Jack Henry & Associates, Inc. (JKHY) Earnings Call Transcript & Summary

All right. Good morning, stockholders, employees and friends. I'm David Foss, Board Chair, President and CEO at Jack Henry & Associates, and it's my pleasure to welcome all of you. In accordance with the notice of the meeting, I call to order the 44th Annual Meeting of Stockholders of Jack Henry & Associates Inc. In the materials given to you as you entered the meeting, you will find a copy of the agenda and the rules of conduct by which we will conduct this meeting. In the official part, we need to elect all 9 of our directors to serve for the next year, and there are 2 other items of official business. Then we will have our annual presentations and a time at the end for questions and answers. Before proceeding to the business meeting, I would like to make certain introductions. I first present the Board of Directors who are candidates for reelection. Please stand when I read your name. Matthew C. Flanigan; Thomas H. Wilson; Jacque R. Fiegel, Wesley A. Brown, Curtis A. Campbell and me, David B. Foss. Each director is in attendance at this meeting. In attendance are the following officers of the company: David Foss, Board Chair, President and Chief Executive Officer; Kevin Williams, our Chief Financial Officer and treasurer; Greg Adelson, our Chief Operating Officer; Craig Morgan, our General Counsel and Corporate Secretary; Renee Swearingen, our Assistant Treasurer, and Mary Stluka, Assistant Corporate Secretary. Also in attendance today are representatives of our independent registered accounting firm, PricewaterhouseCoopers LLP, Stephen Maggio, lead partner; and Jamie Carlson, Director. They will be available to answer any proper questions you may have during the question-and-answer portion of this meeting. Thomas Cooper, representative of Computershare, our transfer agent, is in attendance to assist in tabulation of proxies and ballots and will act as Inspector of Election. Mr. Cooper has delivered his oath of office to the company. I will also add that the minutes of last year's annual meeting are available, and any shareholder wishing to inspect the meetings should contact our Assistant Corporate Secretary, Mary Stluka, at [email protected]. Thomas Cooper, Inspector of Election, will now report on the mailing of the notice of this meeting and the presence of a quorum. I'll ask you, Thomas to turn your microphone on, if you could.

How about now?

There you go.

All right. Sorry about that. This meeting was held pursuant to printed notice with mailed with the proxy statement on or about October 5, 2021, to each stockholder of record as of the close of business on September 20, 2021, who's entitled to vote. A list of stockholders entitled to vote at this meeting has been made available at the company headquarters for the past 10 days and is available here today. All documents concerning the call and notice of the meeting will be filed with the records of the meeting. The count of shares present immediately prior to the commencement of the meeting indicated at a quorum with respect to each voting issue is present in person or by proxy.

Thank you. I hereby declare a quorum present at the meeting. On behalf of the Board of Directors, I would like to express my appreciation to all stockholders who returned their proxies. The formal business of the meeting will now proceed. Those stockholders who have returned their proxy and do not wish to change their vote, need not vote as your proxy has been counted. Stockholders who did not return a proxy or who wish to change your vote, please go to the registration desk now and mark your ballots as we will declare the polls to be closed and voting will conclude upon completion of the following review of items to be voted upon. The first item of business is the election of 9 directors to serve until the 2022 Annual Meeting of Stockholders or until their successors are duly elected and qualified. As indicated in the company's proxy statement and notice of this meeting, the Board of Directors has nominated the following 9 persons whom I presented earlier. There is no need to stand when your name is read. Matthew C. Flanigan, Thomas H. Wilson, Jacque R. Fiegel , Thomas A. Wimsett; Laura G. Kelly, Shruti S. Miyashiro, Wesley A. Brown, Curtis A. Campbell and David B. Foss. Mr. Morgan, General Counsel and Corporate Secretary has informed me that there were no shareholder nominations or proposals for other business for this meeting timely filed with the Secretary prior to the meeting. The next item of business will be to approve on an advisory basis, the compensation of our named executive officers. This vote is commonly referred to as the say-on-pay vote. Specifically, the Board of Directors has recommended that you vote on an advisory basis to approve the following resolution, resolved that the compensation paid to the named executives as disclosed in the company's proxy statement for the 2021 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and related narrative disclosure is hereby approved. For your information, the named executives for fiscal year 2021 were David Foss, Board Chair, President and Chief Executive Officer; Kevin Williams, Chief Financial Officer and Treasurer; Greg Adelson, Chief Operating Officer; Craig Morgan, General Counsel and Secretary; and Teddy Bilke, Chief Technology Officer. The next item of business will be to vote on ratification of the selection of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending June 30, 2022. Stockholders voting in person, please mark your ballots and take them to the registration desk now. All proposals are formally before the meeting. We will pause briefly to allow voting to conclude. [ Voting ] I hereby declare the polls to be closed. The Inspector of Election will now report the tabulation results of all balloting for the election of directors and the other matters presented to the stockholders.

