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

Good afternoon. First of all, I'd like to welcome you all to Dallas. Thank you for coming. We've got a pretty full day for you coming up with several investors. My clicker is not working. Here we go. So obviously, first of all, I have to get the forward-looking statements out there because, obviously, I'm sure you're hoping we will make some forward-looking statements. And obviously, there's risks and uncertainties related to those, and we make no commitment to come back and change anything we say today. So I could read this but that'd be kind of boring. So here's kind of the agenda of the day. I don't have it on the screen down here. So I'm obviously opening up -- I'm Kevin Williams, CFO. I'm opening up with some opening comments. After that, it's going to be Dave Foss, our Board Chair and CEO, has several comments to make and kind of talk a little bit more about the technology modernization that we talked about on the earnings call a couple of months ago. I'll do a brief financial update, which, obviously, we just announced earnings last week so there's not much of an update I need to do for that. Greg Adelson, our President and COO, will then do an operations update. We'll do a break after that. And then Ben Metz, our new Chief Digital and Technology Officer, will give you kind of an update on our technology road map and where we're going. And then Dave Foss will be coming back up with kind of a demand environment overview, kind of sales and marketing update. Then we'll have a little Q&A after each session. And then, obviously, at the end, we'll have an open Q&A for everything. And then, hopefully, you'll all stick around tonight for the technology showcase. Just to introduce a few people here, both here in the room and obviously on the web. We've got a couple of our Board of Directors here, Wes Brown and Tom Wilson, sitting here at front table. Sitting in the back, some of our executive officers, Stacey Zengel, Senior VP and President of Jack Henry Banking. Beside him is Matt Riley, VP and President of ProfitStars. And over at the table, we've got Shanon McLachlan, which is VP and President of our Symitar organization. And then somewhere is Scott Spain, who's VP, and he's over our OutLink organization, which is actually our private cloud organization. And then also back to back, we have Leo Mallamaci, who is Senior Director of Jack Henry Banking Sales. So we've got some good representatives here. Not all the ones I just said are doing presentation today, but they will be around for Q&A and just visit with you at the breaks and different things. And with that, I'll turn it over to Mr. Foss.

