Jack Henry & Associates Inc at Wolfe Research FinTech Forum Transcript

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

Question: Darrin Peller - Wolfe Research LLC - Analyst : Look, on that note, just maybe kick in with what you're seeing in the environment for not necessarily the numbers first, but just -- what are your customers asking for? What kind of demand environment is there? What are they asking for in terms of type of -- is it cost management? Is it investment in certain areas? So let's just start there, and we'll go further.

Question: Darrin Peller - Wolfe Research LLC - Analyst : In terms of digital demand -- I mean, I know that's been a hot topic still -- have you seen any change? Or has that continued to be strong and it still is strong? Is any -- I just wonder if it's increased at all recently?

Question: Darrin Peller - Wolfe Research LLC - Analyst : When is that timing-wise?

Question: Darrin Peller - Wolfe Research LLC - Analyst : Okay. I want to go further into things like digital and the other areas of growth. But before I do, just -- let's just revisit guidance for a minute, okay? So second-quarter results, they were in line more or less with expectations across segments. You're still calling for second-half embedded in your guide for -- I think it's about a 3%, 3.5% acceleration in growth, right? So maybe just start there. I mean the conviction you have in that revenue acceleration in the second half more broadly, what the key drivers are behind that?

Question: Darrin Peller - Wolfe Research LLC - Analyst : But these are bottoms-up analysis, right? I mean, in other words, you see the actual contracts when they're implementing when they're live.

Question: Darrin Peller - Wolfe Research LLC - Analyst : And the revenue flow-through is already kind of built out waterfall. So it's not -- to you, it's not anomalistic type of year. It just from the outside -- 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 11, 2025 / 7:10PM, JKHY.OQ - Jack Henry & Associates Inc at Wolfe Research FinTech Forum

Question: Darrin Peller - Wolfe Research LLC - Analyst : So your conviction is just as high as it was at the beginning of the year (multiple speakers) acceleration and timing.

Question: Darrin Peller - Wolfe Research LLC - Analyst : Let's talk about the competitive landscape because I think even you guys had another conference, talked about pricing, and talked about some of the rational behavior of some of your competitors. And maybe just give us a sense of what you're seeing out there if you could expand on that a little bit and if there are any competitive pressures or either at the high end or the low end of the market that you're seeing out there right now.

Question: Darrin Peller - Wolfe Research LLC - Analyst : There's definitely not just three.

Question: Darrin Peller - Wolfe Research LLC - Analyst : So what do you think it is that's driving the market share to be with -- I mean, because, again, you're talking about examples where others might have priced a little more aggressively, and you're still winning the 100-plus cores. What is it that's driving that? Is it the service level? Is it the actual tech itself?

Question: Darrin Peller - Wolfe Research LLC - Analyst : For sure. And I think core, again, has been something that's an anchor for you guys, and you continue to gain share there as well as you have talked about. But what are the other products that you see as sort of the good attach that you can now cross-sell in given your position with core? And what are you seeing the most demand for? We touched on Banno, maybe you can start there, but (multiple speakers)

Question: Darrin Peller - Wolfe Research LLC - Analyst : And you're seeing that demand as high as ever for those. 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 11, 2025 / 7:10PM, JKHY.OQ - Jack Henry & Associates Inc at Wolfe Research FinTech Forum

Question: Darrin Peller - Wolfe Research LLC - Analyst : Has it changed at all from last year? I mean we seemed like we were having an opportunity for banks to want to spend more money this year, especially in the backdrop of where rates were supposed to be adding. Now there seems like, obviously, macro shakiness just given the backdrop of policy. And so what are you seeing in the market today even if -- as real time as we can get.

Question: Darrin Peller - Wolfe Research LLC - Analyst : Right. And for you guys, that's what? That's implementation work. But is it really beyond that? Is it processing work?

Question: Darrin Peller - Wolfe Research LLC - Analyst : So when we think about the trends for you on revenue per customer, for example, it's really a balance, right, between scale as the customer grows versus the products you're offering really just being able to offer more and offset maybe scale price, right? Are you seeing that sort of stability hold?

