| Metric (Thousands USD) | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Core Segment           | 155,390  **[0000779152-23-000009_jkhy-20221231xex99pressrel.htm:3]**  | 156,903  **[0000779152-23-000022_jkhy-20230331xex99pressrel.htm:3]**  | 168,747  **[0000779152-23-000057_jkhy-20230630xex99pressrel.htm:3]**  | 186,439  **[0000779152-23-000096_jkhy-20230930xex99pressrel.htm:2]**  | 165,601  **[0000779152-24-000016_jkhy-20231231xex99pressrel.htm:4]**  | 166,655  **[0000779152-24-000030_jkhy-20240331xex99pressrel.htm:4]**  | 172,040  **[0000779152-24-000076_jkhy-20240630xex99pressrel.htm:4]**  | 195,624  **[0000779152-24-000111_jkhy-20240930.htm:16]**  |
| Payments Segment       | 191,487  **[0000779152-23-000009_jkhy-20221231xex99pressrel.htm:3]**  | 191,840  **[0000779152-23-000022_jkhy-20230331xex99pressrel.htm:3]**  | 197,473  **[0000779152-23-000057_jkhy-20230630xex99pressrel.htm:3]**  | 199,358  **[0000779152-23-000096_jkhy-20230930xex99pressrel.htm:2]**  | 203,839  **[0000779152-24-000016_jkhy-20231231xex99pressrel.htm:4]**  | 201,919  **[0000779152-24-000030_jkhy-20240331xex99pressrel.htm:4]**  | 212,593  **[0000779152-24-000076_jkhy-20240630xex99pressrel.htm:4]**  | 211,923  **[0000779152-24-000111_jkhy-20240930.htm:16]**  |
| Complementary Segment  | 142,295  **[0000779152-23-000009_jkhy-20221231xex99pressrel.htm:3]**  | 142,122  **[0000779152-23-000022_jkhy-20230331xex99pressrel.htm:3]**  | 151,124  **[0000779152-23-000057_jkhy-20230630xex99pressrel.htm:3]**  | 161,366  **[0000779152-23-000096_jkhy-20230930xex99pressrel.htm:2]**  | 152,466  **[0000779152-24-000016_jkhy-20231231xex99pressrel.htm:4]**  | 149,231  **[0000779152-24-000030_jkhy-20240331xex99pressrel.htm:4]**  | 155,149  **[0000779152-24-000076_jkhy-20240630xex99pressrel.htm:4]**  | 171,702  **[0000779152-24-000111_jkhy-20240930.htm:16]**  |
| Corporate and Other Segment | 16,142  **[0000779152-23-000009_jkhy-20221231xex99pressrel.htm:3]**  | 17,687  **[0000779152-23-000022_jkhy-20230331xex99pressrel.htm:3]**  | 17,290  **[0000779152-23-000057_jkhy-20230630xex99pressrel.htm:3]**  | 24,205  **[0000779152-23-000096_jkhy-20230930xex99pressrel.htm:2]**  | 23,795  **[0000779152-24-000016_jkhy-20231231xex99pressrel.htm:4]**  | 20,757  **[0000779152-24-000030_jkhy-20240331xex99pressrel.htm:4]**  | 20,130  **[0000779152-24-000076_jkhy-20240630xex99pressrel.htm:4]**  | 21,733  **[0000779152-24-000111_jkhy-20240930.htm:16]**  |
| Total Revenue          | 505,314  **[0000779152-23-000009_jkhy-20221231xex99pressrel.htm:3]**  | 508,552  **[0000779152-23-000022_jkhy-20230331xex99pressrel.htm:3]**  | 534,634  **[0000779152-23-000057_jkhy-20230630xex99pressrel.htm:3]**  | 571,368  **[0000779152-23-000096_jkhy-20230930xex99pressrel.htm:2]**  | 545,701  **[0000779152-24-000016_jkhy-20231231xex99pressrel.htm:4]**  | 538,562  **[0000779152-24-000030_jkhy-20240331xex99pressrel.htm:4]**  | 559,912  **[0000779152-24-000076_jkhy-20240630xex99pressrel.htm:4]**  | 600,982  **[0000779152-24-000111_jkhy-20240930.htm:16]**  |

d033347c18788d227f542be925d47f9aaef5d97b41294ff5f8a9d2c79865c406

f820733d0d8f3827dd7fc640b14f7f65d5f37c7e23e6ba79043283ac104e77d9

Jack Henry & Associates, Inc. (JKHY) is a financial technology company that specializes in providing technology solutions and payment processing services to community and regional financial institutions **[0000779152-24-000079_jkhy-20240630.htm:37]** **[0000779152-24-000111_jkhy-20240930.htm:20]** **[0000779152-24-000111_jkhy-20240930.htm:16]**. The company operates through four main segments, offering a range of products and services that cater to the needs of banks and credit unions **[0000779152-24-000111_jkhy-20240930.htm:16]** **[0000779152-24-000033_jkhy-20240331.htm:19]**. These offerings include core information processing platforms, secure payment processing tools, and additional software and services for digital banking and fraud prevention **[0000779152-24-000111_jkhy-20240930.htm:16]** **[0000779152-24-000033_jkhy-20240331.htm:19]**.