Okay. Thank you, Kevin, and good afternoon, everybody. We'll see how long it takes for Kevin to get around the other side. Happy to be with you, and then thanks to all of you for taking time to join us today. We're very excited about the opportunity to share information with you, answer your questions, dive deep on some of those things that you want to discuss in some detail. So my agenda today, I'm going to give you just a brief overview of what our company looks like high level, just a few factoids for you to take away. We'll look back at FY '22 so far, so a little bit of a year-end review so far. I have a few organizational updates I'm going to share with you just to make sure you understand who the -- some of the new players are at the leadership level. We'll talk about our company, the 3 pillars that we follow as we run the company, touch on our sustainability report briefly. And then I'm going to do the tech modernization presentation that I've been doing with Boards of Directors for bank and credit unions, either Jack Henry clients and hopeful new Jack Henry clients. Several CEOs and Boards have requested me to come in and talk about what we're doing and where we're going as a company. I'm going to share that, not the -- all the detail but quite a bit of that presentation so you get a good feel for what is the message that we're sharing with customers and prospects as far as what Jack Henry is doing around tech modernization. And then, as Kevin mentioned, at the end of that, we'll have plenty of time for Q&A, and we'll do that after each presenter this afternoon. So let's get started. First off, a look at our company. Today, we are about 6,800 associates strong, still spread out all over the country. We continue to run 4 core processing systems, and I don't see that number changing. Those of you who've been with us for a while, you'll remember that it used to say 5. We had a very small solution at the low end of the credit union business. We sold that solution off a couple of years ago, but we're very comfortable with the 4 solutions that we offer today. 63% of our core customer base runs in our private cloud environment. We posted $1.76 billion in revenue in last fiscal year. Most of you, of course, have that number right at your disposal. We'll be close to $2 billion this year. And then we are now at 7.2 million users on the Banno digital platform. So on the earnings call last week, I quoted 7.1 million as of the end of March, but of course, we've added users since then. And so we're now a little over 7.2 million users on our digital platform. And I'm not -- there we go. So a little look back on this year so far. Very solid financial performance. You all, I think, are well aware of the consistency of the financial numbers at Jack Henry despite the challenges in this past year, trying to make sure that we're able to predict and remove any volatility from our business. We have really done a good job, I think, as a team here as far as financial performance. We rolled out our tech modernization story on the earnings call in February, have had an overwhelmingly positive response to that. And I'll share with you some statistics on that here in a little bit. One Jack Henry initiative has been a big push for us this year. In fact, Greg is going to spend a good bit of time on this topic, but that's really around bringing consistency across the organization so we look like a single entity in all the different markets that we serve to our customers. We published our latest corporate responsibility report at the end of March, and I'll show you a little bit of information from that. Hopefully, you've all had a chance to read it by now. But I'll share with you some key statistics from that publication. And then as far as our workforce is concerned, May 2 was our voluntary return to office date. So if you're a Jack Henry employee and you wanted to start coming back into the office, May 2 was that date. Our official RTO date is September 6. The idea there is that we're allowing our employees to get all the way through the summer and plan for child care and all that kind of stuff. And then after Labor Day, we'll have our official return to office. After we had returned to office, we'll still be running probably with more than 50% full-time remote, but then the other 50% or 45% will have some type of different twist. We'll have many that will work hybrid, some that will be in the office full time. And we'll talk more about that later in the year. But September 6, that is our return to the office date for those who are returning to the office. A little bit on the organization. So we have had a few key promotions here in the past few months that I just wanted to make sure that I share with you. So Ben will be up here a little bit later. He's our Chief Digital and Technology Officer. Ben has been the driving force behind our Banno digital suite for a long time, but he's also been instrumental in our tech modernization strategy, and he owns that strategy today. So he's going to go through a good bit of detail with you on that later on today. Holly Novak is our new Chief People Officer. Holly has been with Jack Henry for, I think, 5 years. She was just promoted in the fall to that role. Greg, of course, has been our Chief Operating Officer for a couple of years but now has added the President title. He'll be up here on stage in just a bit. Brian Otte is our Chief Sales and Marketing Officer, promoted in January. Brian is on his way to Dallas right now. So he'll be here before we wrap up today, but he's just not in the room right at this moment. And then you heard me announce on last week's earnings call Renee Swearingen, who's been with Jack Henry more than 25 years. Renee was recently promoted to Senior Vice President and Chief Accounting Officer. So all these folks are really helping set our company up for success in the future from an organizational standpoint. As we run the company -- and you've -- if you've listened to me before, you hear me talk about this all the time. We run this company leaning on these 3 pillars of success, and as I say all the time, they're listed in priority order. So we try to create a work environment at Jack Henry where we put the employees first, create a really great environment for our employees; the idea being if our employees are happy and they're excited about what they're doing, they're going to deliver great technology, they're going to deliver great service. And that takes care of our customers. So that's the second pillar. And if we're delivering that great technology and that great service, our customers are happy. They're going to buy more stuff from us. They're going to refer us to their friends. And that, in the end, delivers to our shareholders. So let me just touch a little bit on each of these 3 pillars and give you a little bit of information as far as how we track how we're doing with each of these 3 constituencies. So first off, with our employees, and I'm -- somebody is going to have to guide me here on where I'm supposed to point this because this is not moving very comfortably here. So as far as our employees, we do what's called continuous listening when it comes to surveying our employees and asking them how we're doing as a company. And so we do continuous listening surveys. So what happens is on your anniversary date or your hire date at Jack Henry, the anniversary, you get an e-mail from me that says, "Would you fill out the survey and tell us what you think about Jack Henry?" So it's a brief survey, but we ask a number of questions of those employees. And so what that does for us is all year long, we're continuously getting feedback from our employee base about how we're doing as a company. It's really changed the way we manage the organization and kind of take the pulse of how we're doing with our associates. So in the past quarter, so these are quarterly results here, over 3,200 associates participated in the survey. This exceeds our 45% target -- sorry, this is Q3 to date. So this is the compiled results for the quarter-to-date. 3,200 associates participated, exceeded our 45% target. So we were at 67% participation. And then you see the statistics there. 88% believe in Jack Henry's values and so on. Every one of these was above benchmark; in fact, well above benchmark given the consultant that we work with, who happens to be Gartner by the way, they work with us on this survey process. So really, a great sense of engagement from the employees of Jack Henry. I think these results are terrific, and our results consistently seem to be in this general range. The other good indicator for us of how we're doing with our employees are these Best Place to Work awards. So you hear me regularly talk on the calls about Jack Henry being recognized as a Best Place to Work. We do press releases regularly. I have just a few up here on the screen. A lot of these are geographic, so we win in San Diego, for example, in Dallas and Louisville. But then there are a couple on here that are not specific to a certain region. So Forbes, of course, Best Large Employers. We've been on that list for several years. And then the one that gets a lot of attention is down there in the bottom left. So American Banker Best Places to Work in FinTech. Some of you heard me talk about this before. What American Banker does every year, they recognize only 50 companies. And they are the companies that show up as best places to work in fintech. The really good news for us is, number one, none of our larger competitors have ever shown up on this list. Jack Henry has been on the list now, I think, 6 years in a row. And number two, there are only 50 companies recognized every year. 48 of those companies are what you traditionally think of as a fintech, $50 million, $100 million in revenue, less than 500 employees. It's that kind of company, 48 of them, and there are 2 companies that are outliers. There's one mortgage technology company that works with the Tier 1 banks, and then there's Jack Henry. So we have this 45-year-old technology company that's on the cool kids list every year. And I think that's because of this really great technology that our teams are delivering and that reputation that we have among our employee base for being entrepreneurial in spirit and really pulling together to serve our industry well. So it's great recognition for our team and for our company. So that was a little bit about our associates. Second pillar was our customers. So one of the ways that we gauge how we're doing in the eyes of our customers is we do very regular customer satisfaction surveys. In fact, if you are a customer of Jack Henry and you call into one of our call centers today and ask a question about something, there's a chance that you'll get an e-mail back at the end of the day asking how did we do. And it's a short survey, 10-question survey asking about your experience with Jack Henry. So what you have on the screen in front of you and in the books in front of you, these are the actual results for the month of March. 