Jack Henry & Associates, Inc.

Good morning and welcome to the Jack Henry Third Quarter Fiscal Year 2026 Earnings Conference Call. All participants will be in a 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, Danielle. Good morning, and thank you for joining the Jack Henry Third Quarter Fiscal 2026 Earnings Call.

Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer. Following my opening remarks, Greg will provide an overview of our business along with updates on our strategic initiatives. Mimi will then discuss the financial results and updated fiscal 2026 guidance provided 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 can 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 referring 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, Vance. Good morning and thank you for joining today's call. As always, I want to begin by recognizing our associates for their hard work and dedication. They consistently go above and beyond to serve our clients and drive our success. I will share three key takeaways from the quarter and will then provide additional detail on our overall business. First, our financial performance. We produced record third quarter results with non-GAAP revenue of $616 million. of 7.3% over last year's third quarter. Our non-GOT operating margin was a strong 22.9% on par with last year's Q3. Second, our sales performance. Our sales and marketing team delivered an outstanding quarter with 17 competitive core wins, including five institutions with more than $1 billion in assets. This represents our strongest third quarter for new core wins in seven years and ties our best third quarter ever in over one billion wins. Year to date, we have won 43 core deals, 11 of which are institutions over one billion. That's up from 28 wins and eight over one billion at this point last year. Based on our strong momentum, we are highly confident that we will exceed the 51 core wins achieved last year. Third, our higher value core wins. We continue to see a higher number of trifecta solution wins. So far this year, 25 of our core wins, or 58% of the total, have included digital banking and card solutions. At this time last year, we only had eight core deals that included digital banking and card solutions, just 29% of the total won. This healthy growth in trifecta wins reinforces the strength of our integrated platform and supports deeper, more valuable client relationships. Now turning to our broader business, I will begin with our use of artificial intelligence, followed by updates on several innovative solutions and specific products. As I have shared at recent investor conferences, we view AI as a significant strategic opportunity and have been operating and expanding our capabilities for more than three and a half years by establishing strong governance processes that support a responsible, bold, and balanced approach. AI tools are approved for internal use, ranging from general productivity platforms such as Gemini and Copilot to specialized business and development tools across all areas of our company. These tools support over 500 distinct use cases, delivering meaningful and measurable impacts. A few examples to share. In lending, developers working on our new Jack Henry Origination solution online account opening solution have increased productivity by roughly 90%, driven by faster coding and quicker issue resolution. In digital, as part of the new Jack Henry platform, we have built an AI-assisted recommendation system for exception item processing that is in closed beta with three banks. They all report that AI is reducing the time to close exceptions each day by 70% to 80%. And in customer service, our AI advisor bot is supporting our frontline representatives and has assisted with more than 3,700 complex support interactions over the past two months with a 96% success rate, servicing answers in seconds from our knowledge resources. To further accelerate adoption, we have deployed an internal team of AI coaches who work directly with our associates through workshops and hands-on support. We are also seeing meaningful productivity and efficiency gains from natural language development, sometimes referred to as vibe coding. For example, a non-technical associate recently developed an internal application for our travel program, allowing us to meet a business need without licensing additional software. This is one example of many where our teams have independently built more efficient ways to address specific business challenges. Overall, we believe our approach to AI education and adoption significantly helps us minimize competitive risk. Additionally, regulatory requirements, network certifications, and our role as the system of record make the banking industry very difficult to disintermediate. Shifting to our innovative solutions, we continue to make strong progress on our stablecoin strategy. Data testing with clients to send and receive USDC is going well, and at this point, we are largely awaiting final regulatory guidance to proceed more expeditiously. We are delivering stablecoin processing through the public cloud native Jack Henry platform. This is important because the platform is connected to all of our core systems, serving as a bridge between emerging capabilities and our foundational cores. This provides our clients fast, integrated access capabilities such as Stablecoin and our initial SMB solutions, Tap to Local and Rapid Transfers. Tap to Local, our SMB merchant payment solution, continues to see significant tractions as clients look to better serve SMBs, increase deposits, and recapture business from fintechs. At the end of April, more than 700 banks and credit unions were live with Tap to Local. Since beginning targeted marketing just a few days ago, active merchants have doubled to more than 1,600, with several thousand additional merchants currently in the enrollment process. We intentionally waited to begin marketing so we can ensure the product and infrastructure were fully operational. With that foundation now in place and marketing beginning to ramp up, we expect adoption to accelerate in the coming months. Client feedback has been very positive, particularly around Tap the Local's differentiated capabilities, including easy enrollment, tap to pay on both iOS and Android devices, and continuous account reconciliation. As