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

Thanks for joining us on Day 2 Wolfe Fintech Forum. You know, lot more fun sessions to go through the rest of this day but we're really happy to have David with us from Jack Henry. He's been with us for a number of years at our conference so we really appreciate the support and joining us. Dave, good to see you again.

Good to see you.

Guys for everyone on, we're going to start off with a chat, me and Dave. [Operator Instructions] With that even -- again it's great to see you in person this year. If you could just start off with a quick update on the business given we're at the halfway mark to the year at this point to the fiscal year.

Maybe just touch on anything that could have surprised you over the past 6 months or so and what you're seeing in the business that's positive or negative so far.

Yes. So -- and we are -- so December 31 was the end of the second fiscal quarter for Jack Henry, reported solid results, of course, on February earnings call. I think the only real surprise, the business is operating really well right now. Many times, we're really hitting on all cylinders as far as I'm concerned. The only real surprise in the quarter for me was if you remember back to the end of the fourth fiscal quarter, the June quarter, we set an all-time sales record in June. We meet that all-time sales record in December. So the December quarter set a whole new high watermark for sales. And it wasn't by $1 million. It was a significant beat over the record that we had just said 6 months earlier. So sales is really clicking right now. And as I reported on the last 2 calls, we follow a few different industry surveys regarding expected spending trends. So the report on the November call, the results for the Bank Director survey, they were reporting that average spend increase year-over-year, around 8% based on the feedback from their subscribers. Cornerstone Advisors have reported on the February call that they were expecting somewhere in that same range. And we have got another survey again recently in that range, where the average was 10% increase in spending year-over-year. And so that bodes pretty well for '22. Now I'm not as surprised that we set a record at the end of December, but I'm also really looking forward to '22 as far as expected, spending trends and what our sales folks are going to see coming at them.

There's some that's going on in the industry or now from an evolution of the industry, but also just tailwinds for demand for technology from the financial sector, frankly. And so if you could start with as CEO, you have a lot of different ways you could spend your time and money. Maybe just talk us through your priorities right now, where you're spending most of your time at your investment.

Yes. So it's no surprise coming out of the pandemic, in particular, there's a lot of demand for things to be more digital, first digital forward, modern design, that type of thing. So we have been spending a lot of time working on our digital solution set. It's the #1 as far as our priorities right now, continuing to expand the Banno. We have branded it as Banno, it's our digital banking platform. And by the way, when I talk digital banking, what we're really talking about is the things you used to think about as Internet banking and mobile banking, forget about those as 2 different things, right? Digital banking is a single presentation, a single platform. You can do all the same things on your phone that you can do on your PC, that's a single digital banking experience with a modern front end and a modern user experience. So we've been in market now for about 6 years with that platform. We have millions of subscribers, hundreds of financial institutions on that platform, but there is still a lot of runway for that. Because most banks and credit unions in the U.S. have to go through some modernization and they really learned that lesson through the pandemic, right? So they're all thinking about how do I go from the Internet banking and mobile banking to a single experience for our customers. Other things that we certainly saw during the pandemic was this demand for online account opening, online commercial loan origination. So of course, consumer loan origination has been a hot thing for quite a while. But most financial institutions still require the commercial borrower. If you're doing a loan of any significant size, they expected them to come into the branch, work with a loan officer. Well, now the pandemic through, those fits in the year as well. And so demand for online commercial technology has been a big thing for us. And then, of course, the announcement that I made in the earnings call regarding the technology modernization strategy that we're rolling out. And that's -- it's a long story, but that is something that I'm on the road now -- I've been on the road for 4 weeks in a row. I've spoken at banker conferences, so industry conferences, American Bank Association, the Acquire or Be Acquired Conference. Just Monday of this week, I spoke at a CEO -- a Credit Union CEO conference really trying to ensure that people understand the technology strategy and where we're going and how we're going to get there because this is revolutionizing the approach that the industry has had for more than 40 years regarding Core. We're really redefining Core kind of revolutionizing the strategy around Core, and so I'm some spending a lot of time making sure people understand what we're doing. And then, of course, behind the scenes, we have a lot of people who've been working on developing this technology for the last several years. So lots of emphasis there as well.

