Jack Henry & Associates, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Jack Henry & Associates second quarter fiscal year 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker, Mr. Kevin Williams, Chief Financial Officer. Please go ahead, sir.

Thank you, Cherie. Good morning. Thank you for joining us for the Jackner & Associates Second Quarter Fiscal 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 Dave to provide some of his thoughts about the state of our business and performance of the quarter. Then I will follow that up with some additional thoughts and comments regarding the press release we put out yesterday after market closed, and then I will also provide some updated guidance for FY20, and then we'll open the lines up for Q&A. First, I need to remind you that this call includes certain forward-looking statements, including remarks or responses to questions concerning future expectations, events, objectives, strategies, trends, or results. Like any statement about the future, these are subject to a number of factors that could cause actual results or events to differ materially from those which we anticipate due to a number of risks and uncertainties. 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. Also on this call, we will discuss certain non-GAAP financial measures including non-GAAP revenue and non-GAAP operating income. The reconciliations for historical non-GAAP financial measures can be found also in yesterday's press release. I'll now turn the call over to Dave.

Thank you, Kevin. Good morning, everyone. We're pleased to report another quarter with strong revenue and earnings growth. 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 second fiscal quarter. For Q2 of fiscal 2020, total revenue increased 9% for the quarter and increased 8% on a non-GAAP basis. Deconversion fees were up about $1 million over the prior year quarter, so although that variance contributed to our overall revenue performance, it wasn't the explanation for this very strong quarter. Turning to the segments, we again had a solid quarter in the core segment of our business. Revenue increased by 7% for the quarter and increased by 6% on a non-GAAP basis. Our payment segments also performed well, posting a 10% increase in revenue this quarter on both a GAAP and non-GAAP basis. We also had a strong quarter on our complimentary solutions businesses, with a 10% increase in revenue this quarter and an 8% increase on a non-GAAP basis. As I mentioned in the press release, our sales teams again had a very solid quarter, and total sales bookings are now running 18% ahead of last year's record pace. In the second fiscal quarter, we booked 17 competitive core takeaways and 20 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. We signed 30 new clients to our new debit card processing solution and three new clients on the credit card side of the business. All of those 33 card contracts and 17 competitive core takeaways represent new revenue to Jack Henry. Our Banner Digital platform also experienced very strong demand with 25 new clients signing for the full digital suite. As you may have noticed, we published a press release last Thursday regarding the availability of our new JHA Bank Anywhere solution. I'm happy to announce that we currently have four banks in live production on Bank Anywhere and have several more in the queue to be installed. This solution is a cloud-based core and digital banking solution offered to digital-only banks. It leverages the complete set of open APIs built by our panel team to enable easy connectivity to the core and other complementary functions. If the digital bank is a new charter, we can provide the core and the API connectivity they need to integrate solutions from virtually any fintech provider. If the digital bank is an offshoot of a traditional brick-and-mortar institution, We can deploy bank anywhere regardless of the core system the traditional bank is running. This solution is just another example of the many innovative technology solutions being offered today by Jack Henry to help our banking clients compete in the digital world. Regarding our new debit and credit processing solution, we now have well over 600 customers live on the new platform. This count includes 73 customers installed as new debit clients rather than as migrations, and 13 new full-service credit clients now live on the platform. We have approximately 300 of our debit clients yet to migrate, but as I mentioned on the last call, we suspended our migrations during the holidays because banks and credit unions don't like to implement changes to their card programs during that time of the year. We completed another round of migrations in January and remain on track to complete the migration process during calendar 2020. Although we haven't done a press release on this, I'm happy to announce that in December, we became the first processor in the country to bring a financial institution live with the real-time payments network through the clearinghouse, and we'll bring the second customer live later this month. As I mentioned on the last call, our pay center solution has been designed to allow 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. As we begin the second half of our fiscal year, we continue to be optimistic about the strength of our technology solutions, our ability to deliver outstanding service to our customers, our ability to expand our customer relationships, the spending environment, and our long-term prospects for success. With that, I'll turn it over to Kevin for some detail on the numbers. Thanks, Dave.