Jack Henry & Associates, Inc.

Good morning, ladies and gentlemen, and welcome to the Jack Henry & Associates First Quarter Fiscal Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star zero on your touchtone telephone. As a reminder, this conference call is being recorded. I will now turn the conference over to your host, Mr. Williams. Please go ahead.

Thanks, Whitney. Good morning. Thank you all for joining us for the Jackner & Associates first quarter fiscal year 2020 earnings call. I'm Kevin Williams, CFO and Treasurer, and on the call with me today is David Foss, our President and CEO. In just a minute, I'll turn the call over to David to provide some of his thoughts about the Sabre business and the performance for the quarter, and then I will provide some additional thoughts and comments regarding the press release we put out yesterday after market closed, update our guidance for FY20, and then we will open the lines up for Q&A. First, I need to remind you the remarks or responses to questions concerning future expectations, events, objectives, strategies, trends, or results constitute forward-looking statements or deal with expectations about the future. Like any statement about the future, these are subject to a number of factors which could cause actual results or events to differ materially from those which we anticipate due to a number of risks and uncertainties, and the company undertakes no obligation to update or revise these statements. For a summary of these risk factors and additional information, Please refer to yesterday's press release and the sections in our 10-K entitled Risk Factors and Forward-Looking Statements. I'll now turn the call over to Dave.

Thank you, Kevin, and good morning, everyone. We're pleased to report another quarter with record revenue and earnings. As always, I'd like to begin today by thanking our associates for all the hard work that went into producing those results for our first fiscal quarter. For Q1 of fiscal 2020, total revenue increased 12% for the quarter, and increased 9% on a non-GAAP basis. Deconversion fees were up about $7 million over the prior year quarter, which accounts for a portion of the significant revenue increase over last year, but even excluding deconversion fees, this was a very strong quarter. As a reminder, we generally receive deconversion fees when one of our clients with a long-term contract in place is acquired by another institution and buys out the remaining obligation in their agreement. Turning to the segments, we again had an extremely solid quarter in the core segment of our business. Revenue increased by 12% for the quarter and increased by 10% on a non-GAAP basis. Our payments segment also performed very well, posting a 12% increase in revenue this quarter and a 10% increase on a non-GAAP basis. We also had a strong quarter in our complementary solutions businesses with an 11% increase in revenue this quarter and an 8% increase on a non-GAAP basis. Our sales teams, again, had a solid quarter with two of our three brands exceeding their sales quota. We booked five competitive core takeaways and five deals to move existing in-house customers to our private cloud environment. We also saw very strong bookings in our payments and complementary solution segments. Several of our newer solutions, including our Banner Digital Suite, our new card processing solution, and treasury management, saw strong demand. Regarding our new debit and credit processing solution, we now have 604 customers live on the new platform. This count includes 63 customers installed as new debit clients rather than as migrations, and 11 new full-service credit clients. We have approximately 370 of our debit clients yet to migrate, but we've hit a comfortable stride now, and our program continues to progress very well. As we did last year, We will suspend our migrations during the holidays because banks and credit unions don't like to implement changes to their card programs during this high-volume time of the year. We expect to start the next large waves of migrations in January and remain on track to complete the migration process during calendar 2020. You probably noticed that we distributed a press release last week in coordination with the Clearinghouse announcing our plans to bring 15 clients live with the Real-Time Payments Network in the near future. We currently have 47 clients assigned to implement Zelle and 15 clients ready to implement with the Clearinghouse. I'm very happy with the approach our team has taken in this regard because our pay center solution allows us to connect clients to the real-time payments network in groups rather than one at a time. Additionally, we provide connectivity through this single platform to multiple providers, which facilitates a more logical and efficient approach for our clients than any other processor in the market today. Since our last earnings call, we have completed our two largest client conferences of the year, our SEC conference for our Scimitar core clients and our JAC conference for our Jack Henry Banking and ProfitStars clients. We had many prospects at each conference and, as I mentioned in the press release, our customers continue to be happy with our performance and extremely engaged with our prospective clients. Additionally, they continue to be optimistic about the coming year and their prospects for success. In addition to all the exciting developments with sales and our newer product offerings, you should also note that we've announced a few organizational changes recently. Several weeks ago, Mark Forbus, our longtime chief technology officer, announced publicly that he will retire effective on November 15th. Mark and I have been working for some time with Ted Bilkey, our current Scimitar president, to position Ted to move away from the day-to-day responsibilities running our credit union division and back to his technical roots in the technology area. Ted will assume the role of Chief Technology Officer upon Mark's departure. Shanon McLachlan, a well-known industry veteran and a current member of the Jack Henry leadership team, will move into the role as President of Scimitar. Unrelated to the move with Mark and Ted, I announced that we're promoting Greg Adelson to become our new Chief Operating Officer. Greg and I have been working on positioning him to make this transition for many months. Greg has demonstrated outstanding leadership qualities and an ability to handle more responsibility So he will be leading the primary operating units of our company going forward as a direct report to me. Of course, I'm sad to see Mark leave, but if anyone has earned the right to kick back and relax a bit, it's Mark. I want to extend my heartfelt thanks to him for his years of service and a congratulations to Ted, Greg, and Shanon as they move into their new roles. With that, I'll turn it over to Kevin for some detail on the numbers.