4.73 is our average rating, and that's on a 5-point scale, right? So 4.73 on a 5-point scale. How do you maintain an average of 4.73? Almost every survey you're getting back is a 5 on a 5-point scale. And so this is why oftentimes, I'll point out that Jack Henry, almost more than anything else, is known for customer service in our space. And I know that at least one of the analysts in this room publishes a report every year on that very topic and every time highlights how is this that Jack Henry is getting such great ratings as compared to anybody else in the industry. But that's what we're known for, and it's been that way at Jack Henry for many years. So we're very focused on this topic. I publish the results every month to our teams of what this customer SAT ratings are. And then we send out e-mails to those who are at the top of the top of the list, congratulating our individual reps. So we're very focused on this because we do think it's a competitive differentiator for our company. And we hear that regularly from people who are coming to Jack Henry from other providers, that customer service, our reputation is far better than anybody else in the space. So we talked about our associates. We talked about our customers. And then just a little touch on shareholders. Obviously, many of you in the room are. You know that Jack Henry is known for good steady growth as far as revenue and EPS. These last 3 years have been exactly that. And so we're proud of the performance that we put up for our shareholders. And our commitment is to continue to run this company in a disciplined manner to ensure that we don't mess up that trend right there. We do invest a lot in technology. And so you hear me talk about this regularly on earnings calls. We are committed to 14% of revenue that we're putting back into R&D and to delivering new innovative technology for our clients, and that, of course, is on a rising revenue number. So I addressed this in some detail on the February earnings call, the fact that because we're committed to 14%, as revenue goes up, that's what's allowing us to fund this whole new technology modernization project without backing off on our other major solutions at Jack Henry. We are not slowing down on our existing cores. Our investment continues into those solutions as well as all these other new solutions that we're rolling out. But it's because we continue to maintain that investment level. Best we can tell, as a percentage of revenue, we are well ahead of anybody in our space. Now of course, we have detractors who will say. "Well, yes. But you have other companies with larger revenue." True, but where is that spend going, right? Is it really going into the focus areas that we have at Jack Henry? So we're very proud of this number, very proud of the commitment to new innovative technology. On the right-hand side of the screen, I just listed a few of the key projects that we're working on right now. This is not an exhaustive list, but a few of these will be very familiar to you. Digital is at the top of the list these days. We're continuing to grow nicely in that space, have developed a fantabulous reputation for what we're delivering with digital. And so we're continuing to invest there. And then, of course, our tech modernization story is on that list. We have financial crimes technology that we're working on that Greg will share a little bit with you about. A lot going on in our payment space, cybersecurity, treasury management and other products. So we're continuing to deliver innovative solutions. Of course, now all of those efforts are working toward this single public cloud platform that I talked about on the February earnings call as far as tech modernization and I'll describe here in just a few minutes in more detail. We did -- as I mentioned earlier, March 31, we released our second corporate sustainability report. And so just a couple of things I wanted to highlight here. I'm certainly not going to go through an exhaustive review of that report. I'm hopeful that you all have taken time to peruse that and maybe study some of that in detail. But I just want to pull out a few things here, including some recognition that we've received, a little bit about demographics, our GHG emission reporting and then DE&I at Jack Henry. So first off, as far as recognition, and I did mention a couple of these on the last earnings call. So Newsweek recognized us this last quarter as one of America's Most Responsible Companies; Inc., as one of America's best led companies. And in the paragraph on the left-hand side, we became certified as a Most Loved Workplace in the past quarter. And so what that does is it sets us up for these contests that run in this other column of companies that have been pre-certified to be recognized as a Most Loved Workplace. And so we're excited about the opportunity to highlight some of that as we go forward. And then down to the bottom right-hand corner, we've been recognized by IDC for many years as one of the largest fintechs in the United States, but I've never really highlighted it before. But IDC recognizes the major players in the fintech space, and Jack Henry is continuing to be recognized by them as one of the major players in our space. As far as demographics, so our gender and diversity percentages we published in this report. This is the first time that we've shared this detail in the report. We are committed to continuing to expand that disclosure, but this was kind of the beginning of our disclosure as far as gender and diversity information. And then the other thing that we disclosed in a good bit of detail -- and if you've looked at the report you've seen there is a large appendix at the end of the report with lots of information about GHG emissions. And so what you see here is, on the graph on the left-hand side, revenue going up, and then you see our overall emissions on the graph -- the line graph that goes down. Of course, we, like many companies, were beneficiary of the fact that our offices weren't running at full capacity during this past year, but we are committed to making sure that we continue with that trend and continue to be focused on our impact on the planet. On the right-hand side here, you see that for Jack Henry, when it looks to -- when we look at Scope 1 and Scope 2 emissions, almost everything in that column is related to purchased electricity. And so we have a real focus on ensuring that we're being mindful of where we're purchasing that electricity from and what the impacts are of those purchases. But again, lots more information on this topic in the corporate sustainability report. The other thing that we called out in this latest report was the topic of DE&I. So at Jack Henry, one of the great reflections, I think, of what we're doing is in what we call our Business Innovation Groups or BIGs. At Jack Henry, we support 6 BIGs. They're listed here. But the thing -- the reason we call them Business Innovation Groups as opposed to affinity groups or business resource groups or something like that, they're Business Innovation Groups. The charter that we've set out with each of them is your job as a group within Jack Henry is not simply to be an affinity group but to help us solve problems. What are you going to do to bring whatever it is that you have in common, whatever caused you to join this group or prompted you to join this group, use that to help us solve problems at Jack Henry and grow our company in a better way for the employee base and certainly for our customers? So a few examples here. We have a veterans group. So the veterans group totally revamped the way we do recruiting of veterans. Who better to do that than veterans who have been recruited to Jack Henry in the past. And so really revolutionized the way we do recruiting. We have JHAnyWhere, which was originally set up to support the large group of employees we had working from home. Now of course, this is pre pandemic. During the pandemic, everybody became a member of JHAnyWhere. But pre pandemic, that was a group that was helping us address the concerns of people who work from home. Today, as I stand here, I'm very thankful that we had that group set up before the pandemic hit because we leveraged a lot of what they had learned and developed for all employees as we started to all work from home. Women at Jack Henry, down at the bottom, they're in the area of onboarding, also helping us to recruit and onboard more women at Jack Henry. In learning, in the middle, PRISM is a group that has helped create an allyship tool and a number of other things for our membership there. And then we have Mosaic and Go Green, both focused on the communities that people live in. And so all of those groups, continuing to grow, 24% growth in membership last year, and continuing to help influence the way we run this company and the way we serve our employees in addition to the communities that we live in. So with that, that's kind of the high level of what's going on at Jack Henry from my perspective. I'm going to shift gears now and walk you through this technology modernization strategy. And again, the idea here is that I want to present this to you in much the same way that I present it to a Board of Directors or a CEO as far as what are we doing and why should this resonate if you're running a bank or credit union in Jack Henry's target market. So I'm going to walk you through this presentation kind of front to back here. And hopefully, by the time we're done with this discussion, you'll kind of have an understanding of the strategy. And then when Ben gets up here, he's going to talk a lot more about the details behind the strategy and give you an idea of how we're thinking there. So first off, if you look at Jack Henry today, we are a well-rounded financial technology company. And the reason I use that phrase all the time is we are not a payments company. We do a lot in payments but we're not a payments company. We are not a core company. Yes, we have industry-leading core solutions that are terrific, but that's not all we do. We are a well-rounded financial technology company; the idea being if you are running a bank or credit union in the regional or mid-tier or community space, Jack Henry probably has almost all the technology you need in order to run your institution. We celebrated our 45th year in business last year. We had hoped to ring the bell -- the NASDAQ bell last year but the pandemic kind of put a squash on that. So maybe we can do that this year. And then up in the top right-hand corner there, as I emphasized before, we are consistently recognized as a best place to work in fintech. And that's important to customers of Jack Henry to recognize that we are a fintech and we are doing a lot of innovative fintechy things, if you will, at Jack Henry & Associates today. So if you look at the evolution of our company and our industry, so go all the way back to the left-hand side here. When cores first started -- and for Jack Henry, that was 45 years ago. When cores first started, the whole idea was we're going to automate what's going on in the back room of the bank or credit union. For Jack Henry, it was bank at that time. We're going to automate what's going on in the back room. That was the genesis for this company. It was the genesis for what happens in the core market. And so first-generation technology in our space was that. Everything that we wrote had to be functional. It didn't have to be pretty because it was just employees of the institution that were using that technology. It just needed to work. You need to be able to balance everything, and they were looking for efficiency in processing. So now you go through the years. The second generation of technology really happened with the advent of the Internet. Why? Because all that stuff that was working great in the back room, now we had customers, consumers that wanted to be able to get that access. So now it did have to look pretty. We really did have to make things available online. And so there was a major effort during that period with the advent of the Internet to revolutionize the technology and make it more functional in an Internet-connected environment. And so Jack Henry, of course, was very involved in that second generation. Well, today, we are facing that next-generation opportunity as far as technology in our space for banks and credit unions. Yes, there have been all kinds of things that have come out in the past few years, but we're at that point today that is like the advent of the Internet or like that first generation of core. And so Jack Henry recognized that and looked at it and said, "Okay, what are we going to do to make sure we are a player for the long term as the industry has continued to change?" So there are many driving forces here that make us say, okay, this is a watershed moment. One is here. So what's happening in the world that we all live in today? What I've got here is a very simple slide. If you look across the bottom, we have boomers, Gen X, millennials and Gen Z across the bottom, and we have deposits, the money in the other scale. So where