1. **Payments** - Provides secure payment processing tools and services, including ATM, debit, and credit card processing, online and mobile bill pay solutions, ACH origination, and remote deposit capture processing **[0000779152-24-000111_jkhy-20240930.htm:16]** **[0000779152-24-000033_jkhy-20240331.htm:19]**.
2. **Core** - Offers core information processing platforms to banks and credit unions, which include applications for processing deposits, loans, and general ledger transactions, and maintaining centralized customer/member information **[0000779152-24-000111_jkhy-20240930.htm:16]** **[0000779152-24-000033_jkhy-20240331.htm:19]**.
3. **Complementary** - Offers additional software and services such as digital/mobile banking, treasury services, online account opening, fraud/anti-money laundering solutions, and lending/deposit solutions **[0000779152-24-000111_jkhy-20240930.htm:16]** **[0000779152-24-000033_jkhy-20240331.htm:19]**.
4. **Corporate and Other** - Includes revenue and costs from hardware and other products not attributed to the other three segments **[0000779152-24-000111_jkhy-20240930.htm:16]** **[0000779152-24-000033_jkhy-20240331.htm:19]**.

f49cf3acd437c123dad4226b15dbfbb7d30be7ee00f767fd42893fba26f085df

1. "Your competitor recently won a core processing deal with a bank under $10 billion in assets. Are you seeing increased competition in your target market, and how are you adjusting your strategy to maintain your competitive edge in winning new core clients?"  **[JKHY_3406020_10]** 
2. "Interest income remains high for you, but you experienced a later ramp-up compared to peers. Can you explain what led to this timing difference and whether this interest income level is sustainable given potential changes in interest rates?"  **[JKHY_3406020_28]** 
3. "Despite reporting strong sales and record sales attainment, you noted slower growth rates in on-premise annual maintenance and card processing. How do you plan to address these slower growth areas to meet your full-year revenue and margin expansion targets?"  **[JKHY_3406020_1]** **[JKHY_3406020_3]** 
4. "You've emphasized the importance of your modern core modular platform and migration to the public cloud, especially with larger financial institutions. Can you provide specific examples of how this strategy is converting into new contracts or client migrations, and how it sets you apart from competitors?"  **[JKHY_3406020_18]** 
5. "Given that Banno Business is not yet a significant contributor to user growth or revenue, even with a 20% increase in Banno users, what strategies are in place to accelerate growth in the business segment, and how does this impact your expectations for digital revenue growth?"  **[JKHY_3406020_22]** 

fda9440d76294cd1c0022943bbc9f1c12a911d1c2d36c803b9034cc818aedb4f

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Full Year Non-GAAP Revenue Growth**: Expected to be between **7% to 8%**  **[JKHY_3406020_1]** .
  2. **Q2 Non-GAAP Revenue Growth**: Expected to be approximately **6%**  **[JKHY_3406020_5]** .
  3. **Non-GAAP Margin**: Expected to see contraction of **100 basis points** for the full year, but ended Q1 with only **89 basis points** of contraction  **[JKHY_3406020_1]** .
  4. **Full Year Margin Expansion**: Expected to be consistent with their full-year guidance, with a **25 to 40 basis points** increase in the second half of the year  **[JKHY_3406020_21]** .
  5. **Free Cash Flow Conversion**: Guidance remains intact at **65% to 75%** for the full year  **[JKHY_3406020_9]** .
  6. **Tax Rate**: A **24%** tax rate is used for non-GAAP EPS metrics  **[JKHY_3406020_5]** .

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2025
- **Guidance**:
  1. **GAAP EPS**: Guidance for GAAP EPS is between **$5.78 to $5.87 per share**, representing a growth of **11% to 12%**  **[JKHY_3399615_5]** .
  2. **Tax Rate**: The full-year tax rate estimate is **24%**  **[JKHY_3399615_5]** .
  3. **Free Cash Flow Conversion**: Expected to be between **65% to 75%**  **[JKHY_3399615_5]** .
  4. **Revenue Growth**: Full-year GAAP and non-GAAP revenue growth is expected to be **7% to 8%**  **[JKHY_3399615_4]** .
  5. **Non-GAAP Margin Expansion**: Annual non-GAAP margin expansion is guided to be **25 to 40 basis points**  **[JKHY_3399615_4]** .
  6. **Deconversion Revenue**: Guidance for deconversion revenue is **$16 million** for fiscal 2025  **[JKHY_3399615_4]** .
  7. **Q1 Non-GAAP Revenue Growth**: Expected to be approximately **5.25%**  **[JKHY_3399615_5]** .
  8. **Q1 Non-GAAP Margin**: Expected to contract by approximately **100 basis points**  **[JKHY_3399615_5]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Full Year GAAP EPS**: Revised upward to **$5.15 to $5.19 per share** from the previous guidance of $5.09 to $5.13 per share  **[JKHY_3387530_5]** .
  2. **Deconversion Revenue**: Reiterated full year guidance of **$16 million**  **[JKHY_3387530_5]** .
  3. **Non-GAAP Revenue Growth**: Expected to potentially have a bias towards the lower end of the **7.4% to 8.0%** growth range  **[JKHY_3387530_5]** .
  4. **Non-GAAP Margin Expansion**: Increased annual non-GAAP margin expansion guidance to **45 to 50 basis points** compared to the previously provided 35 to 40 basis points  **[JKHY_3387530_5]** .
  5. **Full Year Tax Rate Estimate**: Remains at **23.5%**  **[JKHY_3387530_5]** .
  6. **Free Cash Flow Conversion**: Increased guidance to **70% to 75%** from the previous commentary of 60%  **[JKHY_3387530_5]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Revenue Growth**:
     - Full year non-GAAP revenue growth is expected to be **7.4% to 8.0%**, compared to the previous guidance of 7.2% to 8.2%  **[JKHY_3372307_7]** .
     - Full year GAAP revenue growth is expected to be **6.6% to 7.2%** for fiscal 2024  **[JKHY_3372307_7]** .
  2. **Margin Expansion**: Annual non-GAAP margin expansion is expected to be **35 to 40 basis points**, compared to the previous guidance of 30 to 35 basis points  **[JKHY_3372307_7]** .
  3. **Tax Rate**: The full year tax rate is expected to be approximately **23.5%**, with a potential bias slightly higher  **[JKHY_3372307_7]** .
  4. **Earnings Per Share (EPS)**: Full year guidance for GAAP EPS is revised upwards to **$5.09 to $5.13** per share, from the previous guidance of $4.98 to $5.04 per share  **[JKHY_3372307_7]** .
  5. **Deconversion Revenue**: Full year deconversion revenue guidance is reiterated at **$16 million**  **[JKHY_3372307_7]** .
  6. **Free Cash Flow Conversion**: The full year guidance of **60% free cash flow conversion** is reiterated  **[JKHY_3372307_7]** .