The results have been tabulated, and each of the 9 directors have been elected by a majority of the votes cast. The compensation of the named executive officers has been approved by a majority of the votes cast. The ratification of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm has been approved by a majority of the votes cast.

The final vote tally will be disclosed on a Form 8-K that we will file with the SEC. This concludes the official business of the meeting. I declare this 44th Annual Meeting of Stockholders is adjourned. Now it's time for the informal part of our annual meeting with the presentation by your CEO, me; and our CFO, Kevin. So, let me get to that. So again, I want to welcome everybody to our annual shareholder meeting. We're thrilled to be back with you this year. Last year, of course, we conducted this meeting virtually in an effort to maintain a safe environment. This year, we made the decision that we could as long as we followed some protocols here, we could conduct a safe and productive meeting for you all. So we're happy to see so many of you with us in person. So I'm going to walk you through a bit of an overview of the company from my perspective. And then as I mentioned, Kevin will come up and review some financial information. Then we'll have Q&A after the two of us have presented. We do have a roaming microphone that we'll have available to you if you have any questions for us at the conclusion of these of this presentation. So just to kick it off, our strategic direction. I always start with a review of the strategic direction. I will point out to you that our strategy has not changed. So there is not a word on this slide that has changed from what you saw last year or probably the year before that. because our strategy is continuing to be sound and very focused. And that's one of the things we believe shareholders like about Jack Henry as an investment is that we have a very focused strategy, and we don't deviate a whole lot as far as what our strategy is focused on. So we provide core processing systems. We offer additional financial technology solutions to other financial institutions who don't run the Jack Henry core. We are focused on digital and payments. Today, if you were running a bank or credit union in the United States or probably anywhere in the world, you must have an outstanding digital experience for your consumers. You must be focused on offering a variety of options when it comes to payments technology. And so we're very focused in those areas. We offer stand-alone solutions to institutions who use a competing core system. So we have a lot of Jack Henry customers who are not Jack Henry core customers, but they're good customers for us regardless of the fact that they're running somebody else's core. We work with some partners outside of financial services. So we have some customers who are not banks and credit unions, but we're still delivering financial solutions to them. We emphasize integration and superior customer service, and I'll show you a little bit more about that here in a second. We focus on developing our people and our culture. And as you can probably imagine, as we've transitioned now into everybody working from home, we're still 96% of our employees nationwide are still working from home today. And so one of the things we talk about a lot now is does that create any challenges for our culture going forward? It's something we're very focused on as we look to the future. And then, of course, we do make some acquisitions to support our strategies. We haven't made any lately, but we're always looking for potential acquisitions to round out the product suite at Jack Henry. We continue to run with a fortress balance sheet, minimal debt. We take on a little debt now and then, but we tend to pay that off pretty quickly. We run a net cash positive business, strong organic revenue growth, profit margins, highest in the industry, a high percentage of recurring revenue, which, of course, makes our P&L very consistent, very predictable for our shareholders. Business profile that continues to demonstrate that we're resistant to economic challenges through the pandemic last year through the real depth of the pandemic, did we struggle a little bit? Sure. Many companies in our space really struggled. Jack Henry, we struggled a little bit, but we were able to manage our way through that pretty effectively. We didn't lay anybody off. A lot of our competitors were doing major layoffs through the real depth of the pandemic last year. Jack Henry did not do that, remain true to who we are, I think. And I think the business model that we have really helps ensure that we don't have to do dramatic or draconian things when the economy starts to get a little challenging. And then we have a highly engaged workforce, and that has been really exciting for us through the pandemic as everybody is working from home. Still, the engagement level of our associates continues to be very high. The response to our employee satisfaction surveys has been really high. And so that's been really gratifying as we've been through this really difficult time