Jack Henry & Associates, Inc.

Good morning, everyone, and welcome to the Jack Henry and Associates fourth quarter and fiscal year end 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please say no to 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 and then one on your telephone keypad. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. And at this time, I'd like to turn the floor over to Mr. Kevin Williams, Chief Financial Officer and Treasurer. Sir, please go ahead.

Thanks, Jamie. Good morning. Thank you for joining us today for the Jackson & Associates fourth quarter and fiscal year-end 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 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 and year, comments regarding the industry in general, and some 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 provide comments regarding our guidance for fiscal year 2023, which was also provided in the press release. 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, 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 Form 10-K entitled Risk Factors and Forward-Looking Statements. On this call, we will also 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, and good morning, everyone. Today, we're very pleased to share details with you for 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. For the fourth quarter of fiscal 2022, total revenue increased 7% for the quarter and increased 8% on an on-gap basis. Deconversion fees were down about 37% as compared to the prior year quarter, As a reminder, although a reduction in deconversion fees impacts the quarter negatively, it is a long-term positive for our business. Turning to the segments, we had a solid quarter in the core segment of our business. Revenue increased by 8% for the quarter and increased by 9% on an on-gap basis. Our payment segment performed well, posting a 5% increase in revenue this quarter and a 5% increase on an on-gap basis. We also had a very robust quarter in our complementary solutions businesses, with a 9% increase in revenue this quarter and a 10% increase on an on-gap basis. As I highlighted in our press release, the fourth quarter was the strongest sales quarter in the history of the company. Those of you who follow us closely will know that in the fourth quarter of 2021, we set an all-time sales record. We broke that record in the second quarter of fiscal 22, and now we've broken that new record in the fourth quarter. Additionally, in the third quarter of this year, we exceeded our highest ever Q3 sales attainment by around 40%. All in all, this has been a remarkable year for the sales teams. To provide a little detail regarding sales successes in the quarter, we booked 17 competitive core takeaways, with five of those being multibillion-dollar institutions. Additionally, we signed 18 deals to move existing on-premise customers to our private cloud environments. 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 48 new clients to our bandwidth digital platform in the quarter and 21 new clients to our card processing solution. For the full year, we signed 52 competitive core takeaways with 10 of them greater than a billion dollars in assets. Additionally, we signed 54 contracts to move on-premise core clients to our private cloud 165 new Bano digital customers, and 58 new clients for our core 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. Our annual client conference is scheduled for the end of this month, and I'm very happy to say we already have 56 core prospects signed up to attend and hopefully finalize their decision to move to Jack Henry. In case you missed that, I'm going to repeat that. At our annual client conference at the end of this month, we have 56 core prospects signed up to attend and work with our sales organization. At our analyst conference in May, I shared with the attendees that we had just surpassed 7.2 million registered users on our BAMO digital banking platform. As of the end of the fiscal year, we were at roughly 7.7 million registered users. As a point of reference, on July 1st of 2020, we had about 3.2 million registered users, so in two years, we've seen an increase of almost 150% 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. On August 9th, we announced the definitive agreement for Jack Henry to acquire PayRails with an expected closing of August 31st. PayRails accelerates Jack Henry's technology modernization strategy by immediately adding next generation digital payment capabilities to Jack Henry's technology stack and payments ecosystem. PayRails also enhances Jack Henry's payments as a service strategy enabling clients to simplify the complexity of payments, modernize their existing payment channels, and remain at the center of their account holders' payment experiences. Today, Jack Henry supports the growing demand for payments as a service with a virtual payments hub that consolidates money-moving solutions and supports numerous payment channels and types. PayRail strategically complements this hub with its extensive capabilities for consumer and commercial bill pay, real-time person-to-person payments, account-to-account transfers, business-to-customer payments, and more. Acquiring Payrails will strengthen Jack Henry's position in the payment space by providing our collective clients with additional functionality, optionality, and flexibility that enhances their diverse digital and payment strategies. Hopefully you've all seen the August 1st announcement about our corporate rebranding. As we move forward, rather than using Scimitar, ProfitStars, and Jack Henry Banking as unique brands, you will see us go to market as simply Jack Henry. We believe that uniting the brands reflects Jack Henry's role as a well-rounded financial technology provider and an advocate for community and regional financial institutions. Our new brand is the outcome of the work we are doing to modernize our technology, streamline operations, and operate as one company, which we believe will result in a better client experience. We now have a platform to speak from a single consistent voice as we continue to help community and regional financial institutions strengthen connections with account holders by offering a full array of solutions and access to a wide network of FinTech partners. As many of you know, Jack Henry is regularly named as the best place to work in various publications around the country. Recently, we were thrilled to be named by LinkedIn as a top 10 best place to work in financial services. Our consistent placement on best place to work lists is a testament to the workplace culture we have at Jack Henry, and our employee engagement scores reflect that strong culture. Additionally, we began a continuous listening strategy this year to gather feedback from our associates, and I'm pleased to share that overall, our participation rate was greater than 65%. We achieved an engagement capital score of 79%, and 87% of our employees say that they believe in Jack Henry's values all well above industry benchmarks. As we shared at the beginning of August, we have now completed a comprehensive search and have named a new CFO effective on September 1st. Mimi Carsley joined our finance team on July 1st and has been busy coming up to speed on the Jack Henry story and financials for the past several weeks. As we stated in the press release, she comes to us with more than 30 years of financial industry experience, but also has a strong technology background. Mimi will be traveling with our Director of Investor Relations, Vance Sherard, in September to meet with a number of investors and analysts, and I expect that she will lead this call in November. Of course, with the addition of Mimi, we are now prepared to wish Kevin a happy retirement. Kevin has been very accommodating through the search process by delaying his intended retirement date until he was confident that we had found a replacement who could help us build the company for the future. As many of you know, Kevin has been with Jack Henry for almost 25 years, but his association with our company goes back well over 30 years. During that time, he has had a tremendous impact on our execution and our success. I'd like to take this opportunity on behalf of all Jack Henry associates, customers, and shareholders to thank Kevin for everything he's done to make us so successful for these many years. You will be missed, Kevin. As I reflect back on fiscal 2022, I can confidently say it was a very good year for our company. Our employee engagement scores remain high and 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 and expect these new members of our leadership teams to continue our track record of success. Our sales teams are performing extremely well and have positioned us for another successful year 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 our future. With that, I'll turn it over to Kevin for some detail on the numbers.