Jack Henry & Associates, Inc.

Good day and thank you for standing by. Welcome to the Jack Henry & Associates fourth quarter fiscal year 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then 0 to reach an operator. I'd now like to hand the conference over to your speaker today, Kevin Williams, Chief Financial Officer.

Thanks, Liz. Good morning, and thank you for joining us for the Jack Keran Associates fourth quarter and fiscal 2021 year-end earnings call. I'm Kevin Williams, CFO and Treasurer, and on the call with me today is David Foss, our Board Chair, 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, financial and sales performance for the quarter, some comments regarding the industry in general, and then some other key initiatives that we have in place. Then after Dave concludes his comments, I will provide some additional thoughts and comments regarding the earnings press release we put out yesterday after market closed, and provide comments regarding our guidance for our fiscal year 2022 provided in the release, and then we will 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 be discussing 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 in yesterday's press release. With that, I'll now turn the call over to Dave.

Thank you, Kevin, and good morning, everyone. Today, we are very pleased to share details with you of a quarter that produced record revenue and operating income, as well as record sales bookings. As always, I'd like to begin today by thanking our associates for all the hard work and commitment that went into producing those results for our fourth quarter and for the entire fiscal year, particularly in light of the challenges posed by conducting business while dealing with the ongoing effects of the pandemic. For the fourth quarter of fiscal 2021, total revenue increased 10% for the quarter, and increased 10% on a non-GAAP basis. Deconversion fees were essentially flat as compared to the prior year quarter. Turning to the segments, we had a solid quarter in the core segment of our business. Revenue increased by 4% for the quarter and increased by 6% on a non-GAAP basis. Our payments segment performed extremely well, posting a 16% increase in revenue this quarter and a 17% increase on a non-GAAP basis. We also had a strong quarter in our complimentary solutions businesses, with a 7% increase in revenue this quarter and a 7% increase on a non-GAAP basis. As I highlighted in our press release, the fourth quarter was the strongest sales quarter in the history of the company. June was also the strongest sales month ever, and it propelled all three sales groups to exceed their quota for the quarter. While they were signing all those contracts in the fourth quarter, the sales team also did an outstanding job of refilling the pipeline with new opportunities to set us up for success going forward. I think this is a good sign of the health of our market and bodes well for the start of the new sales year. In the fourth fiscal quarter, we booked 13 competitive core takeaways and 14 deals to move existing on-premise customers to our private cloud environment. Several of our complimentary offerings also saw very strong demand in the quarter, with, as you might guess, our digital suite leading the pack. We signed 87 new clients to our Banno digital platform in the quarter, 10 new treasury management clients, and 22 new clients to our card processing solution. For the full year, we signed 41 competitive core takeaways with eight of them greater than $1 billion in assets. Additionally, we signed 35 contracts to move on-prem core clients to our private cloud, 219 new Banno digital customers, and 55 new clients for our card processing solution. Of course, we signed a variety of other contracts for many of our other solutions as well, but it's important to note that almost all of these contracts represent long-term recurring revenue commitments to Jack Henry for a wide variety of our solutions. At our analyst conference in May, I shared with the attendees that we had just surpassed 5 million registered users on our Banno digital banking platform. As of the end of the fiscal year, we were at roughly 5.6 million registered users. As a point of reference, on July 1st of 2020, we had about 3.2 million registered users. So in one year, we saw an increase of approximately 75% in our user count. This is significant because, as I've stressed in the past, most of the revenue for a business like this is tied to the number of users on the platform. We continued to onboard clients and their users at a pace of about 30 financial institutions added to the platform each month. In addition to our ongoing success with Banno, we have delivered many new and innovative solutions during the fiscal year. A few examples include our Scimitar team delivered an automated database migration to almost all of our EPCIS clients, which allowed them to move to the new database structure with no effort or client impact. Our lending team delivered the Jack Henry Loan Marketplace, which allows banks and credit unions to easily engage through a digital experience in the buying, selling, and participation of loans. Our digital team delivered the Banno Digital Toolkit, which provides a complete set of application programming interfaces, or APIs, to enable easy plug-ins to third-party solutions in our digital platform. Our payments team continued the expansion of functionality and adoption of the PayCenter platform and delivered the Zelle Digital Toolkit to enable clients not using our digital platform to connect to the PayCenter hub for Zelle transactions. And of course the payments group completed the three and a half year project to upgrade our card payments platform. Almost all of these new deliverables are built on entirely new technology stacks and are designed to make it easier for our customers to leverage our open architecture tools and philosophy to deliver cutting edge solutions to their account holders. As you may know, we have a number of active projects at Jack Henry centered on the topic of corporate responsibility. We continue to advance our environmental stewardship commitment and recently announced that on Earth Day, our associates launched a new business innovation group called Go Green. Our business innovation groups are company-sponsored, associate-driven groups that provide a collaborative platform for people, ideas, and thoughts to intersect and help address business challenges. Our associates decided that a business innovation group focused on our planet was appropriate and necessary for us to make meaningful progress on this initiative. As the labor market continues to heat up, we are focused more than ever on attracting and retaining talented associates. To that end, we have recently implemented new technology to expand our remote recruiting efforts and broaden our pool of qualified and diverse talent. Our hope is that this approach will only serve to improve on the reputation as a great place to work that we currently enjoy in cities across the country. Our consistent placement on best places to work lists is a testament to the workplace culture we have at Jack Henry, and our employee engagement scores reflect that strong culture. I'm pleased to share that nearly two-thirds of our associates participated in our most recent engagement survey, and our average engagement score was 83%, well above the industry benchmark. Like most employers, we have spent a good bit of time in the past few weeks wrestling with decisions around the right timing and approach to move employees back to work in our company facilities. We worked with our leadership teams earlier in the calendar year and determined that more than half of our workforce would continue to work remote indefinitely. We had targeted July 1st as our return to office date for those who would be returning in a full-time or hybrid basis. But as the Delta variant surged, we reverted to our previous operating model with only essential employees in our offices every day. We have proven that we can operate effectively in a remote posture, and we will continue in that mode until we determine it is safe to make a change. As I referenced on the last earnings call, our longtime chairman, Jack Prim, has retired as of the end of June. Jack had been with our company for many years in various leadership roles and as a board member and chairman. As a result of Jack's retirement, we have announced two changes to the board. Curtis Campbell has joined the board effective July 1st, fill the seat left vacant by Jack's departure. Curtis is president of software for Blue Cora in Dallas. He brings extensive experience in infrastructure and cloud computing, as well as digital development and a keen focus on customer experience. I'm very excited to see what new perspectives Curtis brings to our board discussions. Also effective July 1st, I was elected to be the new board chair. I was humbled and honored by the confidence expressed by the other board members and I look forward to leading the Jack Henry Board to even greater success. As I reflect back on fiscal 2021, I can confidently say it was a very good year for our company. Our employee engagement scores remain very high, and we've made great strides with our diversity and inclusion initiatives. Our levels of customer engagement and customer satisfaction scores are also very high. We have successfully completed several leadership and board level retirements and replacements. Our sales teams are performing extremely well and have positioned us for another successful year of selling, and overall demand for Jack Henry Technology Solutions remains high in all segments of our business. We have a commitment to doing the right thing for our constituents that we believe will continue to serve us well. We will continue with our disciplined approach to running the company and expect that approach to help provide stability for our employees, customers, and shareholders. As we begin the new fiscal year, I continue to be very optimistic about the future. With that, I'll turn it over to Kevin for some detail on the numbers.