from an asset size and what they want to spend? And the reason I'm asking is there's so much talk about consolidation and maybe consolidation happening with smaller banks, smaller asset-sized banks. So I'm wondering if there's any hesitation for those banks to spend money or if you're seeing any kind of bifurcation. Yeah.
Greg Adelson: One of the questions early on was pricing pressures. And we've been negotiating more at a position of strength than I think we have in years past. And then just to follow up, Greg, early on, you talked about bank spending and maybe a couple of the reports that have come out that say bank spending should continue or is expected to continue in 2026. Is there a difference, at least as you're talking to clients from an asset size and what they want to spend? And the reason I'm asking is there's so much talk about consolidation and maybe consolidation happening with smaller banks, smaller asset-sized banks. So I'm wondering if there's any hesitation for those banks to spend money or if you're seeing any kind of bifurcation. Yeah.
Speaker #1: But the other is , is part that it's it's allowing us to hold much more in the market You know , one of the questions early pricing pressures .
Speaker #1: you And , know , we've been negotiating more at a position of strength than I think we have in years , years past .
Speaker #6: And then just a follow up , Greg , you know , early on you talked about bank spending and maybe a couple of reports that have come out that bank say spending should continue or is expected continue to in 2026 , is there a difference , at least as you're talking to clients from an asset size and what they want to spend ?
Speaker #6: reason I'm And the asking is , you know , so much talk about consolidation and maybe consolidation happening . With smaller banks , smaller size banks .
Speaker #6: I'm wondering there's any for hesitation if those banks to spend money , or if you're seeing any kind of bifurcation .
Greg Adelson: Just to be candid, you do see it sometimes, but I think you can also probably see them on the market the next week or the next quarter or whatever because you really can, Karthik, determine when technology isn't being bought. Dave coined this line a long time ago, and we like to use it, which is, "Everything that needs to happen in this space, if you want to grow, technology can do for you." So from our standpoint, we are very focused on making sure that's why the level of innovation. The short answer is yes. There are some institutions that are going to spend way more than the 10% or 6% to 10% that's been forecasted based on whatever their needs are, or their desires. There are others that don't. Sometimes they'll take a better financial deal and less impressive technology.
Greg Adelson: Just to be candid, you do see it sometimes, but I think you can also probably see them on the market the next week or the next quarter or whatever because you really can, Karthik, determine when technology isn't being bought. Dave coined this line a long time ago, and we like to use it, which is, "Everything that needs to happen in this space, if you want to grow, technology can do for you." So from our standpoint, we are very focused on making sure that's why the level of innovation. The short answer is yes. There are some institutions that are going to spend way more than the 10% or 6% to 10% that's been forecasted based on whatever their needs are, or their desires. There are others that don't. Sometimes they'll take a better financial deal and less impressive technology.
Greg Adelson: Just to be candid, you do see it sometimes, but I think you can also probably see them on the market the next week or the next quarter or whatever because you really can, Karthik, determine when technology isn't being bought. Dave coined this line a long time ago, and we like to use it, which is, "Everything that needs to happen in this space, if you want to grow, technology can do for you." So from our standpoint, we are very focused on making sure that's why the level of innovation. The short answer is yes. There are some institutions that are going to spend way more than the 10% or 6% to 10% that's been forecasted based on whatever their needs are, or their desires. There are others that don't. Sometimes they'll take a better financial deal and less impressive technology.
Speaker #1: Yeah . You know , just to know , be , you candid . You do see it sometimes , but I think you can also probably see them on the market the next week or the next .
Speaker #1: whatever , Quarter or because you , you really can . when Determine technology isn't being bought , coined Dave , Dave this you know , line time ago .
Speaker #1: we like to And a long it , which is , use you know , that everything that needs to happen in this space .
Speaker #1: If you want to grow , technology can do for you . And so , our you know , from standpoint , we are very focused on making sure that's why the level of innovation and so the short answer is yes , there's some institutions that , you know , are spend way more than the 10% or been 6 to 10% that's forecasted , you know , based on whatever their needs are or , or their desires .
Speaker #1: others that that don't . And sometimes they'll , they'll , they'll take a better financial deal and less impressive technology . And you tend to see those are the ones that are on the market down the road .
Greg Adelson: You tend to see those are the ones that are on the market down the road. Perfect. Thank you very much. I appreciate it. Sure. Thanks.
Greg Adelson: You tend to see those are the ones that are on the market down the road. Perfect. Thank you very much. I appreciate it. Sure. Thanks.
Greg Adelson: You tend to see those are the ones that are on the market down the road.
Kartik Mehta: Perfect. Thank you very much. I appreciate it. Sure. Thanks.
Operator: The next question is from Chris Kennedy with William Blair. Please proceed.
Operator: The next question is from Chris Kennedy with William Blair. Please proceed.
Operator: The next question is from Chris Kennedy with William Blair. Please proceed.
Speaker #6: Perfect . Thank you very much . I appreciate it .
[Analyst] (Raymond James): Yeah. Good morning. Thanks for squeezing me in here. Greg, just wanted to follow up on the trifecta wins that you talked about. What's driving that? Are financial institutions consolidating vendors? Is it from changes in your go-to-market strategy, or are you moving up market? Any more color would be great.
[Analyst] (Raymond James): Yeah. Good morning. Thanks for squeezing me in here. Greg, just wanted to follow up on the trifecta wins that you talked about. What's driving that? Are financial institutions consolidating vendors? Is it from changes in your go-to-market strategy, or are you moving up market? Any more color would be great.
Chris Kennedy: Yeah. Good morning. Thanks for squeezing me in here. Greg, just wanted to follow up on the trifecta wins that you talked about. What's driving that? Are financial institutions consolidating vendors? Is it from changes in your go-to-market strategy, or are you moving up market? Any more color would be great.
Speaker #1: Sure . Thanks .
Speaker #4: next The question is from Chris Kennedy with William Blair . Please proceed .
Speaker #7: Yeah . Good morning . Thanks squeezing me for in Greg . Just wanted to follow up on the here , wins that you talked about .
Speaker #7: that are financial What's institutions consolidating vendors ? Is it from changes in your go to market strategy , or are you moving up market any more color would be great .
Greg Adelson: Yeah. So great question. It's a combination of a few things. One is, as we've been mentioning, we have done a much better job of building out the Banno solution set to be much more competitive on the business side. We've always had what we think is the best retail application, but the team's done a great job of building that out. So as that has gotten more sophisticated and improved, it's allowed us to not only win more deals but win larger deals, as you referenced, and it has happened as well. Same thing on the card side. We've really improved the commercial aspects of our card platform with some other things that we're working on. And so those two things combined have allowed us to get involved in each of those deals. And as I mentioned, 15 of the 22 deals included all three.
