Jack Henry & Associates Inc at Morgan Stanley Technology, Media & Telecom Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Got it. I appreciate that, Mimi. Let's talk about demand environment. This is always a good place to start. How would you characterize, right now, the overall demand environment for Jack Henry solutions? And what are some of the key dynamics that you're seeing in the environment that you would flag as the most prominent upside drivers or potential downside risks, in demand?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Got it. Another key question that we get, especially since the election, as people are trying to temperature check -- have there been any anecdotal conversations that you've had with your customers? And/or relevant third-party data that you've seen, regarding the outlook for bank tax spending, particularly since the change in administration?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Right I want to ask about that. Historically, when there's been an active M&A environment, among your customers, that had been an important source of deconversion fees, which was always helpful, from a cash flow perspective in any given year. But it also represented a bit of a headwind to growth, in subsequent years, from a revenue perspective, et cetera. How do you feel if, at all, your positioning in the market has changed versus those previous periods of higher M&A? And is it still too early to tell or should we expect it, if we were to return to previous levels of M&A -- that you might see similar deconversion fees? Are they going to be less or more? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 6:45PM, JKHY.OQ - Jack Henry & Associates Inc at Morgan Stanley Technology, Media & Telecom Conference I'd just love to hear your assessment of the (inaudible).

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Got it. Just as a quick follow-up, there. Historically, like I said and this, really, goes back to pre-COVID, but when we thought about -- as you said, there was M&A and if the customer was a Jack Henry customer and one was a customer of somebody else, we tended to default to the idea that Jack Henry's customer was the one being acquired. And so as a result, we try to figure out the deconversion fees and, then, how much, like I said, to adjust that revenue headwind for future growth. Now, you're saying it seems like it's more likely to be the opposite of that, on a go-forward basis. So help us think through the incremental revenue opportunities. If you're not going to get deconversion fees, is there incremental revenue opportunity, if we do see an uptick in M&A? And so, your customers end up being the acquiring banks, more frequently? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 6:45PM, JKHY.OQ - Jack Henry & Associates Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Got it. All right. Implicit within deconversion or conversions and these kinds of things are the competitive dynamics of the industry. And, previously, you've mentioned that you are seeing increased opportunity in the $5 billion to $15 billion-dollar range. I think you mentioned $1.5 billion, the average, up to $50 billion. So bigger than average but not at the highest end. What are the competitive dynamics that you're seeing in that $5 billion to $15 billion-dollar asset size segment? And what's changed in that market that you feel, like, you've got a better opportunity?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : If you're seeing good traction and response and success, there, what are you doing, specifically? What's Jack Henry doing, specifically, in that market through pricing and product differentiation? Where are you separating, yourself, from the competition, there?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Right. Got it. Let's talk about cloud and cloud migration. Cloud offerings are growing at around 11% and, now, represent around one-third of Jack Henry's revenue. What are your expectations, regarding implications on the business, as you continue the migration? And the impact of those migrations on profitability and margins?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Let's talk about public cloud. You, guys, obviously have been building a public cloud solution. I think you've talked about and Greg talks about, like, that that has the opportunity for incremental uplift, as you move to public cloud. On the other hand, regulators have been fairly slow in permitting banking and financial institutions to move their stacks, if you will, to public cloud. What are you thinking, in terms of timing? And when can we start to see that contribute as a driver, as well?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Got it. Mimi, you and I have been chatting, now, for about 20 minutes. But I want to make sure that if there are any questions from the audience -- you can raise your hand and we can get you a microphone. Let's continue on. I think that public cloud product is a good transition to talking about product, more specifically. Let's start with product rationalization strategy. And this is something you've talked about, but, maybe, can you talk about what the idea is, there? And, in particular, love to hear some emphasis, from you, on what products have a higher importance to the products than their revenue contribution would suggest and, as a result, like, maybe getting some extra love and attention?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Got it. Let's talk about adoption trends in your digital platform, particularly Banno, and the dynamics you are looking to capitalize on to further push the growth of that product in 2025. Maybe, just a quick overview of what Banno is and, then, how it's growing and what we should expect, there.

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Got it. You mentioned the partnership with Moov. Why don't you describe for people what that is? How you look at that, as an incremental opportunity? And it seems fairly interesting and exciting to me. But I'd love to hear your description.

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Absolutely. And, like I said, just the go-to-market through the financial institution partners and customers, as well as the ability to hit, especially, new businesses, just as they're forming and, as you said, with some differentiation around clearing times, receipt of cash is really compelling. But it's really early days. How should we think about time, until this initiative can really start to move the needle for the business?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Let's talk financials, really quickly, here, as we're getting down to the last of our time. Just remind us what your targeted growth rates are on margins? But, then, one of the things that people have paid very close attention to is free cash flow conversion and how we should expect that to evolve, over the next little while.

Question: James Fassett - Morgan Stanley & Co LL - Analyst : So if we start, like, with that top line of 78%, it's quite a bit faster than your competitors or, at least, your public competitors. What are the puts-and-takes, there? And what's the potential for what would be the upside drivers versus what kind of risks should we be keeping in mind?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Got it. And, then, finally, you, guys, have always been very good allocators of capital. How are you thinking about capital allocation, now? There's obviously buybacks that can be supportive of your EPS growth. On the other hand, historically, you've also done really good acquisitions, especially in the technology space. What's the prioritization, now? And what are you seeing, in terms of opportunities, either place?

Question: James Fassett - Morgan Stanley & Co LL - Analyst : Got it. Well, Mimi, that's all the time we have. Really great talking to you again. Jack Henry, obviously, has a lot of investor fans and has had for a long time. So I'll always love having you here at Morgan Stanley. Thank you.