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Jack Henry & Associates Q2 2023 Earnings Call Transcript


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Participants

Corporate Executives

  • Vance Sherard
    Vice President of Investor Relations
  • David B. Foss
    Board Chair and Chief Executive Officer
  • Mimi Carsley
    Chief Financial Officer and Treasurer
  • Gregory R. Adelson
    President and Chief Operating Officer

Presentation

Operator

Good morning, and welcome to the Jack Henry Second Quarter Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Mr. Vance Sherard, Vice President of Investor Relations. Please go ahead.

Vance Sherard
Vice President of Investor Relations at Jack Henry & Associates

Good morning, and thank you for joining us for the Jack Henry Fiscal 2023 Second Quarter 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 these 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.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Thank you, Vance, and good morning, everyone. Today, we're pleased to report another strong quarter of revenue and operating income growth. 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 second quarter.

For Q2 of fiscal 2023, total revenue increased 2% for the quarter and increased 6% on a non-GAAP basis. This variance was primarily due to a reduction in deconversion revenue, which I'll detail in a few minutes.

Turning to the segments, we again had a solid quarter in the core segment of our business. Revenue was flat for the quarter but increased by 6% on a non-GAAP basis. Our payments segment also performed well, posting a 3% increase in revenue this quarter and a 6% increase on a non-GAAP basis. We had a very strong quarter in our complementary solutions businesses, with a 4% increase in revenue this quarter and an 8% increase on a non-GAAP basis.

Yesterday's press release included revised guidance, which Mimi will outline in her comments. One of the key drivers behind this change in guidance was the actual and forecasted reduction in deconversion revenue for the year. As we disclosed yesterday, deconversion fees are down $20 million year-to-date, and this was the primary driver of the variance in GAAP versus non-GAAP revenue and operating income performance for Q2.

As a reminder, we receive deconversion revenue when one of our clients is acquired by another institution and is required to pay us a fee to terminate their contract prior to the end date. I normally reference this as the revenue you don't want to see because it indicates we've lost a client to M&A. This lack of consolidation by financial institutions is also impacting our services revenue associated with convert and merge activities. Because of the impacts to bank stocks and valuations, M&A is down overall in the banking space, and the experts in the industry don't see any significant rebound for at least a couple of quarters. Of course, consolidation is outside of Jack Henry's control, and we normally update guidance for deconversion revenue as we become aware of pending M&A activity.

The other primary item impacting our guidance is the recent change in consumer spending behavior. Due to economic conditions, consumer card usage is slowing and transactions are shifting from debit to credit. Our card processing business is significantly weighted to debit processing, so we are revising guidance to reflect what we believe to be a temporary economic trend.

As I've said many times in the past, our financial model is very resistant to significant swings resulting from changes in the overall economy but were not completely bulletproof. Despite these external factors, our primary businesses remain strong and continue to perform very well.

As I mentioned in the press release, our sales teams again had an outstanding quarter with a number of notable wins. In fact, Q2 set a new quarterly sales record for Jack Henry, breaking the record we set in the June quarter last year. In the second quarter, we inked 12 competitive core takeaways and an additional 15 deals to move existing in-house core clients to our private cloud environment. December 30 was a particularly memorable day for us at Jack Henry as we signed three core takeaways of multi-billion dollar financial institutions on the same day. We continue to see good success with our new card processing solution, signing 12 new card processing clients this quarter. We also continue to see great success signing clients to our Banno digital suite, with 36 new contracts in Q2.

Speaking of our digital suite, our Banno Business solution is scheduled to go into general release next quarter. We already have 18 institutions live in early adopter status with the feedback being extremely positive from those users. We have 308 clients under contract for this solution, and we're positioned to bring them into full production at a very rapid pace once we achieve general availability. We are also continuing to implement new financial institution clients on retail Banno platform at a similar pace to recent quarters. At the end of Q2, we surpassed 8.8 million registered users on the platform, and Banno continues to hold one of the highest consumer ratings in the App Store.

Normally in January, I share with you the results of bank spending survey projections from the publications we follow closely. Unfortunately, this year, none of those major publications provided forward-looking projections around the topic of expected tech spending in the banking segment. I have received a number of smaller surveys, and we conducted our own informal survey at a banking CEO roundtable last month, with the results being all relatively consistent. The average increase appears to be settling at around 7% for calendar 2023, with the most popular range being a 5% to 10% increase. I'll continue to watch for firm objective data, and we'll share as it becomes available.

As you may have noticed last month, we took a major step forward with our environmental efforts by signing a commitment letter, indicating our intention to set science-based climate targets with the Science Based Targets initiative, or SBTi. Science-based targets are aligned with the level of decarbonization necessary to meet the goals of the Paris Agreement to limit global warming to 1.5 degrees Celsius above preindustrial levels. Jack Henry will pursue validation for near-term greenhouse gas emissions reduction targets through SBTi. This commitment follows extensive analysis and discussion and is supported by our low carbon transition plan, which outlines several mitigation tactics to reduce our greenhouse gas emissions. More information regarding this plan will be disclosed in our next sustainability report, which will be released on March 31 through the investor site on jackhenry.com.

As you will recall, it was on this call last year that we announced our new technology modernization strategy. We developed this multi-year strategy to help us deliver the public cloud-native capabilities to community and regional financial institutions, allowing them to innovate, compete and meet the evolving needs of their account holders. We are continuing to make great progress on the strategy's four main objectives.

First, we're redefining the core processing system by unbundling services that traditionally would be in the core and building them as stand-alone modules on the public cloud. In September, we announced plans to build these services on the Google Cloud, and we've been testing our wire processing and authorization management services modules on the Google Cloud since that time. We currently have six clients live in early adopter status with domestic wires and plan to offer general availability for this solution in July. We expect to launch the international wire solution for early adopters in April and expect that module to be generally available late in the fourth calendar quarter this year.

Second, we're working to provide multiple data integration options utilizing our open philosophy and technology. Our newest offering in this area is real-time data streaming, simultaneous constant streaming of necessary data to all systems on the platform. We're currently in beta with real-time data streaming, which is essential to support real-time payments and fraud detection. We expect this functionality to go into live production later in this calendar year.

