JKHY - Earnings call transcript Q4 2021 | Jack Henry & Associates, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Jack Henry & Associates Fourth Quarter Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. like Kevin the Williams, now your over I'd today, speaker Chief Instructions] to conference hand to [Operator Financial Officer.

Kevin Williams

morning. thoughts Henry put Quarter the call Good for Williams, CFO, earnings Liz. in And me, comments provide year earnings for for yesterday And for press the Kevin you Thanks, comments, provide some regarding that on industry call today Treasurer. about initiatives of we joining release, general, call. quarter, our open some the have regarding release I'm minute, I a Jack is additional lines in In the Fiscal positive CEO. XXXX I just and provide and and will will comments and financial business, Foss, David Sabre for after Fourth with our to turn we the the and close. Associates XXXX the after his year-end our in over the and we then and place. of Dave Board some his the fiscal concludes key thank market comments Chair And President, some other us performance provided Then Q&A. to out will sales regarding guidance up Dave then

of uncertainties. Company could revise to to we the due about to future materially events, these obligation which statement differ factors objectives, and expectations, are need call includes update anticipate or of or events concerning The that number questions Like certain these that a statements. from any number I remind First, this subject actual cause no or remarks strategies, or you to forward-looking statements, results responses including a future, results. to undertakes to those trends, risks

including additional discussing income. be non-GAAP call, measures, now XX-K - historical Also refer in will non For GAAP be and operating release. information, measures of yesterday's Risk release financial and and and sections in certain over entitled the turn we can With Statements. on Dave. factors I'll a revenue to found press to for non this our reconciliations the press financial please Factors The yesterday's - these risk call GAAP non-GAAP summary that, Forward-looking

David Foss

And record Today and we're very a sales Kevin. quarter morning, with share produced income, revenue good you you, bookings. details Thank as to everyone. that as well pleased record operating of

entire in I'd for those commitment always, begin and producing by to by light associates all ongoing into quarter that the pandemic. like while our for our the As results today the challenges business of of particularly effects hard fiscal went year, with for the posed fourth thanking and the work dealing conducting

essentially quarter For fourth non total the quarter. as the were increased of XX% prior-year for basis. a flat XX% Deconversion and GAAP fees XXXX, revenue to increased compared quarter fiscal the - on

Turning had a quarter to Revenue business. solid increased in on segments, - by the X% the segment quarter our for increased we by a and basis. of the GAAP X% non core

- revenue increase extremely GAAP a on basis. quarter and increase performed payments Our non posting segment XX% XX% a in well, a this

with increase basis. We - quarter also X% this X% solutions in strong complimentary had a non GAAP on increase businesses our in a revenue and a quarter a

quarter it for quota the strongest in fourth propelled also month was was release, to the their our exceed quarter the the history and quarter. groups sales highlighted I Sales press all As of June three the strongest the Company. Sales in ever,

job also with opportunities all were quarter, the those forward. While to an set sales the new pipeline success outstanding refilling fourth of going us up did they the in signing contracts for team

digital move takeaways the and fourth start well In new existing fiscal private we core cloud XX the through of strong of for the of new offerings you on-premise in I bodes Several very also quarter demand new the management XX with, market our health and guess, customers new might complementary the as to booked think digital our treasury clients, saw quarter, to deals environment. processing quarter, pack. the leading sales XX clients competitive this clients is our a We the good XX platform to our suite card of in sign our Banno our signed XX year. and solution.

X competitive year, core the we assets. billion For them greater full signed of in XX takeaways X than with

new and XX card processing move new contracts on-prem clients to XX for private Banno we clients XXX solution. signed customers, our core to Additionally, cloud, our digital

in but almost other course, recurring Of important Jack our variety of Henry for attendees a conference May, a commitments that the X I as revenue had million just users to of contracts Banno platform. analyst's on that our solutions. for well, shared it's of digital our many long-term to these with solutions all we our signed note contracts of we registered At other banking wide surpassed variety represent

were users. roughly million at end registered of the we year, As X.X of the fiscal

Xst on of had X.X million As users. a July XXXX, reference, of point registered we about

So in increase This a users saw approximately stressed the for business this is number like significant as user past, in to our because, the is we on in count. the of tied revenue one I've the of year, an platform. XX% most of

financial users the their pace We to a each onboard at of added platform XX continued institutions to clients month. and about

and EPS team A our with impact. them year. of to to to fiscal our clients, many no or delivered Banno, allowed automated include, with move almost during all examples an have to new delivered migration database new the few structure solutions client database the our success ongoing which innovative In we addition Symitar effort

which Jack the the easily buying, Our through loans. in to credit experience marketplace, digital selling, of loan and participation and lending delivered a engage team allows unions Henry banks

delivered a Our complete APIs plug-ins our digital or in Banno set digital toolkit, provides enable solutions the which application interfaces third-party to digital programming of team easy to platform.

project platform hub payments transactions. group using of the connect continued the and and Zelle clients of stacks for digital to X/X to payments course, holders. digital team and technology platform. the cutting-edge to of enable adoption Almost on year X our philosophy, PayCenter it deliver account designed our customers the solutions our entirely easier our upgrade to new leverage open platform to PayCenter new of Zelle their completed for delivered these are deliverables payment and functionality to And, the built card all Our tools expansion and the architecture to are toolkit not for make