26ce4e28b4e4ac6ea680f70cf8f490c5263243015e8b5b6a573dc10651942b78

- **Fidelity National Information Services, Inc.**; competes with Jack Henry's core solutions by providing information and transaction processing solutions to banks and credit unions  **[0000779152-24-000079_jkhy-20240630.htm:13]** .
- **Fiserv, Inc.**; competes with Jack Henry's core solutions by providing information and transaction processing solutions to banks and credit unions  **[0000779152-24-000079_jkhy-20240630.htm:13]** .
- **Corelation, Inc.**; competes with Jack Henry's core solutions by providing information and transaction processing solutions to banks and credit unions  **[0000779152-24-000079_jkhy-20240630.htm:13]** .
- **Finastra**; competes with Jack Henry's core solutions by providing information and transaction processing solutions to banks and credit unions  **[0000779152-24-000079_jkhy-20240630.htm:13]** .

c87ac4078647ee56a8a8dc18339025a97fac36a5859d8889d4a09f306571aa10

0fd3c0d75d5b8f543f88d5aa4179772a63926146464c89731dd07d32ed49f83f

c842d40c5b79c7a14eb24340c88ffbe7e0407ee05507d8de68b0f9aedff02483

| Name                | Position                                             | Start Date         | Short Bio                                                                                                                                                                                                 |
|---------------------|------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| David B. Foss       | Executive Board Chair                                | July 1, 2024       | David B. Foss was named Executive Board Chair on **July 1, 2024**, after serving as CEO from July 1, 2016, to June 30, 2024. He has held various leadership roles within the company since joining in 1999  **[0000779152-24-000102_jkhy-20241003.htm:6]** **[0000779152-24-000097_jkhy-20240920.htm:6]** **[0000779152-23-000087_jkhy-20231004.htm:30]** .                      |
| Gregory R. Adelson  | President and Chief Executive Officer                | July 2024          | Gregory R. Adelson became CEO in **July 2024**. He joined Jack Henry in 2011 and has held several executive roles, including COO from November 2019 until his appointment as CEO  **[0000779152-24-000102_jkhy-20241003.htm:25]** **[0000779152-24-000097_jkhy-20240920.htm:25]** .                                                        |
| Mimi L. Carsley     | Chief Financial Officer and Treasurer                | September 2022     | Mimi L. Carsley was appointed CFO in **September 2022**. She has over 30 years of experience in financial planning and corporate finance, with previous roles at Blucora, Inc., and LPL Financial Holdings, Inc.  **[0000779152-23-000087_jkhy-20231004.htm:30]** **[0000779152-24-000102_jkhy-20241003.htm:25]** **[JKHY_3408875_0]** **[JKHY_3401264_0]** .               |
| Shanon G. McLachlan | Senior Vice President and Chief Operating Officer    | July 1, 2024       | Shanon G. McLachlan was appointed COO on **July 1, 2024**. He joined Jack Henry in 2015 and has held various leadership positions, including President of Credit Union Solutions  **[0000779152-24-000102_jkhy-20241003.htm:26]** **[0000779152-24-000097_jkhy-20240920.htm:26]** .                                                        |
| Craig K. Morgan     | General Counsel and Secretary                        | November 2016      | Craig K. Morgan has been General Counsel and Secretary since **November 2016**. He oversees the legal and corporate responsibility functions and has been with the company since 2004  **[0000779152-24-000102_jkhy-20241003.htm:26]** **[0000779152-23-000087_jkhy-20231004.htm:30]** .                                                  |
| Renee A. Swearingen | Senior Vice President, Chief Accounting Officer, and Assistant Treasurer | May 2022           | Renee A. Swearingen was appointed to her current role in **May 2022**. She joined Jack Henry in 1996 and has served in various financial roles, including Controller and Vice President of Finance and Procurement  **[0000779152-23-000087_jkhy-20231004.htm:31]** **[0000779152-24-000102_jkhy-20241003.htm:26]** .                      |

