William Nance

William Nance asked about AI's potential to accelerate code base modernization and improve competitive positioning for Jack Henry's next-gen platform. He also inquired about competitive dynamics in payments and card, specifically regarding new entrants in the community bank space.

Answer

Gregory Adelson (President, CEO, and Board Member) highlighted Jack Henry's multi-year use of AI in modernization, enabling faster development with less headcount, and stressed the complexity of building integrated core systems beyond simple code migration. Mimi Carsley (CFO and Treasurer) added that public cloud infrastructure allows for increased velocity of solution enhancements. Adelson acknowledged new entrants in payments but described them as compartmentalized, often focused on commercial card with limited debit offerings, emphasizing Jack Henry's full suite and increasing 'trifecta wins' (digital, card, core).

William Nance asked about AI's potential as a positive accelerant for modernizing code bases, particularly in the context of Jack Henry's next-gen platform and its impact on competitive positioning. He also inquired about competitive dynamics in the payments and card space, specifically regarding a resurgence of new entrants targeting community banks.

Answer

Gregory Adelson, President and CEO, explained that Jack Henry has leveraged AI for years in back-end processes and new platform development, contributing to faster innovation with controlled headcount growth. He emphasized that the complexity of building fully integrated core systems goes beyond just AI. Mimi Carsley, CFO and Treasurer, added that their public cloud infrastructure enables DevOps, increasing the velocity of solution enhancements. Regarding payments, Mr. Adelson noted that new entrants are typically compartmentalized, focusing more on commercial cards with limited debit offerings. He highlighted Jack Henry's increasing "trifecta wins" (digital, card, core) due to an improved solution set, stating no significant market disruption from new entrants has been observed.

William Nance asked if the strong second-half 2025 revenue growth rate should be considered a sustainable run-rate for fiscal 2026. He also inquired about current capital allocation priorities and the outlook for M&A.

Answer

CFO Mimi Carsley advised against annualizing any single quarter's growth rate, though she noted that drivers like new products and cloud growth are continuous. CEO Greg Adelson added that while the goal is to move towards 8% growth, it's too early to guide for FY26. On capital allocation, Carsley reiterated the priorities: internal investment, dividends, and debt paydown, with M&A always being an option if a prospect is financially and strategically attractive.

William Nance sought clarification on the tech platform's segment growth rate, specifically its pro forma calculation for a large customer migration, and inquired about the treatment of any termination fees related to that customer.

Answer

Anthony Noto, CEO, clarified that the 20% tech platform growth outlook for 2026 is an 'apples-to-apples' comparison, excluding revenue from the large customer in both years, as no revenue is assumed from them in 2026. He explained that the revenue recognized from this customer in Q4 was part of the contract, equal to the average of the last six quarters, and tied to the contract's conclusion. Chris Lapointe, CFO, confirmed this explanation.

William Nance inquired about the macroeconomic impact on guidance, specifically what assumptions regarding trade policy and demand destruction are baked into the full-year outlook, and asked for details on the renewed Shopify partnership, including the timeline for Managed Markets and the trade-offs of losing 3P exclusivity.

Answer

CFO Ofer Koren explained that while they see greater uncertainty and slightly lower same-store sales, no clear new trends have emerged since their initial guidance, which already incorporated some potential impact. CEO Amir Schlachet added that regarding the Shopify deal, they are confident in maintaining their leadership via a 'preferred partner' status, exclusive features, and a robust integration. The updated Managed Markets product will be rolled out gradually over the coming quarters.

William Nance inquired about the outlook for free cash flow, its seasonality, and its conversion from EBITDA, as well as client reception for new product enhancements like BOPIS and the company's pricing power.

Answer

CFO Ofer Koren confirmed the seasonality of free cash flow, noting a strong Q4 and weaker Q1, with full-year free cash flow expected to be slightly above adjusted EBITDA. Executive Nir Debbi added that new products like BOPIS have seen great traction and that value-add services like duty drawbacks can increase take rates without raising fees for merchants, who are not expected to see general price increases in the near future.