As you responsibility. have of number projects Jack active corporate topic may of centered on know, we the a Henry at

announced We that commitment associates risk group launched continue new day, to Go and our called business environmental recently advance a on Green. our innovation stewardship

and groups challenges. business ideas, address people, platform Our collaborative that a business and our innovation Company-sponsored, for provide associate-driven to groups, intersect, thoughts, help

group decided Innovation planet was Our appropriate progress a focused to on initiative. business meaningful us this our necessary and that on for associates make

on than of and more that As the diverse broaden continues to labor associates. To pool up, our attracting new talent. we're remote talented retaining we our and recruiting expand heat market to have recently qualified end, efforts focused ever technology implemented and

a is currently to country. in hope which that Our enjoy will cities only we reputation across approach great this on the place serve improve work, as to

of past X/X reflect the Our consistent at is of And targeted than approach Best Henry. in and half list pleased to to teams that return to participated model Company placement nearly culture engagement be determined to to on hybrid We share employee continue in work work I'm the our Jack But only day. our Places strong our leadership associates more a year workplace surged, culture. facilities. the that scores Xst previous our bit the Work operating a state back score with have in calendar we well a July move to our and testament recent few with XX%, returning Like in essential office as good average to that around reverted earlier had our was employees survey spent would those right remotely to who and employees with our Delta We time above basis. the engagement our offices engagement weeks for the the as we of our worked indefinitely. decisions variant benchmark. we in would our most full-time workforce industry every most wrestling on timing or have employers,

make effectively a posture that until operate in continue we will can to we remote determine change. that we proven safe a and have mode is it We in

our As our end for Jack various earnings had with Company leadership of and Chairman, Jack June. I been call, of roles Chairman. as has in retired years referenced on Member the many the long-time Prim, Board and last a as

humbled President retirement, Jack's infrastructure and of effective Xst, July of July extensive Jack's board confidence Curtis result perspectives changes and by greater new our new very other digital to I for He Board in Curtis Software be Also as well as Campbell the Board to honored members, to focus in the have I'm Dallas. to even effective I Jack departure. a announced to vacant board. I experience by discussions. the Blucora excited a is the joined what keen we fill seat experience. left forward As Board development brings by computing, cloud customer and was two Xst Board the on Chair. has was to leading to and Curtis the Henry success. the in look brings elected see expressed

good As was for Company. can a our I I reflect it very back on year confidently XXXX, say fiscal

high very and inclusion and remain diversity great scores engagement employee with initiatives. made our Our we've strides

levels very satisfaction are Our of also and customer high. engagement customer scores

several We and retirements and board-level leadership completed replacements. have successfully

remains positioned Overall year us demand Jack are business. teams successful and Technology Sales Solutions segments Our for selling. high in all well have Henry performing our of extremely for of another

will We serve have us that to thing believe to for right a our commitment constituents we continue doing the well.

customers, to our the with help approach running expect continue that to approach will employees, shareholders. for Company. and disciplined provide stability We our And

Fiscal be the it new Kevin turn With the to I'll the I begin numbers. optimistic some we future. on to for detail As that, about year, continue over very

Kevin Williams

Dave. Thanks,

revenue a increased compared revenue same to ago. in support -- the XXXX year fourth and line service fiscal Our quarter the of of quarter X%

with As Dave quarter quarter. fourth deconversion last the mentioned, for flat year's pretty our were fees

which the However, this fees to year, we down ago XX.X compared is full on a million fiscal for the were for year, year the the provided year our that prior call. guidance full actually deconversion

was and fees to quarter revenue by for growth in show our data for X% quarter. the continued our public strong offerings, cloud cloud year, primary to processing service growing hosting the compared which and Our previous driver private the

the However, delivery prior-year is which deconversion X% this and compared fees, includes the revenue, due product grew obviously in significantly growth only to which line hardware, to by license, line somewhat convert which revenue, COVID. quarter, merged service in this slowed implementation, impacted is

fiscal the same Our higher from last from credit customers. year. The existing our the new fourth debit and revenue to in primarily card by driven increased increased was installed usage compared fiscal increase last card year quarter processing XX% customers of quarter XXXX card and volumes

grow be digital platform highlighted. digital as Banno demand our very Henry Jack to show revenue -- Dave to continues for strong Our continues as growth strong very

on year last Our a non-GAAP total to both revenue was quarter XX% for the GAAP up and compared basis.

