Jack Henry & Associates, Inc.

Good morning and welcome to the Jack Henry fourth quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal 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 then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Vance Sherrard, Vice President, Investor Relations. Please go ahead.

Thank you, Anthony. Good morning, everyone, and thank you for joining us for the Jack Henry Fourth Quarter 2023 Earnings Call. Joining me today on the call is David Foss, Board Chair and CEO, Mimi Carsley, CFO and Treasurer, and Greg Adelson, President and COO. After my opening remarks, I will turn the call over to Dave for his thoughts about the state of our business, financial and sales performance for the quarter, industry comments, and other key initiatives. After Dave concludes his comments, Mimi will provide additional commentary regarding the financial results and fiscal year guidance included in the press release issued yesterday that is available from the investor relations section of the Jack Henry website. We will then open the lines for Q&A. As a reminder, 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 multiple factors that could cause actual results or events to differ materially from those which we anticipate due to multiple 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. On this call, we will discuss certain non-GAAP financial measures, including non-GAAP revenue and non-GAAP operating income. The reconciliations for non-GAAP financial measures are in yesterday's press release. I will now turn the call over to Dave.

Thank you, Vance. Good morning, everyone. Today, we're very pleased to share details with you for a quarter that produced record revenue and 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 2023, total revenue increased 11% for the quarter and increased 8% on an on-gap basis. Deconversion fees were up as compared to the prior year quarter, but were still down significantly for the full fiscal year. Turning to the segments, we had a solid quarter in the core segment of our business. Revenue increased by 11% for the quarter and increased by 10% on an on-gap basis. Our payment segment performed well, posting a 9% increase in revenue this quarter and a 7% increase on an on-gap basis. We also had a very robust quarter in our complementary solutions businesses, with an 11% increase in revenue this quarter and an 8% increase on an on-gap basis. As I highlighted in our press release, the fourth quarter was the strongest quarter for sales bookings in the history of the company. Those of you who follow us closely will know that in the fourth quarter of fiscal year 22, we set an all-time sales record. We broke that record in the second quarter of fiscal 23, and now we've set another new record in the fourth quarter of 23. Additionally, we set a new annual sales record in fiscal year 23. 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 16 competitive core takeaways and an additional 19 deals to move existing on-prem core clients 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 63 new clients to our Bano digital platform in the quarter and 19 new clients to our card processing solutions. For the full year, we signed 47 competitive core takeaways with five of those institutions with greater than $1 billion in assets. Additionally, we signed 52 contracts to move on-premise core clients to our private cloud, 56 new clients for our card processing solution, and 198 new BAMO digital customers. 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. Regarding the Banno Digital Suite, we were at almost 10 million registered users at the end of the fiscal year. As a point of reference, on July 1st of 2020, we had about 3.2 million registered users, so in three years, we've seen our user count triple in size. 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 delivered Banno Business into general availability for our bank clients in late July, and the response has been outstanding. More than 25 banks are live, and we signed an additional 53 Banno Business clients in fiscal Q4. On July 20th, we became one of the first service providers to support live transactions on the Federal Reserve's new FedNow Instant Payment service. More than 100 of our clients are in various stages of implementation, and we expect to add hundreds of financial institutions over the next 12 months. We plan to deliver Financial Crimes Defender, a real-time fraud and anti-money laundering compliance platform, into general availability for our banking clients in late September and for our credit union clients late this calendar year. As you may recall, it's been one year since we announced our corporate rebranding to retire the Scimitar, ProfitStars, and Jack Henry banking brands And go-to-market is simply Jack Henry. I said on this call a year ago that uniting the brands reflects Jack Henry's role as a well-rounded financial technology provider and enables us to speak from a single consistent brand voice. We've seen strong results during the year from our rebranding, including a 50% increase in website visits and a 30% increase in social media followers. I also mentioned on our last call that we recently published our 2023 sustainability report, I am pleased to share that Jack Henry has been recognized as a 2023 climate leader by USA Today and Statista for our ongoing efforts to reduce greenhouse gas emissions. In addition, we were recently recognized as one of America's greatest workplaces by Newsweek. Our consistent placement in Best Places to Work rankings is a testament to the workplace culture we have at Jack Henry, and our employee engagement scores reflect that strong culture. Our continuous listening program enables us to gather feedback from our associates throughout the year, and I'm pleased to share that overall, our participation rate this year was greater than 65%. We achieved an engagement capital score of 81%, and 87% of our employees say that they believe in Jack Henry's values, all well above industry benchmarks. By taking care of our associates, they in turn are taking care of our clients. Delivering outstanding customer service is a hallmark of our company, and this past year was no exception. On surveys we send to customers, we scored an average of 4.6 out of 5 for overall customer satisfaction and 4.75 out of 5 for satisfaction with our customer service representatives. Both are increases over our already industry-leading satisfaction scores. We are encouraged by recent surveys of financial institutions showing positive growth and sentiment around technology spending for the balance of the calendar year. To that end, Bank Director's 2023 Technology Survey will be published in September, and it will provide a helpful barometer of bank sentiment relative to technology. I will plan to share these results with you on our November call. In today's environment, we found that no matter what a financial institution is trying to solve for, technology is almost always the solution. Our breadth of solutions regularly positions us well to participate in these opportunities. In Mimi's comments, she will discuss a program we recently offered to a select group of associates who meet certain criteria. Internally, we refer to this offering as our Voluntary Early Departure Incentive Program. We have many employees who have been with us for a long time, and this program enables us to reward them while giving others a chance to move up in the organization. While there is a cost associated with this program, it is something we've offered in the past that has been well received and produced positive long-term results for the company. As I reflect back on fiscal 2023, 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. Mimi has been in her CFO role for nearly a year, and her collaborative, thoughtful leadership has had a visible impact on both you as investors and our associates. Our sales teams are performing extremely well and have positioned us for continued success with a sales pipeline that is the largest we've ever had entering a new fiscal year. We believe that our commitment to doing the right thing for our constituents 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 Mimi for some detail on the numbers.