William Nance of Goldman Sachs Group, Inc. sought confirmation on the currencies driving the FX impact on ARR, asked for the percentage of ARR from outside the U.S., and inquired about the current competitive environment, especially regarding down-market competitors.

Answer

CEO Savneet Singh confirmed the FX impact was from the New Zealand and Australian dollars, noting a $10 million sequential ARR growth on a constant currency basis. CFO Bryan Menar added that just under 20% of ARR is generated outside the U.S. On competition, Singh expressed confidence in PAR's strong product positioning, stating that in head-to-head evaluations, PAR's product consistently proves its strength, even if other factors sometimes influence deal outcomes.

William Nance inquired about PAR's on-the-ground observations of consumer health and trends in the restaurant space. He also asked about the drivers behind the recent inflection in Hardware revenue and how PAR's strategy differs from competitors.

Answer

CEO and President Savneet Singh noted a slowdown in full-service dining but low single-digit growth in PAR's core QSR base, with the most significant disruption seen in small chains. He attributed Hardware success to a best-in-class product, strong software attachment, and the new PAR Clear drive-thru solution. CFO Bryan Menar added that PAR's growing location count provides a larger base for hardware attachment.

William Nance asked about the drivers behind the increased attachment of Data Central to POS deals and the plans to "double down" on this strategy. He also sought clarification on whether low-20s organic ARR growth is the right expectation, given the integration of recent acquisitions.

Answer

CEO Savneet Singh attributed the Data Central success to product integration, specifically embedding its reporting within the Brink POS platform, and a consolidated go-to-market team. He reiterated that the company's goal remains greater than 20% organic growth, with a playbook to accelerate the growth of acquired businesses, as is already happening with PAR Retail.

William Nance from Goldman Sachs asked for an update on how the relationship with Walmart is expected to evolve, given recent headlines.

Answer

CEO Max Levchin and COO Michael Linford both affirmed that Affirm is currently live at Walmart, actively investing in the partnership, and proud to power the program for Walmart consumers. They stated they will notify the market if and when the situation changes.

William Nance asked for details on the RLTC margin profile of the incremental growth in 0% loans and questioned whether Affirm is approaching a tipping point to lean in more aggressively on this strategy.

Answer

COO Michael Linford stated that while the long-term RLTC target remains 3% to 4%, the bar for investment is high. He noted that 0% APR offers are attractive due to the positive credit selection they bring, resulting in a lower credit loss profile. CFO Robert O'Hare added that Affirm can iterate on approval thresholds for 0% loans, allowing for fine-grained control to manage the margin profile without making long-term bets.

William Nance questioned if Affirm's visibility into future volume is improving in a similar way to its control over credit, given the shareholder letter's stats on increasing repeat user transactions.

Answer

CEO Max Levchin explained that the significant growth in cohort engagement indicates substantial room for further improvement rather than a plateau. He cited ambitious internal targets for products like the Affirm Card (e.g., $7,500 annual spend) as evidence of the large opportunity ahead, which is factored into their conservative guidance.

William Nance congratulated Affirm on the Costco partnership and asked for an update on how the relationship with Walmart is expected to evolve throughout the year.

Answer

CEO Max Levchin and CFO Robert O'Hare both affirmed that they are currently live with Walmart and are actively investing in the partnership to provide the best possible value. They stated they are proud to power the program and will notify the market of any changes to the relationship.

William Nance inquired about the go-to-market pitch and economic model for the WorldPay partnership with large retail clients. He also asked where the company sees the lowest-hanging fruit for its payment solutions between the retail and restaurant segments.

Answer

CEO James Kelly detailed a value proposition centered on a single, integrated relationship for both middleware and acquiring, which reduces complexity for clients. Darren Wilson, President of Retail, added that the pitch is a holistic data and insight solution, not just a commodity price play. Kelly identified the retail segment (fuel and grocery) as the largest volume opportunity, while Beimnet Tadele, President of Restaurants, expressed strong optimism for growth in his segment due to new platform capabilities and a transformed go-to-market team.