Delivering industry-leading capabilities across a single next-generation platform is the third objective. Banno is a key element in this part of the strategy, but we're working on several other additional solutions to build upon this commitment. As an example, in September, we added Payrailz, a public cloud-native digital payments platform to our suite of payment solutions. Additionally, this summer, we're launching Financial Crimes Defender, our next-gen financial crimes platform with enhanced capabilities, including machine learning and artificial intelligence. This new fraud solution has been built entirely on our public cloud-native platform.

The last step in the strategy is to move from acting as a core processor to offering a full banking ecosystem. This includes our own capabilities, plus access to leading fintechs through a single platform that prioritizes openness, agility, speed and optionality. A year ago, I announced that we had more than 850 fintech providers in our ecosystem. Today, it's closer to 950, and the number continues to grow.

We're also the only platform provider that has relationships with all four major financial data aggregators, Finicity, Plaid, Yodlee and Akoya. Through these companies, financial institutions can give account holders a complete financial picture in a safe, secure manner that eliminates screen scraping.

We've seen strong interest in this strategy from both prospects and customers. Anecdotally, I can tell you that we are currently in conversations with a number of prospects who have indicated that the technology modernization strategy I just described is the primary driver for them to engage with Jack Henry to help develop their technology strategy for the future.

Community and regional financial institutions are the lifeblood of Main Street [Phonetic] America. Many of them, however, are at a crossroads. The personal service and experience they are known for is being disrupted by technology, as nontraditional financial service providers have entered the market and the way people bank has fundamentally changed, especially for the younger generation. As a well-rounded financial technology company, Jack Henry is in a unique position to provide modern technology and services to help community and regional financial institutions capitalize on this opportunity and strengthen connections with their account holders.

The key takeaway is that while we're successfully meeting the needs of our clients today, as shown by our performance results, we're also preparing them for the future. We're pleased with the progress we've made on this exciting strategy, and we'll share more updates at our Investor Day in May.

As we begin the second half of our fiscal year, our sales pipeline is very robust, and we continue to be optimistic about the strength of our technology solutions, our ability to deliver outstanding service to our clients, our ability to expand the client relationships, the spending environment and our long-term prospects for success.

With that, I'll turn it over to Mimi for some detail on the numbers.

Mimi Carsley
Chief Financial Officer and Treasurer at Jack Henry & Associates

Thanks, Dave. Good morning, everyone. As highlighted by Dave's comments, Jack Henry had a successful second quarter, and I will discuss the details driving those results. Total revenue was up 2% for the quarter on a GAAP basis and solidly up 6% on a non-GAAP basis. Fiscal year-to-date GAAP revenue was up 5% and non-GAAP revenue increased 7%. So, let's jump into the details.

On a GAAP basis, services and support revenue decreased 2% in the second quarter but increased 3% year-to-date. Services and support were negatively impacted as deconversion revenue decreased $21 million for the quarter, $20 million year-to-date. This is consistent with the broader market lack of acquisition activity in our space. We now anticipate approximately $15 million in deconversion revenue this fiscal year. However, forecasting deconversion revenue remains challenging, given the limited advance notice and the general uncertain nature of M&A.

Our private and public cloud offerings showed robust growth this quarter, growing 11%, and 10% year-to-date. Product delivery and services decreased 26% in the quarter, impacted by lower deconversion fees and convert/merge activity, offset by slightly higher implementation-related revenue. As a reminder, user group conference related to our major customer conference, shifted into Q1 this year, contributing to the year-over-year Q2 revenue decline. Year-to-date, product delivery and services revenue decreased 11%, influenced by similar drivers as the quarter.

On a non-GAAP basis, services and support revenue grew 6% for the quarter and 7% year-to-date, which serves to highlight our consistent fundamental business strength.

Processing revenue increased 9% on a GAAP basis for both the quarter and year-to-date. On a non-GAAP basis, the growth was 7% for the quarter and 8% year-to-date. The increases were largely driven by higher card volumes despite a slight decrease in the rate of growth. Additionally, digital revenue continues to show rapid growth, led by robust demand for our Banno Digital Platform.

Now turning to costs, cost of revenue was up 8% for both the quarter and year-to-date. Quarterly drivers included increased card processing costs consistent with card revenue growth, higher personnel costs and amortization expense. These drivers are consistent across our year-to-date results.

Research and development expense increased 22% for the quarter, mostly due to higher personnel costs and licensing fees. Year-to-date, these expenses increased 23% based on the same factors.

SG&A rose 2%, driven by increases in personnel, travel, professional services, partly offset by the gain on sale of assets. Year-to-date, the increase was 7%, influenced by similar drivers. The quarter and the remainder of the year benefit from disciplined focus and actions involving facility rationalization, headcount and travel control, procurement wins and other expense management. These collective efforts helped to offset inflationary pressures and mitigate lower revenue. As we have previously mentioned, some compensation and travel-related cost increases result from the lower cost comparisons from our first half of fiscal 2022. Due to previously mentioned management rigor on cost controls, we concluded Q2 with strong operational results.

Despite net income declining 16%, primarily due to lower deconversion fees and increased interest expense, the quarter saw a fully diluted earnings per share of $1.10. Our GAAP and non-GAAP results for the quarter and year-to-date are consistent with internal expectations and set us up for a strong finish to fiscal year '23. As a reminder, for transparency, the impact from the gain on the sale of assets, including this quarter's sale of an Albuquerque property yielding a $1.2 million gain, the Payrailz acquisition and deconversion fees are shown as part of non-GAAP adjustments in the press release.

Turning our attention to cash flow. Operating cash flow was $191 million for the year-to-date, down from $197 million for the same period last year, essentially due to lower deconversion revenue. Total R&D investment remains slightly elevated but should normalize by next fiscal year. Free cash flow, which is operating cash flow less capex and cap software, plus proceeds from the sale of assets, was $119 million. We remain committed to maintaining ample operating liquidity, reinvesting for growth, evaluating financially-sound strategic acquisitions, paying dividends and opportunistically repurchasing our stock. This consistent dedication to value creation resulted in a trailing 12-month return on invested capital of 21.4%.