bb6c3fd975d851a1428386f39425307f1473ae53d9a9c6caf4d5f0aa2e3c2fbe

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | **May 14, 2021**  **[0000779152-24-000111_jkhy-20240930.htm:35]**  |
| End Date/Duration        | **No expiration**  **[0000779152-24-000111_jkhy-20240930.htm:35]**  |
| Total additional amount  | **35,000,000 shares**  **[0000779152-24-000111_jkhy-20240930.htm:35]**  |
| Remaining authorization  | **3,618 shares**  **[0000779152-24-000111_jkhy-20240930.htm:29]** **[0000779152-24-000111_jkhy-20240930.htm:5]**  |
| Details                  | The program does not include specific price targets or timetables and may be suspended at any time.  **[0000779152-22-000076_jkhy-20220630.htm:68]** **[0000779152-23-000099_jkhy-20230930.htm:5]** **[0000779152-24-000033_jkhy-20240331.htm:35]** **[0000779152-23-000024_jkhy-20230331.htm:34]** **[0000779152-23-000012_jkhy-20221231.htm:34]** **[0000779152-24-000111_jkhy-20240930.htm:29]** **[0000779152-23-000099_jkhy-20230930.htm:28]** **[0000779152-24-000079_jkhy-20240630.htm:45]** **[0000779152-22-000076_jkhy-20220630.htm:51]**  |

6febeae17cfebe2c2b6e69e7127ca39c0518692df9bb8bc863785a24fbd26338

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

a5825e779b58f9dce17bf71b8a6f4d539803bc9b38007f1bd554ecc3c1f25db5

**Quarterly guidance for Q2 2025:**
- **Non-GAAP revenue growth**: 6%  **[JKHY_3406020_5]**  (no prior guidance)

**Annual guidance for FY 2025:**
- **Revenue growth**: 7%–8%  **[JKHY_3406020_1]**  (no change from prior guidance 7%–8%  **[JKHY_3399615_4]** )  
- **Non-GAAP margin expansion**: 25–40 basis points  **[JKHY_3406020_21]**  (no change from prior guidance 25–40 basis points  **[JKHY_3399615_4]** )  
- **Free cash flow conversion**: 65%–75%  **[JKHY_3406020_9]**  (no change from prior guidance 65%–75%  **[JKHY_3399615_5]** )  
- **Tax rate**: 24%  **[JKHY_3406020_5]**  (no change from prior guidance 24%  **[JKHY_3399615_5]** )  
- **Non-GAAP margin**: 100 basis points contraction  **[JKHY_3406020_1]**  (no prior guidance)  

1590896128964e04f67c959ea9e5b222a781f590eb4860b8f6ef6a3ba8a5c882

| Name                     | Start Date       | End Date       | Reason for Change                                                                                   |
|--------------------------|------------------|----------------|-----------------------------------------------------------------------------------------------------|
| PricewaterhouseCoopers LLP (PwC) | December 7, 2015  **[0000779152-15-000095_jkhy-20151210x8kxchangeofa.htm:1]**  | Present   | Current auditor.                                                                               |
| Deloitte & Touche LLP    | N/A          | December 7, 2015  **[0000779152-15-000095_jkhy-20151210x8kxchangeofa.htm:1]**  | Part of a competitive process by the Audit Committee; no disagreements, but a reportable material weakness.  **[0000779152-15-000095_jkhy-20151210x8kxchangeofa.htm:1]**  |

82b291da3a68d35722d60ad267310e8cc804c8de1cb31aa9ee08a990663b7025

3313be79efba5bb75f93f41959f6ef8322d0e6ddd68a93698aac1db2b39d5675

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

58a2dfeac000293f344987fdce05f77ac2c2dc524da99154dbc8c9a537ba64b8

| Year       | Amount Due (Millions) | Debt Type          | Interest Rate (%) | % of Total Debt |
|------------|-----------------------|--------------------|-------------------|-----------------|
| 2025       | 90                    | Term Loan Facility | Variable          | 64.3% = (90 / 140) * 100 **[0000779152-24-000111_jkhy-20240930.htm:30]** **[0000779152-24-000111_jkhy-20240930.htm:2]** |
| Beyond 2025| 50                    | Other Long-Term Debt| N/A               | 35.7% = (50 / 140) * 100 **[0000779152-24-000111_jkhy-20240930.htm:2]** |

c4cca8f571b8c845e1d0268ab77e37e8ba78ee9b1dc633ef0287d5c16cae2b5e

Number of financial institutions served (count)

Number of full-time and part-time associates (count)

Remaining performance obligations (USD thousands)