Greg Adelson: Yeah. So great question. It's a combination of a few things. One is, as we've been mentioning, we have done a much better job of building out the Banno solution set to be much more competitive on the business side. We've always had what we think is the best retail application, but the team's done a great job of building that out. So as that has gotten more sophisticated and improved, it's allowed us to not only win more deals but win larger deals, as you referenced, and it has happened as well. Same thing on the card side. We've really improved the commercial aspects of our card platform with some other things that we're working on. And so those two things combined have allowed us to get involved in each of those deals. And as I mentioned, 15 of the 22 deals included all three.
Greg Adelson: Yeah. So great question. It's a combination of a few things. One is, as we've been mentioning, we have done a much better job of building out the Banno solution set to be much more competitive on the business side. We've always had what we think is the best retail application, but the team's done a great job of building that out. So as that has gotten more sophisticated and improved, it's allowed us to not only win more deals but win larger deals, as you referenced, and it has happened as well. Same thing on the card side. We've really improved the commercial aspects of our card platform with some other things that we're working on. And so those two things combined have allowed us to get involved in each of those deals. And as I mentioned, 15 of the 22 deals included all three.
Speaker #1: Yeah . question . It's a combination Great of a few is , as things . we've been One mentioning , know , we have you done a much better job of building out the solution set up to be much more competitive on the business side .
Speaker #1: You know , we've always had , you know , what we think is the best retail application . But the team's done a great building job of that out .
Speaker #1: So as that has gotten more sophisticated and allowed improved, it's us to not only win deals but more win larger deals. As you referenced.
Speaker #1: And and it has happened as well . Same thing on the card You know , side . we've improved the really commercial aspects of of our card platform with some other things that we're working so on .
Speaker #1: And those two things have combined allowed us to to involved get in in each of those deals . And as I mentioned , you know , 15 of the 22 deals included all three .
Greg Adelson: But it is by design, and it will continue to be by design as we continue to not only go up market but also as we go after some of these new opportunities in a consolidating base.
Greg Adelson: But it is by design, and it will continue to be by design as we continue to not only go up market but also as we go after some of these new opportunities in a consolidating base.
Greg Adelson: But it is by design, and it will continue to be by design as we continue to not only go up market but also as we go after some of these new opportunities in a consolidating base.
Speaker #1: But it is by and it design will continue to be by design as we continue to not only go up market , but also go after some of these opportunities in , in , in a consolidating base .
[Analyst] (Raymond James): Great. Thanks for that. And just as a follow-up separately, I think you launched a new enterprise account opening platform. Can you just talk about the opportunity with that new solution?
[Analyst] (Raymond James): Great. Thanks for that. And just as a follow-up separately, I think you launched a new enterprise account opening platform. Can you just talk about the opportunity with that new solution?
Chris Kennedy: Great. Thanks for that. And just as a follow-up separately, I think you launched a new enterprise account opening platform. Can you just talk about the opportunity with that new solution?
Speaker #7: Great . Thanks for that . And as a follow up separately , I think you launched a enterprise account opening platform . Can you just talk about the opportunity new with that solution ?
Greg Adelson: Yeah, Chris. I will say that we're still in what I would call closed beta or what we call closed beta, still pretty early. There are some feature gaps that I want to get closed before I want to release it out into what we would call generally available. I'll talk more about that in coming months as it becomes more relevant. But it will be a very unique platform where you'll have a single platform for both consumer and commercial with account opening embedded. So it'll be something that's very unique in the market, but it still needs a few more things completed before we're ready to talk too broadly about it.
Greg Adelson: Yeah, Chris. I will say that we're still in what I would call closed beta or what we call closed beta, still pretty early. There are some feature gaps that I want to get closed before I want to release it out into what we would call generally available. I'll talk more about that in coming months as it becomes more relevant. But it will be a very unique platform where you'll have a single platform for both consumer and commercial with account opening embedded. So it'll be something that's very unique in the market, but it still needs a few more things completed before we're ready to talk too broadly about it.
Greg Adelson: Yeah, Chris. I will say that we're still in what I would call closed beta or what we call closed beta, still pretty early. There are some feature gaps that I want to get closed before I want to release it out into what we would call generally available. I'll talk more about that in coming months as it becomes more relevant. But it will be a very unique platform where you'll have a single platform for both consumer and commercial with account opening embedded. So it'll be something that's very unique in the market, but it still needs a few more things completed before we're ready to talk too broadly about it.
Speaker #1: Yeah , Chris , I will say that we're what I would still in call closed beta or what we call closed beta . Still pretty early .
Speaker #1: There some some feature are gaps that that I want to get closed before I want to release it out into what we would call generally available .
Speaker #1: I'll talk more about that in coming months . As as it becomes more relevant . But it will be a very unique platform .
Speaker #1: We'll where you'll have a single platform for both consumer and commercial , with account opening , embedded . So it'll be something that's very unique in the market , but it still needs a few more things completed before we're ready talk to to to broadly about it .
[Analyst] (Wolfe Research): Great. Thanks for taking the questions.
[Analyst] (Wolfe Research): Great. Thanks for taking the questions.
Chris Kennedy: Great. Thanks for taking the questions.
Greg Adelson: Sure.
Greg Adelson: Sure.
Greg Adelson: Sure.
Operator: Our next question comes from Dave Koning with Baird. Please proceed.
Operator: Our next question comes from Dave Koning with Baird. Please proceed.
Operator: Our next question comes from Dave Koning with Baird. Please proceed.
Speaker #7: Great. Thanks for taking the questions.
[Analyst] (Raymond James): Yeah. Hey, guys. Great job. And I guess my question is really on complementary. You've done a really good job. And I think Greg called out that some of the platform consolidation in the space is creating more wins in complementary. And we often think of it driving core. But if it's driving complementary, too, is that faster? Those are a little smaller products. Are those faster to implement? And then secondly, you've had really good growth. You hit a tougher comp. Is that new kind of win rate or the additional complementary work going to allow you to keep growing as fast even though you hit a tougher comp?
[Analyst] (Raymond James): Yeah. Hey, guys. Great job. And I guess my question is really on complementary. You've done a really good job. And I think Greg called out that some of the platform consolidation in the space is creating more wins in complementary. And we often think of it driving core. But if it's driving complementary, too, is that faster? Those are a little smaller products. Are those faster to implement? And then secondly, you've had really good growth. You hit a tougher comp. Is that new kind of win rate or the additional complementary work going to allow you to keep growing as fast even though you hit a tougher comp?