Focusing ahead, let me discuss updated guidance. The press release included revised GAAP and non-GAAP full year guidance. The GAAP guidance remains inclusive of Payrailz acquisition, gain on asset sales and deconversion fees. We expect the trends impacting Q2 results to continue for the remainder of the fiscal year, impacting both GAAP and non-GAAP results. Most significantly, assuming minimal industry consolidation, deconversion fees will likely remain muted at approximately $15 million for the fiscal year, representing a $20 million decrease from our previous guidance.

Secondly, languishing bank M&A-related consolidation negatively impacted our outlook for our convert/merge services revenue for the fiscal year. As a reminder, this revenue is driven by our clients acquiring and implementing Jack Henry solutions at their newly purchased institution.

Finally, in line with the announced payment network activity, we're experiencing a slower rate of growth than anticipated for debit transaction volumes in our card processing business, primarily driven by a combination of lower consumer spending and the spending shift to credit cards. As a reminder, card processing is approximately 22% of our total revenue, and as Dave highlighted, more heavily weighted to debit card business. As a result of these impacts, GAAP revenue growth for fiscal '23 is now expected to be 5.4% to 5.8%. Guidance for non-GAAP revenue growth is now 7% to 7.3%.

Outlook for full year GAAP operating margin is now approximately 22.9%, which is negatively impacted by the expected lower deconversion fees and is inclusive of the impacts from both gain on sales assets and the Payrailz acquisition. Full year non-GAAP operating margin guidance, due to strong management expense control, is now expected to deliver slightly margin improvement for the fiscal year compared to previous guidance of flat to slightly down. The management team remains focused on returning to margin expansion in fiscal '24.

Full year GAAP EPS guidance is now a range of $4.79 to $4.83. The midpoint of $4.81 is an $0.11 decrease from previous guidance, even though the lower deconversion fee drives a $0.20 reduction. The headwind caused by lower deconversion fees is mitigated by the team's collaborative and disciplined cost control, gain on sale of assets and lower net income.

We expect the remainder of fiscal year '23 quarterly non-GAAP revenue growth momentum to deliver increases in both in the third and fourth quarters to achieve our revised full year guidance targets. We anticipate similar growth patterns for non-GAAP operating margin, delivering the revised increased full year guidance.

So in closing, we delivered another quarter of strong operational and fiscal results and remain solidly optimistic about the success of our business model. We thank all of our investors for their continued confidence in Jack Henry.

Keith, will you please open the call for questions?

Questions and Answers

Operator

[Operator Instructions] And the first question comes from Vasu Govil with KBW.

Vasu Govil
Analyst at KBW

Hi, thank for taking my questions. I guess the first question on just the non-GAAP revenue weakness. It seems like most of that is basically related to the payments segment with more shift from debit to credit spending. Any changes anticipated in any other segments based on what you were thinking before?

And then, Dave, just for you, any update on macro? I know you're sort of still seeing good momentum in new client signings. But has anything changed in the quarter in terms of bank decision-making for new deals, whether it's taking some more time to close deals or the size of deals that you are seeing? Just any update there would be super helpful.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

I'll take the second part first, Vasu, and then I'll turn it over to Mimi. As far as the overall macro environment, I would say things are continuing to look very strong. Our pipeline -- I just mentioned in my prepared remarks that we set another sales record in Q2, which I was not expecting, given the huge performance we saw in Q4, the June quarter last year. So, to set another overall sales performance record was a surprise to me. But the environment is very strong. The pipeline is larger than it's ever been. I would say that on the core side of the business, we are trending larger. So I highlighted, we signed three multi-billion dollar institutions on December 30 alone, core takeaways on December 30. And I think the -- if you look at the core side of the business, the accounts that we're currently involved in are definitely trending larger, bigger institutions coming to Jack Henry looking to make a change. I certainly believe part of that's driven by the technology modernization strategy. They're looking for that partner that will really help them modernize. But I think the other driver for that is just the reputation Jack Henry has for delivering great technology and great service.

So, I would characterize the overall environment for us as far as sales as very strong right now. And, as I said in my prepared remarks, although we don't have any of the big surveys that I can quote because nobody has published results, I have a whole bunch of more anecdotal bits of feedback and that CEO roundtable that I hosted two weeks ago in Phoenix, and there, the kind of average spend increase for calendar '23. And this is them knowing that their budgets are in place for '23 already, so it's them quoting to me what they have planned. The average was around 7% as far as an expected spend increase. And by the way, this CEO forum that I hosted was not just Jack Henry core customers. This was a variety of CEOs from a variety -- who are running a variety of different solutions.

So, that would be my comment on the overall, and I'll turn it over to Mimi to answer your first part of your question.

Mimi Carsley
Chief Financial Officer and Treasurer at Jack Henry & Associates

Thanks, Vasu, for the question. I would say on the non-GAAP revenue change, yes, I think you're right in terms of predominantly, it's around card with -- based on the -- we were optimistic in terms of now the slowing consumer is a little bit slower than we anticipated. And so I think that's led to a modest deceleration of growth but still an attractive growth rate, I would call out. And so it's predominantly around cards.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes, I think that's important to emphasize that our growth rate year-over-year is -- for the payments business is very strong. Now, we've backed off a little bit because of what's happening in consumer behavior. But we should not lose sight of the fact that the payments business is up significantly year-over-year as far as overall growth.

Vasu Govil
Analyst at KBW

That's super helpful. And if I may ask a follow-up on Banno. I know there are a number of sort of new players out there that are trying to sell digital banking and to banks, some of them who might be your core customers. But I was just curious, when you go to sell Banno and it's a competitive deal, like what sort of win rate do you see typically for your product? And then, have you started to sell Banno outside of your core base of clients already? And if not, what's the road map for that?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes. So I don't think, Vasu, I can quote you accurately on what our win rate is. I think pretty much every deal, where we're selling digital banking, is a competitive deal. So I couldn't quote you an accurate percentage as far as what our win rate is. I just know it's very high because Banno has this outstanding reputation.