So as excluding our well. divestitures, XX% grew and deconversion non-GAAP fees

the and revenue excluding For fiscal basis. X% basis up and deconversion a full year, from revenues was Again, fees a X% on divestitures. non-GAAP GAAP on

up X% to cost personnel revenue processing increase compared costs compared Our to and higher our fourth a of last due ago. was with costs to higher associated primarily quarter. is card year's The year

Our percentage for of costs research quarter fiscal over and due for quarter year a decrease The 'XX a this quarter. was of being the X% capitalized decreased development development higher primarily prior-year product to compared expense to ago. the slightly

the increased fiscal expense and to in costs. primarily The professional same year. of services quarter to due fiscal compared personnel SG&A X% prior is quarter the the in increase increased 'XX Our fourth

year year basis, to current reported margins XX.X% a Our operating last year expanded in XX.X increased XX.X% to consolidated last XX.X operating And from non-GAAP the margins year. this from our quarter. nicely on

XX.X. saw segment GAAP this year Payments basis, year Payments and in on the segment platform last migration payment margins on Our the non-GAAP expansion to a completing on our XX.X a grew After to from fourth-quarter in quarter. a QX, nicest grew XX% margin margins from XX% the basis,

So over XXX base margin expansion.

margin segment basis. last on quarter slightly the to GAAP compared decreased the both Our non-GAAP and during operating core year

same for 'XX tax While quarter fourth Fiscal year state both tax was deductibility some XX.X%, increased segment -- slightly ago, The in our and XX% to primarily quarter of GAAP on due compared down to margins effective a the Company's rate the to slightly tax timing. non-GAAP basis.

earnings Our year, year. a per the fourth income XX% or to XX% million prior compared the the of $X.XX net increase fiscal to quarter, to XX.X $X.XX compared quarter, last grew for over million $X.XX year with or XX.X share current for last

for projects total being flow for fiscal primarily service amortization the increased last total cash amortization capitalized due year year compared as of last to into the Our intangibles the including is to amortization million X% to year. year. year placed year, Depreciation the slightly up XX.X than prior compared which fiscal million fiscal related acquisitions, at less decreased this year X% to the to compared last fiscal XX.X to

shareholders purchased we dividends Henry our of for we shares million. million for XXX.X And to XXX.X year, a Jack million X.X XXX.X to stock million of treasury year. the total of the the During paid return for

Our was back primarily which million capitalized We is was assets into million flow through of for the decrease Capex and XXX.X is the XXX.X operating operating million down this and and cash timing Company liabilities fiscal year, invested various software. last XXX.X due our year, from timing. which to

located in were sheet, cash balance will X-K, is for Our free cash million was free version which Capex, -- and the included should've omitted our of a less stock from million the to within our Yesterday's the for software, net in year, million investing release website. primarily operating ago, cash flow, million per the down cash X.XXX adding flow summary, activities fiscal income corrected one totals yesterday million inflows represents magnetic mass comments did. and compared press earnings investing been assets, This significant net The of a XX.X% which cash year XX flow filed that due the couple a XX from conversion. XXX the correct. from of XX,XXX cash and flow to cap XXXX. to fiscal on inadvertently the proceeds cash 'XX the Form we of proceeds press less line were was mission on repurchase dispositions on of XXX.X a release activities A position disposal

the of million QX, down at revolver. XXX had remember draws on You end a we

down paid balance. million During we of QX, XXX that

other on operating long-term So $XXX million had sheet at than no Debt XX/XX, had We we a revolver. our leases. other on Balance

on return our was year, assets year for the the XX.X%. For average fiscal

and XXXX. the we Our our year for Yesterday, the provided revenue return press was release equity XX.X%. the for return GAAP guidance And was on invested fiscal non-GAAP in XX%. on fiscal capital year both for

non-GAAP a the in revenue information of reconciliation the the and release GAAP provided also segment We guidance press release. following in

clear, continues differently country to Just then be and the but guidance to that continues if guidance to to were revised. this things assume continues go economy than will open be improve, this, to the

to X% as released higher too fees. fiscal and year 'XX on growth due growth GAAP 'XX, little based expansion on to future non-GAAP earnings were somewhat last continue our do I have and in segment FY deconversion improve anticipated For license anticipate we guidance will X.X% of initial GAAP the to for much am on operating guiding margins calls. the the will of should And as we is in revenue payments on nice over We higher revenue amounts guiding in revenue for to these year of for operating margins to a fiscal during margin, our cautious anticipate range have growth, improvement revenue. headwinds the year. compared fees to compared 'XX. deconversion FY be range to that non-GAAP updated a X.X% yesterday, 'XX Obviously, we're to the an to X.X Fiscal growth

on-prem year. to from As Also, compared Jack Conference to person to and travel year. core Symitar cloud. are continue move at Henry we Edu our Conference in this our to to we And continued host Annual planning time, the still private significantly increase costs this our last customers

little travel. last cost returning very when was there there Thereafter, large some this to year year be compared will

expansion will in do we However, least of XX the think at BPS get that we year. margin fiscal

XX.X. that significant 'XX. tax primarily is year rate Our were And from equity to XX.X% at in deductible FY this to this 'XX slightly to for to is rate approximately due impact XX% awards our compared effective the projected higher be FY actual of

is guidance in plus is questions. of XX% Our initial will 'XX (ph), increase open which FY our range a XXX, questions. a to XXX to This EPS concludes you ready up for lines take finish. the now our 'XX please opening FY We're Liz GAAP comments.

Operator

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

Vasu Govil

on wanted congratulate Board. becoming to And Hi. Thanks question. my I David of the for Chairman taking

David Foss

Thank you, Vasu.

