Revenue Growth Outlook
Q: Will revenue growth accelerate next year?
A: Mimi stated that there's no reason to expect anything other than growth within their long-term algorithm of 7% to 8%, and they feel confident about hitting their revenue targets despite some challenges. She mentioned that the growth algorithm remains a good framework for next year.

Margin Outlook
Q: How does margin performance affect long-term margins?
A: Mimi explained that strong execution, operational focus, and product mix contributed to this year's margins. While it's early in planning, they still consider their long-term margin range appropriate but are always aiming to deliver shareholder value.

Free Cash Flow Sustainability
Q: What's driving free cash flow improvement?
A: Mimi highlighted that improved clarity on cash taxes, especially regarding Section 174 R&D expenses, has increased free cash flow conversion to above 70%, a level she believes is sustainable going forward.

Payments Segment Softness
Q: Why is the payments segment trending softer?
A: Mimi noted slower transaction growth in debit cards, consistent with major card network trends. Consumers are spending more per ticket but making fewer transactions, impacting revenue. They reaffirmed full-year guidance and expect payments growth of 7% to 8%.

Sales Pipeline Strength
Q: How is the sales pipeline performing?
A: David Foss reported that Q3 was their best third-quarter sales ever, with the pipeline replenished to near-record levels. He feels bullish about future sales, and Greg added that recent sales success will drive revenue in future quarters.

Banking M&A Impact
Q: How does bank M&A affect your business?
A: Greg noted increased M&A interest among banks, but regulatory delays are affecting deal completions. Mimi mentioned this creates headwinds, with conversion revenue approximately $3.5 million lower year-over-year in Q3.

Implementation Queues
Q: How are implementation queues affecting margins?
A: Greg stated they continuously assess and add resources to accelerate implementation queues when it makes sense, balancing operational efficiency with margin goals through business case evaluations.

Banno Business Adoption
Q: What's the outlook for Banno Business adoption?
A: Greg anticipates that 60% to 70% of their customers will adopt Banno Business over the next 3 to 5 years, as many institutions are commercially focused and see value in the offering.

Competitive Landscape
Q: How is the competitive landscape evolving?
A: David Foss noted that while fintechs try to enter the market, they often underestimate banking complexities and regulations. He doesn't see significant changes and believes their comprehensive banking solutions remain competitive.

AI for Cost Savings
Q: Can AI lower your internal costs?
A: Greg explained they are leveraging AI for operational efficiencies across the organization, prioritizing initiatives through business cases. Mimi emphasized a responsible balance in AI usage and investment within existing budgets.

Mid-Market Success
Q: How are you progressing with mid-market banks?
A: Greg noted increased opportunities with banks in the $5-15 billion asset range, driven by their technology strategy. They have three prospects over $20 billion and are seeing success selling to larger institutions.

Capital Allocation
Q: What are your thoughts on buybacks?
A: Greg said they are evaluating share repurchases. Mimi emphasized prioritizing internal investments to drive growth, planning to substantially pay down debt, and being mindful of financial ratios.

Credit Card Processing
Q: What's the status of your credit card processing?
A: David Foss reported signing three additional credit customers. While not expected to be a major revenue driver, offering credit processing meets the needs of customers desiring both debit and credit services from one provider.

Negative Term Fee Event
Q: Why did you have a negative term fee?
A: Mimi said a customer delayed their deconversion, leading to a reversal of the termination fee. David Foss added it was a rare case of a failed conversion where the customer chose to stay with Jack Henry.

Complementary Revenue Growth
Q: Is complementary revenue growth slowing?
A: Mimi affirmed that digital solutions like Banno show robust growth. The complementary segment remains strong, with growth in line with expectations, and there's no slowdown affecting performance.

Small Business Initiatives
Q: What are your initiatives for small business banking?
A: Greg highlighted offerings like treasury management, lending, account opening, business bill pay, and remote deposit capture. They are developing a cohesive small business strategy using existing solutions.

Core Conversions Demand
Q: What's the demand for core conversions and cloud?
A: Greg observed strong demand driven by needs for deposit growth, operational efficiency, and fraud prevention. Their technology modernization and cloud-native solutions are attracting institutions aiming to stay relevant.