As far as selling outside the base, so we're -- from a technology point of view, we're prepared to do that right now. It's a strategy point of view that has kind of prompted us to back off a little bit. And I think I talked about this on a previous call. We see opportunities outside the base, as I said, from a technical point of view, ready to deliver outside the base. But we have learned that for some of our competitors, us selling into their base, they perceive it to be a real positive, a real win because it gives them a better solution overall. And so we're weighing the opportunity for us to sell Banno versus the potential negative for us in selling the core side. If a competitor says, "Oh my gosh, we finally have Banno in our base now. So our customers won't be as likely to leave us on the core side of the business." That's not necessarily a good thing for Jack Henry. So we're being very strategic about how we position this and which core bases we go after. And I'd rather err on the side of making sure the strategy is right, and rather than just chasing after a few dollars that might damage us long term from a strategic point of view.

Vasu Govil
Analyst at KBW

Understood. That makes sense. Thank you very much.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Certainly.

Operator

Thank you. And the next question comes from David Togut with Evercore ISI.

David Togut
Analyst at Evercore ISI

Thank you. Good morning. Dave, given you completed the transition of processing over to First Data, using their back end for debit and credit card processing, are you able to leverage their capability at all to build out your credit card processing capacity to offset some of the shift from debit to credit?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes, certainly, we're able to use that platform, and we already have customers in production on the credit side and customers that we've signed. But as I've highlighted in other settings, it's not a matter of going to a customer and saying, "Hey, we have credit now, you want to sign up?" They have -- if they're in the credit space, they already have an agreement with somebody, and so normally, they need to allow that agreement to anniversary, or else they have to buy the contract out.

The other thing that I've been pretty transparent about on these calls is, we've been building up our expertise in the credit space. Credit is a different business from debit. We needed to literally hire people to sell, hire people to service that side of the business. And so, we've been building up that capability over time. So it's a combination of those things that has been kind of a slow roll for us as far as being in the credit space. But as far as being positioned today to offer credit when a customer is ready to get into the credit space, we have the programs, we have the sales organization, we have the technical abilities to deliver. And so, it's a matter of us finding those customers and converting them.

David Togut
Analyst at Evercore ISI

Understood. And then, on the tech modernization strategy, do you have specific time lines to roll out some of the key initial modules to clients?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes, we do. And so -- and we've published that for our clients. We have a road map out on our customer portal, so our clients can go and see what the road map looks like. And so, we're being very transparent with our clients and with prospects. Initially, I had hoped to publish that for everybody to see, but we've realized that, again, competitors are very, very eager to see what Jack Henry is doing. They're trying to figure out how to compete with this strategy. And so, we backed off on being quite that transparent, but we're being very transparent with our existing customers and with prospects who are looking at tech modernization to help define their strategy for the future.

David Togut
Analyst at Evercore ISI

Since we don't have access to the client portal, can you kind of share in any broad-brush strokes, what we should be expecting in terms of rollout of tech modernization strategy?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes. I'll -- so I'm going to turn it over to Greg here just to give you a couple of highlights. Again, we're not going to go into great detail at this point, but Greg can give you a couple of highlights of what to expect. And I will point out that in the -- my prepared remarks here, I highlighted the fact that we have some of these things rolling out. We have our domestic wire solution coming into full production here in just a couple of months. We have our international wire solution coming into full production later this year.

So I've already highlighted a few of those things, but I'll turn it over to Greg for a little more color.

Gregory R. Adelson
President and Chief Operating Officer at Jack Henry & Associates

Yes, there's a few other things we're doing. So we basically have planned out for the next three years. So we have various targets that we've assessed. But things around authorization management is a big one. Dave actually mentioned that as some of the testing that we're doing already in the Google Cloud, that's a big one. There's a lot of components that we're doing with real time to help us with some solutions that we're going to look to roll out over the next 18 months or so that we're not prepared to talk about publicly, but components of that, and then, of course, a lot of the other key modules, general ledger itself, other components that will be done. But each of those is already bracketed by year for what we plan to get done over the next three years.

David Togut
Analyst at Evercore ISI

Got it. And just finally, the three big core wins you signed on December 30, Dave, what were the key to those wins? What particular capability drove those wins? And how big were those banks? Were they above $10 billion in assets?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

None of them were above $10 billion. My recollection is they were mostly be in the 3-ish range, $3 billion to $5 billion, somewhere in there, and I'm not -- I'm just doing that off the top of my head, but somewhere in that range for those customers. And I think it's the same story that you've heard from us time and time again. It's a combination of great technology, a great reputation for service, a very focused strategy. So if you come to do business with Jack Henry, you know which core -- on the core side, we're going to be supporting for the go-forward. There's no question about what our strategy is regarding core. So I think it's all those things rolled together, plus this reputation we have for openness. And today, most banks and credit unions want to connect to fintech solutions, and they want a partner who embraces that idea of open connectivity. And so, you roll all those things together, it's the same things that we've been talking about for a long time. Those are the primary drivers for us in these wins.

David Togut
Analyst at Evercore ISI

Understood. Thanks very much.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Certainly.

Operator

Thank you. And the next question comes from Kartik Mehta with Northcoast Research.

Kartik Mehta
Analyst at Northcoast Research

Hi, good morning. Dave, in the past, we've talked about maybe the backlog in the business. I know you don't report that, but the one way I know you kind of look at revenue and your ability to kind of projected backlog of installed teams, and it seems as though you've been winning a lot. If you kind of look at that metric, over the next maybe 12, 18 months, does that still look very good and give you confidence from a revenue standpoint?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes, we actually have a report, Kartik, that I look at every month that shows the number of -- we refer to it as slot, so the number of conversion slots, the number of conversions that we're prepared to do in any given quarter. And it shows how many of those slots are already booked, how many of them are being held because there's a deal that's in process where a customer has said, "Hey, I want to convert in nine months as opposed to 18 months" and then how many are open. And our backlog on the core side is well into the next fiscal year as far as those slots being held. Now once in a while, when I say things like that, people will say, "Well, hey, you ought to just go hire more people and speed that up." The thing you have to remember is this isn't about hiring more people, and we can do a conversion in a month.