here in the past couple of years. As we look on this particular year, we just celebrated our 45th anniversary as a company at Jack Henry. We delivered solid financial results, as I alluded to just a moment ago. We hosted two very successful virtual client conferences, had never done that before, but last fall, fall of 2020 and then the spring of 2021. So both of that was in the fiscal year, totally virtual conferences, but really successful conferences. We published our first corporate sustainability report at the end of December of this past year, highlighting all of our efforts around ESG, environmental, social and governance initiatives. And that has been well received by our shareholders, launched a continuous listening strategy. So in the past, when we were trying to get a feel from our employees for how do you feel about the company and what we're doing, we would do generally once a year, a big survey and then we would kind of take action on that survey throughout the remainder of the year. Well, now what we do is on your anniversary date, the anniversary date that you were hired at Jack Henry, you receive a survey link, and we ask you to talk about your satisfaction level working for Jack Henry. And so we're constantly getting feedback from our employees, and we're able to act on that feedback throughout the year as opposed to kind of that one big bang once a year that we did in the past. We launched our sixth business innovation group. So we have -- we call business innovation groups. Some companies call them affinity groups where people have things in common. We launched one this year because of employee demand that we're referring to as Go Green. So it's for employees who want to get together and really help support the environment and environmental initiatives. So that's been a successful new launch. And then we have announced a few key leadership transitions. So we've had a few retirements. Russ Bernthal, who is President of our Profit Service division, for example. He retired, we had a successor ready to take his place. Steve Thompson, who ran sales and marketing. He retired in June. We did an external hire to fill Steve's position. And so we've had several of those changes throughout the year. And of course, the most recent announcement, we announced that Ted Bilke, our Chief Technology Officer, was going to retire in the summer of next year. He's going to transition out of his role in January; and Ben Metz, who's our current Head of Digital. He will move into Ted's role. He'll be responsible for digital and technology going forward. So that transition will happen in January. That was a planned transition. And then Kevin has announced his retirement for next summer. We're currently in the process of a search to find a CFO candidate. We'll be talking to both internal and external candidates to find a new CFO. And Kevin's expected retirement time frame is next summer but we'll just kind of see how that goes. We want to make sure we identify the right person to take that role. So I think we've done a really good job at Jack Henry of succession planning and kind of planning these things out to ensure no disruption to the company and to our flow of business going forward. We also, during the past year, kind of shifting to some product initiatives from the past year. We completed our Jack Henry card processing migration. This is a project we've been talking about for 4 years, it took about 3.5 years to execute, but we started talking about it well before the execution began. So we've been talking about this project for about 4 years. We migrated 1,000 financial institutions off of our 2 legacy debit card processing platforms over to a new platform. We migrated about 20 million accounts as a result of that migration. And now we have both debit processing and credit card processing off of a single platform. So it was a significant project for Jack Henry, a very successful project for Jack Henry, but also a really long-term project because like I said, it was 3.5 years in execution. We delivered an automated database migration for our Episys credit union customers. And you might say, well, what's the big deal about that? Well, we replaced the database, the underlying technology, the database in that platform without customers having to do anything. And that's a really big project, a big lift. You kind of don't think about it sometimes, but to replace the database with an entirely new database and the customer doesn't have to do any work, that was a big deal for those customers. So another really successful project. We delivered our Banno Digital Toolkit. So a lot of conversation today around digital is banks and credit unions want the ability to connect technology into the digital platform. So the mobile banking platform, they want to be able to connect other technology from other providers seamlessly into that platform. And so we've created this toolkit to allow that to happen. Then the last thing on the list here, although we did a lot of other projects, the other really significant thing was the rollout of our PayCenter platform. So you probably have heard about Zelle for