are we today? The boomers have all the money, right? But who is using the technology? Who's the most adaptive technology? The Gen Z-ers. And what's happening? That money is moving from the boomers to the Gen Z-ers, right? It's going to be moving. And as you get to the Gen Z group and even the millennials, there is an expectation that as I do banking services, whoever I'm banking with better have great technology for me to use or I'm going to find somebody who does, right? That's what -- that's a disruptor that's happening in our industry today. And so as I talk about this with bank Boards and credit union Boards and CEOs, every one of them acknowledges this is true. And it's not just for consumer deposits. This is happening with small, medium business as well. Who is innovating? Who's going to be running all these small businesses here in the near future? It's not the boomers. It's the millennials and the Gen Z-ers. And they expect their financial institution to be very technology forward in their thinking. And so this is a disruptor that's happening in our space today. Another disruptor, there are new technologies that people are using today that are chipping away at the relationship between the financial institution and their customers. And you all -- many of you have asked me questions about it on our earnings calls. What do you think about this? What do you think about that? We've had conversations in investor meetings about these topics. We all know that it's happening out there, and it's a variety of different fintechy solutions. The other thing that we don't talk about as much, however, is there is emerging a new hybrid monetary ecosystem. Crypto is here to stay. And so when I say that to a bank Board, they're like, "Whoa, Bitcoin, that's speculative." We don't -- I'm not talking bitcoin. I'm talking about cryptocurrency, right? There are thousands of them out there today. We have the Fed talking about a CBDC, a central bank digital currency. Whether or not they roll out that CBDC at the Fed doesn't matter. Crypto is here today. We have financial institutions here in Texas that are mining crypto today. And if you're a state-chartered bank here in Texas, you can take custody of those crypto balances on your balance sheet. It is not going away. And so that is a disruptor to the financial ecosystem in the United States. And of course, much of this has been accelerated through the pandemic, right? People were looking for different ways to do banking as they were not going into their bank branch and they were not interacting in person with people at their financial institution. So what this has created now is what we refer to as financial fragmentation. We launched a study a couple of years ago with Javelin, and what we learned with that study was the average person reports that they have 20 to 30 different banking relationships today. So think about yourself, think about what you have on your phone or think about what you have in your wallet. And as you follow the circle around here, you probably have some financial management tool that you're using today. You certainly have checking account. You have credit cards. How many different branded credit cards do you carry in your wallet? You have a savings account. You probably have an investment account at 1 or 2 different places. You might have an HSA and then mobile payments applications, Venmo and Zelle and different options there. So the average person says, "I have 20 to 30 different banking relationships." And so what they -- what consumers report today is that they are financially unhealthy. 125 million report being financially unhealthy. It's because of all of this confusion that this creates. Where is my money? How do I manage my money? How do I get it? Which payments are due today? I've got things going on in different places. I pay my credit card bills through the credit card website, but I pay other bills through my bank website, right? People really are feeling fragmented when it comes to their financial health. Not just consumers. Small businesses are in the same boat, right? So if you're a large enterprise, a large commercial business, you have some ERP system and you have a treasury management system and you're probably not feeling this. But if you're running an SMB, and of course, millions of people do, this is the same experience that the consumer has. You have a variety of different tools that you're using, and so SMBs feel financially fragmented. So if -- as we talk to our financial institutions, and we're trying to see around corners for the future and predict the future, we realized a number of different things, and I'll walk through some of these things with you. Number one, for an FI today, they need a clear growth strategy. And the good news is they're not hampered anymore by geography, right? So if you talk to most bankers, they think in terms of "I serve customers in this city, this county, this state." It's geography they tend to talk about for most bankers. Those rules are gone now. You can do things digitally. You can serve customers all over the country. And we have a number of banks at Jack Henry that are doing that. They've created different brands even to serve customers around the country with some skill or some niche that they know how to do. So number one, what's your growth strategy? Number two, how are you going to service customers? If they're not coming into your branch anymore and you're really going to find niches to go and serve, how are you going to service those customers in their moment of need and their moment of relevance? Meaning, when they hit the wall on something and they need to talk to somebody, how are you going to work with them? Because they can't drive to your branch. How are you going to work with them? We can solve that problem using this digital experience. Number three, okay, now what products and services do you need in order to serve those customers that you've identified as this niche? And then lastly, which technology will help do all of this? And so the thing I stress here to customers is you don't start with a technology anymore and you'll say, "Oh maybe I need a new core system." You start with define the strategy. You have all kinds of new opportunities if you're a community or regional financial institution in the U.S., all kinds of new opportunities created by this disruption. So define the strategy first and now figure out how you're going to fill that strategy, what technology you need to satisfy that strategy. So at Jack Henry, our view is that as this continues to emerge, as customers start to think about this and move in this direction -- and as I said on the February earnings call, this was not a product announcement. We're not rolling something out next month. That's not the point of all this. This is about planning for the future, 5, 10 years down the road. If you're running a bank or a credit union, where are you going and how are you going to get there? Who are you going to target? What do your customers look like in the future? We're trying to predict that and help set our customers up for success as they look to the future. So we've created this modern, next-generation technology platform to help our customers strengthen their connections with their account holders. So what is next generation? Number one, component-based, and I'll define that for you here in just a moment. So think in terms of components. Number two, cloud-native, and I'm talking public cloud, not private cloud. Number three, open, meaning easy-to-connect fintech solutions into this platform. And then lastly, digitally centric. To the point I made earlier in my follow the money slide, Gen Z-ers, they want to do everything through their phone, through their tablet. They don't want to have to call people. They want to be able to do everything through chat or by a truly outstanding digital experience. So we've broken this project out into kind of 4 key components. Number one was to redefine the core -- and I'll go through each of these in some detail with you. Number one was to redefine the core. So we have always thought of core as being a big thing that has a whole bunch of functionality. We're going to kind of break those rules, and we're going to talk about that here in a moment. Number two, provide multiple integration options so that it is easy to connect into Jack Henry systems, and I'll show you that in just a moment as well. Deliver industry-leading capabilities across a single next-generation platform. So what that means is not just things we thought of as core in the past but the other things as well, all the other components like fraud management and remote deposit capture and lending origination, all those things. And then lastly, operating as more than a core. We're trying to ensure that our customers have a true banking ecosystem that they can set up and operate in that allows them to connect things together easily. And again, I'll go through this in a bit of detail as well. So first, redefining the core. So if you look at the left-hand side of your screen, this is a representation of what a core system is. Now there's a lot more functionality in the core today. But regardless of who -- what core vendor you're talking to, any of us in the industry that have been in the industry for more than 10 years, that's the way core has always been defined. It's a whole bunch of functionality. You have account opening, account management. You have transactions. You have cards and deposits and wires and so on, probably 30 primary functions within a core system, again, regardless of who you're talking to. But it's a thing, it's a product that you buy with all this different functionality. So in our effort to redefine the core, we're essentially unbundling all those services and creating discrete components that will sit on the public cloud and operate as discrete components. So now our customer, Jack Henry, can choose which of those components they want. And they can put them together in whatever order they want to put them together in as opposed to what we decide would be best for them. So we're unbundling these services, putting them in a secure cloud environment that offers the financial institution great flexibility. So here's an example, we believe, of one of the first iterations of this in production. So this is a re-bundling example where somebody takes all those discrete components that are now in the blue boxes and puts them together to create a digital-only brand, maybe a deposit gathering brand that they're going to host on our public cloud platform and sign a new brand to it. So I'm First State Bank but I've created this new brand that's XYZ, and I'm going to go out and gather deposits. I pick these 3 modules from Jack Henry. I don't need 30. I only need these 3 or 5. And I can do everything that I need to serve those customers as far as what we used to think of as core, but now I'm going to connect some fintech things into it or I'm going to connect some other applications from Jack Henry into that experience and create a truly differentiated experience for that niche of customers that I'm trying to attract to come to do banking with me. So this is just an example, but this is what we believe will be the first probably in production as far as a real "bank" for a Jack Henry customer. So that was the unbundling of the core component. Second, provide multiple integration options supported by our open philosophy and technology. So many of you have heard me talked many times in the past about the commitment at Jack Henry to being open, meaning open connectivity. And some of you have even been to the Jack Henry client conference. And if you walk into a Jack Henry client conference, we host ours in the fall, you walk into our technology showcase, hundreds of vendors in the technology showcase, and almost none of them are "partners" with Jack Henry. We don't allow core competitors in there, but almost anybody else is welcome. And they're not partners. They're not doing rev share. They are true competitors to Jack Henry. And we have prospects