Dave Koning: Yeah. Hey, guys. Great job. And I guess my question is really on complementary. You've done a really good job. And I think Greg called out that some of the platform consolidation in the space is creating more wins in complementary. And we often think of it driving core. But if it's driving complementary, too, is that faster? Those are a little smaller products. Are those faster to implement? And then secondly, you've had really good growth. You hit a tougher comp. Is that new kind of win rate or the additional complementary work going to allow you to keep growing as fast even though you hit a tougher comp?
Speaker #1: Sure .
Speaker #4: Our next question comes from Dave Koning with Baird. Please proceed.
Speaker #8: Yeah . Hey , guys . Great job . And I guess my question is really on complementary . You've done a really good job in I think Greg called out that some of the platform consolidation space is creating more wins complementary .
Speaker #8: And we often think of it driving core. But if it's driving complementary too, is that faster? Those are a little smaller products.
Speaker #8: Are those faster to implement . And then secondly you've had really good growth . You hit a tougher comp . Is that new kind of win the rate or additional complementary work going to even though you growing hit a allow you to keep tougher comp ?
Greg Adelson: Well, yeah, it's good insight. I think it depends on a couple of things, Dave. I mean, some of these are sold with core deals. Some of these are tied to the timing there. Actually, we had several nice independent wins outside of core, digital, and financial crimes for this particular quarter. So those typically are 6 to 9 months, maybe less, depending on their sense of urgency and timing in their contracts. But they're definitely sooner than what would be tied to a core deal. One of the things that we are doing, and it's starting to be, I won't say successful, but being interesting to some folks is we're really going to them and talking to them about integrating the digital offering even before the core.
Greg Adelson: Well, yeah, it's good insight. I think it depends on a couple of things, Dave. I mean, some of these are sold with core deals. Some of these are tied to the timing there. Actually, we had several nice independent wins outside of core, digital, and financial crimes for this particular quarter. So those typically are 6 to 9 months, maybe less, depending on their sense of urgency and timing in their contracts. But they're definitely sooner than what would be tied to a core deal. One of the things that we are doing, and it's starting to be, I won't say successful, but being interesting to some folks is we're really going to them and talking to them about integrating the digital offering even before the core.
Greg Adelson: Well, yeah, it's good insight. I think it depends on a couple of things, Dave. I mean, some of these are sold with core deals. Some of these are tied to the timing there. Actually, we had several nice independent wins outside of core, digital, and financial crimes for this particular quarter. So those typically are 6 to 9 months, maybe less, depending on their sense of urgency and timing in their contracts. But they're definitely sooner than what would be tied to a core deal. One of the things that we are doing, and it's starting to be, I won't say successful, but being interesting to some folks is we're really going to them and talking to them about integrating the digital offering even before the core.
Speaker #1: Well , yeah , good it's a good it's a insight . I think it depends on a couple things , Dave . of I mean , if some of these are sold with core deals , some of these are , you know , tied to the timing , there , you know , there are actually we had a several nice independent wins outside of core in and digital financial crimes .
Speaker #1: This particular quarter . So those typically are a 6 to 9 months , maybe less their their sense of And their timing in urgency .
Speaker #1: contracts . But but they're you know , they're definitely sooner than what would be tied to a core deal . are One of the things that we doing , and it's starting to be , you know , I won't say successful , but but being interesting to some folks is we're really going to them and talking to them about integrating the digital offering , before the even core .
Greg Adelson: This could also be part of or is part of our outside-the-base strategy to drive some opportunities sooner than waiting on core. So we're working through some of the logistical parts of that. But as that starts to take hold, I think that will create even more of an opportunity for us to do what we've really envisioned and even on our core platform, right, doing things in a more modular or componentized approach and doing it incrementally than doing it all at once. So we'll kind of give you more context on that as it happens. But absolutely by design, absolutely by continued improvements in those products.
Greg Adelson: This could also be part of or is part of our outside-the-base strategy to drive some opportunities sooner than waiting on core. So we're working through some of the logistical parts of that. But as that starts to take hold, I think that will create even more of an opportunity for us to do what we've really envisioned and even on our core platform, right, doing things in a more modular or componentized approach and doing it incrementally than doing it all at once. So we'll kind of give you more context on that as it happens. But absolutely by design, absolutely by continued improvements in those products.
Greg Adelson: This could also be part of or is part of our outside-the-base strategy to drive some opportunities sooner than waiting on core. So we're working through some of the logistical parts of that. But as that starts to take hold, I think that will create even more of an opportunity for us to do what we've really envisioned and even on our core platform, right, doing things in a more modular or componentized approach and doing it incrementally than doing it all at once. So we'll kind of give you more context on that as it happens. But absolutely by design, absolutely by continued improvements in those products.
Speaker #1: be this could And also or is part of our outside the base strategy to part of drive some opportunities sooner than waiting on core .
Speaker #1: So we're working through some of the logistical parts of that. But as that starts to take hold, I think that will create even more of an opportunity for us to do what we've really envisioned.
Speaker #1: And even in our core platform . Right , doing in a more modular , componentized approach and doing things incrementally than doing it all at once .
Speaker #1: so And we'll we'll kind of give you more context on that as happens . But but absolutely , by by , you know , by design continued .
[Analyst] (Raymond James): Great. Thank you.
[Analyst] (Raymond James): Great. Thank you.
Dave Koning: Great. Thank you.
Operator: The next question is from James Faucette with Morgan Stanley. Please proceed.
Operator: The next question is from James Faucette with Morgan Stanley. Please proceed.
Operator: The next question is from James Faucette with Morgan Stanley. Please proceed.
Speaker #1: those products Absolutely .
Speaker #8: you Great . Thank .
[Analyst] (Morgan Stanley): Great. Thank you very much. A couple of questions for me. First, obviously, I think everybody understands and is very excited about the tailwinds your business is likely to see from some competitors' core platform consolidation. How do you think about what your execution requirements are? Kind of what keeps you up at night in terms of things that could trip you up, whether it be timing or magnitude or just trying to get it from you, the checklist of things you need to do to potentially take advantage of the opportunity?
[Analyst] (Morgan Stanley): Great. Thank you very much. A couple of questions for me. First, obviously, I think everybody understands and is very excited about the tailwinds your business is likely to see from some competitors' core platform consolidation. How do you think about what your execution requirements are? Kind of what keeps you up at night in terms of things that could trip you up, whether it be timing or magnitude or just trying to get it from you, the checklist of things you need to do to potentially take advantage of the opportunity?