real-time payments, other real-time payment options that are evolving now. The Federal Reserve Bank has announced FedNow where they're going to be doing real-time payments. We created this technology that allows a bank or credit union to connect any real-time payments provider into a single hub and that creates efficiencies for the bank or credit union in the way they interact with those real-time payments providers. So we're very excited to have that in production now and live. A few challenges. It wasn't all Sunshine and roses certainly this past year. It wasn't all success as we did have some challenges during the year. The cost of security, governance and compliance only continues to escalate for a company like us. If you think about all the things that you see on the news and hear about when it comes to cybersecurity and attacks using technology, that is only escalating. The bad guys are only getting better at what they do, and there are only more of them, they're nevertheless of them. There are always more of them and they're getting better. And so for a company like ours, a major provider in the United States of financial technology, it is imperative that we have an outstanding team, and we spend whatever we need to spend to ensure the security of our company and the security of our customers. So that is an ever-increasing cost for our company. Ongoing capital investment requirements, so internal infrastructure, the needs for our facilities and the evolving needs of our facilities now as a result of COVID is a significant topic. You will see us in the coming year and the coming years, you'll see us moving out of some of the facilities we have around the country, certainly not Monett and not our major locations like Springfield in Dallas and San Diego, but some of the smaller locations, we're at a point now where almost everybody wants to continue to work from home, and we don't need those big facilities in some of those locations. So you'll see us kind of rearranging how we deal with facilities. And then research and development, a technology company like ours with all the things happening in technology, we continue to invest significantly in R&D. You have probably heard about what is termed the great resignation that's happening nationwide. That's happening to almost every company out there. It certainly has impacted Jack Henry, although we have a great reputation for being our best place to work and for an outstanding benefit program and an outstanding compensation plan. We have been hit by some of this move where people just say, I've been doing this a long time, and I decided I want to do something else now. I'm going to resign and oftentimes, people change careers. And so that has impacted us as well. So it's been a real -- a major initiative for us to get creative in ensuring that we don't lose key employees. And then the COVID-19 impact. So sales has performed well, but there certainly have been challenges. Lot of customers who wouldn't allow sales reps into their bank or credit union. So we had to really shift the way we sell virtually, move to a virtual sales model in many cases. As with the rest of the world, some of our teams are experiencing working from home fatigue. So on the one hand, you say, "Oh, it's great, we can continue to run the business with everybody working from home." But if you're working from home and your spouse is working from home and your kids are trying to do school work from home that can be a pretty taxing on people. And so we're very conscious of that and trying to make sure that we're being smart about providing options for our employees so that they don't experience too much work from home fatigue. As far as returning to office, we had hoped that January 31, 2022, would be a good logical target for us to really start to move people back into the office. There is another wave that we're hearing about that is -- that's happening, even though the rates have been decreasing here in the past week, there's this lot of discussion about another wave that's coming. So we're keeping our eye on all of that. Our expectation, once we do return to office is that 66% of our employees will probably continue to work full time from home. 26% will be in the office full time and then 6% in a hybrid mode. I think that will normalize over time. I think that 66% will come down. Probably long term will end up around 50% full-time work from home. By the way, pre-pandemic, we were 28% full-time work from home before there even was a pandemic. So we've been encouraging work from home for a long time, but I think we'll normalize probably over time here, more into a 50% full-time work from home. And then, of course, the thing we're watching closely right now is this mandate that has come out that the Department of Labor and OSHA enforcement. It's been challenged in the courts. There's a stay as of Friday, but we're a large employee more than 100 employees. If that, in fact, makes it through the court system, if that is put into place, we will have to make sure that we're doing what we need to do to address the mandate. So that is an outstanding issue for us, something