who will walk into that conference and say, "What in the world is this? How -- why do you -- how do you allow your competitor -- what are you -- I mean they're just kind of gobsmacked when they see this. And the idea at Jack Henry is we are here to serve our customers, and it's in our customers' best interest to have access to all those different players out there. Now we hope that our solutions are better than any of our competitors and they'll want to do business with Jack Henry. But it's this counterintuitive thing that we've done for years at Jack Henry where we create this open environment and support the idea of third-party solutions connecting into our platforms. And I think because we are so counterintuitive in the way we approach that, customers want to do business with Jack Henry because they know we do things differently when it comes to allowing people to connect into our systems. We are furthering that. We are taking that philosophy even further with this commitment. So we've created this platform to embrace openness from a technology point of view and from a philosophical point of view. A key new part of this strategy is what's called real-time data streaming. And that's the example that's on the screen here. So notice that we have an address change happening at 12:05 p.m. And notice over to the left-hand side of your screen here, those blue boxes, traditional Jack Henry core functions. Notice that all those systems are being updated at 12:05 pm. But also notice that over on the right-hand side, those are third-party solutions, fintech solutions, and maybe Jack Henry noncore solutions. They are all being update at 12:05 pm. That is a key new component of this technology strategy that is great for our customers because, generally, for most of their other systems, they've had to wait until end of day to see that or they've had to subscribe and ask for -- send me this data when it changes. Here, it's just streaming all the time, and customers can pick that up. It's a key part of the strategy and a key differentiator as far as what we're doing today. Step #3 -- or component #3. So we are delivering industry-leading capabilities across this single next-generation platform. So what you have in the middle here now, these are noncore solutions that we have today at Jack Henry, digital banking. We have payments technology. We have our lending technology, our commercial lending platform as an example, our financial crimes platform that Greg is going to talk about later. But that list could go on and on and on. Our commitment is that we were moving all of these technologies over time onto this single cloud, public cloud platform that we've created. What does that do? It ensures that our customers have this best-of-breed experience. Everything looks the same, it functions the same, it's the same security infrastructure. All those benefits are there. Additionally, when you get to an environment like this, we can live in the world that's referred to as DevOps. In a DevOps environment, as you're developing software, you can do rapid releases of software. So today, for most solutions like this and for -- certainly, for core solutions, customers are used to 1 or 2 updates a year. But customers who have Banno today, because Banno lives in this environment, they may get 20 updates a month. Because in the DevOps world, you can do real rapid release of software and technology that hasn't been available in the industry in the past. So this is a significant piece of the strategy as well. And then lastly, we will, in the end, create this environment that's more than a core. It's a banking ecosystem. So now we pull all these things together, third-party solutions; Jack Henry solutions in the lighter blue, noncore; Jack Henry core, what we used to think of as core in the darker blue, and there could be 30 of those boxes. We're just trying to give you a representation here. But then we have fintech solutions also on this connectivity layer as far as this platform is concerned. Now key piece of this story right here is jack henry is the only provider today to have relationships with all 4 of the major financial data aggregators. So that's Finicity, Akoya, Plaid and Yodlee. Who cares? Why does that matter? The reason it matters is because you can eliminate screen scraping with that. And if you're not familiar with the term screen scraping, think of if you have a financial management application, you provide to them your user name and password and every month, they go and pull all your balances together. Well, what they're doing is what's called screen scraping. They are -- electronically, they are logging on to your account and streaming your user name and password and pulling down information. Very, very insecure technology, but it's been around in the banking industry for many years. And so our mission has been we have got to get rid of screen scraping. It's very rife with potential risk to you all because of the ease that, that can be hacked. So with these relationships with Finicity, Akoya, Plaid and Yodlee, what those facilitate is exchange of data on these secure financial platforms. And we're doing that at 0 cost and 0 lift, meaning our customers aren't going to pay for every single transaction that goes back and forth -- pay Jack Henry for every transaction that goes back and forth on those platforms. So in the end, what this does for our customers is it helps them build, differentiate and evolve a digital experience that is different, a product set that is different. It offers leading services so they can deliver this great service to their customers in their moment of need and moment of relevance as we've been really pressing for quite some time and creates value that none of their competitors can create because of the solution set that they're able to put together with Jack Henry. So now same picture as we saw before. I've got my small business owner and my consumers down in the bottom there, but notice the arrow is pointing in. The idea is we've created this opportunity for them to connect to these things. You're not going to get the customer necessarily to quit using their investment account with wherever or their financial management account over here or certainly not their HSA, certainly not if they have a mortgage with Rocket Mortgage. They're probably going to stay with Rocket Mortgage. They're not suddenly going to come to the bank or credit union and move that loan. But what it does is it creates the opportunity for the consumer to see all of that stuff in one place. So imagine now for a moment, you pull your phone out, whoever your digital banking application is today, when you look at your digital banking application today on your phone, you see your accounts with your bank or your credit union. But imagine if you see your accounts with your bank or credit union, you can also see your Rocket Mortgage balance. You can see your crypto balance with NYDIG or Circle or whoever you have. You can see your investment account balance, all of those things on the same screen, and you can move money back and forth on that same presentation, right? That's pretty valuable. That creates an environment for the consumer or small business where they say, "Wow, my bank is really adding value here. They've created a different experience for me than anything that I could get anywhere else." That's the evolution of what's happening here at Jack Henry. That's where we're going with this. That's what we're going to be able to help our customers do by creating this environment that we've done. Again, I'm not trying to say we're going to -- all those consumers are going to move away from the apps they're using and move everything to one of our banks or credit unions. They're still going to use many of those, but this creates this opportunity for a real bond between the financial institution and the consumer or small business that they don't feel like they have today. And it really creates relevance for our customer when we deliver this experience and when they're able to deliver this experience for their customers in small business. So as I began here, I'll end. Jack Henry today, a well-rounded financial technology company, 45 years in business. There are lots of upstarts in our space, and you all remind me of them all the time. But the thing I'll point out to you is we've been successfully delivering technology in this environment for 45 years. There have been a lot of detractors over the years. They haven't thrown Jack Henry off course. I don't see any of these players out there today that are going to throw Jack Henry off course. We have a differentiated strategy, and people really like where we're going as far as a technology provider today. So I see bright things ahead. So as we look at -- if we put the technology modernization together with the opening that I gave you as far as the overview of the company, look at Jack Henry today, we have a highly motivated workforce. That shows up in our employee engagement scores, I think. Very engaged associates who want to help us be successful. Very high customer satisfaction, as I pointed out earlier. That's maybe what we're known for more than anything else, that our company is this great customer service that we deliver at Jack Henry. Number three, this technology modernization strategy helping our customers and prospects see where they can be in the future and how we're going to help them get there. And lastly, we are well positioned now at Jack Henry with new solutions to help address the challenges that are faced today -- our customers face today and into the future. So as we look forward, we are going to continue to focus on the space we knew -- know best. We focus on financial services to U.S.-based financial institutions. And I've been asked many times, "Are you guys are going to go international? Are you going to get into another business? Why didn't you do merchant acquiring?" We know this space. We have a lot of opportunity to continue to grow in this space, focusing on U.S.-based financial institutions. Now that is not to say -- if some opportunity came up international that made sense for us, we may pursue that. But it is not a strategic imperative for us to do any of those things. We see a long runway for our company today, continuing to focus where we focus. We are going to continue to enhance our products and services, make sure that we remain relevant to our customers. We are going to continue our focus on customer service because, as I said before, it is a differentiator for us as a company. We are going to continue to focus on openness. That's a key component of our strategy. And we will pursue acquisitions that fit our strategy as they make sense for us to pursue. I will point out we rolled out a new mission and purpose statement this year to our associates. I think this really captures what we're all about today as a well-rounded financial company. We strengthen connections between people and their financial institutions through technology and services that reduce the barriers to financial health. I think this really reflects not only what we do today at Jack Henry but where we're going as a company in the future. And then, of course, our purpose statement or why we do what we do, empowering people and communities to gain financial freedom to move forward. That is an imperative for us as a company. And all of that underpinned by our founding philosophy. And I think most, if not, all of you have heard this before. At Jack Henry, we try to do the right thing, do whatever it takes and have fun along the way. And I think our customers will bear that out that we, as a company, are known for doing the right thing, doing whatever it takes. We don't get everything right every time, but we commit to our customers. We will get it right eventually. If we mess something up for the first time, we will figure it out. We'll take care of you. And our customers appreciate that. They know that about our company, and our employees are all committed to that idea. So with that, I am happy to take any questions.