James Faucette: Great. Thank you very much. A couple of questions for me. First, obviously, I think everybody understands and is very excited about the tailwinds your business is likely to see from some competitors' core platform consolidation. How do you think about what your execution requirements are? Kind of what keeps you up at night in terms of things that could trip you up, whether it be timing or magnitude or just trying to get it from you, the checklist of things you need to do to potentially take advantage of the opportunity?
Speaker #4: The next question is from James Fawcett with Morgan Stanley . Please proceed .
Speaker #9: Great . Thank you much . A couple of questions for me . First . Obviously , I think everybody . Very understands the excited about tailwinds your your business is likely to see from some competitors .
Speaker #9: Core platform consolidation you think . what How do your execution requirements are , kind of what keeps at night in terms you up of things trip that could you whether it up , be timing or or or , just trying to you know , magnitude get it from you .
Greg Adelson: Yeah. So James, I mean, it's candidly number one priority here right now based on kind of a, I won't say once-in-a-lifetime, but a very few times-in-a-lifetime opportunity where you see this. And so between the sales team, the operations teams, the finance teams, the marketing teams, they're all very much aligned, working regularly in conjunction with our go-to-market stuff that we've done. I don't want to share openly the opportunities that we have in front of us at this point. But as I mentioned, there's significant numbers that are already in the pipeline, not just ones that are "out there" but already in our current pipeline for all products, not just core. And then there's, again, work that we've done on the operational side to ensure that we're ready.
Greg Adelson: Yeah. So James, I mean, it's candidly number one priority here right now based on kind of a, I won't say once-in-a-lifetime, but a very few times-in-a-lifetime opportunity where you see this. And so between the sales team, the operations teams, the finance teams, the marketing teams, they're all very much aligned, working regularly in conjunction with our go-to-market stuff that we've done. I don't want to share openly the opportunities that we have in front of us at this point. But as I mentioned, there's significant numbers that are already in the pipeline, not just ones that are "out there" but already in our current pipeline for all products, not just core. And then there's, again, work that we've done on the operational side to ensure that we're ready.
Greg Adelson: Yeah. So James, I mean, it's candidly number one priority here right now based on kind of a, I won't say once-in-a-lifetime, but a very few times-in-a-lifetime opportunity where you see this. And so between the sales team, the operations teams, the finance teams, the marketing teams, they're all very much aligned, working regularly in conjunction with our go-to-market stuff that we've done. I don't want to share openly the opportunities that we have in front of us at this point. But as I mentioned, there's significant numbers that are already in the pipeline, not just ones that are "out there" but already in our current pipeline for all products, not just core. And then there's, again, work that we've done on the operational side to ensure that we're ready.
Speaker #9: The checklist of things you need to do to potentially take advantage of the opportunity.
Speaker #1: So , . Yeah . it's it's candidly , mean , number one priority here right now on , you know , based of a I won't say once in a lifetime , but a very few times in a lifetime where opportunity you see and this between the sales team , the operations teams , the finance teams , the marketing teams , they're all very much aligned working so our go that we've market stuff done .
Speaker #1: James , I
Speaker #1: know , I don't You share want to openly the opportunities that we have in us at this point , front of but as to I mentioned , there significant numbers that are already in the pipeline , not just , you know , are , quote , out ones that there but are in our current pipeline for all products , core not just .
Greg Adelson: As you can imagine, I mean, especially on a core deal, even if we sell the core deal like we did this quarter, it's still going to be another 15, 18 months. So our ability to get ready on the operational side is honestly the easier part. It's more about what we needed to do to gear up on the marketing, sales, and finance sides. And the teams have done a great job of that. We are humming right now. It's absolutely in all full gear. And so I'm very proud of the team on how fast they reacted and what they did.
Greg Adelson: As you can imagine, I mean, especially on a core deal, even if we sell the core deal like we did this quarter, it's still going to be another 15, 18 months. So our ability to get ready on the operational side is honestly the easier part. It's more about what we needed to do to gear up on the marketing, sales, and finance sides. And the teams have done a great job of that. We are humming right now. It's absolutely in all full gear. And so I'm very proud of the team on how fast they reacted and what they did.
Greg Adelson: As you can imagine, I mean, especially on a core deal, even if we sell the core deal like we did this quarter, it's still going to be another 15, 18 months. So our ability to get ready on the operational side is honestly the easier part. It's more about what we needed to do to gear up on the marketing, sales, and finance sides. And the teams have done a great job of that. We are humming right now. It's absolutely in all full gear. And so I'm very proud of the team on how fast they reacted and what they did.
Speaker #1: then And again , there's we've work that operational done on the side ensure that to we're . As you can imagine . I mean , especially on a core deal , you know , even if we sell the ready like we did deal , this quarter , it's still going to be another 15 , 18 months .
Speaker #1: So our ability to get ready on the operational is , is the easier side . more It's honestly about what we needed to do to to gear part , sales and finance sides .
Speaker #1: A great team has done a job of that. And they are humming 'We' right now. It's in absolutely full gear. And I'm very, and so proud of the team.
[Analyst] (Morgan Stanley): That's great color there, Greg. And then wanted to ask about the attach rate and bundling strategy. As you win more competitive core deals, how are complementary attach rates trending at signing and maybe at 12 months post-conversion? Just looking for any quantified examples of bundles you're seeing more frequently.
[Analyst] (Morgan Stanley): That's great color there, Greg. And then wanted to ask about the attach rate and bundling strategy. As you win more competitive core deals, how are complementary attach rates trending at signing and maybe at 12 months post-conversion? Just looking for any quantified examples of bundles you're seeing more frequently.
James Faucette: That's great color there, Greg. And then wanted to ask about the attach rate and bundling strategy. As you win more competitive core deals, how are complementary attach rates trending at signing and maybe at 12 months post-conversion? Just looking for any quantified examples of bundles you're seeing more frequently.
Speaker #1: reacted and what fast they did they
Speaker #1: .
Speaker #9: there , great color Greg . And then
Speaker #9: wanted to ask about the That's On how attach and rate bundling strategy . As you win more deals , how are competitive complimentary core attach rates trending at and signing and maybe at 12 months post just for looking examples of any quantified bundles .