William Nance asked about the remaining exposure to onetime software licensing, how long it would be a drag on revenue, and for details on the hardware outlook, including the reason for a tough Q1 comparison.

Answer

CEO James Kelly confirmed a strategic and aggressive shift to a subscription model. Executive Brian Webb-Walsh quantified the remaining onetime license revenue at $30-$40 million by year-end. He also explained that the tough Q1 hardware comparison is due to the timing of a large retail customer's refresh cycle, which occurred in Q1 of the prior year.

William Nance inquired about the timeline for the new go-to-market strategy and growth investments to yield results, and which KPIs investors should monitor. He also asked about capital allocation priorities for the next year.

Answer

CFO Brian Webb-Walsh stated the strategic changes will be fully effective in 2025, with key KPIs being new site acquisitions, payment sites, and ARR. CEO David Wilkinson outlined capital allocation priorities as maintaining leverage around 2x, executing the announced share repurchase and product investments, followed by funding internal growth and considering tuck-in M&A.

William Nance from Goldman Sachs asked for details on the assumptions behind the estimated $50 million revenue headwind from the trade environment and questioned the rationale for pulling full-year guidance rather than adjusting it. He also asked for a clarification on whether the 20% China-to-U.S. revenue figure includes float revenue and for a breakdown of the drivers behind the strong take rate expansion.

Answer

CFO Bea Ordonez clarified that the $50 million figure is an estimate based on a wide range of assumptions about seller behavior, consumer demand, and supply chain impacts, not implicit guidance. She confirmed the 20% China-U.S. revenue exposure does include float revenue. Ordonez attributed the strong take rate expansion to a mix of B2B franchise growth, increased card adoption, pricing initiatives, and the workforce management acquisition.

William Nance asked about the B2B business dynamics and the potential to outperform the 25% growth target. He also requested an update on the acquisition in Mainland China and the opportunities it represents.

Answer

CEO John Caplan expressed confidence in the B2B segment, which surpassed $10 billion in 2024 volume, citing strong regional penetration and potential upside from cross-selling new workforce management products. Regarding the China acquisition, he stated that with regulatory approvals secured, it will enable Payoneer to take more market share, explore outbound payments, accelerate product development, and improve its cost structure, thereby strengthening its competitive moat.

William Nance asked about the sustainability of market share gains in the marketplace payouts business and the potential impact of U.S. tariffs on its Chinese goods sellers.

Answer

CEO John Caplan stated that the 17% marketplace volume growth reflects durable market share gains in China and successful card cross-selling. Regarding tariffs, he expressed confidence in Payoneer's resilience due to its diverse global business across 190 countries and a focus on services and non-sensitive consumer goods, noting that low-cost goods often absorb tariff impacts within the supply chain.

William Nance of Goldman Sachs Group asked about the impact of the current environment, particularly U.S.-Mexico tensions, on customer behavior and potential market share gains in digital channels.

Answer

CEO Matt Oppenheimer emphasized the resilience of the remittance market and Remitly's diversified business model. He highlighted that most of their U.S. customers are established and use bank-linked accounts, a lower-risk profile. He confirmed that revenue from Mexico grew faster than the company's overall 34% rate, underscoring their strength as a scaled digital provider.

William Nance asked if Remitly observed the same macro headwinds in October that a competitor cited, such as subsiding FX tailwinds in the U.S.-Mexico corridor. He also inquired about the expected cadence of marketing spend in Q4.

Answer

CEO Matt Oppenheimer stated that performance in the Mexico corridor remained strong in Q4-to-date, with the company continuing to gain share and seeing resilient customer behavior. CFO Vikas Mehta addressed marketing, explaining that while Q4 is a crucial investment period, he expects a moderation in year-over-year spend growth, with marketing dollars increasing sequentially but marketing cost per active customer declining year-over-year.

William Nance requested an update on the channel partnership strategy and its contribution to new business, and also asked for a quantification of the revenue and contribution profit from new large enterprise clients to aid in modeling.