01963d707e929ec1117ee08e6e25730abf032352fddf89e2caaaa5eebf233f83

87573a82d6b614a1fbe3be0328a45936839be3b9a4b39bcaa9c3527ba753c462

- **The company's modern core modular platform strategy is resonating with clients and prospects**, particularly larger financial institutions, leading to competitive wins, including a recent **$7 billion asset bank win**. This focus on **technology modernization** and open philosophy is attracting institutions seeking innovation and flexibility.  **[JKHY_3406020_18]** ,  **[JKHY_3406020_10]**
- **The partnership with Moov is progressing well**, with significant advancements since its announcement. The company demonstrated this solution at their client conference, receiving positive feedback. They are on track to deliver this **unique solution to early adopter clients in May 2025**, indicating strong future growth potential.  **[JKHY_3406020_24]**
- Despite increased competition, **the company continues to win new business and renew contracts with larger clients**. They are proactively preparing for industry consolidation by adding conversion and migration teams, and they have several acquisitions lined up for the second half of fiscal 2025, positioning them well to capitalize on M&A activity.  **[JKHY_3406020_10]** ,  **[JKHY_3406020_7]**

30f321f907359cddc7e4875bde79ab36b8cf6b40f2e88e5c7139c816b0cd2e0c

- The company expects **margins to decrease in the second half of fiscal 2024** due to seasonality and increased costs, which may impact overall profitability.  **[JKHY_3372307_10]**
- A significant portion of the **EPS guidance increase** is attributed to **favorable tax rates and higher net interest income**, rather than operational performance, raising concerns about the sustainability of earnings growth.  **[JKHY_3372307_32]**
- **Margin expansion** in the quarter was partly due to **onetime changes and cost controls** that may not be sustainable in the future, potentially affecting future profitability.  **[JKHY_3372307_37]** **[JKHY_3372307_18]**

96b26bfa1304fe73beae20830830516bb972893d72e417bdcbec5aa6ab37b06d

1. **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.  **[JKHY_3387530_14]** **[JKHY_3387530_28]** 

2. **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.  **[JKHY_3387530_10]** 

3. **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.  **[JKHY_3387530_12]** 

4. **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%**.  **[JKHY_3387530_14]** 

5. **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.  **[JKHY_3387530_8]** 

6. **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.  **[JKHY_3387530_23]** 

7. **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.  **[JKHY_3387530_21]** 

8. **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.  **[JKHY_3387530_25]** 

9. **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.  **[JKHY_3387530_15]** 

10. **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.  **[JKHY_3387530_9]** 

11. **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.  **[JKHY_3387530_17]** **[JKHY_3387530_22]** 

12. **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.  **[JKHY_3387530_24]** 

13. **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.  **[JKHY_3387530_27]** 

14. **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.  **[JKHY_3387530_19]** 

15. **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.  **[JKHY_3387530_29]** 

16. **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.  **[JKHY_3387530_26]** 

17. **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.  **[JKHY_3387530_13]** 

d56d418b70c48cb0c7dccaa128651fffa309f2231710deeba59d518fa2d269e6

1. **Second Half Revenue Growth Outlook**  
   **Q:** What drives confidence in second-half revenue acceleration?  
   **A:** Management expects a robust second half, with revenue growth accelerating due to multiple factors, including easing hardware drag, continued cloud revenue growth, strong faster payments adoption, and the ramp-up of new products like Defender. They also anticipate increased implementation of prior year sales and higher digital adoption, giving them confidence in second-half performance.  **[JKHY_3406020_12]** 

2. **Core Wins and Pipeline Confidence**  
   **Q:** Is the target of 50-55 core wins this fiscal year achievable?  
   **A:** Yes, management is confident in achieving their normal numbers. They are tracking well, having already secured three core wins in Q1, including a significant **$7 billion** deal. The sales pipeline is at an all-time high, even after record quarters, reinforcing their confidence.  **[JKHY_3406020_13]** **[JKHY_3406020_6]** 

3. **Margin Expansion and Outlook**  
   **Q:** Can margins expand beyond the 25-40 basis point target?  
   **A:** While it's too early to say definitively, there could be upside if the economy and consumer sentiment remain strong. Management feels comfortable with the full-year margin expansion guidance, expecting challenges in the first half but aligning with revenue growth in the second half to achieve the **25 to 40 basis points** target.  **[JKHY_3406020_11]** **[JKHY_3406020_21]** 

4. **Impact of M&A on Revenue Growth**  
   **Q:** How will M&A activity affect revenue growth?  
   **A:** Consolidation is expected to lead to higher deconversion revenue, particularly in the next fiscal year. Several acquisitions are already lined up for the second half of fiscal '25, baked into the numbers. Regulatory challenges may lessen with the new administration, potentially accelerating M&A approvals.  **[JKHY_3406020_7]** **[JKHY_3406020_15]** 

5. **Cloud Migration and Growth Runway**  
   **Q:** How sustainable is cloud revenue growth?  
   **A:** With **73%** of clients on the private cloud, management sees several years of runway for double-digit cloud revenue growth. They anticipate reaching low to mid-90% adoption, acknowledging some clients may not move. Larger customers are now migrating, and as clients grow, so does Jack Henry's cloud revenue. Public cloud traction is expected with the upcoming deposit-only core in 2026.  **[JKHY_3406020_25]** 

6. **Deemphasizing Low-Growth Businesses**  
   **Q:** Is there a change in pace of deemphasizing less profitable businesses?  
   **A:** Management is focused on this area, exploring divestitures and sunsetting certain products, which typically takes two years. While it's doubtful there will be significant immediate impact, over time this strategy should reduce the drag on performance and aid in margin expansion and cost containment.  **[JKHY_3406020_16]** 