It's amazing. I mean we've years and years have seen Core grow, but not on a very accelerated rate really, other than you guys have outperformed the industry, frankly. But when you think about an inflection, if any -- if there's ever been a time of inflection, I think now has been the time around digitization at least, right? I mean on that note, I think there's a forecast for a 10% growth in digital banking demand basically over the next 5 years per year. And so it's accelerated from what used to be, call it, a mid-single-digited plan for investment. In that regard, I mean do you think you're positioned well? It sounds like what you're doing right now fits squarely into that.

We are. And that's exactly it. So the thing that I announced on the earnings call was we didn't just dreamed this up a couple of weeks ago. We've been -- we started down this path about 5 years ago trying to think about what does the future look like, not just for our Core solutions but for the entire suite of solutions that a bank or a credit union would want to employ. So several years ago, we started down that path. We started thinking about the options for Core. You could do what's called a lift-and-shift. You could take your Core solution and make it work on the public cloud environment, we decided that was not the right strategy for us. We could rewrite the Core and create it as a cloud-native solution to sit on the public cloud but that would be a monolithic core, meaning core is still a thing. And what we settled on was there was a better option than either of those, and that was to unbundle the Core, so essentially rewrite the Core functionality. But as opposed to thinking of the Core as a thing that has all these different functions in it, we're creating these discrete components and unbundling the Core and rewriting those things as components that sit on this public cloud platform that we've created. And now we allow the banker to choose which of these components do I need from Jack Henry, which components might I want from a fintech. We have this public cloud platform now that we've created, and we're enabling the bank or credit unions to kind of put those things together easily using API connectivity and just totally rethink how they deliver services and how they think about Core services. And this, of course, was all with an eye toward the future. This isn't a product announcement that's going to be live in a week or something like that. This is trying to map out the future for our customers because most banks and credit unions are trying to figure out, how do I get to the public cloud? When do I get to the public cloud and what should that offering look like? And how do I differentiate myself from the neo-banks that are chipping away? They're nipping away at their customer base and differentiate themselves from the money center banks. And what technology do I want in the future? And what do I want to deploy to really make sure that I'm delivering a best-of-breed offering to my customers and something that really allows me to differentiate my financial institution? And so we believe this strategy enables all of those things and kind of puts the power in the hands of the bank or credit unions to determine what solutions do they need to attract the customers that they're looking for. We believe a key part of this is we believe in the future, a lot of financial institutions are going to be looking to serve niches, serve segments. So historically, if you think about a bank, you normally think geographically, right? I serve the customers in this area. Well, that -- those rules are changing now with the digitization of banking. I can serve customers across the country. Okay, now what's my strategy? What's my model? How do I track those customers? And so I've used many times the example of IncredibleBank, and you may have seen we've done a couple of releases -- press releases with them recently. So IncredibleBank has worked with Jack Henry some of the technology we're deploying now, and we're talking about now was actually developed in support of some of the things IncredibleBank and other banks have been doing. But what IncredibleBank did was there was a legacy bank and brick-and-mortar bank in Wisconsin. Their CEO found this niche. I don't exactly know how he found it, but he found a niche to serve customers who are high net worth, who buy these great big RVs. So the buses, bus size RVs. He discovered he had a real skill set for serving those customers. So he created an online-only brand, IncredibleBank. His main bank was First State Bank, but he created an online-only brand, and he started attracting these customers. Nationwide, he grew the bank tremendously through this initiative, but it was through this really skinny niche that he was able to attract using this technology. Well, now in the end, he rebranded the whole bank to be IncredibleBank, but we've seen a lot more interest in that type of thing. And with the technology we're offering today, bankers can think that way now. They can think outside their geography and really get strategic about attracting new markets, offering services to those customers that are specific to their needs, and they can set up multiple brands if they want.

It sounds like you're allowing your banks, your customers to effectively change at a faster, more easier way than a full, like hard and long transparent Core replacement, right? And that's the unbundling element to it.

And so the other things we already had non-Jack Henry core customers coming to us to say -- so the eliminating the heart and lung transplant point is well made. We've had non-Jack Henry Core customers come to us already since the announcement only 3 weeks ago come to us and say, "Okay, if I want to convert my bank over to Jack Henry, with this strategy, can I evolve that conversion bank? Can I start to consume these services one at a time? And so my conversion, which before looked this big, I can make it this big because I -- and the answer is, yes, you can do that with this platform approach where we're unbundling the Core.