Dave's hand went up like crazy. So we have microphones that are roaming around the room here. So I'll ask you -- because we have people listening in online, I'll ask you to wait to ask a question or to shout out a comment until we get a microphone in your hand. And Mark has a microphone for you, David.

David Togut with Evercore ISI. Two questions on the tech modernization strategy. The first is by essentially unbundling the 30 components of the core and giving the customer the opportunity to effectively select which components they want, in some ways, you're sort of lowering the castle wall, and you're essentially saying benchmark our loan processing system against nCino, benchmark our digital banking system against Q2. So question one is how confident are you that when you kind of decomponentize those 30 pieces of the core, you can beat the best-of-breed providers kind of at their own game? And then the second part is this seems, in some respects, like ProfitStars 2.0, whereby decomponentizing these pieces, you can effectively go after the customers of your competitors more effectively and become a best-of-breed provider in each of these components. So I mean is that a reasonable read of the strategy as well?

So you've followed us a long time. You know us pretty well. You're on the right track. What I will tell you is that for the examples you gave, this -- we win in those situations regularly today. So this strategy -- we didn't need the strategy to be able to win when it comes to a commercial loan application, for example. We win regularly today. Our digital banking application, highest rated in the App Store, fastest application out there. We're winning today in those spaces. So this is more about those customers who are trying to figure out how to get to public cloud for everything they do and who are -- for many, who are trying to figure out how do I create a different experience for a niche. This enables them to do that. And so unbundling was the best way for us to create that story for them. I believe as we look forward -- first off, a lot of people are not going to move in this direction very fast. A lot of people are scared by public cloud. That's fine. We're going to support our existing cores with a great technology and great service that we have been. That goes forward for many, many years for those customers who want to stay in the environment that we're in. What this is doing is it enables those customers who are really forward-thinking, kind of cutting edge, trying to do something different. And definitely, to your last point, it opens the door to those customers who are not currently Jack Henry customers who are trying to figure out how to do business with us in the most effective way. It allows them to test drive a little bit, right? So we're going to set up -- I'm running somebody else's core, but I'm going to set up a digital-only brand. And I'm going to use Jack Henry's platform to do that. It allows them to create a relationship with us, see if we're the real deal. And then hopefully, they'll move everything over to Jack Henry. So in that regard, it's a little bit like ProfitStars maybe, but it's really a different strategy that I think is going to appeal to people who maybe wouldn't have done business with us before. Maybe they're larger regional financial institutions, and I alluded to that on one of the calls. I forgot who asked me the question. We already have large regional banks who never would have considered Jack Henry before coming to us saying, "Okay, it looks like you guys have something here that might help us solve our problem, and we want to talk to Jack Henry." So definitely in that regard, it opens some new doors for us.