7. **Product Developments (Banno, Moov, Loan Origination)**  
   **Q:** What's the progress on new product initiatives like Banno and Moov?  
   **A:** Banno user growth is driven mainly by the retail platform, with a **20% year-over-year** increase. Banno Business contributes but is not yet a significant driver. The Moov partnership is progressing well, with a full demo showcased at the client conference, and is on track for early adopter release in **May 2025**. The loan origination platform, now called Enterprise Account Opening, combines consumer and commercial capabilities and will enter early adoption in **January 2025**.  **[JKHY_3406020_8]** **[JKHY_3406020_19]** **[JKHY_3406020_24]** 

8. **Competition in Core Processing**  
   **Q:** Are you seeing increased competition in core processing?  
   **A:** Management is not seeing increased competitive pressure. While they don't win every deal, they continue to be very successful, including recent significant wins and renewals among larger clients. The competitive win mentioned by a rival involved a significant price difference, but overall, they feel confident in their position.  **[JKHY_3406020_10]** 

9. **Capital Allocation Priorities**  
   **Q:** What are your capital allocation priorities in the current environment?  
   **A:** The company remains steadfast in investing in future growth through innovation, supporting their dividend policy, and paying down debt. As they build a more positive cash flow position post-debt repayment, they will consider share repurchases. M&A is always on the table, but they've seen limited opportunities recently.  **[JKHY_3406020_15]** 

10. **Implementation Queues and Resource Allocation**  
    **Q:** How are you balancing implementation queues with margin expansion?  
    **A:** Management evaluates this monthly, balancing the need to expedite revenue flow with operating margins. They have added resources where needed, such as in the Financial Crimes Defender group. Some implementation delays are due to factors like core implementation timing, not just resource constraints.  **[JKHY_3406020_23]** 

b0c9fd7e2a2cc3bd7191ea83629b054566f473719050f3a31aa3b4ea53ab5e80

- **Significant increase in core wins with larger financial institutions:** This fiscal year, Jack Henry signed **15 new core contracts** with financial institutions over **$1 billion** in assets, compared to only **5** in the previous year. Over the past four years, average assets for bank clients have increased by **27%**, and for credit union clients by **34%**.  **[JKHY_3399615_12]**
- **Strong growth in the payments segment:** The payments segment reported an **8%** growth in the fourth quarter and **7%** for the full fiscal year. This growth is driven by increased demand in the EPS business, PayCenter (real-time payments), and card-related services, including fraud solutions.  **[JKHY_3399615_9]** **[JKHY_3399615_15]**
- **Ongoing migration of clients to the cloud with significant revenue uplift:** Currently, **73%** of core clients are hosted in Jack Henry's private cloud. The company aims to increase this to around **93%-95%**, providing several years of growth runway. Clients migrating to the private cloud experience approximately **1.75x** revenue uplift.  **[JKHY_3399615_22]**

ca271766a016bd62976295a7423ea379ab784efb1701eda9d6055824aa2663da

- **Interest income may decrease if interest rates fall**, as it has been elevated due to recent negotiations and is correlated with interest rates, potentially impacting earnings.  **[JKHY_3406020_28]**
- **Increased competition in core processing**, with competitors winning deals in Jack Henry's focus area, including a bank with less than $10 billion in assets, suggesting potential market share loss.  **[JKHY_3406020_10]**
- **Potential revenue impact from M&A and consolidation**, as higher deconversion revenue indicates client loss due to mergers, which could negatively affect revenue growth if not offset by new sales.  **[JKHY_3406020_7]**

8df7162515e43c426d5487627aaaef398d5c880be04484b7f858afc2cf849673

1. **Free Cash Flow Outlook**  
   **Q:** When will free cash flow return to historical levels?  
   **A:** Management expects free cash flow to revert back to the historical norm of **80% to 100%**, but the timing—whether in **2024 or 2025**—is still uncertain.  **[JKHY_3372307_9]** 

2. **Margin Outlook**  
   **Q:** What are the headwinds for second-half margins?  
   **A:** Margins are managed on a full-year basis, with the first quarter usually being the highest. Lower margins in the second half are due to timing of personnel-related and licensing costs, but overall, they are pleased with the **additional margin expansion** in the guide provided.  **[JKHY_3372307_10]** 

3. **Sales Growth Drivers**  
   **Q:** What is driving the strong sales momentum?  
   **A:** Key drivers include **14 core wins** in the quarter, with **4 multibillion-dollar banks**. Innovative solutions like **Banno Business** with **56 contracts signed** and other products developed in the last **five years** are fueling growth. There's significant demand for modern digital solutions in fraud, treasury, and digital banking.  **[JKHY_3372307_11]** 

4. **Pipeline Composition**  
   **Q:** How has the pipeline composition changed recently?  
   **A:** The size of core opportunities has increased, with larger institutions recognizing Jack Henry as a real player. New technologies introduced in the last **2–3 years** are dominating sales conversations, strengthening the pipeline.  **[JKHY_3372307_14]** 