You don't see that with others, though as much?

Nobody is doing that.

This really makes a lot of sense for -- in an industry where I think banks are pretty scared to change. Demand though for this, I mean, you talked about, I think, 15 competitive Core takeaways, right?

In the quarter.

In the quarter, yes. And you obviously talked about some real demand for pieces of it, but even just overall bundled quarters, even though, obviously, you're trying to offer more one-off if you can as well. I mean just touch on that for a minute. What's driving that now?

So the Core, Jack Henry, we're on this space, and we know this well. We're doing about 50 to 55 new Core wins per year. So that's competitive takeaways. If somebody running somebody else's Core, deciding to come to Jack Henry and do business with Jack Henry. That demand is still there. So we are still assigning Core customers at that rate, and I don't expect that to slow down even with this strategy announcement. Because, again, what we announced here was not a product announcement, it's a strategy. This is going to evolve over the next 3, 5, 10 years. But our customers -- these customers what they're looking for today is who is a partner that I can sign up with who will support me today with a traditional Core environment, best-of-breed solution that I want today, but also is somebody that I can partner with as they try to figure out my strategy for the future, who's thinking in the right way regarding the future. And so there have been several customers here in the past few months in the last fiscal quarter that we took under the covers, and we shared with them some details about what we were doing. And their response almost every time was, "Okay, this is what we're looking for. Somebody who has this great core solution that we can partner with now, but we can see the future with you guys. We can see where you're going to evolve in the future, and we can evolve with you." That's been a pretty appealing proposition to a lot of our customers. So we feel like we're in a great position right now to serve them with a great Core solution today but also provide that path forward for the future.

And when you think about the pipeline and the demand that you're seeing literally today coming out of the last quarter results, holding up well...

We're on that pace -- we're still on that pace of one new Core customer a week, and it's lumpy. I've said it many times. There are weeks where we signed 3, and there are weeks where we signed 0. And so it's really lumpy. Oftentimes, it dependent on when their attorney -- they always have a third-party attorney that they bring in the word through contract work. And so it's often times dependent on the attorney, but we're still on that pace of one new Core customer a week.

Okay. Maybe we could shift gears a little bit to Banno. I mean it's continued to see tailwinds pretty clearly. And the company, I think it surpassed, what, 6.6 million users on the platform signed 44 million, 45 million contracts -- I'm sorry, a 44 new contracts signed during early break -- during fiscal second quarter. If you could just talk about how you see Banno really resonating in the marketplace right now, if you think this kind of momentum can be sustainable given the digital momentum with Banno.

So Banno, we've been in market for 6 years now with Banno. And we don't have Banno business out yet, so Banno business comes out here this summer. So everything we've been done -- doing so far has been on the consumer side, but getting great response. Highest rated app in the App Store, continues to be highest rated app. We're now like I said -- like we said, a 6.6 million as of the end of December, registered users, meaning consumers that are on the platform. And the demand is coming from, I think: a, it's a cloud-native solution and so we can live in a DevOps environment, which means we can do rapid release of functionality. There are many months where we're doing 20 or more releases in a month. So new functionality, almost every day, every month. The consumer doesn't have to do anything. They just see new things being added. So that's appealing to everybody that it's a truly cloud-native solution that lives in that environment. Secondly, the design elements in this platform, getting a lot of great recognition for the design work that our teams have done. Very consumer-friendly, which I think leads to that highest score in the app store as far as the usability of the application. The API layer that we created with that solution, very robust API layers. You can easily connect fintech solutions into the delivery that the consumer experiences, things that look like they're part of the application, even though they're not because of the API functionality. And then the technology is differentiated from anything anybody else is doing. What we have in this application, a feature that's called Banno Conversations. Banno Conversations, what it allows through the application is for the customer and the banker to have a conversation in the application. They're authenticated and security -- the security is there, so we can share private information through this conversation in the application. Nobody else is doing this. There are some who say, "Well, we have a button in there where you can launch a texting session." That's not the same. That's not secure. You're not authenticated, you're leaving the application. This is in the application. The customer can have a conversation with somebody in the call center, for example, at the bank in that moment of relevance, moment of need. I'm just stuck, I found something, I need help with this. You don't call somebody at the bank. You just launch this session within the application. There are little widgets in there to make the conversation more feature-rich, and it has a revolutionized. And I'll tell you a quick story. Last week, I was doing one of these conferences. And I was live with the live audience, and second row in the audience was this unbeknownst to me, CEO of one of our largest banks. I know him. I recognized him when I got on stage. I didn't realize he was going to be there. And so I go through my whole thing and answered questions like this. I got done and walked out of the stage. And he grabbed me and said, "Dave, everything you said about Banno is absolutely true. It has totally changed the way we have relationships."