Conversion -- when you're doing an entire core conversion, normally, we plan for 12 months. And that's not because Jack Henry's so slow, we can't do it any faster, it's because there is so much to be absorbed on the customer side. They're trying to run the bank or credit union, and at the same time, they're learning all new systems and all new processes, and they're validating data to be converted, and it's just a very large massive project. And so, we manage our backlog really well. I think our conversion team has managed the backlog well.

We do a similar exercise for every other product that we have. The core backlog is the one that normally gets a lot of attention, but every product we have, we have that exercise and that reporting. And so, we can staff up and staff down as we need to, generally, fairly easily. Certainly, there are some roles that are very specialized and you can't simply move people from one group and to another based on demand. But generally, we can do that pretty easily and manage our backlog effectively.

Kartik Mehta
Analyst at Northcoast Research

And then, just one of the issues that you always hear banks talk about, especially maybe community banks and credit unions, is having to deal with fraud, whether it's fraud related to P2P payments or fraud related to ATM business or checking accounts. And I'm wondering from Jack Henry's perspective, how you might be able to help your customers and how that might help Jack Henry in terms of selling products?

Gregory R. Adelson
President and Chief Operating Officer at Jack Henry & Associates

Yes, Kartik, this is Greg. I'll take that one. So, a couple of things. So even in the Payrailz acquisition, we have a fraud module that we're actually rolling out with our open-loop P2P. So again, it provides an extra layer of fraud protection for that. Actually, there's a -- unlike Zelle, which is irrevocable and a couple of the other faster payment solutions, there's an option as when the receiver gets it to designate how they want to receive the payment. And as part of that process, we have an extra kind of fraud layer there.

The other thing, as Dave mentioned, our Financial Crimes Defender product, that one is going to be specifically tailored for the opportunity to help with both Zelle fraud and other faster payments fraud because it's got real-time components to it. And so, those will be two things. We're actually in beta right now with the Financial Crimes Defender product, and it is getting significantly really good fanfare from our clients in the beta process. So we're pretty excited. But those are just two of several other things. We actually have a committee here at Jack Henry that we kind of aggregate all of our kind of defense projects or fraud products, and we have a team that is looking to kind of consolidate some of that and drive the right strategy for our customers.

Kartik Mehta
Analyst at Northcoast Research

Thanks, Greg. I appreciate it. Thank you.

Operator

Thank you. And the next question comes from John Davis of Raymond James.

John Davis
Analyst at Raymond James

HI, good morning, guys. Mimi, just on the updated EPS guide, it looks like the better margin on a non-GAAP basis kind of offset the little bit weaker revenue. And then, the deconversion fees looks like it'd be about $0.20 hit to EPS, but you only took down the midpoint by $0.11. So just curious, is there a tax rate or anything below the line or anything else that drives that kind of smaller EPS hit?

Mimi Carsley
Chief Financial Officer and Treasurer at Jack Henry & Associates

Yes. Thanks for the question, JD. You're right in terms of the deconversion revenue driving about $0.20, if it were to stand on its own. A couple of things. One, to just follow on to my prepared remarks, the disciplined focus on expense controls in the second half is driving part of that upside. Additionally, we are seeing -- because of the higher interest rates, we are seeing some positivity from an interest income perspective that's helping as well. And then, on a GAAP basis, you have the Albuquerque sale as well. So, that's just not a lot of changes on the tax rate, but just between management control and a little bit of interest rate savings, I would say, are the primary drivers of that change.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

I'm glad you called that out, though, JD, because I think the -- as Mimi just detailed, there are several things in there, but the primary driver of that difference between the $0.20 and the $0.11 is management expense control. We have a team here who has really dug in to make sure that we're doing the right things on the expense side. And so if it were just for the slowdown in deconversion revenue, we'd see a $0.20 hit, but the team has really put in the extra effort to make sure that we're doing the right things here. And I think that's a significant call-out for the management team at Jack Henry.

John Davis
Analyst at Raymond James

Okay. Thanks. And then, the second half implied guide is a little -- a very modest step-up, implies growth a little over 7%. Any callouts, Mimi, 3Q versus 4Q should be relatively consistent? Just trying to think about cadence of revenue growth in the back half of the year?

Mimi Carsley
Chief Financial Officer and Treasurer at Jack Henry & Associates

Yes. It's a good question, JD. I would say, and similar to our comments last quarter, that the first half is slower, and we see a pickup as the year goes on, both from a revenue with Q2 expected to have been our lowest quarter and growing as the year continues. So I wouldn't say that there's a dramatic difference between 3Q and Q4, but just a second half favorability versus first half.

John Davis
Analyst at Raymond James

Okay. Thanks. And then, Dave, on the debit card revenue, I think you guys called out it's about 22% of revenue. Can you help us think about what's in the account on file fee versus per transaction? Just trying to understand it. If macro slows further, it gets better. How sensitive that card business is to spending levels?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes, that type of detail is not something that we've disclosed. I think the best way for us to -- for you all to track what's happening in our business is just the overall macro environment, kind of following what's happening in the overall macro environment. This is not unique to Jack Henry. This is what's happening overall. It's consistent with what's been reported by the major card vendors, Mastercard and Visa. And I think that's the best way to kind of anticipate what's happening at Jack Henry is what's happening overall in the industry because we follow the industry when it comes to things like debit volume and any kind of shift between debit and credit.

John Davis
Analyst at Raymond James

Okay. And I'll sneak one last one in here. Free cash flow conversion, trailing 12 months is down a little bit relative to history for Jack, somewhere in the 80s versus the 100% or so target. Any thoughts there on timing? Are you still comfortable with getting back to 100% for the full year for free cash flow conversion?