Answer

Dushyant Sharma (Executive) described channel partners as an increasingly strategic part of the go-to-market strategy that complements direct sales. Sanjay Kalra (Executive) declined to provide a specific financial breakdown for the large enterprise cohort, stating it was too early, but reiterated that the business is accretive to the bottom line and is helping drive record adjusted EBITDA margins.

William Nance of Goldman Sachs asked for clarification on the client incentive outlook, questioning why growth is expected to accelerate in the second half of the year given a front-loaded renewal schedule.

Answer

CFO Chris Suh explained that Q2 incentives were lower than expected due to deal timing. He clarified that incentive growth in the second half is now expected to be higher than the first half due to client performance adjustments and some anticipated early renewals. The full-year expectation that 20% of payment volume would be impacted by renewals remains unchanged.

William Nance inquired about the underlying factors contributing to the recent acceleration in spending and whether this represents a new sustainable run rate or is primarily due to lapping tougher prior-year comparisons.

Answer

Chris Suh, Chief Financial Officer, attributed the strength to several factors, including a strong holiday season boosting discretionary categories like retail and travel, as well as the lapping of the prior year's Reg II implementation impact. He noted a significant step-up in cross-border travel but cautioned it's still early in the year to confirm a new trend.

William Nance inquired about the merchant lending portfolio, asking if there have been any changes to underwriting standards in response to potential merchant cash flow strains from tariffs or supply chain issues.

Answer

CFO and COO Jamie Miller confirmed the portfolio is actively managed with a focus on risk. She explained that the underwriting models, which include features like cash sweeps, are well-constructed. She also noted that the team made slight, conservative adjustments to underwriting in March and can react quickly to any changes in the environment.

William Nance asked how the current macroeconomic environment might affect bank technology spending and how Fiserv's implementation pipelines would perform in a weaker economy compared to a typical software company.

Answer

President and incoming CEO Michael Lyons stated that client conversations are about doing more with Fiserv, not less, as the company provides mission-critical, revenue-generating systems. He noted a 'flight to quality' in the current environment, where clients are turning to Fiserv for its scale, stability, and consistent model, sometimes moving away from smaller fintech providers. So far, he has seen the opposite of a spending slowdown.

William Nance asked about the pressures on Western Union's North American retail business, inquiring about potential channel remixing from retail to digital and whether the company is recapturing lost retail volume through its digital channels.

Answer

CEO Devin McGranahan explained that while slowing is occurring in both retail and digital channels in North America, it is more pronounced in retail, particularly in the U.S. to Mexico corridor. He noted that channel migration rates have remained consistent, indicating no significant acceleration of customers moving from retail to digital. CFO Matt Cagwin added that the full-year guidance already incorporates the Euro Change acquisition and the current macroeconomic headwinds, which have stabilized after deteriorating in late 2024. McGranahan emphasized that the company's global diversification provides a buffer against weakness in the Americas.

William Nance from Goldman Sachs inquired about the reasons for the modest revenue deceleration in North America, requested an update on macro impacts in the U.S.-to-Mexico corridor, and asked about the margin profile of the Consumer Services segment.

Answer

CEO Devin McGranahan attributed the North American softness to macro events and shifting migration patterns following the recent election, while emphasizing the company's global diversification. CFO Matt Hagan reported that Consumer Services margins improved 200 basis points sequentially to 11% in Q4. He expects margins in this segment to scale toward the total company average over the next couple of years as new products mature. McGranahan added that he would prioritize the segment's high revenue growth over short-term margin optimization.

William Nance asked about key learnings from the multiyear renewal strategy regarding pricing and competition, and also inquired which verticals show the most potential to become the next major growth driver, similar to the Tickets & Travel category.

Answer

Eido Gal, CEO, stated that high win rates are driven by the platform's superior accuracy and its strategic, multi-product roadmap. Regarding future growth, he highlighted the encouraging success in non-discretionary verticals like groceries, food delivery, and remittance, though it is premature to identify the 'next ticketing' category.