Vasu Govil

the of you points some in there basis have Kevin. up follow indicated previously potentially on I to expansion had I XXX margin the upside you guess, just 'XX margin and that. know to question fiscal commentary that even about first that provided,

basis to XX you be Now, points. seem indicating

what So I what versus outlook before? in changed guess, you just wanted were to your understand expecting

Kevin Williams

tell and nice that the other because, was Well, travel-related is will really revenue change of decrease had merge margin obviously, expansion biggest the you year COVID there I some with revenue converted no impact Obviously, we also a this from things. costs. in

And revenue of be X.X% feel of to is out bits margin expansion or lot things clear, GAAP X%. I just offsetting there. like to from XX non-GAAP both our And a both conservatives. grows there's revenue our So

Vasu Govil

And seen second the you a strong was everybody you kind know and is further I do improvement this into expectations had, just some for wins the of card payment provide for hoping to of I segment. as Understood. on side then to you're particularly expect we've for non-GAAP it. then segment payments what the of new flow some quite by fiscal in? continue expecting question year I and growth the core next and that been Got could payments core segment on I the acceleration 'XX, guess if there room basis start sort on color with segment,

Kevin Williams

Yeah.

half coming some costs that nice more I payments expansion in saw in in the payments margin segment. in see mean, QX, we still 'XX the There segment will of are first of really end FY by the Fiscal we So 'XX. out will be additional the

segment. And margin that we obviously, will added the customers, XX% are I margins. payments And still be think there additional the expand So cards also nice really will as some of expansion. still

Vasu Govil

much. very you Thank

Kevin Williams

you. Thank

Operator

comes next question D.A. from with Our Peter Davidson. Heckmann

Peter Heckmann

everyone. morning, Good

David Foss

Pete. morning, Good

Peter Heckmann

there ACV on TCV about basis? In a think I increase, the thinking had of fourth in way a about the year core total sales In terms like of thinking in you prior or takeaways. XX record terms thinking is competitive about the quarter, of year-over-year bookings

are in They're thinking increase that variant of percentage the about kind the sizes. might But difficulties given some last about year, bookings fiscal outlook? the all not Of us overall over course, way, quite either in financial equal. institutions think the of help

David Foss

sales a have a of quota, you When X% the way, Yeah. size year I exactly Pete, sales about correctly, have or sales was Dave, our you the It organization don't more far than sales a if quota, a per very a increase it or by sense, percentage somewhere when of is but year-over-year think significant I in as I me, X% as was increase. remember think front year-over-year. that it have I of And X%, bookings. in sales range,

we this well, about like anything Now, think assigned. or measure numbers know how TCV that's that, know you and -- good don't quotas but how it's we a we to are -- publish way quota

can logic in of that assumptions. some you kind So making use

performance, if think that's X% year as far So good ish about we're X% over a prior sales it. increase way the or as to

year, in apply we what and point Now when of then year. performance point -- fiscal the the somewhere performance, was we quotas increase our 'XX, last top quota now, last is we normally is year for I'll for out between the we other thing and starting year's assign meaning are the X% next over X% the

a where is somewhere sales the out sales the So their to year. this attainment actual team prior starting than for that that's was quota it with X% larger in is range the X% is year

Peter Heckmann

for terms might quarterly in out surprise would of specifically fees, the cadence then and might the the space. trying cadence, or you the first just is That some about get the those in Got fees, just Kevin, to we've level of with of when terms call seen term And in guide think in But the uptick M&A forecast for helpful. the the correct? some mid-tier quarter you it. of term thinking hit

Kevin Williams

that's mean, over year. what so that's Peter, of lot obviously, yet a a the fees to But activity, drives been activity I seen hearing deconversion about actual going is. have grow Well, I M&A not we've which obviously think we lot

fees probably I are So the half bulk a second to the the the year. have be in feeling deconversion that going of of

Peter Heckmann

it. Got

you. Thank Okay.

Operator

with Koning Our comes from Dave next Baird. question

Dave Koning

question, Thank the kind And world providers, But of guys. you of take that I and move bank first are are that that just of group just space, the nice accounts time. of couple when lot job. that over a think over guess we Hey, there my wallet is all I guess investors that going just will to to and a kind of concerned FDIC things, make can't in is know growth total bank don't of do all thing metrics and provide the rather any have number that, exactly have am that account your just time? have all a banks most also, the the you reason I consumers if things on plus seeing those some and accounts? insurance your you same that same services, over But accounts. there

David Foss

intuitive very a question, Dave. That's

February platform starting consumers the conference have on of In you the like fact, a if all think desire backing all infrastructure those there's like a it among realize customers that reason demand that. front a are take of today you take of can year, next essentially platform FDIC to with bankers topic, open I'm and about do this it's a draw presenting on your and at that, things good I for in, we that advantage to as and because to it's Henry solutions the same for digital you if the bankers real advantage insurance bank a have very as at banker, Jack and and opportunity it, talk we time, end,