Mimi Carsley
Chief Financial Officer and Treasurer at Jack Henry & Associates

Yes. I think you're right, JD, in terms -- to look at it on a longer cycle. I wouldn't recommend looking at it on a quarter, but rather on a year-to-date. And so, on a Q1 -- because of the timing of Q1 versus Q2, year-to-date, this year, we're about $119 million versus prior year, $96 million. That's with asset sales without -- pretty comparable -- if you would adjust for deconversion revenue, we'd be pretty comparable on a six-month basis. So I think all in all, I think not a lot to kind of call out for the second half there. I think trends will kind of continue to normalize.

John Davis
Analyst at Raymond James

Okay. Thanks.

Operator

Thank you. And the next question comes from Ken Suchoski with Autonomous Research.

Ben Varga
Analyst at Autonomous Research

Hi, good morning. This is Ben Varga on for Ken. Thank you for taking my questions. So firstly, I wanted to ask about Payrailz. It looks like the asset generated about $2.5 million of revenue in the second quarter, and you're guiding to $12 million for the year. So I would love to get an update on the performance in the quarter and kind of what drives the assumption behind the implied step up in the second half.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes. So from a sales perspective, we're starting to really see some nice wins, a little bit slower than we had hoped to kind of start out the first few months, but we're starting to pick that up. We're also -- through the integration efforts that we've been doing, we're able to sell some separate modules. So some of those components that we bought from Payrailz, we can actually sell into our existing iPay business. So the open-loop P2P that we mentioned, the A2A components and even the fraud module, we're able to sell. So we're starting to get that geared up. We're completing some integration. So we're pretty bullish that we're going to have an opportunity to continue to sell into the iPay space, as well as what we have in the prospect list for the Payrailz customers pre-acquisition and post.

Ben Varga
Analyst at Autonomous Research

Got it. That makes sense. And secondly, just as we think about your guidance, how should we expect the updated targets to really flow through to segment results in 3Q and 4Q? Is it expected to spread out evenly? Or where are you expecting the biggest impact relative to the prior guide?

Mimi Carsley
Chief Financial Officer and Treasurer at Jack Henry & Associates

I can take that one, Ben. So I would say year-to-date trends that we've seen, core being up about 6%, driven mostly by cloud strength, payments up about 7% growth and complementary about 8%, for the full year -- and that's on a non-GAAP basis, for the full year, we're seeing some consistency in those trends, so I would say, particularly around core and payments consistently full year versus kind of year-to-date; and on complementary, I think, growing slightly in the second half to kind of land us up a little bit there. So, that's kind of the direction I would call out.

Ben Varga
Analyst at Autonomous Research

Got it. Thank you so much for taking my questions.

Mimi Carsley
Chief Financial Officer and Treasurer at Jack Henry & Associates

Of course.

Operator

Thank you. And the last question comes from Rayna Kumar with UBS.

Aditya Kulkarni
Analyst at UBS Group

Good morning. This is Aditya Kulkarni, filling in for Rayna Kumar. Thanks for taking my questions. I guess to start, I appreciate the details on the tech modern strategy, but can you touch on how this is progressing, and particularly if there are any notable development on this front within the payments business since the acquisition of Payrailz? And then I have a follow-up.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

So Payrailz is part of the strategy. The idea was that by acquiring Payrailz, we acquire a public cloud-native bill pay and overall payments platform that does P2P, account-to-account and business-to-business payments. And so acquiring Payrailz was to kind of fill that need for a public cloud-native payments platform. Our choices were to essentially rewrite iPay and add functionality to iPay or go acquire something that was already public cloud-native and integrate it into the solution. So as Greg just highlighted, Payrailz is up and running. The integration work is being completed, but not much left to do as far as integrating it into the rest of the solution in the public cloud environment that we've created. So it's progressing beautifully as far as I'm concerned, from a technology point of view.

Aditya Kulkarni
Analyst at UBS Group

Great. That's very helpful. And for my follow-up, you've mentioned Jack Henry began leaning more on CPI escalators last year as inflation climbed to kind of record levels. Now there is expectations of inflation to moderate in 2023. Could you just walk us through how this could impact Jack Henry's business, if at all?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Well, at this point, we're continuing to implement CPI escalators. So I stressed two calls ago, I think, that's not a one-and-done thing at Jack Henry. We don't do that at one time, and then we're done doing that. As contracts come up for renewal, those CPI escalators are implemented for those customers, and we're continuing to do that. So until we see some significant change in the overall economy, we are going to continue to implement those changes to the level that we think is appropriate and that our customers are expecting. We'll continue to implement CPI escalators. We just did another batch last week, and so this is not something that we're kind of evaluating as a point in time that we're going to stop or that we're going to do something different. We're continuing to do the activities that we've been doing, and we'll do that until we see some change in the overall economy that warrants a change in our practice.

Mimi Carsley
Chief Financial Officer and Treasurer at Jack Henry & Associates

The only add-on I would say there is, it's quite early from a fiscal '24. We haven't even started budget cycle planning. So in terms of being able to indicate utilization, and for next year, I think it's premature. I would say we're not reliant on that as a core strategy of our growth.

Aditya Kulkarni
Analyst at UBS Group

Got it. Thank you.

Operator

Thank you. And the next question comes from James Faucette with Morgan Stanley.

James Faucette
Analyst at Morgan Stanley

Hi, good morning. Thank you so much, Dave, Mimi. I wanted to get your perspective a little bit on the prospect for vendor consolidation in the current environment. I guess, I'm wondering if I'm a bank or credit union today, I'm using Jack Henry for core processing, but in the past, elected to do best-of-breed software from other lending partners. Am I looking to consolidate those activities in some form or fashion? And how does that give you a -- what does that do for your sales and sales cycle, etc., if that is...

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes, that's a really interesting topic, James, and I could probably talk for about two hours on this one. I won't, but I could. So what's happening right now, so there are a couple of competing forces here when it comes to talking about that. First off, you have a real desire among banks and credit unions to continue to look for best-of-breed solutions. It's why we have so many best-of-breed products in the Jack Henry product family. It was the whole basis for the ProfitStars initiative that we ran until we just changed our branding here. We still have all those solutions. We still have that strategy. We still have a sales force that only calls on customers outside the Jack Henry core base. That is still a wonderful business for Jack Henry because there are those customers who demand and expect best-of-breed solutions to connect into their core.