Just a quick final question on this. If a customer were to individually purchase each of the 30 components of the core, what would the pricing of that package look like versus the prior pricing where you just buy the whole bundle? Is it equivalent? Is there a delta?

Well, I think if they individually choose each -- I mean we don't have pricing established yet. We haven't published any pricing. I think you're a smart guy, pretty logical that if you were to go up and choose each component one at a time over the course of years, would you end up paying more? Probably would do that because we're not going to price it that way. But what my expectation is most customers will come and buy a bundle. And it may be a bundle that looks just like what the old core bundle looks like. It's very likely that it will be some smaller bundle. And that pricing hasn't been published yet. We haven't settled on that, but we did a lot of work. So again, we've been working on this strategy for 5 years. We've had developers writing code for 2 years. We've done a lot of work around modeling and what does this look like as far as financial projections internally. We're just not sharing all that with you yet. Kartik, go ahead.

Okay. Just back on the next-gen stuff. Is there an opportunity for Jack Henry to drive revenue from those that are providing services? Or is this truly open platform and people can integrate -- or brands can integrate into Jack Henry without any cost to them?

Yes. It's a good question. In some cases, there may be -- will Jack Henry be the reseller? And will there be some revenue component there for Jack Henry? Certainly, there will be some of those. But that's not what we're trying to get at here. Again, consistent with the approach we've taken for years and years, we have 850 fintechs today plugged in through our systems. In only a handful of them is Jack Henry a participant in the revenue exchange. So we've always been at that approach. Again, we believe it's one of the things that prompts people to do business with us -- customers to do business with us. They like the fact that we open ourselves up like that. But we also know that because we open ourselves up, because we are very willing to be open, customers will say, "Okay, I want to do business with you. And I could have chosen this fintech solution, but I wanted to buy from Jack Henry because I want to maintain that relationship." So again, to a lot of people, I think that's counterintuitive but it's worked for us for years. And this is just the extension of that.

And then just moving away from this next-gen platform, Dave. Today, kind of what issues are your customers facing today as rates are rising and maybe there isn't as much loan demand as there was? And what can Jack Henry do to provide -- to help them?

Yes. So it's interesting. None of them today have said that loan demand is -- that it's really in danger. I know that there are conversations out there. I haven't had any -- I talk to a lot of CEOs every week. I haven't had any of that real concern. The bigger concern right now among CEOs is I have -- if you're a 30-year-old commercial lender, let's say, at a bank, in the financial crisis, you were 15 years old, right? You were not even in college yet. You didn't really pay that much attention to the idea of rising rates. So I have a 30-year-old lender who has never lived in a rising rate environment. You may even have a 40-year-old lender and they were in college when we went through the great financial crisis, 40-year-old commercial lender. I think they're more concerned about we have lending practices here. We got to make sure that our lenders are really button-down as far as the types of loans that we're writing. That's on the top of almost everybody's mind. There is a concern among a lot of customers about their ability to attract talent. If you're running a regional bank in whatever city and you're looking for a specialized talent pool with all the jobs that are open in the U.S. today, are they going to come and work for your financial institution or not? So we have -- particularly in the credit union side, we have some staff augmentation requests that are coming in. We're able to do some of that. We're not in the body shop business, but we're able to do that because we have talent that we can use that multiple locations not just for one institution. So that's top of mind for many. And then the biggest topic that comes up all the time though is still digital. What are we going to do to ensure that as we move to the future, we have a really outstanding digital presentment to our customers, particularly to attract new customers, and then certainly retain the customers that we have. David?

Dave Koning at Baird. So I guess I have a question -- is this a big positive for the banks if -- let's say you connect the consumer to 8 fintechs around the bank. That -- as a consumer, I look and I say, "Why do I have these 10? I should just consolidate half of these with my bank." Like this could be a big positive for them, right?

Absolutely. You are -- that is absolutely correct. So most bankers that we talk to -- again, the push is not get your customers to quit using whatever fintechy solution, but most of them see that where that's probably what's going to happen. It's going to create more relevance that will create that loyalty among the customers to say, "I should bring my business back to your institution." So yes, most bankers are expecting that. We think that's going to happen, but we didn't try to bake that into the assumptions or bake that into the strategy for Jack Henry. But certainly, bankers are seeing that.

Got you. Yes. And I guess just one follow-up. Are there ever like bad solutions from competitors that you might just say, "Hey, look, we're open to anybody, but we really don't want a couple on here?"

Yes. That's a good question. So we have done that before, some solutions that just don't pass muster. We -- in the past, we managed the -- we've had a hand in managing the connectivity just to make sure that it's right and it's secure and all that. I believe that will continue to happen in the future. Sometimes you have to help protect people from themselves when they're trying to do business with somebody that doesn't make sense. But we're trying to -- as long as they meet the standards, we're trying to be as open as we possibly can, as we have always done, to make sure that customers can use whatever technology they really think will benefit them. Anybody else? Over here.

I was just wondering, similar to one of the previous questions. If you have a company, a bank or a credit union that is obviously asking or sees all these various products that they're not providing to their customers and then now they can look and say, "Well, geez, 50% our customers use this type of fintech, do this type of product. Why don't we just launch that ourselves?" Is that part of the strategy?

Absolutely, yes. So that's a great point. Yes. And I should have mentioned that earlier. You're absolutely on the right track there. What this will do, we believe, will help our customers understand their customers better to that point right there. If you got half of your customer base doing X, then the bank will say, "Well, why aren't we doing X? And we may want to use that or we may have something in-house." It is shocking sometimes how often a bank or credit union will discover their customers are doing whatever X is, and they'll say, "well, we have that ability to do in-house. We just have never advertised or have never really promoted it as a service that we offer." And so certainly, I think that this will help prompt those types of conversations. Yes. Okay. Anybody else for me? David?

Just a quick question on the treasury management system, which you highlighted as a key R&D priority, 14% of revenue. Where do you stand with treasury management in terms of pushing up market into the bigger banks? And what's the average asset size of the banks that are signing up for treasury management system?

Yes. I'll answer that. I'm going to ask Greg to toss me on average asset size in a minute here, but -- or Ben, whoever wants to do that. So originally, when I first started talking about treasury 2, 3 years ago, I suppose that is, that's one of the things I said at the time, is you're not going to see us sign 1,000 financial institutions on treasury. That's -- it's not geared for the average bank or credit union. It's geared for those customers who have larger commercial customers. We have a wonderful cash management solution that is totally functional and is a good solid solution for an SMB or even a larger medium-sized business. So it's only geared to those large commercial entities. So it's a bank that has and almost -- rarely a credit union. It's a bank that has relationships with large commercial entities. So I don't know what our average asset size. Would anybody make a guess?

Average is probably $3 billion, $4 billion, but we've ranged -- the customer base is from about $1 billion to about $15 billion right now.

So $1 billion to $15 billion with the average being $3 billion to $4 billion. And there just aren't that many customers in the space in general. So we always knew that it was going to be a relatively low volume solution but a high-value solution for our customers.

Okay. With that, I'm going to turn it over to Kevin to walk you through the numbers. Should I talk slower? And here is Kevin. I hope you all know the poor guy has had knee replacement surgery, and he is here to do battle. So he's ready to go.

I'm here.

There you go.

