Jack Henry & Associates, Inc.

Good morning and welcome to the Jack Henry First Quarter 2024 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.

Good morning, and thank you for joining us for the Jack Henry First Quarter 2024 earnings call. Joining me on the call today 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 and some industry comments. After Dave concludes his comments, Greg will provide additional insight on our new solutions, pay rails, and other key initiatives at Jack Henry. Mimi will then provide insight regarding the financial results and updated 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. As Vance mentioned, Greg is joining me this morning to provide an update on several innovative new solutions we've recently launched, followed by Mimi, who will take a deeper dive into our financial performance. I'm pleased to report another strong quarter of revenue and operating income growth for our company. As always, I'd like to thank our associates for all the hard work and commitment that went into producing those results for the quarter. For the first quarter of fiscal 2024, total revenue increased 8% on both a GAAP and non-GAAP basis. At the same time, deconversion fees were down 8% as compared to the prior year quarter. Turning to the segments, we had another solid quarter in the core segment of our business. Revenue increased by 8% for the quarter on both a GAAP and non-GAAP basis. Our payment segment again performed very well, posting a 7% increase in revenue this quarter and a 6% increase on a non-GAAP basis. We also had another strong quarter in our complementary solutions businesses with a 9% increase in both GAAP and non-GAAP revenue. As I've discussed previously, the first quarter is normally our lightest sales bookings quarter because our fourth quarter tends to be extremely strong and the sales pipeline is depleted as a result. As you may recall, the June quarter was the strongest sales quarter in the history of the company, so we certainly expected that historical trend to hold true. This year, however, our sales pipeline was the largest ever, entering a new fiscal year. In the first quarter, we booked 10 competitive core takeaways and another 10 deals to move existing in-house customers to our private cloud environment. This strong start leaves us confident that we are well-positioned to achieve approximately 50 to 55 competitive takeaways this fiscal year. We continue to see success with our card processing solution, signing seven new debit processing clients this quarter and two new credit clients. We also continue to see success signing clients to our Bano digital suite with 44 new contracts in Q1, including 21 contracts for our new Bano business offering. Speaking of our digital suite, at the end of Q1, we had more than 10.5 million registered users on the platform. That number is now growing at approximately 200,000 users per month. At the end of Q1 last year, we had about 8.3 million registered users on the platform, so we've experienced a 27% increase over the past 12 months. The continued success we've seen with sales and the adoption of our digital suite is consistent with results in the Bank Director Technology Survey published in September. As they do every year, bank directors survey their subscribers during June and July regarding a variety of technology prioritization and spending topics. More than 50% of the responses they received were from bank CEOs and board members, and more than 80% of the respondent banks have greater than $500 million in assets. Most respondents said their bank's technology budgets grew over the prior year with a median increase of 10%. That level of spending is consistent with our own strategic priorities benchmark study published last spring. Respondents to the Bank Director Survey named digital business account opening, payments capabilities, and digital business lending as their top three planned investments. One of the interesting items from this year's Bank Director Survey was the analysis of technology and use by respondent banks as it relates to their ability to serve different generational groups. Fully 96% of the respondents said they have the technology in place to serve baby boomers, but only 18% said they have the necessary technology in place to effectively serve Gen Zers. Of course, it's primarily the younger generations that expect to conduct all banking services without ever entering a branch. Clearly, the initiative for all banks to get to digital presentation layer has a long way to go. All of this bodes well for the future of our digital suite, as well as the other innovative solutions offered by Jack Henry, that help financial institutions facilitate an improved customer experience through a digital front door. Digital banking was one of the many topics discussed at our annual client conference held last month in Indianapolis. This is our largest conference of the year, and this year we hosted more than 160 prospect attendees, an all-time record. Of the financial institution prospects, over 30 have more than $1 billion in assets, with a couple in the $10 to $30 billion range. Additionally, more than 250 third-party fintechs participated in the trade show, which underscores our approach to accessibility and open banking. Of course, events like this not only present a wonderful opportunity for relationship building and education, but they also generate a substantial number of new sales leads. We saw strong interest in our technology modernization strategy and our ongoing development of a single public cloud native platform that can run the entire financial institution. We've now branded that solution as simply the Jack Henry platform, and we were able to demonstrate some of the current functionality at the conference. In one of the most talked about main stage sessions, our chief technology officer hosted an executive from Google and one of our bank CEOs to highlight the use of generative AI on the platform as well. As we normally do at Jack Henry Connect, I hosted our annual CEO forum, attended this year by nearly 150 client CEOs. Although we didn't conduct a formal survey during the meeting, the general feedback was that while attendees are concerned about the overall economy, they continue to invest in technology to enhance their digital capabilities, improve efficiencies, and position their businesses for the future. During the quarter, we were proud to be included in several national workplace rankings. We placed 11th in Newsweek's list of top 100 most loved workplaces, up six spots from last year. We also made Newsweek's greatest workplaces list, earning five stars, which is the highest possible rating. Additionally, we were named a top company in our sector by U.S. News & World Report based on work-life balance, stability, and professional development. We are honored to be recognized in these national rankings because they reflect our people-first culture and and the engagement, energy, collaboration, and client focus that our employees bring to work each day. Next week, we'll conduct our annual shareholder meeting in person in Monette. We're excited to be able to meet with our shareholders, and once again, we'll offer an option for people to observe remotely. As we move forward, I remain extremely optimistic regarding our robust sales pipeline, the demand environment, the strong interest in the solutions we're delivering, and the strategies we're executing. We remain committed to our disciplined approach to running the company, and we expect that focus to continue to provide stability and solid performance for our employees, customers, and shareholders. With that, I'll turn it over to Greg.