William Nance inquired about the remaining runway for gross margin expansion and OpEx control, given that the company has already reached its 75% gross margin target. He also asked for more context on the new financial services partnership aimed at reducing paper checks.

Answer

CEO Michael Praeger explained that the long-term trajectory is towards an 80% gross margin, driven by sourcing, standardization, and AI automation, though the path may not be linear. He noted that the financial services partnership leverages other firms' specialty supplier networks to accelerate the conversion of paper checks to electronic payments, a strategy AvidXchange is also applying to its own network to maximize e-payment adoption.

William Nance inquired about the remaining runway for gross margin expansion and operating expense control, given that AvidXchange has already reached its 75% gross margin target. He also asked for more details on the new financial services partnership aimed at reducing paper checks.

Answer

CEO Michael Praeger stated that the company is targeting a long-term gross margin of 80%+, driven by sourcing strategies, standardization, and AI-led automation. He explained that the financial services partnership is a strategy to leverage existing specialty supplier networks to accelerate the conversion of paper checks to electronic payments, a model AvidXchange is also applying to its own network.

William Nance requested more detail on top-of-funnel activity in challenging verticals and the underlying drivers of the positive inflection in transaction retention.

Answer

CEO Michael Praeger highlighted strength in the real estate, financial services, HOA, and health care verticals, attributing success to strategic shifts in go-to-market motions that have improved close rates and shortened sales cycles. CFO Joel Wilhite added that while the improvement in transaction retention was broad-based, it's only one quarter of data and overall retention remains below 100%.

William Nance from Goldman Sachs asked for details on the softening U.S. visa numbers and inquired about the scope of the strategic review, specifically if it could include an outright sale of the company.

Answer

CEO Mike Massaro noted that U.S. F1 visa issuance was down about 10% exiting the year, prompting a cautious outlook. Regarding the review, he stated they are examining all aspects of the business to optimize efficiency and will "take what comes our way" but remain focused on executing their strategy to deliver shareholder value. President and COO Rob Orgel added that the U.S. strategy is diversified beyond international students to include domestic payments and new products.

William Nance inquired about the positive signals from Toast's newer initiatives in international and retail, the evolution of strategic priorities, and the outlook for SaaS ARPU and same-store sales.

Answer

CEO Aman Narang confirmed that while the core U.S. restaurant market remains the primary focus, strong signals in new markets justify investment, citing 50% YoY SaaS ARPU growth for new international locations. CFO Elena Gomez noted that Q1 same-store sales would see a decline due to weather and calendar effects but expects GPV per location to remain in a stable, narrow band for 2025.

William Nance of Goldman Sachs asked about the go-to-market strategy for the retail vertical, specifically how the company is balancing the use of its existing, scaled sales force versus creating a more specialized, vertical-focused sales team.

Answer

CEO Aman Narang acknowledged the great momentum in retail, which gives the company confidence to invest more in 2025. He explained that while they are investing in a focused retail team, they also benefit from the broad lead flow generated by their national sales force. He stated that the company is actively testing and tweaking the approach to determine the optimal structure for maximizing growth.

William Nance inquired about the expected cadence of banking revenue growth in 2025, specifically the timing of acceleration in recurring revenue, and asked about the financial impact of the recent technology outage.

Answer

CEO Stephanie Ferris explained that client-requested implementation delays shifted about 100 basis points of revenue from Q1 into Q2 2025, providing clear visibility for acceleration. CFO James Kehoe confirmed Q1 would be the low point, with a sharp pickup in Q2. Regarding the outage, Ms. Ferris stated it was not a cyberattack and is not expected to have a material impact on financial results.

William Nance asked about the expected margin cadence for next year, considering the Worldpay TSA roll-off and offsetting cost actions. He also inquired about the momentum in international markets following recent wins.

Answer

CFO James Kehoe reaffirmed the medium-term margin expansion guide of 40-60 bps, noting the TSA headwind is more than offset by a larger cost savings program that is on track. CEO Stephanie Ferris addressed international momentum, confirming strong demand for Capital Markets products in Europe and Asia-Pacific, as well as for Banking solutions like MBP and international payments. She added that FIS is exploring M&A to enhance its international capabilities.