Greg Adelson: Well, the most frequent one is what I called out, which was, again, to us, is the trifecta of card and digital. So that is as frequent. There's always some products that get thrown in, some variation of account opening or the lending platform or whatever. But those three in particular, we're still averaging about what we have been. And again, remembering that we're doing some small levels of end-of-lifing or product rationalization as part of our initiatives. But we're still seeing anywhere from 35 to 50 products, typically, in a deal as we have in years past. The key is that the more lucrative ones, candidly, are card, digital, financial crimes, and things along that line.
Greg Adelson: Well, the most frequent one is what I called out, which was, again, to us, is the trifecta of card and digital. So that is as frequent. There's always some products that get thrown in, some variation of account opening or the lending platform or whatever. But those three in particular, we're still averaging about what we have been. And again, remembering that we're doing some small levels of end-of-lifing or product rationalization as part of our initiatives. But we're still seeing anywhere from 35 to 50 products, typically, in a deal as we have in years past. The key is that the more lucrative ones, candidly, are card, digital, financial crimes, and things along that line.
Greg Adelson: Well, the most frequent one is what I called out, which was, again, to us, is the trifecta of card and digital. So that is as frequent. There's always some products that get thrown in, some variation of account opening or the lending platform or whatever. But those three in particular, we're still averaging about what we have been. And again, remembering that we're doing some small levels of end-of-lifing or product rationalization as part of our initiatives. But we're still seeing anywhere from 35 to 50 products, typically, in a deal as we have in years past. The key is that the more lucrative ones, candidly, are card, digital, financial crimes, and things along that line.
Speaker #9: You're seeing more .
Speaker #1: the most Well , frequent one is what I called out , which was again to is is the us trifecta of of card and digital that is as , as .
Speaker #1: frequent , you know , there's always some products that get thrown in So that , you know , some variation account of or , you know , the lending platform or whatever .
Speaker #1: But those those three in particular , we're averaging about what we have been . And again , remembering that we're doing some small levels of , of of still end of life or product rationalization as part our of initiatives .
Speaker #1: But we're still seeing anywhere from 35 to 50 products , in a in typically a deal , as we past . The key years is , is that , you know , the more lucrative ones , candidly , are , you know , card digital financial crimes , things that along line .
[Analyst] (Morgan Stanley): Got it. Thanks for that, Greg.
[Analyst] (Morgan Stanley): Got it. Thanks for that, Greg.
James Faucette: Got it. Thanks for that, Greg.
Greg Adelson: Okay. Sure.
Greg Adelson: Okay. Sure.
Greg Adelson: Okay. Sure.
Operator: The next question comes from Charles Nabhan with Stephens. Please proceed.
Operator: The next question comes from Charles Nabhan with Stephens. Please proceed.
Operator: The next question comes from Charles Nabhan with Stephens. Please proceed.
Speaker #9: Thanks for Got it . that , Greg .
Speaker #1: Okay . Sure .
[Analyst] (Stephens): Good morning. Thanks for squeezing me in. I noticed that you tightened the outlook for free cash flow conversion from 90 to 100, from 85 to 100. I know your bias was towards the higher end of that range last quarter, but curious what led to that increased visibility. As a follow-up to that, it sounds like there's no shortage of opportunity that you're investing in to pursue. Love any comments on capital expenditure and the level of investment necessary to pursue that opportunity that you're seeing across your markets.
[Analyst] (Stephens): Good morning. Thanks for squeezing me in. I noticed that you tightened the outlook for free cash flow conversion from 90 to 100, from 85 to 100. I know your bias was towards the higher end of that range last quarter, but curious what led to that increased visibility. As a follow-up to that, it sounds like there's no shortage of opportunity that you're investing in to pursue. Love any comments on capital expenditure and the level of investment necessary to pursue that opportunity that you're seeing across your markets.
Charles Nabhan: Good morning. Thanks for squeezing me in. I noticed that you tightened the outlook for free cash flow conversion from 90 to 100, from 85 to 100. I know your bias was towards the higher end of that range last quarter, but curious what led to that increased visibility. As a follow-up to that, it sounds like there's no shortage of opportunity that you're investing in to pursue. Love any comments on capital expenditure and the level of investment necessary to pursue that opportunity that you're seeing across your markets.
Speaker #4: question The from Charles Nabhan comes next Stephens . Please proceed .
Speaker #10: Good morning and squeezing me in . I for outlook noticed that you for free cash flow tightened the conversion from 90 to 100 .
Speaker #10: From 85 to 100. And I know yours was towards the higher end of that range this quarter, but curious what led to that increased visibility.
Speaker #10: As a follow-up to last, and that, you know, it sounds like there's no shortage of opportunity that you're investing in to pursue, love.
Speaker #10: Any comments capital expenditure on and the level of investment level necessary to to pursue that , to pursue that opportunity that you're seeing across markets your ?
[Analyst] (Northcoast Research): All good questions, Chuck. So yeah, we continue to see positive progress on the free cash flow and free cash flow conversion. I think now just having a crisper outlook of understanding all of the puts and takes of the legislative changes that we did have a number of just small asset sales as well, having clarity on those just makes us more confident on the projections for the full year and to have a bias towards the higher end of that range from a free cash flow. In terms of an allocation or an investment, we continue to be hovering around that 14% to 15% of R&D. As Greg mentioned earlier, in the last five years, ex-M&A have kept headcount growth less than 1%. So we feel like we're able to make the strategic bets and solution progress while still maintaining a very tight workforce.
[Analyst] (Northcoast Research): All good questions, Chuck. So yeah, we continue to see positive progress on the free cash flow and free cash flow conversion. I think now just having a crisper outlook of understanding all of the puts and takes of the legislative changes that we did have a number of just small asset sales as well, having clarity on those just makes us more confident on the projections for the full year and to have a bias towards the higher end of that range from a free cash flow. In terms of an allocation or an investment, we continue to be hovering around that 14% to 15% of R&D. As Greg mentioned earlier, in the last five years, ex-M&A have kept headcount growth less than 1%. So we feel like we're able to make the strategic bets and solution progress while still maintaining a very tight workforce.
Mimi Carsley: All good questions, Chuck. So yeah, we continue to see positive progress on the free cash flow and free cash flow conversion. I think now just having a crisper outlook of understanding all of the puts and takes of the legislative changes that we did have a number of just small asset sales as well, having clarity on those just makes us more confident on the projections for the full year and to have a bias towards the higher end of that range from a free cash flow. In terms of an allocation or an investment, we continue to be hovering around that 14% to 15% of R&D. As Greg mentioned earlier, in the last five years, ex-M&A have kept headcount growth less than 1%. So we feel like we're able to make the strategic bets and solution progress while still maintaining a very tight workforce.
