Jack Henry & Associates, Inc.

Welcome to the Jack Henry & Associates Third Quarter Fiscal Year 2022 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw yourself from the question queue, press star, than two. I would now like to turn the conference over to Mr. Kevin Williams, Chief Financial Officer and Treasurer. Please go ahead.

Thanks, Tom. Good morning, and thank you for joining us for the Jack Heron & Associates Third Quarter Fiscal 2022 Earnings Call. I'm Kevin Williams, CFO and Treasurer, and on the call with me today is David Foss, Board Chair and CEO. In just a minute, I will turn the call over today so he can 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 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 press release we put out yesterday after market closed and also provide comments regarding our updated guidance for the remainder of our fiscal year 2022. We will then 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, and 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 in yesterday's press release. With that, I'll now turn the call over to Dave.

Thank you, Kevin. Good morning, everyone. We're very pleased to report another quarter of revenue and operating income growth and an overall solid performance by our business. 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 third fiscal quarter. For Q3 of fiscal 2022, total revenue increased 10% for the quarter and increased 7% on an on-gap basis. As projected on our last call, deconversion fees were up more than $13 million over the prior year quarter. Turning to the segments, we again had a good quarter in the core segment of our business. Revenue increased 12% for the quarter and increased by 7% on a non-GAAP basis. Our payment segment performed very well, posting a 10% increase in revenue this quarter and a 9% increase on a non-GAAP basis. We also had a strong quarter in our complementary solutions businesses. with a 10% increase in revenue this quarter and a 7% increase on a non-GAAP basis. As I mentioned in the press release, our core sales teams again had an extremely solid quarter, and we continue to see core activity consistent with our pre-pandemic run rate. During the quarter, we inked 14 competitive core takeaways, so we continue at the approximately one deal per week run rate I've discussed on recent calls. In addition to our success signing new core clients, we signed nine existing on-prem core customers to move to our private cloud environment. In addition to the tremendous success we experienced in our core business this quarter, we continued to sign new clients to our digital banking suite. During the third quarter, we signed 38 new clients to our Bano platform, and we continue to see increased interest in this offering as well as the rest of our digital suite. On our last quarterly call, I mentioned that the sales team set an all-time sales booking record in our fiscal Q2. Although we didn't break that record in Q3, we did set a record for the strongest Q3 in history with sales bookings coming in almost 40% higher than the same quarter last year. This extraordinary sales performance in a quarter that is normally lighter than others is reflective of the interest in our company and demand for Jack Henry Technology Solutions in our market. Regarding our Bano Digital Suite, as of March 31st, we have just over 7.1 million users live on the Bano platform. We continue to enjoy the highest consumer rating in the App Store, and we are regularly recognized as the fastest application in the industry. As I've said before, I expect our success in this area to grow as we continue to add new functionality and features to the platform. On our last quarterly call, I shared an announcement regarding our technology modernization strategy and how we believe it will help position our clients for greater success in the future. As many of you know, that announcement has been received very positively by many experts in our industry, and our strategy has been highlighted in a wide variety of publications. Several pieces are still in production, but so far we've been interviewed for close to 40 different articles, podcast interviews, and video podcasts. for publications with a combined subscriber base of more than 53 million people. Hopefully you've all seen the new corporate sustainability report that we published on March 31st. I think it's an excellent representation of the key initiatives and accomplishments we've been working on since we published our last report more than a year ago. In this new report, we provided more detail on the demographic makeup of our workforce, a summary of our employee engagement survey results, more information about our data privacy and cybersecurity practices, and a significantly enhanced update on climate-related risks. This year's report also includes an appendix with detailed disclosures aligned with the Sustainability Accounting Standards Board, or SASB, and the Task Force on Climate-Related Financial Disclosure, or TCFD. We continue to make great strides in the key areas of ESG and are committed to providing more detailed information about our progress over time. Although you regularly see Jack Henry recognized as the best place to work in various contests around the country, we received two new designations last quarter that recognize us as a company that isn't simply an outstanding employer. Inc. Magazine recognized us as one of America's best-led companies, and Newsweek recognized us as one of America's most responsible companies. Both awards are great recognition for our ongoing commitment to do the right thing for all of our Jack Henry stakeholders. As we announced a few months ago, Ted Bilkey will be retiring at the end of June after 17 years with our company. Ted ran the Scimitar Division for many years, but shifted to become our Chief Technology Officer a few years ago to help us define and finalize our technology modernization strategy. Our modernization strategy benefited significantly from Ted's years of experience speaking directly with our customers about their technology wants and needs. I'd like to thank Ted for his many years of leadership and for helping us to drive consistent success for our customers and shareholders. As you are also aware, we've been working to find a new CFO so Kevin can enjoy a much-deserved retirement. That process has been slower than I had hoped, but we expect to name a new CFO in the near future. Kevin has graciously agreed to stay with us until we're ready to make the transition, so we still have no formal departure date for him. Today, however, we're announcing that Renee Swearengen has been named Senior Vice President and Chief Accounting Officer for Jack Henry. Renee has been with the company for more than 25 years and is a key leader on our management team. You'll see a press release with this announcement later today, but I want to take this opportunity to congratulate Renee and thank her for her partnership for these many years. As we look forward To the end of our fiscal year, our sales pipeline is very strong, and 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. I look forward to seeing and chatting with many of you at our Investor Day in Dallas next Monday. With that, I'll turn it over to Kevin for some detail on the numbers.