Jack Henry & Associates, Inc.

Good morning, and welcome to the Jack Henry First Quarter 2025 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 Sherrod, Vice President of Investor Relations. Please go ahead.

Thank you, Wyatt. Good morning, and thank you for joining the Jack Henry First Quarter Fiscal 2025 Earnings Call. Today, I am joined by President and CEO Greg Adelson and CFO and Treasurer Mimi Carsley. Following my opening remarks, Greg will share his insights on the first quarter of our fiscal year and provide observations on our business and the industry. Mimi will then discuss the financial results and fill your guidance outlined in yesterday's press release, which is available in the investor relations section of the Jack Henry website. Afterward, we will open the lines for a Q&A session. Please note that this call includes forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from our expectations. The company is not obligated to update or revise these statements. For a summary of risk factors and additional information that could cause actual results to differ materially from such forward-looking statements, refer to yesterday's press release and the risk factors and forward-looking statements sections in our 10-K. During this call, we will discuss non-GAAP financial measures such as non-GAAP revenue and non-GAAP operating income. Reconciliations for these measures are included in yesterday's press release. Now, I will hand the call over to Greg.

Thank you, Van. Good morning, and I appreciate each of you joining this morning's call. I'm pleased to report overall solid financial performance results in the first quarter of our fiscal year 2025. I'd like to begin by thanking our associates for their hard work and commitment to our success by doing whatever it takes and doing the right thing for our clients. As I introduced in my script last quarter, I will share three main takeaways from the quarter, and then we'll provide additional detail about our overall business. First, our financial performance. We exceeded our first quarter outlook. We had non-GAAP revenue growth of 5.3% in Q1, slightly ahead of the 5.25% anticipated in August. As we indicated in August, Q1 revenue and margins were impacted by slower growth rates for on-premise annual maintenance and card processing. Additionally, several long-term software usage contracts closed in Q1 of last year, creating a difficult comparison for this quarter. We remain confident in our full-year non-GAAP revenue guidance of 7% to 8%. We provided commentary in August that non-GAAP margin would see contraction of 100 basis points. We ended the quarter with only 89 basis points of contraction. Second, our sales performance. After a record Q4 for our sales team, we continued the positive momentum with record sales attainment in Q1 that included six competitive core wins of the six Three were financial institutions with over $1 billion in assets, including one $7 billion asset win. We also closed six deals to move existing clients from in-house processing to our private cloud. Third, our client conference. We had a very successful Jack Henry Connect conference last month in Phoenix with nearly 2,600 clients and prospects in attendance. This is our largest conference of the year and produces a significant number of sales leads. Last year, 17 of our new core wins were from prospects that attended the conference. Now for more detail on our overall business. During the quarter, we were proud to be included in several national best places to work rankings. We placed 16th in Newsweek's list of top 200 most loved workplaces, marking our third consecutive year ranked in the top 20. We also made Newsweek's most admired workplaces list. earning five stars, which is the highest possible rating. Additionally, we rank number 11 in IDC's 2024 FinTech rankings based on annual revenue, representing our 16th consecutive year on that list. We are honored to receive these national recognitions as they reflect our people-first culture, commitment to exceptional service, and success in delivering innovative technology that empowers community and regional financial institutions. Our payment segment continues to perform well. We signed four new debit processing clients and three new credit clients in the quarter. We now have 324 clients on the Zelle platform, 326 clients using RTP, representing approximately 43% of the live RTP clients, and 290 clients using FedNow, representing approximately 36% of the live FedNow clients. In our complimentary segment, we signed seven new Financial Crimes Defender contracts in the quarter. In addition, we signed 26 new contracts for the Financial Crimes Defender Faster Payment Fraud module, a real-time solution designed to help mitigate fraud in Zelle, FedNow, and RTP transactions. We have installed 83 Financial Crimes Defender customers and have another 94 in various stages of implementation. We also have 37 Faster Payment modules installed and 133 in various stages of implementation. Continuing with our complimentary segment, we continue to see strong success with our BANL digital solution. For the quarter, we signed 12 new clients to the BANL retail platform, as well as 18 new BANL business deals. We currently have more than 950 BANL retail clients with over 180 live with BANL business. We finished the quarter with 12.7 million registered users on the BANL platform. At the end of Q1 last year, we had 10.5 million registered users, a 20% increase over the past 12 months. Each year, we sponsor two technology surveys. We conduct the Jack Henry Strategy Benchmark in mid-January through early February, and this only goes to Jack Henry clients. We also co-sponsor a survey with Bank Director, and the results from their mid-June to early July technology prioritization and spending questions were published in September. In the bank director survey, 75% of the respondents reported an increase in their bank technology's budget for fiscal year 2024. Their top technology objectives are to improve operational efficiency, attract and retain customers, and increase deposits. Those results are consistent with findings from our strategy benchmark published last spring. In that survey, 80% of our own clients said they plan to increase technology spending over the next two years, with their top priorities being growing deposits, increasing operational efficiency, and growing loans. Although the two surveys were conducted six months apart, they yield very similar results around planned technology spending and key priorities. As I mentioned earlier, Jack Henry Connect was a tremendous success, and we received rave reviews from our clients, prospects, and industry consultants that attended the event. Along with the more than 2,400 clients in attendance, We hosted 130 prospect attendees from 50 financial institutions. Our technology showcase included 250 third-party fintechs, with most being competitors, which underscores our philosophy to being an open technology provider. Our vendor exit survey indicated 99% of these fintechs want to exhibit again at our conference in 2025. The conference agenda was robust and anchored by the significant progress we made on our technology modernization initiative. We continue to execute the strategy of breaking out key components of the core and building them on a cloud-native, API-first platform, the Jack Henry platform. We are live with domestic wires, international wires, data broker, and entitlement. We are in beta testing with both exception processing and general ledger. We remain on track to deliver a digital retail and commercial deposit-only core during calendar year 2026. I will continue to provide more details on our progress throughout the year. As we've done in prior years at the Jack Henry Connect, we held our annual CEO forum, which was attended by 185 CEOs, a new record for us. The general feedback throughout the meeting suggested that attendees are less concerned about the overall economy than last year and they continue to invest in technology to enhance digital capabilities, improve efficiencies, and modernize their businesses. The CEO agenda was well received by both clients and prospects, including a demonstration of our recently announced SMB solution with Moo. As mentioned at Investor Day, we remain on track to deliver this unique solution to Bano early adopter clients in May of 2025. This solution will be sold through our bank and credit unions to capture more and higher value deposits while positioning the financial institution at the center of the relationship with their SMB customers. The SMB will benefit from eight daily settlement windows, tap-to-pay capabilities for both iOS and Android devices, one-click enrollment and approval, and continuous accounting reconciliation. In closing, we hold our annual shareholder meeting next week in Monette, Missouri. We will also offer a webcast viewing option for observers to watch remotely. I remain extremely optimistic about the demand environment based on the recent surveys I referenced and our pipeline returning to an all-time high. Furthermore, we continue to hear positive feedback from our clients, prospects, and industry consultants regarding our key differentiators of culture, exceptional service, and innovative technology. These strengths, along with our proven track record of execution, will continue to drive positive results and position us well for the future. With that, I'll turn it over to Mimi for more specifics on our financials.