William Nance asked about the competitive dynamics in Europe, specifically regarding the consolidation of local schemes into the European Payments Initiative (EPI) and its potential impact.

Answer

CEO Michael Miebach acknowledged the push for local solutions like EPI's Vero but stated that consumer experience and merchant availability are the ultimate differentiators. He noted that Mastercard has a long history of competing and partnering with domestic schemes and does not view EPI as a material threat at its current pilot stage. Instead, he sees it as healthy competition that motivates further investment in Mastercard's own offerings.

William Nance from Goldman Sachs inquired about the progress of Mastercard's multi-rail strategy, specifically the opportunity to attach value-added services to non-Mastercard networks.

Answer

Chief Executive Officer Michael Miebach explained that the proliferation of alternative payment methods creates a significant opportunity. He identified cybersecurity as the foremost area where Mastercard's VAS portfolio can be applied to non-Mastercard transactions, as all networks require security. He noted they are a scheme-agnostic provider for many services, which diversifies their customer base.

William Nance asked about the typical ramp-up time and margin profile for Galaxy's investment banking business and requested clarification on how the segment fits within the company's broader strategy.

Answer

Executive Christopher Ferraro explained that the investment banking business is inherently 'lumpy,' with revenues recognized upon deal closings, many of which have been delayed by regulatory uncertainty. He expressed optimism that these deals will now close. The business is capital-light and people-focused, resulting in high-margin flow-through. Strategically, he noted the team's 'unsung' but critical role in advising on Galaxy's own internal transactions, in addition to serving its external client franchise.

William Nance asked about the confidence in the 2025 mid-single-digit growth outlook, questioning if there is enough cushion to execute the company's restructuring initiatives. He also inquired about the revenue and margin profile of the divested AdvancedMD business.

Answer

CEO Cameron Bready expressed high confidence in the medium-term guide, stating the 2025 plan provides flexibility for the transformation while delivering double-digit EPS growth and significant capital returns. Bready confirmed AdvancedMD's 2024 revenue was projected at $250-$260 million with a cash EBITDA margin around 30%. CFO Josh Whipple added that restructuring charges would flow through over the next 6-7 quarters.

William Nance asked about the trajectory of deposit costs and net interest margin (NIM), as well as the company's capital allocation strategy, including the potential for more aggressive capital returns and the M&A environment.

Answer

Group CFO Craig Bridgewater stated that the increase in deposit costs has slowed significantly and that the bank is actively lowering deposit pricing. President and Group Chief Risk Officer Michael Schrum added that while they remain asset sensitive and expect some NIM compression in a falling rate environment, this will be managed with a focus on expenses and credit quality. Chairman and CEO Michael Collins outlined the capital allocation priorities as dividends, then M&A, and finally share buybacks. He noted they are actively repurchasing shares as no immediate M&A is on the horizon, after passing on a recent trust deal due to jurisdictional risk concerns.

William Nance inquired about the financial impact of the renewed financial institution (FI) channel contract, specifically how spreading the RPO over more years affects quarterly revenue. He also asked for details on the long-term goal for ad valorem payment monetization and how the payment mix will influence the take rate.

Answer

President and CFO John Rettig clarified that the RPO for the large FI partner remains consistent but will now be recognized over four years instead of one. Regarding monetization, Rettig positioned the 20% ad valorem penetration target as a long-term "floor," stating that investments in product experience, payment speed, and an increasing mix of card payments are expected to expand both volumes and take rates over time.

William Nance from Goldman Sachs Group asked for the weighted average cost of the BDA portfolio to better understand the company's pricing flexibility in a rate-cutting cycle.

Answer

EVP & CFO Stephen Boyle indicated that the cost could be inferred to be around 25 basis points. He also referenced prior disclosures that modeled a deposit beta of 20 to 40 in a scenario of falling rates.