Speaker #3: All good questions , Chuck . So yeah , we continue to to see progress positive free cash flow and free on the cash flow think .
Speaker #3: now just having crisper a I outlook understanding all of of puts and takes of the the legislative changes . We did a have number of small just asset sales as well .
Speaker #3: Having clarity on those just makes us more confident on the full year and to have a projection for bias towards the higher end of free cash flow, in terms of a range from an allocation or an investment.
Speaker #3: We continue to to be hovering around that 14 to 15% of R&D . As Greg mentioned earlier , we've in the last five years , ex M&A have kept headcount growth less 1% .
Speaker #3: So than we feel like we're able to make the strategic bets and solution progress while still . And very tight workforce . So maintaining a through our that's improvement continuous efforts .
[Analyst] (Northcoast Research): So that's through our continuous improvement efforts. That's through the deployment of AI. That's through being very strategic on where those headcounts are going and are they fueling strategic initiatives. So we feel pretty good on our ability to continue to accelerate our growth, our progress against our strategic initiatives without needing to step up and increase our spending.
[Analyst] (Northcoast Research): So that's through our continuous improvement efforts. That's through the deployment of AI. That's through being very strategic on where those headcounts are going and are they fueling strategic initiatives. So we feel pretty good on our ability to continue to accelerate our growth, our progress against our strategic initiatives without needing to step up and increase our spending.
Mimi Carsley: So that's through our continuous improvement efforts. That's through the deployment of AI. That's through being very strategic on where those headcounts are going and are they fueling strategic initiatives. So we feel pretty good on our ability to continue to accelerate our growth, our progress against our strategic initiatives without needing to step up and increase our spending.
Speaker #3: That's through the deployment of AI . That's through being very strategic on where are headcounts . And going are they fueling strategic initiatives .
Speaker #3: So, we feel pretty good on our ability to continue to accelerate our growth, our progress strategically against our initiatives, without needing to step up spending.
[Analyst] (Stephens): Got it. And as a follow-up, I wanted to get your specific comments on the credit union market. And if you're seeing anything different in terms of competitive dynamics, demand trends, and just generally how you see that opportunity.
[Analyst] (Stephens): Got it. And as a follow-up, I wanted to get your specific comments on the credit union market. And if you're seeing anything different in terms of competitive dynamics, demand trends, and just generally how you see that opportunity.
Charles Nabhan: Got it. And as a follow-up, I wanted to get your specific comments on the credit union market. And if you're seeing anything different in terms of competitive dynamics, demand trends, and just generally how you see that opportunity.
Speaker #10: Got it . And as a follow up , I wanted to get your specific comments on the credit union market . And if you're seeing anything different in terms of competitive dynamics , demand trends , generally how you see that and just opportunity .
Greg Adelson: Yeah. So we're getting a little bit of the still residual from the core consolidation from one of the competitors. We've done a lot to increase our solution set on our Symitar platform over the last couple of years. That's starting to pay some dividends. We're winning a good number of the mergers that are happening. So that continues to be a positive. And then the bigger thing that's happening is our ability to penetrate the complementary and payments market with our core solution set. So we are driving a higher penetration rate than we have in years past in the credit union business, both with existing clients and with wins, new competitive wins, with, again, taking digital or payments as a for instance.
Greg Adelson: Yeah. So we're getting a little bit of the still residual from the core consolidation from one of the competitors. We've done a lot to increase our solution set on our Symitar platform over the last couple of years. That's starting to pay some dividends. We're winning a good number of the mergers that are happening. So that continues to be a positive. And then the bigger thing that's happening is our ability to penetrate the complementary and payments market with our core solution set. So we are driving a higher penetration rate than we have in years past in the credit union business, both with existing clients and with wins, new competitive wins, with, again, taking digital or payments as a for instance.
Greg Adelson: Yeah. So we're getting a little bit of the still residual from the core consolidation from one of the competitors. We've done a lot to increase our solution set on our Symitar platform over the last couple of years. That's starting to pay some dividends. We're winning a good number of the mergers that are happening. So that continues to be a positive. And then the bigger thing that's happening is our ability to penetrate the complementary and payments market with our core solution set. So we are driving a higher penetration rate than we have in years past in the credit union business, both with existing clients and with wins, new competitive wins, with, again, taking digital or payments as a for instance.
Speaker #1: Yeah . So , you know , we're getting a little the still bit of residual from the core consolidation from one one of the from competitors .
Speaker #1: we've done You know , a lot to increase our solution set on our platform over the last couple of years . That's starting to , to to to pay some dividends .
Speaker #1: You know, we're winning a good number of the mergers that are happening, so that's a continues to be a positive. And then the bigger thing that's happening is our ability to penetrate the complementary and market payments with our core solution set.
Speaker #1: So we are . Driving a higher penetration rate than we have in years past in the credit union business , both with existing and clients with wins .
[Analyst] (Stephens): Got it. Great quarter. And I appreciate you squeezing me in.
[Analyst] (Stephens): Got it. Great quarter. And I appreciate you squeezing me in.
Charles Nabhan: Got it. Great quarter. And I appreciate you squeezing me in.
Speaker #1: New competitive wins with, again, taking digital or payments as a— as a—for instance.
Greg Adelson: For sure. Thank you.
Greg Adelson: For sure. Thank you.
Greg Adelson: For sure. Thank you.
Operator: The next question comes from Ken Suchoski with Autonomous Research. Please proceed.
Operator: The next question comes from Ken Suchoski with Autonomous Research. Please proceed.
Operator: The next question comes from Ken Suchoski with Autonomous Research. Please proceed.
Speaker #10: Got it . quarter Great and I appreciate you squeezing me in .
Speaker #1: Thank you. For sure.
[Analyst] (Raymond James): Hey, good morning, guys. Thanks for squeezing me in. I'll ask one since it's getting late. But Greg, you talked about not seeing a benefit on the core competitive takeaway side this quarter, but obviously, lots of work happening behind the scenes by Jack Henry. But you mentioned that service differentiation is really driving your success. And one of the competitors has talked about increasing its service levels and reinvesting on the support side. So I'm curious how you think about maintaining your differentiation relative to other providers when it comes to that support and service. Thank you.
[Analyst] (Raymond James): Hey, good morning, guys. Thanks for squeezing me in. I'll ask one since it's getting late. But Greg, you talked about not seeing a benefit on the core competitive takeaway side this quarter, but obviously, lots of work happening behind the scenes by Jack Henry. But you mentioned that service differentiation is really driving your success. And one of the competitors has talked about increasing its service levels and reinvesting on the support side. So I'm curious how you think about maintaining your differentiation relative to other providers when it comes to that support and service. Thank you.