Question: Darrin Peller - Wolfe Research LLC - Analyst : Maybe we could talk a little more about just the private cloud. I mean it's a trend that we've been seeing obviously within -- really within core. I mean you talked about financial institutions moving to in-house private cloud. I mean how many more core clients are on private cloud now. How do you expect that trend to accelerate in the back half of the year? And just if we should consider any impact on your margin profile also. And I know I remember, for the last couple of years, we've talked about this. It seems like it's gotten more real even last year and certainly more this year than last. So where are we in this road map?

Question: Darrin Peller - Wolfe Research LLC - Analyst : And again (multiple speakers) points accretive.

Question: Darrin Peller - Wolfe Research LLC - Analyst : I mean are you seeing any shift from a regulatory standpoint that's affecting that at all in terms of this administration or anything else? And just more broadly, I guess, you can layer that into the questions of what you're seeing under the new administration. 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 11, 2025 / 7:10PM, JKHY.OQ - Jack Henry & Associates Inc at Wolfe Research FinTech Forum

Question: Darrin Peller - Wolfe Research LLC - Analyst : It seems like it's very, very scary from a security standpoint, without knowing exactly what you're doing.

Question: Darrin Peller - Wolfe Research LLC - Analyst : Where do you think you are competitively on this front? I mean you hear other companies say that their offerings on core and what they can do on cloud is something that's comparable. But I'm not sure it's quite the same, right? There are cloud-based cores out there, but it's not quite the same of moving somebody's entire infrastructure onto the cloud, right?

Question: Darrin Peller - Wolfe Research LLC - Analyst : Maybe just switching over to your partnership with Moov for a minute. I mean, it seems like there's -- it's been progressing well, just especially with the recent Visa Direct announcement. Just maybe help us understand when you expect revenue from that partnership to start really meaningfully impacting your growth. 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 11, 2025 / 7:10PM, JKHY.OQ - Jack Henry & Associates Inc at Wolfe Research FinTech Forum

Question: Darrin Peller - Wolfe Research LLC - Analyst : Got it. So if we put it all together, I mean, you guys are obviously doing well on the core side. You have Banno; you have digital banking that's obviously high in demand. Payment seems to be going well in terms of integrating and cross-selling, right? Maybe what have we missed? What do you -- if you had to rank order the areas in terms of the contribution to the next year or two of growth to being as strong as it has been in sustaining, what do you want us to know about and make sure we're aware of and what are you most excited about?

Question: Darrin Peller - Wolfe Research LLC - Analyst : Yeah. All right. That's really helpful. I guess, just before I wrap it up, the financial the algorithm, right? When we think about your top line has always been -- it's very consistently been leading in the market, call it, mid- to high single-digit range, revenue growth through some time. But when we think about your ability to operate expenses and invest at the same time, just remind us what we should be expecting from an expense growth standpoint, from an operating leverage standpoint from -- really, and then we can touch on capital return and what you -- how you think about that strategically.

Question: Darrin Peller - Wolfe Research LLC - Analyst : (multiple speakers) good thing in this market.

Question: Darrin Peller - Wolfe Research LLC - Analyst : Just -- it reminds me to ask that question that I had earlier, but I skipped over it. But let's go back to it. The free cash flow question has obviously been one we've gotten from investors. So just your conviction around returning to that higher level of a conversion ratio that we thought we'd all like to see, again, obviously. And so just help us understand the building blocks.

Question: Darrin Peller - Wolfe Research LLC - Analyst : Guys, I'll take a question from the audience, if anyone has. But while I'm just letting everyone think about it, a year from today, what do you want to see to succeed and call the year a successful year for what you're looking for?

Question: Darrin Peller - Wolfe Research LLC - Analyst : That's great. All right, guys. Any questions from the audience? Unidentified Participant Yeah. Maybe just quickly, if you could walk through any implications given banking consolidation.

Question: Darrin Peller - Wolfe Research LLC - Analyst : Okay. Thank you very much.