-- areas. compete what doing for but part should be channel about, the to they in of that they on number banks, educate of what how we're those they So part today that is with bankers do, a me of thinking process can

platform. opportunity. then all today things at digital those but based production So for And this opportunities the a of in digital connect really is types Jack those platform. that Jack isn't in so And having and into our This Fintech connectivity functions a great Henry. today, with to we all are future, today wish have production lots the of for customers for on Henry, it outstanding customers

customer to customers, first adding customer credit so side, new on measure credit the happening, platforms. are members but about sales not only on been yes, banking share, are And banking or the winning inside so we're on the it's the union we of growth it's same-store growth, the able because winning whether part strong on on the question we're customers crediting of we platform customers of And the net growth, your there but is the side because well. business, business particularly happening customers serve so number greater, is the of as we It's

Dave Koning

of Thanks. That's then good how Okay. of a debit do off secondly, to maybe hear. good. low And But Great. is growth assume -- I we just you pretty in growth base. payments, really to that obviously, expect how do that transaction through comps would kind still high think of QX any something, pretty rest of be I like, would you double-digits the below do cadence sort have for that? then maybe or year, off the little grow the in a year? easier

David Foss

that's think a I good expectation.

we capture business. to business that The the our of payments don't talk EPS, is merchant been the solutions. and our well. -- I'll refer but has platform, emphasizes forget mobile other That's remote is, on nicely growing our as highlight capture cards as and business Kevin thing payment XX% business we That cat about enterprise

Henry as segment, much you're Jack So piece And at about of growing that but continue going business a it's to rapidly. smaller hear to I well. the more it's think

good you've not think of now under card for the traditional that There's seeing The growth we're EPS So pay. the lot of it said right earnings or single-digits many of greater relatively will as be as card a happening that calls, in growth. for expectation both two. what in everybody. stuff for a seen, bill new the But I I've business, that the And high because whole business than strength the it bill of on flat pay those is platform. far

Kevin Williams

new remember not full-service the Dave, we now because it's as moved well offer not that could offer credit platform. we got just over before And We debt. to

credit So growing, from base our a X. full-service of is basically,

Dave Koning

Gotcha. Thanks, guys. Yeah. Nice job.

Kevin Williams

Thanks.

Operator

comes Research. question next Kartik Northcoast with from Our Mehta

Kartik Mehta

wondering little little a the conversion. that's to bit platform, about from wanted about coming like what morning. just platform? the business. cost cost achieved out you How that? exceeded well. would cost that a you credit you And I'm Hey. Kevin, your more payments platform of a for the anticipated characterize would I have out relation to of card in Good savings that savings ask you going talked Looks bit or

Kevin Williams

Okay.

So, Kartik, completed QX. the in we migration

Kartik Mehta

Right.

Kevin Williams

we the mid-July, mainframes So decommissioning new the right. there think April, sometime on other that supported used got platform in four some customers I -- But in Kartik. are X things we completely decommissioned, have. started the those on and are by And had believe, remember that all if platforms I we here, I going to that

done So there have and other be the which keep were end some tools the QX. by tools rewrite to on to talent place, will additional in that we of some get

And coming so you'll see some additional costs out by then.

we will of ago. the years X benefit see cost guided to So by the that takeout we of this year, full QX

Kartik Mehta

Dave, making. to normal? is increasing I on back COVID they characterize they're you've now that make, people today? and some Is And of How realize you core increasing about it is didn't it demand as going maybe think the Perfect. talked or would demand core decisions still

David Foss

I would normal. to say it's back that

Jack normal Henry. So for

It's leading by looks would new for definitely at us that's we that sustainable that far we level while. -- that new that now. about pre-pandemic, We're replacements. did And running We one quarter, now for replacement pace competitive were the So at quarter indicate that's back seeing this per we to XX industry that week. quarter. I'm now. did Everything a can last a as XX run

Kartik Mehta

little last market normal? to one seen competitive a gets bit in question there. the for you just back nature Have any these as the And change core maybe renewals,

David Foss

are there's now the core Consultants in about -- renewals, For past. a what every renewal. we've this talked time engaged

was Henry, And industry. the has Jack how their So just the consultant to consultant very it's have competitive renewals. involved does them a rare it's single XX process. It's not in Today, it justify every consultant one years ago, of that the that's and a in a ensuring role? by

of encouraging all place of is been pandemic. consultant and the that's engaged. going are every It for They stuff. started where before that pricing us, definitely So there review of It today, renewal all kind diligent is a in on. single

so operate and happening. And know model to with we're how we comfortable in that what's

Kartik Mehta

appreciate Thanks, Perfect. it. Dave. I

David Foss

[Indiscernible].

Operator

with Our from Davis comes next Raymond John James. question

John Davis

morning, Good guys. Hey. Kevin, just around quick a the clarification margin.