we're watching very closely. As far as pillars of success at Jack Henry, this has not changed. And the order, as I stress to shareholders all the time. We put our associates first to the idea if we create a great work environment, our employees will take care of our customers and deliver great solutions and service to our customers. So our customers are second on that list of priorities. If customers are happy, they buy more stuff from us. They continue to remain customers, that takes care of the shareholders. So that list of priorities has remained the same at Jack Henry since before I got here 21 years ago. That's been the mantra and we continue to operate in that fashion. So just a little bit about each of those primary groups of constituencies, though. First off, for our associates. One of the best demonstrators, I think, of the idea that we're doing the right thing in the eyes of our associates is we are very regularly winning Best Place to Work awards around the country. So several of these are geographic. You'll see Dallas and Nashville and San Diego and a bunch of location-specific awards that we've won in the past year. But then there are a couple that I always call out here. Number one, Forbes Magazine up at the top here. So that is the Forbes Magazine. We were again named by Forbes as a best large employer this year. And then right over on the far right-hand side there in the middle, American Banker Best Places to Work in fintech. The significant item about that is, that's American Banker. So it's customers are evaluating us who are using our solutions all the time. And it's the best place to work in fintech, and that's an important word, fintech, because American Banker only recognizes 50 fintechs. And when most people hear the word fintech, they think small start-up Silicon Valley type company, usually less than $50 million in revenue, fewer than 500 employees. And sure enough, 48 of the companies on this list are the 50 companies, 48 of them fit that profile. They're small, nimble startup companies that are doing really cool things. And then there's one mortgage technology company on the list, and then there's Jack Henry. So how does a 45-year old technology company with almost $2 billion in revenue and close to 7,000 employees, how do you make it on the cool kids list? It's because our teams are delivering this really outstanding technology. And I think the culture that supports that at Jack Henry, that's what we're being recognized for. So that is a really significant award for Jack Henry. And I will emphasize. We don't -- it's not because you buy advertising or something like that, that you win those awards. Those are objective surveys that determine whether or not you win one of these things. So we're really proud of that recognition for our company. So that was a little bit about our associates, a little bit about our shareholders. So we -- as I've mentioned before in these meetings, we conduct extensive surveys of our -- I'm sorry, about our customers. We conduct extensive surveys of our customers asking how we're doing. On a daily basis, customers may get a survey from us. And so what you have in front of you here, this is the roll-up average rating as of the end of September. So this is for the month of September. Our average rating is 4.74. Now that's on a 5-point scale, a 1-to-5 scale, we're averaging a 4.74. So think about that for a moment and do some math in your head. If you're going to average a 4.7 on a 5-point scale, what that means is almost every survey you get back is a 5, right? We're being rated a 5, which is extremely satisfied in the eyes of our customers. And in fact, at Jack Henry, if any survey comes in with a rating of 1 or 2, which are the low ratings, the customer service manager is required to call the customer and ask "What happened? What did we do wrong?" And so it is this point right here, that Jack Henry, I think, is known for more than almost anything else in our space. We're known for this outstanding customer service and this focus on delivering outstanding customer service and making sure that we don't mess that up. As far as our shareholders, so we talked about our associates, talked about our customers, a little bit about our shareholders. So you all are well aware of this. We continue to grow revenue, continue to grow earnings per share. So we have 3 years' worth of revenue and earnings per share here. Of course, Kevin is going into a lot more detail in his presentation. A key point, though, is our investment in R&D. So we are continuing to run at 14% of our revenue that we're putting back into R&D for new product development. And this is on a rising revenue number. So that 14% has been consistent now for several years. And that is key because in our space, back to us winning the American Banker Best Places in FinTech Award, that commitment to R&D, which we believe is about double our major competitors on a percentage basis, that is what's creating that reputation. What is getting people's attention. Jack Henry is spending a lot on R&D, spending a lot and rolling out new products, new innovative solutions, that gets our