an additional validation to the product's uniqueness, Tap to Local recently won the FinTech Breakthrough Award for Small Business Payments Solution of the Year. We are also seeing strong early momentum with Jack Henry Rapid Transfers, which enables both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets. Rapid transfers is now live with over 110 banks and credit unions with an additional 190 at various stages of onboarding. Transaction volumes have been healthy, particularly given that marketing has not yet begun. The average transaction size is approximately $260, which is double our original projections, and it's being driven by stronger than anticipated inbound transfers. Larger inbound transfers deliver one of the key value propositions, increased deposits for the financial institution. With higher average transaction sizes and consistent monthly activity without any marketing, rapid transfers is currently tracking well ahead of our initial modules, though we are still in the early innings of the rollout. As another key part of the Jack Henry platform, we are developing a cloud-native deposit-only core. Client testing is underway and development was completed six months ahead of our original schedule announced in February of 2022. We will continue to broaden our testing as the year progresses. I also want to highlight early progress on our enhanced embedded payments capabilities following the acquisition of Victor Technologies last fall. The Victor platform, now branded as Jack Henry Payments Orchestrator, enables financial institutions to embed payment capabilities directly into third-party non-bank brands such as fintechs and commercial customers. In Q3, we signed one bank and onboarded three fintechs to the platform and have quickly grown our sales pipeline to more than 40 banks and or fintechs. Moving on to our reporting segments, in core, in addition to the 17 competitive wins I mentioned earlier, we also secured four on-premise to private cloud contracts, including one institution over $1 billion. So far this year, we have signed 23 in-to-out contracts with 18 institutions over $1 billion. In payments, we continue to see strong growth in faster payments. Over the past year, our clients' adoption of Zelle grew by 25%, RTP by 26%, and FedNow by 31%. In the third quarter, payment transaction volume across these channels increased 47% year over year. In complementary, we signed 36 new financial crimes defender and faster payment module contracts during the quarter. As of March 31, we have completed 168 financial crimes defender installations and another 68 in various stages of implementation. We've also installed 168 faster payment modules with an additional 256 in progress. The Bano digital platform had another strong quarter with 23 retail and 34 Bano business signings. In total, we have 1,028 clients live on Bano, including 466 on Bano business. The platform now serves more than 15.5 million registered users, up 13% from a year ago. As a reminder, all of our Bano wins and growth thus far has occurred within our core base. As we look ahead, we believe we are at a meaningful inflection point. We now have a competitive feature set along with increased willingness among certain competitors to operate as open providers. As a result, we see an opportunity to begin expanding Bano beyond our existing base and more closely align it with our payment product strategy where we have successfully sold outside the base for many years. We will provide more updates as we progress with this strategy. On the technology spending front, we recently released results from our eighth annual strategy benchmark survey, which highlights technology spending priorities. While we monitor a number of industry surveys, this one is particularly meaningful because it reflects direct input from the CEOs of our bank and credit union clients. The results point to a clear and growing commitment to technology investment. Eighty-eight percent of respondents expect to increase their technology budgets over the next two years. up from 76% last year. Of those, the largest segment, 41%, plans to increase investments between 6% and 10%. These trends are consistent with other industry surveys pointing to increased technology spending. We asked CEOs where they plan to prioritize those investments. For the first time, artificial intelligence ranks as the top priority, cited by nearly 50% of the respondents, followed by digital banking and data analytics. These priorities align directly with where Jack Henry has been investing and delivering innovation. Last week, we highlighted our differentiated innovation at the Jack Henry Annual Strategic Insight Symposium in Salt Lake City. We featured presentations and panels that included both Jack Henry leaders and well-known industry experts covering key topics such as the macroeconomic environment, the Jack Henry benchmark survey, our technology priorities and progress, broad initiatives, AI education and use cases, the impact of stable coins and tokens, and meeting the needs of Gen Z. We will provide updates on many of these topics along with additional innovation updates at our Investor Day on September 15th in our Dallas offices. We recently completed and published our 2026 Sustainability Report. The report is an outstanding information source on the Jack Henry on Jack Henry and is available to review on the investor relations page on jackhenry.com. The report coincides with our 50th anniversary and reflects our continued focus on preserving long-term value for our associates, clients, communities, stockholders, and the environment through responsible business practices. As part of our 50th anniversary celebration, our board is looking forward to ringing the closing bell at NASDAQ tomorrow, May 7th. This is one of the many activities we are doing throughout the year to mark this significant milestone. In closing, we remain focused on culture, service, innovation, strategy, and execution. These key differentiators will enable Jack Henry to continue to drive industry-leading revenue growth and margin expansion. With strong sales momentum, increased client technology spending, and a disciplined execution, we believe Jack Henry is extremely well positioned to capture the opportunities ahead. With that, I will turn it over to Mimi for more detail on our financials.