So basis XX you points. said

clarify, Just on then to And follow-up basis to of there. non-GAAP that's want a expansion. the

our the a basis payments math cut benefit XX would suggests for about that point be year. think migration this I

way the bit little about travel operating right during a kind expenses it, of conservative incremental offset that normal with and the So upside to other leverage comments. of think maybe

Kevin Williams

your and And margins. then, John, in your I EPS saw the about I calculation note saw you on --

You so our guiding to that's tax to EPS, we're still impact, to effective EPS XX%. have just a but than up if also at looking that from negative grow XX.X to to more is going going remember you're rate too, XX% also slightly XX.X go

John Davis

Okay. expected the can little deconversion the should year bounce that that just guys core trying coming a that of percentage convert increase -- are of about merger up us way revenue? fees convert XX% percentage normal reg And year-over-year. And give then right guiding then, guys is in were to your about anyway, idea a of 'XX. conversion segment you to this Is the think in that you think what understand revenue? of weaker than how we one was bit think Just And about you revenue I back year. a merge because areas an

Kevin Williams

does M&A customers as think, be if Yeah. convert revenue much as merge take down are right. just buying There there's as revenue you're because and I deconversion our from significant up activity, was will acquired. our being no absolutely headwind customers mean, getting a we

people do would only but not increase travel merge increase have billed because it So more that to traveling we'll merges. it'll also convert out convert revenue,

I I that total John, in not when million number. can't But -- of talking top beat you convert it's merge start of boat missing bills percentage those. several mean, a dollars head, huge full a my on As revenue, we'd revenue for

So it's actually very have. highest margin the of price a business, we them. nice a implementation margins It's

it So on also, overall not reduce the headwinds revenue, margin. operating it only our helps but or does help

David Foss

this to a working a it's we contact at have will is have topic. because sure -- visibility institution, we're credit business lot available. another to I that are the that will things slot a or may consummate in not say, chime is it, customer deal we we're And on one existing that bank on make here, that a in We that us interesting the we of this conversion want into looking union, Dom when deal. -- whether acquiring an We on working they of

time have We we because we to to on Henry calendar quickly be after deal that do close possible. the as as Jack the want able

now -- is happening good So visibility a that's can the we there good visibility you in have right of space. lot activity. convert into the of merger deal out tell And there I a activity

you we're So acquiring back. sure make lot saying, certainly about institution, customers coming us. to us want the at the we're coming are of who in And press in M&A looking our there's to ready it guys to a are we activity seeing number another help

So those we activity predict the can't are but when levels are back. definitely happen, exactly things to going

John Davis

side? guys. revenue in-person just this And years Okay. in. Where X on then remind which one your year us are? your CAGRs line? when the at in basically to margins maybe conferences top those from sequential be out expenses those cadence we will Thanks, are for call and the And to last quarters on look anything Should Kevin, me.

Kevin Williams

Yeah.

a And this this Cadance that it's ASC good driving years. we've as thing here John, So, -- one now was actually, now the over X is, thought I about I'd been say I question. morning. for XXX on meeting for said

all in that subscription QX to that the So combined, first actually of combined this gets really the and we they're or QX scheduled year, of and should they weaker not a the kind little well, the an and software be And to cadence user overlap, -- in revenue a far QX going just there. then conference come obviously growth conference, It same. those because to strong really as is of from be quarter. take, QX October. as in our grows are

that'll QX. So hit

John Davis

guys. I Okay. you, appreciate Thanks.

Kevin Williams

Yeah. Thanks, John.

Operator

from Our with Dominick Oppenheimer. next question comes Gabriele

Dominick Gabriele

through is much clients Anything taking us pure is to coming to it. quota, recently much. that? won The better, quarter gap. could we it your talk a few Hey, questions. X% that versus it X%. good demand morning. you X% of just execution? rather, the Thanks of raise so what's that a so my large is typically Is you that's X% Maybe sales filling of -- about just Or your perhaps much pent-up kind that for Thanks there. could that and in previously? have takes walk appreciate you some lagging could Maybe you're I'd was it why so -- raised provide really puts of pipeline

David Foss

to the I year. actual talking Sure. clear, was referring performance X%, so I over the And about was just prior when Dominick, be to X% to

the close things the something customers. already answer so pipeline, opportunities large been to This to specifics list attainment opposed when all currently been on that this past a broad we're no, have few clear about are pipeline, your talking I But or to is the and as of we're just like as I'm that the question, a working may booked of broad that not a of suite we've is have customers. in that solutions in selling deals been terminology quota future, with talk our clients signed So that. that just

customers. the that's course, forward. year an we this significant, Banno XXX digital highlighted so we've so it's That that we Banno solutions. opening important in number these But Of us all success is had comments driver. new my I and year, core signed then a brand customers driver becoming go of was other as the for this that of

going earlier, like seeing nice mentioned we management Koning's signed the we're platforms, payments forward. payments treasury to in our our platform platform, for including and our I all customers that a some EPS Dave my as which for question So in response interest that customers

of see because XX-month point broad that's lumpier sales little didn't was -- lumpy. pent-up the height down, one of period, tough solutions demand we the but just a -- about we bit it we very So a didn't it saw you but slowed it's see a during COVID, to at of sales were the variety look and when over

happen, characterizing or were smooth quite pent-up sales not demand as So because just I have they the as it trouble normally accustomed to.