Should have called him on stage.

I should have. Yes. And what he did for me, and again, unbeknownst to me, he grabbed 2 investors from the audience and said, "Let me tell you about what this has done for ours.

Great.

And he gave a testimonial right there on the spot about what this has done. So the key thing in all this is nobody in the industry is doing this. There are a couple of digital banking players out there that are larger than Jack Henry now as far as having more subscribers, but nobody has this technology, and that's why I'm so confident about the ongoing demand. People are starting to figure this out, and they're figuring out that they can deliver that same high-touch service but without the personal walk-in in the branch. They're delivering that service through the digital application, which is exactly the point of what we're going.

If you could just remind us, number one, of your customer base, who has a good -- who needs to still upgrade to a better mobile offering, mobile banking and digital banking offering that hasn't done so yet? And then also, if you don't mind just expanding a little bit again on the economic model for you guys on Banno.

Sure. So I would say most banks and credit unions in the United States have -- are in that position where they need to find a more modern platform. Most are running Internet banking and mobile banking as 2 different things, and so they need to come together with a digital banking offering. Most of them, if it wasn't already top of mind for them before the pandemic, it is definitely top of mind now, which back to the point we've started with about the spending expectation this year being closer to 10% over last year as opposed to kind of the -- any normal year, it's usually around 4% to 5%, this year being around 10%, a lot of it is because of that. So most banks and credit unions have to make a decision in the near term to modernize their platform. As far as how we monetize this, -- it's -- we charge on a per user basis, per registered user, which is why I disclosed to you guys on the earnings call how many users we have. Customer pays kind of a base license to get access to the platform, but then everything after that is based on number of users that are using the platform. And it's a pretty simple model.

Okay. Really helpful. Let me shift gears a little bit. I mean the Complementary segments has shown strong growth. I think you had, what, 17% last quarter, right, on a year-over-year basis. If you could just talk about what's been the driving forces there and just how much Banno may be contributing there.

So Banno is part of the Complementary segment, yes. So we're Core, Payments and Complementary. So Banno fits in the Complementary segment, certainly is helping brand growth.

You've never disclosed the percentage of it, though, right? I don't think you gave that yet.

But there are a number of pieces in that segment that are growing nicely. So digital lending, so I referred to it earlier. If you're doing online commercial lending or if you're doing commercial lending, you want to have an online offering, and Jack Henry has a wonderful digital commercial loan offering. So that's certainly driving growth. We have our fraud solutions in that bucket. Those are continuing to drive growth. Treasury management is in that bucket. I talked about treasury management on our earnings call many times. That's a nice grower for us. So there are a number of different components, and several are kind of leading the pack. But then there's probably 200 products in that Complementary group, and so many of them are growing at least a little bit, but the frontrunners are the ones that...

The ones we're really honing it on, right?

Yes.

Okay. And then just maybe touch a little further on the cloud conversion, what's going on because, obviously, I know it's a big transformation to the company.

So are you talking about us moving on-prem customers over to the cloud? Or are you talking about the new strategy?

No, the new strategy.

The new strategy. Okay. So just a little bit of detail on that strategy. So it is this unbundling approach. And I think the key thing for everybody to be aware of is the platform that we're unbundling these things to put on to is essentially an extension of the Banno platform that we've had in production for over 6 years. So we're not just starting on this. So I've had questions about, "Hey, where are you going to find the technical staff to do all this work?" Well, we have the technical staff. We've been growing that staff. We started -- we've been working on Banno for 6 years. We started on this central rewrite for the quarters about 2.5 years ago. So we've been staffing up for quite some time. We didn't just decide in February, "Oh, we got to hire some people." We have been staffing...

In this environment for hiring.

