Madison Suhr

Madison Suhr asked if the 200-300 basis point tailwind to Cross-Border from the Mastercard partnership is still the right way to think about its contribution, or if there's potential for upside given early positive indications.

Answer

Ron Clarke, Chairman and CEO, acknowledged that it's a timing call due to the longer sales cycle for financial institutions (FIs). However, he emphasized the significant potential upside, noting the 'whopper segment' and the 'crazy large' flows that banks currently manage. He highlighted that independents like Corpay only have a fraction of this business today, making the FI channel a potentially massive contributor over time if successful.

Madison Suhr inquired about the Mastercard partnership, specifically whether the previously indicated 2-300 basis point tailwind to CrossBorder is still the right expectation, or if there's potential for upside given the positive early indications.

Answer

CEO Ronald Clarke acknowledged the positive early indications and large pipeline for the Mastercard partnership. He emphasized that the financial institution (FI) segment represents a massive opportunity with significant flows, and successful penetration with a number of banks could lead to a 'big, big contribution' over time, substantially changing the long-term prospects for the cross-border business, despite the longer sales cycle.

Madison Suhr asked about the adoption and long-term opportunity for SMB products like Rapid Transfers and Tap2Local, and how their competitive set differs from traditional Jack Henry competitors. She also inquired about capital allocation priorities, appetite for buybacks, and the M&A pipeline.

Answer

Gregory Adelson (President, CEO, and Board Member) mentioned early positive anecdotes for Tap2Local and Rapid Transfers, with more data expected in May. He highlighted significant differentiation from Stripe/Square, including instant account approval, iOS/Android tap-to-pay, and patent-pending account reconciliation, noting a long roadmap for SMB products. Mimi Carsley (CFO and Treasurer) reiterated consistent capital allocation priorities: dividend policy, M&A (looking for accelerants/enhancements), internal development, and share repurchases ($125M year-to-date, comfortable with $200M+ for the year), emphasizing dynamic capital allocation with a conservative balance sheet.

Madison Suhr asked about the adoption and longer-term opportunity for Jack Henry's SMB strategy, specifically Rapid Transfers and Tap2Local, and how the competitive landscape differs from traditional Jack Henry competitors. She also inquired about the company's capital allocation priorities, appetite for buybacks, and the M&A pipeline.

Answer

Gregory Adelson, President and CEO, noted it's still early for comprehensive data on SMB product adoption, with more details expected in May, but shared an anecdote of rapid client sign-ups. He highlighted key differentiators from competitors like Stripe and Square, including instant account approval (75% instantaneous), tap-to-pay on both iOS and Android, and patent-pending account reconciliation. Mr. Adelson emphasized a long roadmap for SMB solutions. Mimi Carsley, CFO and Treasurer, outlined capital allocation priorities: a committed dividend policy, ongoing evaluation of M&A for accelerants, significant internal development, and share repurchases (with $125 million year-to-date and comfort for $200 million+ for the year), while maintaining a conservative balance sheet.