Jack So all just of business of and Jack before. its Henry, broad customers that technology new us it's I And hasn't because think the suite Henry we of we have coming to solutions done it's this who deliver. interesting, with

the talked platform. it new, team, I year, payments platform digital work The that there brand my delivering Symitar now all our that which comments, our database migration, I've my opening real-time new already The we've lending functionality in team payments opening So ground-up about we the database. all and comments. highlighted ' in through payments where delivered team new highlighted, did these enable I this an the with that around PayCenter entirely

variety and it's of So a a it just was them you things that add different together sales all successful year. really

Dominick Gabriele

being like and if investments you'd over wins arguing that talk with there you that no sales for think beating could then investments But basis you. question you went you points the revenue about make of awesome When Thank that definitely numbers. beating takes just maybe guidance can of you are around where, expansion on and through you keep overall you XX might could to margin for do margin some just that walk of coincide maybe beat additional revenue guidance? And you -- some the bit. is It basis more. you revenue you with your really about guidance, little look year? think one margin a kind And And the when does the what perhaps the the commentary? see this even you XX conservative, puts expansion, points

Kevin Williams

good a question. That's

would would from we guidance gave So implementation some of card the non-GAAP continued movements beat some customers. our for of it mean that to have revenue, we

just platform moving obviously and So drive activity, over in of the which convert talked the then earlier. on-prem customers revenue margins. customers merge move meeting movement MA also -- billable about into in continued out help the our cloud we that success private some large would continued our card credit processing debit and our travel then And

are that guidance. there improve that how I willing non margin. one to probably point. from different revenue And just much several limb those happen. could I'm cause help things on But to So of to And think I beat that to say seeing, this also can step every mentioned going that's and GAAP not drivers what us - I'm

and part from there just we mean, we there need that or from I guidance, don't know investments, as beat development out finished revenue which not that software is in already we're to our I that's cap we making, that Capex budget that guidance. even already a not of investments I far make, budget, either that any big As don't know are if the

Dominick Gabriele

much great. my questions. Really Thanks so on for taking

Kevin Williams

bet. You

Operator

from Autonomous comes with Research. Ken question Suchoski next Our

Ken Suchoski

to since I longer really Hi, the question. year. strong Thanks to and some about David good for want taking I no basis restricted believe there. morning, had is Banno just Kevin. results the you ask core Banno

is what's mean, that Banno could revenue I Banno to the of hoping So users. today? rest how business about now does was I million you you type that growth And talk what it's of I to expect X.X of that think the contribute? offering trend mentioned the open size market. You

David Foss

selling Banno off, we'll outside to said first So start clear, Ken, is calendar that just I've the what be base XXXX. in

mobile Jack an from them offering anymore. are U.S. when a about different -- customers, single have it of X And financial I'm different months year different couple of with experience which side have will on major don't Internet here, consumer experiences Henry experiences. they're next offering the side we banking they outside think So group is most in If Banno a not expect banking they on is X deliverable core it we'll general. form factor of their type to the solution. what and their information calls matter expect business is. things, the on talking have same start Banno the about Banno, a that the They in a go the base. talking to and delivering This be tablet, institution. X But credit the for to just on phone, year. you a want And the year and is they experience. I'm deliver stressed this calendar year, same all functionality the I've in on doesn't that it'll functionality business, as -- these we'll a then in be the Most Consumers banks have on PC, all of access unions calendar it's not the past, the next

so our outside us, and an that both creates And opportunity inside for base.

thousands we There next to changing are so upgrade out experience, their And base plan be several the year. institutions over who not with will, and digital Banno soon. there of that's outside the next there anytime years,

As far we as as that business, business. the of out the don't a call size separate

possibly you the based we there out segment, would We transferable pure asked large per that Jack yes, that of on their have business. figure calls of revenue pure-play user for as The before. do there it's math figure out some There -- the transferable, you is. is generally, users that's with is. to offerings million some do X.X so -- how the and point, can answer number that can the a But not And is thing I of users, Henry? Is business kind that my out discussed will kind these we're that are yet. been stress at but players I've on

making rules money. Henry, Our digital pass which business means at a get under you don't operates as our same Jack other businesses the on

results addition to for revenue the to Henry. operating doing growth. that produce income, certainly, Banno business operating Jack And have is in You

backlog to Company. of produce nicely, So results it's installs all continue grow for right we're our nicely seeing to to based the have continuing And that grow will bottom-line things operating -- now, operating continue will now. on we right the

Kevin Williams

one thing in more Just there.

and about not a different things, mobile includes includes talk NetTeller and a is predecessor digital, still digital, we've will never which of and our all those anywhere, that Molson, X we're [Indiscernible], But Banno. last of FIs several Geezeo, when acquisitions that which done talking when some goDough open talk lot using years. about of we we is to which the about move our our hundred So And solution, that's just on which solution solution. Banno lot NetTeller have of we the

So the different quite term and few digital offerings. encompasses a products

Ken Suchoski

expansion lot really but answer there's margin I the fiscal platform that guys year that. the up, guidance opening you at to 'XX, have terms migration. way The for of once That's after very think you, or aren't of fiscal moving detailed things But Yeah. you giving 'XX. what's platform a Appreciate there. right margin guess, migration, in s parts know helpful. I And about the year margin is behind

it had good call that margin a in when because fiscal mean, fiscal I your benchmark a Henry I look operating XX.X% roughly, at is I year a, Just 'XX. year Jack for mean, numbers, 'XX?