Ken Suchoski: Hey, good morning, guys. Thanks for squeezing me in. I'll ask one since it's getting late. But Greg, you talked about not seeing a benefit on the core competitive takeaway side this quarter, but obviously, lots of work happening behind the scenes by Jack Henry. But you mentioned that service differentiation is really driving your success. And one of the competitors has talked about increasing its service levels and reinvesting on the support side. So I'm curious how you think about maintaining your differentiation relative to other providers when it comes to that support and service. Thank you.
Speaker #4: The next question comes from Ken Sikorsky with Autonomous Research. Please proceed.
Speaker #7: Hey good .
Speaker #11: Morning Thanks for squeezing me in . I'll ask one since it's getting late , but Greg , you talked about seeing not a benefit on the core competitive takeaway side this quarter , but work lots of happening behind the obviously scenes Jack by mentioned .
Speaker #11: You, Henry, but that service differentiation is really success-driving for you. And one of the competitors has talked about increasing its service levels and reinvesting on the support side.
Speaker #11: So, I'm curious how you think about maintaining your differentiation relative to other providers when it comes to that support and service? Thank you.
Greg Adelson: Yeah. Thank you. I'll kind of say it this way. We have a 50-year head start on how we've been handling service at this company. And it's been in our DNA all the way back to Jack and Jerry and every other leader that's come before me. And I will tell you, we're actually at all-time highs right now as far as how our survey results are and things along that line. And I know there's a motion, really, at both of our two largest competitors to improve service. And I applaud them for that from a standpoint of the industry perspective. But it's hard to move a big ship when you don't have that mindset built-in as we do at this company. And so could they have some improvement? Sure. I don't know what that will take. And is that bodies? It's not always bodies. It's usually a mindset.
Greg Adelson: Yeah. Thank you. I'll kind of say it this way. We have a 50-year head start on how we've been handling service at this company. And it's been in our DNA all the way back to Jack and Jerry and every other leader that's come before me. And I will tell you, we're actually at all-time highs right now as far as how our survey results are and things along that line. And I know there's a motion, really, at both of our two largest competitors to improve service. And I applaud them for that from a standpoint of the industry perspective. But it's hard to move a big ship when you don't have that mindset built-in as we do at this company. And so could they have some improvement? Sure. I don't know what that will take. And is that bodies? It's not always bodies. It's usually a mindset.
Greg Adelson: Yeah. Thank you. I'll kind of say it this way. We have a 50-year head start on how we've been handling service at this company. And it's been in our DNA all the way back to Jack and Jerry and every other leader that's come before me. And I will tell you, we're actually at all-time highs right now as far as how our survey results are and things along that line. And I know there's a motion, really, at both of our two largest competitors to improve service. And I applaud them for that from a standpoint of the industry perspective. But it's hard to move a big ship when you don't have that mindset built-in as we do at this company. And so could they have some improvement? Sure. I don't know what that will take. And is that bodies? It's not always bodies. It's usually a mindset.
Speaker #1: yeah . Thank Yeah , you . You know , I'll kind of say it this way . You know , we have a 50 year head start on how we've been handling service at this company .
Speaker #1: And you know , it's been in our , our DNA all the way back to , to Jack and Jerry and every other leader that's come before me will tell you , we're .
Speaker #1: actually at all time highs right And I now as far as how our survey results are and things along that line . And , you know , and I know there's , there's a there's a motion at both of our competitors two largest really to improve service and , you know , I for that .
Speaker #1: applaud them From a standpoint of the industry perspective . But it's hard to move , you know , a ship big when you don't have that mindset in as we do at this built company .
Speaker #1: And so , you know , could they have some improvement ? Sure . I don't know . You know what that will take .
Greg Adelson: And so when you do whatever it takes and do the right thing like we do here, it just gets embodied into our everyday offering. So I just think that's going to be really difficult to "catch us." And we're sure not going to take off the gas here. So we'll continue to keep that as part of what we think is a huge differentiator and hear it from people that come over to us.
Greg Adelson: And so when you do whatever it takes and do the right thing like we do here, it just gets embodied into our everyday offering. So I just think that's going to be really difficult to "catch us." And we're sure not going to take off the gas here. So we'll continue to keep that as part of what we think is a huge differentiator and hear it from people that come over to us.
Greg Adelson: And so when you do whatever it takes and do the right thing like we do here, it just gets embodied into our everyday offering. So I just think that's going to be really difficult to "catch us." And we're sure not going to take off the gas here. So we'll continue to keep that as part of what we think is a huge differentiator and hear it from people that come over to us.
Speaker #1: And is that bodies it's not always bodies . It's usually a mindset . And so when you do do whatever it takes and right do the we do thing like it just gets embodied into our everyday , you know , offerings .
Speaker #1: So I just think it's going to be really difficult to quote , catch And we're sure not going to take off the gas here .
Speaker #1: So , you know , we'll continue to keep that as part of of what we think is a huge differentiator . And hear it from people that come over to us .
[Analyst] (Northcoast Research): Yeah. The only point I would add on that is, well, Greg aptly said, we have not seen a tremendous meaningful impact from the consolidation yet in the pipeline because deals take quite some time to walk through and to hammer out. But our track record over the last several years, our increase in market share, and our gains against both competitors are indicative of that service that Greg just talked about and of our innovation. So we have a track record. So it's not we feel very strongly in this opportunity and our ability to continue to win. And that's backed up by the wins we've been doing from the last number of years. So it's not new that people have wanted to leave competitors. And it's not new that they're coming to Jack Henry.
[Analyst] (Northcoast Research): Yeah. The only point I would add on that is, well, Greg aptly said, we have not seen a tremendous meaningful impact from the consolidation yet in the pipeline because deals take quite some time to walk through and to hammer out. But our track record over the last several years, our increase in market share, and our gains against both competitors are indicative of that service that Greg just talked about and of our innovation. So we have a track record. So it's not we feel very strongly in this opportunity and our ability to continue to win. And that's backed up by the wins we've been doing from the last number of years. So it's not new that people have wanted to leave competitors. And it's not new that they're coming to Jack Henry.
Ken Suchoski: Yeah. The only point I would add on that is, well, Greg aptly said, we have not seen a tremendous meaningful impact from the consolidation yet in the pipeline because deals take quite some time to walk through and to hammer out. But our track record over the last several years, our increase in market share, and our gains against both competitors are indicative of that service that Greg just talked about and of our innovation. So we have a track record. So it's not we feel very strongly in this opportunity and our ability to continue to win. And that's backed up by the wins we've been doing from the last number of years. So it's not new that people have wanted to leave competitors. And it's not new that they're coming to Jack Henry.