5. **Payment Segment Growth**  
   **Q:** When will the Payment segment return to 8–9% growth?  
   **A:** The processing-related part of payments grew strongly at **8%**. Non-processing headwinds like lower card production are temporary; they expect the processing engine to continue driving strong growth.  **[JKHY_3372307_12]** 

6. **Generative AI Opportunities**  
   **Q:** How will generative AI impact revenue and costs?  
   **A:** Jack Henry is carefully incorporating generative AI in development and customer service, partnering with **Google** and others to test models. Opportunities exist in automating processes and enhancing products, but they are ensuring strong governance and guardrails.  **[JKHY_3372307_13]** 

7. **M&A Outlook**  
   **Q:** Is there any change in the M&A environment?  
   **A:** Currently, there are no deals under review. While interested in potential companies, it's a slow time for M&A activity, and no deals are on the table right now.  **[JKHY_3372307_31]** 

8. **Revenue Guidance Confidence**  
   **Q:** Is there upside to the free cash flow guidance?  
   **A:** Management feels comfortable about potential upside due to **year-to-date results** and a lowered tax rate; fine-tuning the forecast shows confidence in exceeding the original guide.  **[JKHY_3372307_24]** 

9. **Cloud Adoption**  
   **Q:** How are banks approaching core in the public cloud?  
   **A:** Financial institutions are gradually adopting public cloud through a modular approach due to regulatory considerations. Jack Henry's strategy allows them to "walk before they run," easing into cloud adoption with non-core solutions.  **[JKHY_3372307_28]** 

10. **Management Transition**  
    **Q:** Will leadership change affect execution?  
    **A:** The new CEO assures continuity given his **13 years** working directly with the departing CEO. They share consistent philosophy and operational approach, so no significant changes are expected.  **[JKHY_3372307_34]** 

11. **Implementation Resources**  
    **Q:** Can implementations be accelerated to recognize revenue faster?  
    **A:** They regularly assess implementation queues and resources to expedite revenue recognition. Adding resources is considered based on installation timing and client readiness.  **[JKHY_3372307_29]** 

12. **Competitive Landscape**  
    **Q:** Is competition changing in the core business?  
    **A:** There's no significant change in competition; they continue to compete against traditional players, with no notable new entrants affecting the landscape.  **[JKHY_3372307_15]** 

13. **Banno Growth**  
    **Q:** What's driving Banno's strong new wins?  
    **A:** The launch of **Banno Business** led clients to adopt both retail and business solutions together. Total users surpassed **11 million** this quarter, indicating strong demand.  **[JKHY_3372307_19]** 

14. **Card Processing Initiatives**  
    **Q:** What's the status of the card migration and credit processing?  
    **A:** The initiative has been **wildly successful**, meeting financial targets and creating significant sales opportunities. Over **100 institutions** are using their credit card services, although growth is less than debit.  **[JKHY_3372307_17]** 

15. **Expense Strategy**  
    **Q:** How are expenses being managed versus revenue acceleration?  
    **A:** Margin expansion is partly due to cost control and changes in merit timing. They continue to invest in top projects, maintaining consistency with **14%** R&D spend, focusing on future growth.  **[JKHY_3372307_36]** 

3fdc2657e9e8dd641f3fb54b3b757cfbccb3cac985fcbaefd1b43162bbd865df

- **The company's Return on Invested Capital (ROIC) has declined to 20%, partly due to debt from the Payrailz acquisition, and while management expects improvement, this downward trend is concerning.**  **[JKHY_3399615_17]**
- **Revenue recognition from recent core wins, especially with larger institutions, will be delayed due to longer implementation timelines of 12 to 18 months, potentially impacting near-term growth.**  **[JKHY_3399615_18]** **[JKHY_3399615_16]**
- **Growth in the payments segment is increasingly reliant on new initiatives like the Payrailz integration and faster payment solutions, which may pose execution risks and uncertainties.**  **[JKHY_3399615_9]** **[JKHY_3399615_15]**

9ce55053dcb81c7d7bbd7fc3069a3f642659fb9e343d9b6164513d7914867dc0

- **Record Sales and Strong Pipeline**: Jack Henry achieved the best second quarter ever for sales bookings, including **14 competitive core takeaways with 4 multibillion-dollar institutions**.  **[JKHY_3372307_11]**  The sales pipeline remains robust, at its highest level ever, indicating sustained growth opportunities.  **[JKHY_3372307_11]**
- **Strong Demand for Innovative Solutions**: The company's newly developed solutions are driving growth, with **56 contracts signed for Banno Business in Q2**  **[JKHY_3372307_11]** **[JKHY_3372307_39]** , and **over 150 clients in the implementation queue for Financial Crimes Defender**.  **[JKHY_3372307_3]**  These products are successfully displacing competitors and expanding market share.
- **Margin Expansion and Positive Financial Outlook**: Jack Henry delivered **111 basis points in non-GAAP margin expansion**, reaching **21.3%**.  **[JKHY_3372307_37]**  Management expresses confidence in continued margin expansion and strong performance in fiscal 2024, with potential **upside in free cash flow even without legislative changes**.  **[JKHY_3372307_16]**

e6cdd364853019051f72f546c32483df6d23335fe1cfaa4067c5032717aea771

- **Slowing growth in the complementary segment revenue**, as analysts noted a slowdown despite strong user growth in Banno, potentially signaling challenges in this area.  **[JKHY_3387530_30]**
- **Increasing competition from fintech companies**, with more fintechs entering the market, possibly affecting Jack Henry's market share over the next 3 to 5 years.  **[JKHY_3387530_15]**
- **Higher corporate costs and lower corporate revenue**, with corporate costs higher than usual and corporate revenue lower, which may impact profitability if the trend continues.  **[JKHY_3387530_18]**