At the same time, you have regulators that are pushing pretty hard on those same customers to say, you shouldn't be trying to manage so many vendors. You're introducing more risk into your environment if you have so many different vendor partnerships. And so part of our strategy has been we can do both. We can be the best-of-breed provider for somebody who's not running a Jack Henry core. They limit the number of vendors they work with by working with Jack Henry on non-core solutions because we have such a broad suite of non-core solutions. So we're positive in that sense to those vendors who -- for those customers who are looking to do best-of-breed but limit the number of vendors that they're working with.

But again, there is this real push because of the disruptive factors or disruptive forces that are happening in the banking space in general, there is this real push among bankers to find those fintechy solutions, those best-of-breed solutions to offer to their clients. And so it's that balancing act. But it's something that we've been watching for quite some time. I feel strong that Jack Henry is really well positioned to serve both ends of that spectrum. And it's part of the reason why we continue to look for some of those best-of-breed solutions to acquire like Payrailz so that we can continue to be a force among those customers looking for best-of-breed.

James Faucette
Analyst at Morgan Stanley

Got it. And I wanted to ask also, I guess, a more specific product-related question, and that's related to FedNow. Given how close you are to FedNow, I was hoping you could give us an idea of the general readiness and implementation capabilities that the regional community banks that you work with have to implement that and start to use FedNow? And I guess, on a high level, what's your take on the time line on how JHA PayCenter is positioned to accommodate the rollout? Thanks.

Gregory R. Adelson
President and Chief Operating Officer at Jack Henry & Associates

Hi, James, this is Greg. I'll take that one. So, a couple of things. So one, we are positioned to be the first processor live starting in July. So we've been working with the Fed for over two years directly on kind of preparedness for that. So we will be launching -- it looks like somewhere between 25 and 30 institutions will be part of our initial launch. So the interest level with the community institutions is very high. Part of the reason why is that the clearing house is owned by the larger banks, and so there's always been a little bit of a concern about doing business with the larger banks. But with the Fed, the smaller community banks are very excited about this, especially about some of the use cases that are being talked about. So in short and just as a reminder, we have about 60% of the clearinghouse institutions or Jack Henry institutions today. If you look at who's live, about 60% are Jack Henry. So we will be the first processor going live with the FedNow product in the summer.

James Faucette
Analyst at Morgan Stanley

Great. Thanks a lot.

Operator

Thank you. And the next question comes from Cris Kennedy with William Blair.

Cris Kennedy
Analyst at William Blair

Good morning. Thanks for taking the question. I know credit is a small percentage of your overall business today, but can you talk about the agent program that you guys launched in January and how meaningful that could be?

Gregory R. Adelson
President and Chief Operating Officer at Jack Henry & Associates

Yes, this is Greg. I'll take that one as well. So we did just launch it. We have three customers that are in some type of pilot with us right now since we just got it going. But what we really believe is going to happen is that the smaller community institutions that were -- had credit programs or wanted to be part of credit programs, they didn't have the staffing or expertise to handle the full service solution. So just like Dave mentioned that we were gearing up and we brought in people to help us with it. They didn't have the resources as well. So we really believe the agent program is going to be a nice opportunity for more folks to take advantage of a credit offering. And the way we position the solution set is that at some point in time, if they would like to actually move to a full service solution, we will let them take that portfolio with them. So that's also pretty advantageous. So again, more to come on that, but we do believe that there will be more uptake in the agent program than maybe -- especially in the smaller community institution space.

Cris Kennedy
Analyst at William Blair

Great. Very helpful. And then just a follow-up on Payrailz. It's a little bit slower than initially expected. But are you still anticipating it to be accretive next year, the dilution going away?

Gregory R. Adelson
President and Chief Operating Officer at Jack Henry & Associates

Yes. We're still working through that. But yes, we're working through everything we can do related on the sales side, making sure that the sales engine is going to the point that we need it to. And as long as that happens, we feel very confident about that.

Cris Kennedy
Analyst at William Blair

Great. Thanks a lot.

Operator

Thank you. And the next question comes from Dave Koning with Baird.

Dave Koning
Analyst at Robert W. Baird

Hi, guys. Thank you. And I guess, first of all, the non-GAAP revenue, I know you took down the year by $20 million to $25 million, and you walked through that. But EBIT you mentioned, too, is still -- non-GAAP EBIT is still stable, meaning you're taking the $20 million to $25 million of cost out with cost controls. I guess I'm wondering, where are you taking costs out? And then is that sustainable into next year? Or will some of that just flex back up as you grow into next year?

Mimi Carsley
Chief Financial Officer and Treasurer at Jack Henry & Associates

So Dave, I think that's a great question. I think it's a combination of factors. I think the disciplined focus, as Dave mentioned previously, we look at every headcount renewal, every ask on like a role by role, there are some we're postponing. There's some we're just kind of eliminating completely. Some may dribble back in next year. We're making kind of mindful choices. Travel is another example where we are just kind of being disciplined about the amount of travel, but that may not be a structural kind of long term. So I suspect some of that might come back. But then there's other factors, including performance management and other things, that will help us this year.

Gregory R. Adelson
President and Chief Operating Officer at Jack Henry & Associates

And this is Greg. I'll add one piece. We have a very strong focus on process automation here, not only tools but just in people. So about 25% of our staff is really certified in some level of what we call caught [Phonetic] in the classroom. And so, as part of that, we've been driving a lot of operational savings and some of the headcount reductions as part of our initiatives to be better automated in various things that we do. So that's also another contributing factor.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

And that's something that will go on forever at Jack Henry, Dave. I think the key point there is that what Greg just highlighted, that isn't a one-and-done exercise. That's something we're trying to ensure is embedded in our culture going forward. We'll continue to look for those opportunities always.