customers' attention and it certainly has gotten American Bankers attention. So we are committed to that spend rate of about 14%. Over on the right-hand side, I just listed a few areas that we are particularly focused on right now when it comes to new development. So digital, financial crimes, no secret probably. You hear about all the fraud that happens out there in our space. Our payments hub that I mentioned earlier, cybersecurity, I talked about. Open banking, which is the idea of connecting in any technology to any technology is a hot topic right now in our space. We are very committed to that concept. Treasury management, integrated account opening, which allows people to open new accounts with their bank or credit union from the comfort of their own home without ever going into a branch without ever talking to somebody at a branch, sit at home, open the account, fund the account, do that all remote. And then what we were referring to the last item here, we're referring to as the One Jack Henry program. Many of you in this room have been shareholders of Jack Henry for a very long time. You've seen this company grow significantly over the years. And one of the challenges in that growth has been, as we're growing all over the country, we have many different approaches to sometimes solving the same problem. And so we have a major initiative going on at Jack Henry today, led by our Chief Operating Officer, Greg Adelson, to kind of bring those processes together, make us look more like one organization to our customers as opposed to having different processes and different approaches and different groups. So it's a really big push that we're working on right now to ensure kind of a single view when our customers look at us, they look at us as One Jack Henry. You function the same, you operate the same, you think the same, you approach issues the same way. That's something that we're really working on enhancing. So if you look at our company today, we're a little over 6,800 associates strong. We provide 4 core processing solutions, as I mentioned earlier, our 45th anniversary this year. 64% of our core clients now are operating in our private cloud environment. That for those of you who have been coming to these meetings for a while, that has a number that has grown significantly over the past several years. So 64% in our private cloud environment also contributes to that recurring revenue point that I made earlier. If you're in the private cloud environment, you're paying us every month for services and it's very predictable revenue for us as a public company. And then last year, we ended about $1.75 billion as of June 30 in revenue. A little bit about corporate responsibility. So as I mentioned earlier, our people, our associates, our customers and our shareholders have always been top of mind for Jack Henry. But as we are becoming a much larger company, we're on the S&P 500 now. We have to be mindful of broadening that message just a little bit to make sure that people who are investing in our company understand our commitment to our communities and to our environment as well. So ESG initiatives, we've encapsulated those in our sustainability report, but also we want to make sure that people understand that we are good corporate citizens in all of the communities that we live in around the country, not strictly in Monett and Springfield, but in all the various parts of the country where we operate. And I think we do a wonderful job in that regard. We are also focused on diversity and equity inclusion. So we have been continuing to do training at Jack Henry around these topics, ensuring that when we are recruiting, for example, that we're looking at a broad slate of candidates for recruiting for new positions. We are training our employees to ensure that everybody understands the value of diversity of thought and ensuring that we have people in the room that represent our customers and our country. And then the business innovation groups, as I referenced earlier. So we have 6 business innovation groups. They are women at Jack Henry. So it's a group of women who are supporting each other, and we have allies. So a number of men are also members of that, allies who are helping support women in their careers within Jack Henry. We have JHAnywhere, which pre-pandemic. we created this organization because we have a lot of people working from home. Of course, the pandemic came and everybody was working from home, so pretty much anybody could be a member of that group. But originally, it was to help support people who are working remote full time and don't have that opportunity to be in the office, interacting with others. We have Mosaic, which is people of color. We have Prism, which is LGBTQIA. We have veterans, a very active veterans group at Jack Henry, and then the Go Green Group that I referenced earlier. So some really wonderful things going on within the company, groups that are helping support each other as they grow their careers and helping our company make sure that we're looking at opportunities and issues with different perspectives. Back to associate engagement. So I mentioned