Kevin Williams

at on for you're it XXXX. looking which depends numbers Well,

on unknowns you're comfortable XX way. you're XX, back margin the out ASC numbers we the put of things. If FY are place that XXX all XXX for COVID basis ASC XX, with normal after there our answer kind kind again, points restated to go it expansion a -- lot to get previous of after operating we get did XXX would starting looking our a I'm in FY But or everything because the numbers there and impact pretty if in have I an think our of say can this this But at as looking year. margins. we of I I'd through back

Ken Suchoski

the think reopens, as really pipeline's they're And new just the to guess, then and That's as economy strong. trend how you maybe I helpful. quite last expected sales question -- my about

you that your Just get if accelerate person. to back as curious expect you to see customers in

David Foss

today. I don't said is sales. mean, very number I pop Yeah. big a that I see to expect some in going as you're great our quota large before,

X% a Company such growing revenue. year-over-year you're if because concentration pretty sets on a so up high of And number, very it that recurring we're sales the to well large X%

X% layering revenue a So sales you're top in year it, X% on you is you're and revenue to assume and of quarter at growing recurring continuing per percolate to that the a solid we're that coming over model. happy year. the expect pop sales some That's see in performance. in with prior-year Don't the that going so pretty great model big I'm to

will performance continue to the consistent. I think and solid be

Ken Suchoski

it. really David a That's helpful. Thanks and appreciate Kevin, Okay. lot, really

Kevin Williams

Good.

Operator

with from Perlin comes Markets. Capital question next Our RBC Dan

Dan Perlin

morning. for Good Dan. It's [Indiscernible] Yes.

question. a Just quick

software, income re-plat need formed solutions components to sort on conversion change are of cadence open timing, architecture. open with CapEx? accounting With capitalization of remaining theoretical solutions of the or of And an there the platform onto the any then between done, that statement D&A, the architecture? kind payment be that major are or Does

David Foss

So and financial the Kevin of can of any I'll questions, question part take hard the first address your the stuff. CFO

So different we first solutions. up, about have XXX

And anymore. process solutions that it open logical around or completely to it's And an either a in platform of long to a is been stage to are in the It done. payroll payroll a like platform, example, they architecture. are take successful there time. they're has -- product. all some have some provider for so a or that was buying for Nobody on full from isn't some them We, new us a open a solution

of platform. maybe would We isn't or XX effort if into we haven't offer, all to and a those product? are solutions, solutions new sold public But try cloud for solution. of imported process the -- type we everything that that So Why in at been of put it been to open either a re-platforming to move copy in that suite high that demand you look offerings. the completely put have the many real broad logical into environment a And they're offering have years.

and some Azure our with in of both AWS we're solutions. So today

We our cloud. many have in private

we products well or And on I'll platforms hard offer today way of But for that. open it's we're the is broad So supporting kind either our of the we part, just suite key of kind it's Kevin. that that doing them let of take variety because infrastructure, then open a the that connectivity, you -- the to solutions naturally different just on. have, of

Kevin Williams

for, of on the the So statement this, has actually us cash-flow XX% look R&D Dan, if years, been our for revenue. expense have say the at plus total let's and I P&L you shows spend last a software on is the other part, XX cap that chart and R&D

So grown same last for exact at almost XX the changing. top-line as our see spends that pace has the don't years. I our total R&D revenue

and that sprints modules. modules you we're possible changing way And as bang quickly do get that. really think big and not to -- do the I out I that I we we try do additional rolled as tell would mean, don't productions. do

no amortization chart It's of see is not show year. a total every either. on balance of software a slowly that in Board given cap our -- you're about the changed any increase software the going At production hasn't there's actually become So any last to just grow. given in Because there's in -- And last I years quarter. the huge for time time, kind any -- being of at the XX% amortized. or few XX% couple sheet given

of as the to So stuff, what years, it tells you, done that amortizations software, But in the we're continuing that amortizing. to were all develop we same time out. at roll the X continue some

So there. offset you've got an

last going So of in P&L crazy do think we're have cash impact going I the than to foreseeable years. in what on much seen the to It's anything flow that few either other the an don't future. you've or

Dan Perlin

you very Thank Okay. much.

Kevin Williams

You bet.

Operator

I That for like to Kevin concludes call and would to today's answer remarks. question session. Williams turn the closing back

Kevin Williams

And again all us. you joining you. thank Thank for

I do our of and all results the We continue thank for continue overall hard to challenges ongoing by these operations. handled care taking moving to for to the and to the themselves customers be work Company our associates with future. of want way to very pleased improve forward of our our continuing they've

replay customers to continue Henry Jack number the (ph), us. focus at you so And joining for again us of provide would what on transcript? for it's shareholders. best our our All the is in Liz and please you Thank

Operator

of great [Operators until and XX:XX this you, a Thank Instruction]. PM have Eastern XXth, XXXX. August call be replay The day. available will Time,

Jack Henry & Associates (JKHY) 18 Aug 212021 Q4 Earnings call transcript