Dave Koning
Analyst at Robert W. Baird

Got you. Thank you. And maybe just a follow-up. I know Payrailz, I know the year -- it's supposed to be $12 million. And Q2 was like $2.6 million or something, but the rest of the year needs to be $4.2 million per quarter to get to the full year. And I'm wondering why does it step up from $2.6 million up to $4.2 million per quarter, the rest of the year? Is there something seasonal, etc.?

Gregory R. Adelson
President and Chief Operating Officer at Jack Henry & Associates

Yes. There are a couple of decent sized deals out there that we're working on and feeling pretty good about. So that's part of it. And again, it's also getting these add-on solutions -- what we call add-on solutions to the iPay business and moving those on, and that's really where a lot of that is baked.

Dave Koning
Analyst at Robert W. Baird

Got you. Thank you.

Gregory R. Adelson
President and Chief Operating Officer at Jack Henry & Associates

You're welcome.

Operator

Thank you. And the next question comes from Dominick Gabriele with Oppenheimer.

Dominick Gabriele
Analyst at Oppenheimer

Hi, guys. Hi, everybody. Thanks you for taking my questions. So, could you just talk about the demand for -- and forgive me, I missed the beginning of the call. Can you just talk about the demand for Jack Henry core and the sentiment around the tech modernization and uptake [Phonetic] of interest in your conversations with potential new and existing clients versus conversations, say, six months ago?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes. So it's becoming a significant part of many of the conversations. So I highlighted at the beginning of the call, Dominick, that we signed 12 new core deals in the quarter with a significant call-out that I made there was three of them were multibillion-dollar institutions that are all signed on December 30. So December 30 was kind of a fun day around here. But the other thing that I've talked about already on the call is the fact that we have larger institutions. I think overall demand is moving larger. And I think some of that is definitely being driven by the technology modernization story. So we have -- it's become a part of most conversations with core prospects. It's not necessarily part of the conversation with people who are not looking to bring their core to Jack Henry, but for core prospects, it certainly is a part of the conversation usually.

And we are trending up as far as the size of customers that are coming to Jack Henry wanting to talk about tech modernization because they've been looking for that company that will help them develop a strategy in the future that gets them to the public cloud. And it's a more I think rational strategy about how you do the core side of the business and tie in fintech solutions, complementary solutions into that experience for the customers. So conversations have been great. I personally have been involved in a lot of them because, as I've stressed before, when it's a larger institution and the CEO wants to be in the conversation, I am normally involved in those, and it's pretty fun right now.

Dominick Gabriele
Analyst at Oppenheimer

Great. And I actually had one of a really large card provider admit to me that they just can't keep up with the investment that's being provided to modernize these tech stacks with you and some of your largest peers, so they made a switch to do so. If I just think about the complementary growth and kind of how it slowed a little bit, and then the comments around the second half, do you -- and also deconversion fee expectations, do you think that some of that would suggest that there is some level of tech spend retrenching at some of the FIs versus previously as they kind of look at the macro outlook and try to hold on to the cash that they have? Do you think that's fair?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Well, so what I talked about in the early part of the call is, we don't have any of the major surveys that I can quote to you this year, but I have a number of smaller surveys with smaller sample sizes. And then I hosted this CEO roundtable discussion just two weeks ago, and these were CEOs of larger institutions, Jack Henry core and not. So it was a variety of CEOs and kind of the overall feel -- and these are people who have their budgets in place now for 2023. So they weren't speculating. They were sharing with me real numbers that they plan for 2023, the kind of the average settled in was around 7%, their expected increase for 2023. And that's in line with what we're seeing in the sales organization. The sales pipeline is very robust, larger than it's ever been. So I don't see any slowdown or any kind of pullback when it comes to the commitment that folks in our space have on continuing to spend in the technology area.

Dominick Gabriele
Analyst at Oppenheimer

Great. Sorry, I missed that commentary. Maybe just one last one. Have you seen the pace about -- just from that further -- beginning comment I made about a large FI outsourcing. Are you seeing more higher pace of outsourcing than you have in the past versus, say, like six months ago with client willingness to outsource their tech capabilities? Is that speeding up? Or do you think it's fairly stable over the last few years, the willingness?

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Yes, I'd say it's pretty stable. It's -- I've described it before as a religious conversation. When you talk to a bank or credit union, they either believe in being in-house with either everything or some things or they believe in outsourcing, and they just have this kind of ingrained belief. And normally, it requires some driver that has nothing to do with Jack Henry to get them to talk about outsourcing. So it might be that they've lost somebody in their tech group that they were very dependent on and now -- and they can't hire a replacement. It might be that the regulators are giving them -- pressuring them because they're trying to do things themselves that they maybe shouldn't be doing themselves. It might be a change in leadership at the institution. And the new CEO comes in and says, "I don't know why you guys are doing this yourselves. We really ought to be outsourcing this." So it's some kind of driver normally that's external to Jack Henry that prompts them to bring their business into an outsourced environment. And I don't think anything has changed in that regard in the past six months or even in the past six years.

Dominick Gabriele
Analyst at Oppenheimer

Okay, great. Well, thank you so much for taking all my questions.

David B. Foss
Board Chair and Chief Executive Officer at Jack Henry & Associates

Certainly.

Operator

Thank you. And this concludes our question-and-answer session. I now would like to turn the conference back over to management for any closing comments.

Vance Sherard
Vice President of Investor Relations at Jack Henry & Associates

Thank you, Keith. We have additional investor engagement opportunities from management participation at multiple investor conferences and non-deal road shows over the next month. Additionally, please save the date as our annual investor day will be held in Denver, Colorado on the afternoon of Monday, May 15. If you're interested in attending in person, please send contact me for additional details. Otherwise, we hope you join us via the webcast.

We are pleased with the results from our operations and remain enthusiastic and focused on our future. We thank all Jack Henry associates for their efforts that produce these results. Thank you for joining us today. And Keith, will you please provide the replay number?

Operator

Yes. Thank you. The replay number for today's call is 877-344-7529 and the access code is 4711955.

[Operator Closing Remarks]

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