Exactly, yes. We've been staffing up for quite some time. So we have people. We've created this platform already. It's in production already. We have the connectors on that platform. So the APIs are there. We rewrote our traditional connection options because a lot of fintechs can't live in the API environment. Their technology list isn't there yet. They live in the older environment. So we've rewritten that already. That sits on this public cloud platform that we've created. So there's a lot of pieces there. Although plumbing, I guess you would think of it, to enable all this stuff is there now. And it's in production, it's running. Now it's a matter of us rewriting all these components and moving them over into this public cloud environment over time to enable all of this functionality together. And so it's a major project for us. This is going to take years, but it sets the direction for our company because it's not just core. It's all the Complementary solutions are also evolving in this direction. So they will all end up being public cloud-native, sitting on the public cloud and supporting our customers with this really modern technology stack. The other good news about this move is now all the security standards are the same for all these products. All the design standards are the same for these products. They all look and feel the same. There's a lot of benefit in us moving all these things toward this single environment for delivery. And then, of course, eventually, we get out of the data center business. We're not having to own our own data centers. We're having to host our own private cloud. And that's many years away, but it's a directional statement about where we're going and how are we going to get there. But I think our customers and certainly our employees have really been able to grab on to understand what the future looks like for our company.

And the cost or margin implications of all these changes for you in terms of: a, you obviously need engineering talent for this, which I imagine you mentioned you've been building up towards for some time.

Right.

But is that getting more expensive? And then I imagine on the other side of this, the margins are -- is a benefit, right?

The higher margin. So the thing that I disclosed on the earnings call is we're committed to 14% of revenue now to continue to support R&D and ongoing R&D. So there's some capitalization in there, there's some new expense in there, there's expense to the P&L. So that will continue, 14% on a rising revenue number, 14% revenue on a rising revenue number. That funds this development, and we've mapped this out for years going forward. We maintained that 14%. That's what we need in order to fund this development. And historically, that's where we've been at. So if you look back 5, 6 years, we've been at 14%.

Even in this higher wage inflation environment?

So we dealt with -- we really got hit with the wage issue about, I'd say, May of last year. So we dealt with this last summer as far as -- I'm sorry?

So it's in the run rate?

Yes. It's in the run rate. It's worked into the guidance we provided. That really has all been addressed. So there certainly is expense there. But one of the other things to keep in mind around this project is because we are doing this in a modular approach, as each component is finished and put into production on the platform, people can start to consume that component and will start paying us for that component. So this isn't a rewrite, rewrite, rewrite for years, okay, then a big bang revenue opportunity. We start to see revenue opportunities over time as people start to consume those components. So it kind of levels out the expense with the new revenue opportunities over time. We believe this will attract new customers to Jack Henry. In fact, we've already had some very large regional banks who I wouldn't have thought would have been paying attention this early because we just made this announcement 3 weeks ago or so. Very large regional banks contact us and say, "Hey, we want to understand this. Does this mean we can start to consume these components and shrink the size of our Core conversion?" The answer is yes. And so I think we're going to have some pretty interesting conversations with some larger banks that maybe wouldn't have done business with Jack Henry in the past because of this strategy.

Big picture on the medium-term targets and guidance that you've given at your Investor Day. Given the demand environment, are there any other aspects of what you're seeing now and the momentum on the cloud initiatives? Anything going on that you say would give you more conviction in that, in high end or anything else for that matter?

Yes. So we've guided to 8%, and we're actually at about -- I think it's 9% or 8.9% today as far as the guide that we've provided. Is there potential upside to that? Yes, there's potential upside to that. And it's probably in 2 areas. The Core business certainly is rocking for us right now, and that's signing new customers. It's also in the convert merger activity, where we have a lot of our existing customers acquiring smaller institutions and merging them in. So there's maybe a little bit of opportunity there. And then the payments business continues to perform really well. We're an issuer on the card side. So our card issuing business has performed well. Our bill pay business is a pretty steady, steady eddie, but it's certainly a nice performer. And then our enterprise payment solutions business in the Payments area is growing very nicely. And so is there potential upside there? Maybe. Can we get to 9% to 10%? Maybe, but we're not prepared to guide that way yet. But yes, there are certainly opportunities.

Okay. On the last question I'll ask you before we take some Q&A from the audience. But when thinking about allocation of capital now, I mean, look, there's been a pretty volatile market. And some of the valuations have obviously come in quite a bit across the space that as for -- maybe finally narrowing a little more. What are your -- what are you focused on in terms of M&A? And does it make sense for Jack Henry to do?