earlier that we do this continuous listening survey. Right before we launched that in July, though, we conducted a company-wide survey and there were a couple of statistics that came out of that survey that I think are really notable. Number one, 62% of our associates participated in the survey. They told us what they thought. That is remarkable. That's much above average when it's compared to other companies. And then 83% of our employees were engaged and really helped us -- help provide opinions to Jack Henry, which is well above the industry benchmark. So really, really outstanding engagement. This is significant for us because, again, this was earlier this calendar year when the pandemic was still really raging, and we really needed to measure how we were doing in the eyes of our employees and what their level of engagement was with our company as we continue through this transition. One last point on engagement within our communities. So I've reported on this the last few years. We have a lot of employees at Jack Henry, who volunteer in a variety of ways. So first off, many associations in our industry where employees are involved in those associations. So there are payments industry groups, there are security industry groups. We have a number of employees who volunteer for those organizations. So 6,495 industry volunteer hours, where people are serving on boards, providing their expertise to help make our industry better through these various associations. And then 70,538 local and national charitable volunteer hours. So this is an industry specific. This is about helping out with a charity in the community where our employees live. So it's more than 70,000 hours of volunteer time based on the responses we got. And of course, we don't track this for our employees. We depend on them to tell us when they're volunteering. So I know that number is much larger because we know a lot of people are all volunteering and don't necessarily report it into Jack Henry. And the independent sector value of those volunteer hours more than $2 million that our employees are giving up their personal time. So we feel strongly that we represent a group of associates who are really good citizens in the areas where they live. So with that, I want to thank all of you for your confidence in our company and your investment in our company. We hope you can tell very happy with the way things are going at Jack Henry today. Despite the challenges that we have with the pandemic right now, the company is in great shape and performing well, and we have a wonderful group of associates here that are going to continue to take care of our customers. So with that, I'm going to turn it over to Mr. Williams and ask him to give you a financial update. So Kevin, if you would.

Thanks, Dave. As Dave mentioned, we want to welcome you. It's really nice to have everybody here in person. It was weird doing it last year with just Dave and I in the room kind of talking to everybody, but I think we pulled it off pretty well. So I am one to give you kind of an update on the financials, how we ended the year. And obviously, just a week ago, we actually announced our first quarter of FY '22, so I'll briefly hit on that as well. Obviously, if I may make some forward-looking statements. You need to regard our risk factors and additional information in our 10-K that we filed, which is entitled Risk Factors and Forward-looking Statements. So Dave already kind of presented this slide. This is the last 3 years. But those of you who have been long-term shareholders know that I could actually take both of these slides back to 1991. So since 1991, for 30 years, we've gone up and to the right. So that's a very good track record. And then we do report our financials in 3 different segments or 3 different operating segments and then 4 is kind of a corporate catch-all. And all 3 segments have continued to do well. This is on a GAAP basis. So I'm kind of going to report GAAP and non-GAAP. And the primary difference between the 2 is what we call de-conversion fees. So when one of our customers is on a long-term contract and they get acquired, they have to pay us to get out of that contract, and that's de-conversion fees. We have no control. We don't even like them because we just do not lose the customers. We just keep all of our customers and keep that revenue. So this is on a GAAP basis. So core, which is primarily our in-house and our private cloud core customers that are on one of our core platforms, as Dave mentioned. Payments is one of the three different payments -- the type payments we have, which is online bill pay, what we call enterprise payment solutions, which is Remote Deposit Capture and then obviously, card, which is growing nicely. And then complementary is kind of everything else that we do. So it could be check documenting, check imaging, any number of things. That's primarily where our digital Banno Platform is, is in that as well. And then again, corporate is kind of a catch all. And then on a non-GAAP basis, so we back up de-conversion fees, and I would tell you, de-conversion fees had a pretty significant impact on us last