2b3568a2574ebe666963689a38a7dee2dfd5e8b30b7d5ad1f338d27dd50602d9

- **Record sales performance with the best third-quarter sales ever**, and the **sales pipeline replenished to near-record levels**, indicating strong future growth.  **[JKHY_3387530_8]**
- **Robust demand for key solutions** like the **Banno Digital Platform**, now with over **11.6 million registered users**, and the **Financial Crimes Defender** platform, with **16 clients live** and **175 in the implementation queue**.  **[JKHY_3387530_2]** ,  **[JKHY_3387530_30]**
- **Successful expansion into larger markets**, signing **6 multibillion-dollar institutions** this year, surpassing last year's total, demonstrating the company's ability to win larger clients.  **[JKHY_3387530_22]**

2a9e2180879ec0bdfb5935c8f56284d23f348231992b2d411a1c9c9a93b1c0d9

1. **Margin Outlook**  
   **Q:** Why is margin expansion less in FY'25 guidance?  
   **A:** While margin expansion remains a key focus, certain headwinds from FY'24 into FY'25, like the slowing back-fill of VEDIP departures and a one-time shift in merit increase timing, present grow-over challenges. However, we are confident the model continues to produce margin expansion at a nice clip, and we aim to deliver numbers we feel confident in.  **[JKHY_3399615_10]** 

2. **Core Wins with Larger Customers**  
   **Q:** What's driving the increase in core wins with larger institutions?  
   **A:** We had **15 new core wins over $1 billion in assets** this year, a significant increase from the typical **4 to 6** range. This is due to our execution, technology innovation, and reputation as an industry leader, which have helped us engage larger customers and be successful in this space.  **[JKHY_3399615_7]** **[JKHY_3399615_12]** 

3. **Payments Segment Growth**  
   **Q:** What are the drivers for payments segment growth?  
   **A:** Payments grew **8.4% in Q4** and **6.7% for the full year**. Growth isn't just from cards; our EPS and PayCenter businesses are doing well, with demand for fraud solutions aiding real-time payments adoption. We expect opportunities from bill management solutions and faster payment rails like FedNow, with ancillary solutions providing upside over the next couple of years.  **[JKHY_3399615_9]** **[JKHY_3399615_15]** 

4. **Free Cash Flow Conversion**  
   **Q:** Can you explain the free cash flow conversion outlook?  
   **A:** Adjusting for a **$29 million** tax overpayment and **$60 million** timing benefit from annual maintenance collections in FY'24, our free cash flow conversion was around **65%**. This aligns with our expectation for FY'25, and we're confident in our guidance range.  **[JKHY_3399615_13]** 

5. **Implementation Timelines**  
   **Q:** Are larger core wins affecting implementation timelines?  
   **A:** No significant changes; implementations typically take **12 to 18 months**. Recent core wins won't contribute revenue in FY'25, but we're not seeing any extensions beyond typical timelines, and we're increasing resources to expedite implementations where possible.  **[JKHY_3399615_16]** **[JKHY_3399615_27]** 

6. **Cloud Migration Uplift**  
   **Q:** What's the impact of moving clients to the cloud?  
   **A:** With **73%** of clients now in the public cloud, we aim for around **93-95%**. The revenue uplift is now about **1.75 times** (down from 2 times) as we migrate larger clients. There's several years of runway left, and opportunities to move clients from private to public cloud will also arise.  **[JKHY_3399615_22]** 

7. **Competitive Environment**  
   **Q:** Any changes in pricing or competition recently?  
   **A:** No significant changes; competitors continue their usual tactics. Our success with **22 competitive core wins** reflects our execution, service reputation, and consistency, and we don't see any major shifts in the marketplace.  **[JKHY_3399615_19]** 

8. **M&A Outlook**  
   **Q:** What's driving the slower pace of M&A?  
   **A:** Our approach hasn't changed, but we're now focused on public cloud-native targets that accelerate strategies in payments and SMBs. We have fewer gaps in our solutions, and we're also considering product rationalization for offerings that no longer make sense.  **[JKHY_3399615_21]** 

9. **Return on Invested Capital**  
   **Q:** Thoughts on the decline in ROIC?  
   **A:** Our **ROIC is 20%**, slightly down due to debt from the Payrailz acquisition. As we continue to pay down debt and potentially engage in repurchases or other activities, we expect ROIC to trend positively and upward.  **[JKHY_3399615_17]** 

10. **Net Interest Income**  
    **Q:** How is net interest income positive despite net debt?  
    **A:** We earn revenue from administering cash settlement balances, which has increased due to better yields from partners. While sensitive to interest rates, this income is sustainable, helping offset interest expenses despite our debt position.  **[JKHY_3399615_25]** 

bd179763f299e13f4a90419c00d1b0a4868f27f4016db1af81f168bcbbfb8ab2

Jack Henry & Associates Inc (JKHY)

Financials