So you know well, we were a serial acquirer for years, right? So 2004 to 2018, we acquired 32 or 34 companies, whatever it was. And we acquired a lot during those years. But the past 2, 3, 4 years, it's been really tough to get a deal done between IPOs and stacks. Everybody has stars in their eyes or reasons getting these valuations that are totally outside the range that would be reasonable for a public company like us to pursue.

That's a little different now.

That's exactly right. So what I've been talking to my team about is I believe it's still a little early in the cycle. There's still a lot of people that I think are hoping that it's going to come back and there's some miracle that's going to happen. But I think by the summer or early fall, I believe there will be possibly some takeout opportunities for us in some of these public companies that are looking for a savior, companies that never really should have gone public in the first place. But the greater opportunity even is I think there are some really nice private companies sitting on the sideline that were planning to IPO. When everything kind of went to hell here, they kind of took a step back and said, "Okay, IPO isn't the route for us. Maybe we should be talking to a good strategic acquirer." So our hope is that later this year, we might have some opportunities.

And what types of assets? What are you looking at?

So one of the things we've been really successful at is we do a lot of 1 plus 1 equal 3 type deals, where we have a really good solution. There's somebody we're competing with in the market with a similar solution, but they've got some functionality we don't have. We acquire them, put them together, create a really -- a much better solution than neither of us had. We've done that many, many times. And so we're constantly looking for those type of opportunities. And there are other stand-alone companies that might make sense for us. The good news for us is for us to execute on this big digital -- or this technology modernization strategy I was talking about. We don't require any acquisition. We don't need to go do anything. That is all mapped out. We can do all of that stuff without an acquisition. So these would be probably complementary solutions that would kind of augment what we already do and add into what we do. The key thing for us is whenever we're looking at acquisitions, we're looking for things that our customers, meaning banks and credit unions, would want to consume from us. We don't go direct to business customers. We don't go direct-to-consumer. We work through our financial institutions. We're always looking for those types of solutions, and then we're always looking for companies that are a good cultural-fit. Because at Jack Henry, culture -- we are all about culture checking. We have a very strong culture, very strong relationship with our customers, very service-oriented company. We can't endanger that. We ensure we're always very sensitive to finding companies that fit that form.

Very helpful, Dave. All right. Why don't we take a couple from the audience now? All right. So we have 2 so far. One of them is if the industry is growing at about 10% plus, and I think he's referencing the digital part of the business, can we see Jack Henry grow at levels -- at those levels over the next 5 years?

So I'll say no, but I'll explain why I said no. So yes, the industry is growing at 10%, and I think we're comfortable that's what's happening in the digital side of the industry. It is the digital side of the industry. The other thing you have to keep in mind when those numbers are quoted is that's their technology spending for a bank or credit union, but that's not all flowing to us. That includes them spending on their own personnel. So there's people cost in that, and there's infrastructure costs for the financial institution. They're buying, upgrading their network. That's not Jack Henry's revenue, that's for things they do internally. So digital is a key point of that. But also you need to keep in mind there's internal spending that they're doing if it's incapsulated in that number. So it's not all going to flow to Jack Henry. The key point is the number is now 10%, and historically, it's been 5%. And so that's a real significant move in the industry.

You talked about increased demand from banks and credit unions for digital commercial lending solutions. Can you touch on the competitive dynamics there? And who you would typically see in an RFP for that solution?

Yes. As far as a freestanding platform, there's really only one and that's nCino, and I think everybody knows that. We have some significant advantages over the nCino platform, and we win very regularly when we're in the head-to-head sales engagement with them. But there's not really anybody else who has the full breadth of technology that we have at Jack Henry. The challenge that we have with that platform is it's not branded as a separate company or a separate thing. It's within the Jack Henry family. We've been very successful with it. But it's just one of many Complementary solutions at Jack Henry.

That makes sense. Dave, I think that's it. There were 2 questions on, so we'll leave it there, and I just want to thank you again for joining us. For everyone on, just so you know, there's a short break now. And then the next session fireside chat, we have JPMorgan and we have Toast, both having at the same time starting at 11:20. So we have about a 20-minute break. All right. Thanks, guys.

Thank you, [ Jerry ].