year. De-conversion fees were down $33 million compared to the year ago, which was kind of some of the noise in our stock during the year. So down significantly. We think it's going to be back up this year because M&A activity is really picking up. So without the de-conversion fees, our core business actually grew 5%, payments grew 9%, common grew 6%, overall 6% growth. So in the year of the pandemic to have 6% overall growth, pretty solid results. And then one of the things that Wall Street really focuses on is our operating cash flow, which for us, we use in a number of ways. This is kind of like your take-home pay, so to speak. And like you have mortgages and car payments to make, we have some things we have spent on two, which is primarily reinvestment in our company through CapEx. So hardware upgrades, earner facilities. And then obviously, Cap software. We spend a lot of money on Cap software. And then once you pay for those two, what that leaves you is free cash flow. And this is another thing Wall Street likes to look at is your conversion of net income to free cash flow, and they like to see it at 100%, which we're well above 100% in 2020. We were exactly at 100% in 2021. So that's an indicator that Wall Street really likes to look at, and we performed very well with that as well. Then with free cash flow, we can do a number of things in which we pay dividends. I can also take this slide back to 1991. We've actually increased our dividend every fiscal year since 1991 when we started the dividend program. So we pay a lot of dividends, and then we also buy a lot of stock back, which just helps drive EPS. We would much rather do acquisitions, but I will tell you the acquisition market out there is completely crazy right now. Valuations are off the chart. And as a company like us, it's really hard to pay the valuations for an acquisition that is not going to be accretive for -- some of them can be 5 to 7 years. So we will use our excess cash to continue to buy back stock to help drive EPS up. So a snapshot of -- and this is -- again, this is GAAP. So this has the decrease in de-conversion fees in there. So revenue went up 4%, operating income went up 5%. So we've got a little bit of leverage. And then if you look at a non-GAAP basis, and this is pretty impressive. So revenue goes up 6%, operating income were at 13% as well as net income and earnings per share were up 15%. So a very good return to our shareholders on a non-GAAP basis. Snaps of our balance sheet. As Dave said, we don't have a lot of debt. We did have $100 million at the year because we spent about $400 million last year on stock buybacks. But we do have cash, and we've actually paid down the debt a little bit since the end of the year. So as I said, we just reported Q1 last year -- or last week, I'm sorry. And so very impressive results. And again, this is on a GAAP basis. Revenue went up 8%, operating income up 14%, nice leverage to earnings per share of 16% because of the stock buybacks that we did. So a very, very nice quarter. And again, de-conversion fees went down again in Q1 compared to last year. So non-GAAP, we actually had revenue growth of 9%, net income growth 15% and EPS growth of 19%. So I was a little surprised we didn't get a better reaction to the stock market when we announced our earnings because we were very, very pleased with these reports and results. And again, so just a snapshot of the balance sheet as of September 30, still a very strong balance sheet. We still have a lot of leverage that we put on our balance sheet. We have drawn very little on our revolver, so we've still got a lot of capacity. So again, if the right acquisitions come along, we would love to do the right acquisition. But short of that, we will continue to buy back stock systematically as we go through the year. And again, like Dave, I want to thank you for believing in us investing in us and investing in Jack Henry. And with that, we have no rev for Q&A.

Let me do one thing before we take questions. I should have done this at the beginning, but I want to do it at this moment. So I was thrilled. We have two guests joining us today who used to stand on this stage for these meetings. And so I just want to make sure that you all recognize that they're here. So Rob Sindel is with us. Rob retired as our General Counsel several years ago. So it's great to have Rob back with us. And then Jack and Margaret Primer with us, Jack was, of course, our Chairman -- our Board Chairman, until July of this year. So we're happy to have Jack and Margaret join us as well. So thanks for being here. With that, Casey is at the back of the room with a microphone, if anybody has a question, if you would raise your hand, and Casey will get you the microphone. And if not, Kevin and I will sing and dance. No, we won't do that. Anybody have a question for either of us? Going once. Going twice. Okay. I think I do have an official statement. I'm supposed to make that. Okay. I guess you're off the hook, Casey. Thank you very much. Thank you, everybody. So this concludes our meeting. I thank you for joining us here today. Thank you for coming everybody.