Speaker #3: Yeah . The only point add on I would that , well , is Greg aptly not you know , we have a seen tremendous meaningful impact the from consolidation yet in the pipeline because deals take , quite some time you to to walk through and to , to hammer out .
Speaker #3: But our track record over the last several years and our increase in market share and our gains against both competitors are of indicative of that that , Greg , just talked about and of our innovation .
Speaker #3: So service we have a track record . So it's not , you know , we feel very strongly in this opportunity and our ability to continue to .
Speaker #3: And when backed up by the wins we've been doing a number of years, so it's not new that people have wanted to leave competitors. It's not new that they're coming to Jack Henry.
Greg Adelson: Yeah. And I think one just last point since you're on, Ken, is that the 50-plus wins that we've had for multiple years kind of emphasize what Mimi just said. The last part that I want to emphasize is, though it didn't have a significant impact in Q2, as I mentioned before, our pipelines are growing faster because of that news. And so I anticipate that not just this year, but over the next several years, which a lot of these contracts will have several years still remaining, but conversations could be taking place now, where you're going to see not only just the number of opportunities increase, the size of the opportunities increase, much to what we've been focused on, as we said, a going up market.
Greg Adelson: Yeah. And I think one just last point since you're on, Ken, is that the 50-plus wins that we've had for multiple years kind of emphasize what Mimi just said. The last part that I want to emphasize is, though it didn't have a significant impact in Q2, as I mentioned before, our pipelines are growing faster because of that news. And so I anticipate that not just this year, but over the next several years, which a lot of these contracts will have several years still remaining, but conversations could be taking place now, where you're going to see not only just the number of opportunities increase, the size of the opportunities increase, much to what we've been focused on, as we said, a going up market.
Greg Adelson: Yeah. And I think one just last point since you're on, Ken, is that the 50-plus wins that we've had for multiple years kind of emphasize what Mimi just said. The last part that I want to emphasize is, though it didn't have a significant impact in Q2, as I mentioned before, our pipelines are growing faster because of that news. And so I anticipate that not just this year, but over the next several years, which a lot of these contracts will have several years still remaining, but conversations could be taking place now, where you're going to see not only just the number of opportunities increase, the size of the opportunities increase, much to what we've been focused on, as we said, a going up market.
Speaker #1: Yeah . And I think just last point , since you're on Ken , is that , you know , 50 plus wins that the we've had for multiple years kind of emphasize what what Mimi just said the part that the last I want to emphasize is , though it didn't have a significant impact in Q2 , as I mentioned before , our growing are pipelines that because of faster news .
Speaker #1: And so I anticipate not just this year , but over the next that several years , which a lot of these contracts will have several years still remaining .
Speaker #1: But could be conversations taking now you're going where to see only just the number of opportunities increase , size of the opportunities much to what we've been focused increase on .
[Analyst] (Raymond James): Yeah. Makes sense. Thanks, Greg. Thanks, Mimi.
[Analyst] (Raymond James): Yeah. Makes sense. Thanks, Greg. Thanks, Mimi.
Ken Suchoski: Yeah. Makes sense. Thanks, Greg. Thanks, Mimi.
Greg Adelson: Sure. Thank you.
Greg Adelson: Sure. Thank you.
Greg Adelson: Sure. Thank you.
[Analyst] (Northcoast Research): Thank you.
[Analyst] (Northcoast Research): Thank you.
Mimi Carsley: Thank you.
Speaker #1: We, as said, are going up market.
Operator: This does conclude today's question and answer session. I would now like to turn the conference back over to Vance Sherard for any closing remarks.
Operator: This does conclude today's question and answer session. I would now like to turn the conference back over to Vance Sherard for any closing remarks.
Operator: This does conclude today's question-and-answer session. I would now like to turn the conference back over to Vance Sherard for any closing remarks.
Speaker #12: Yeah .
Speaker #11: sense . Makes Thanks , Greg . Thanks , Mimi .
Speaker #1: Thank Sure . you .
Speaker #4: And this does conclude today's question-and-answer session. I would now like to turn the conference back over to Vance Sherard for any closing remarks.
Vance Sherard: Thank you, Chris. Management will be participating in eight investor events over the next two months. We look forward to continuing our engagement with the investor community. We also extend our appreciation to all Jack Henry associates for their exceptional commitment and execution, which delivered a strong first half of fiscal 2026. Thank you for joining us today. Chris, please provide the replay number.
Vance Sherard: Thank you, Chris. Management will be participating in eight investor events over the next two months. We look forward to continuing our engagement with the investor community. We also extend our appreciation to all Jack Henry associates for their exceptional commitment and execution, which delivered a strong first half of fiscal 2026. Thank you for joining us today. Chris, please provide the replay number.
Vance Sherard: Thank you, Chris. Management will be participating in eight investor events over the next two months. We look forward to continuing our engagement with the investor community. We also extend our appreciation to all Jack Henry associates for their exceptional commitment and execution, which delivered a strong first half of fiscal 2026. Thank you for joining us today. Chris, please provide the replay number.
Speaker #1: Thank you . Chris . Management will be participating in eight investor events over months , the next two and we look forward to continuing our engagement with the investor community .
Speaker #1: We also our extend appreciation to all Jack associates for their Henry exceptional commitment and execution , which delivered a first half strong of fiscal 2026 .
Operator: Thank you. As a reminder, the replay number for today's call is 855-669-9658. Again, that is 855-669-9658. The access code is 4206506. Today's conference has now concluded. I would like to thank everyone for attending today's presentation. You may now disconnect your lines.
Operator: Thank you. As a reminder, the replay number for today's call is 855-669-9658. Again, that is 855-669-9658. The access code is 4206506. Today's conference has now concluded. I would like to thank everyone for attending today's presentation. You may now disconnect your lines.
Operator: Thank you. As a reminder, the replay number for today's call is 855-669-9658. Again, that is 855-669-9658. The access code is 4206506. Today's conference has now concluded. I would like to thank everyone for attending today's presentation. You may now disconnect your lines.
Speaker #1: Thank you for joining us today. Please provide the Chris replay number.
Speaker #4: Thank you . As a reminder , number for replay today's call is the (855) 669-9658 . Again , that is (855) 669-9658 . And the access code is 4206506 .
Speaker #4: Today's conference has now concluded . I would like everyone for to thank attending today's presentation , and you may now your disconnect lines .