Yes. So I had a total knee replacement on my left knee. It will be 5 weeks tomorrow. So that's kind of why I'm hobbling around, and I can feel my knee swelling from sitting here so much today. I'm not used to having it down this much. So bear with me. So like I said, we just announced earnings last week. So there's not a whole lot to talk about, but I thought I'd run through the numbers real quick and answering your questions if there are any. Obviously, I could take this slide back to 1991 and look about the same in growth in revenue and EPS. I think it's interesting that through the first 3 quarters of FY '22, we're almost at the same EPS we were for the full year in FY '20, with actually lower deconversion fees this year than we had in '20. So we're having a pretty good year, which I'll hit on that in a minute. '20 to '21, obviously, this is historical numbers. '21 was a very difficult year because deconversion revenue was down $53 million, which we guided at the beginning of the year. And somehow my crystal ball remained being cloudy, and that's how much we went down. Our segments -- reporting segments, obviously, we had some -- not a lot of growth in any of the segments because of the impact from deconversion fees last year. But this year-to-date, our segments GAAP revenue -- again, our deconversion revenue is up quite a bit this year from where it was in '21, but nice growth at 12% on a GAAP basis, nice growth in each one of the segments. This is operating income year-to-date. Again, this is on a GAAP basis so this does have the deconversion revenue. But obviously, some very nice margin expansion in each one of the segments as we've gone through the year. And so people always say, "So Kevin, how are you going to continue growing?" I think this slide is about the same as it has been for the last few years. Our public -- our private and public cloud revenue continues to grow very nicely, about 3% organic growth, which that represents just under 30% of our total revenue. Our processing, which is all of our cards and remittance and anything that we do electronic processing, is about 40% of our revenue and growing at roughly 10%. I don't see either one of those changing much for next year, which is kind of why the -- I gave you the overall guidance on the earnings call last week that I think we continue to grow on a non-GAAP basis 8.5% to 9%. Obviously, we'll continue to have headwinds as license and hardware continues to become a smaller piece of our total revenue pie. Operating cash flow is down a little bit this quarter. But remember, our operating cash flow and free cash flow were both heavily impacted in Q4 and Q1. We send out our annual maintenance billings on June 1. We typically collect about half of that in the month of June and the other half in July and August. So it makes for a very strong operating and free cash flows in both those quarters, which kind of skews the year a little bit. Capital expenditure is up a little bit from last year. We're probably going to end up the year mid-30s as we continue to reinvest in the organization. Cap software -- as Dave pointed out, 14% of our total revenue goes back to R&D. A big chunk of that is cap software. So cap software will probably end up the year somewhere around $140 million for the entire year. And then the operating cash flow components, which obviously is based on our operating cash flow less CapEx and less cap software. And then as everybody here in this room is always asking about, is our free cash flow conversion to net income. We've been very solid in the last 3 years. Again, this year, we've got a pretty big delta there, but that delta will get closed significantly in Q4 when the annual maintenance billing start coming in that we bill again on June 1. We continue to return good value to our shareholders through dividends, stock repurchase and occasional acquisitions. Acquisitions have been few and far to find as the valuations have been pretty ridiculous for the last few years. But we will continue to look for the right acquisition. Whether it be a tuck-in or a larger one, we continue to look constantly for the right acquisition. The dividends, again, we started our dividend program in 1991. We've increased our dividends every fiscal year since 1991. We did miss one calendar year. So -- but we have increased every fiscal year. Share repurchase, we've been pretty aggressive for the last 2 years, bought back a little over 4 million shares in the last 2 years, which has obviously had a nice overall impact on our EPS for this year to date. And then I think these are some key financial metrics. Just to point out, I mean, extremely strong return on average assets of 16%, nice growth for the trailing 12 months. Invested capital is 23.4% and return on equity at 27.2%. I think those are all extremely strong financial metrics that I'd point out put against most of the companies out there. And I know that's quick. But again, we just announced earnings. So if there's any questions -- sure. Look at the hands come up. I'm not going to give any more guidance. Yes?

Kevin, just on the earnings call, I believe Dave had talked about asset prices potentially coming down, that giving you an opportunity to make some acquisitions. Has that changed at all your outlook on repurchasing shares or what you might do over the next 12 months?

No. I mean I don't know that anything is going to change much, Kartik. I mean if you think about what we've done for the last few years, I mean, when there has not been acquisitions, we've used most of our free cash to buy back shares. As long as the acquisition front stays the way it is, we'll probably continue buying back our shares. Right now, we've got $240 million or something like that pulled down our revolver for the stock we bought the last 12 months. Obviously, we've got quite a bit of capacity left on the revolver, so we're not afraid to it. But obviously, when your stock is $200 a share, how aggressive do you really want to get buying it back when I'd rather you -- or our buy-side investors buy the stock at those prices? But as far as our logic on where we're going with capital outlay, there is no change.

Vasu Govil, KBW. I guess a question on just the macro risk. Clearly, the interest rate environment is really good for banks right now, but the drumbeat on a potential recession being around the horizon is also increasing. If that were to happen, how should we think about the downside risk to your growth potential?

Well -- so I mean that's a good question. Obviously, recession is something that we can't predict or avoid. But the nice thing, as you guys can remember, is we're -- right at 90% of our total revenue is recurring in nature now. We've got a very strong backlog of installations of just about every solution we have out there. There's a huge demand for technology and digital. And even if there was a recession, I can't see the demand for those things changing that much. So could our growth slow to 7% instead of 8.5% or 9%? It's possible, but I think we'd still see some nice growth. I mean we grew right through the financial crisis.

And I guess the other question I had was just the 8.5% growth rate that you've laid out. The 1% headwind from licensing revenue, that's been kind of the part of your formula for a long time now. Where are we in that cycle? And when -- are we at a point where that headwind could dissipate and we could actually be looking at almost double-digit revenue growth?

Yes. That's a good question. And I can't remember exactly the exact percent that license and hardware make up of our total revenue, but there's still going to be headwinds for the next several years as that continues to go down. Because -- I mean we just don't sell new in-house core customers anymore. I mean, occasionally, we'll sell a Core Director customer in the Caribbean, but very seldom, we would sell new in-house core in the United States.

David Togut with Evercore ISI. Could you drill down a little bit on your thoughts regarding acquisitions? You've highlighted that a number of targets are now more attractive from a valuation perspective. When you look at the markets that you're addressing, when you look at the tech modernization strategy, does this new strategy imply the need to add specific technologies to some of your point solutions where you could get it from doing, let's say, a small to midsize acquisition or even something larger?

Yes. And David, that's a very good point, and you're absolutely right. So as we are decomponentizing our core solutions and writing everything native in cloud, does that present some potential opportunities to get more acquisitions for those specific solutions? Absolutely. But it's not going to change our philosophy. And obviously, we're still going to be developing our own. I think Dave wants to jump in here.

You got me turned up here? Yes. So I just wanted to be clear about that, that we -- and I think I said it on one of the earnings calls. There is no expectation, no requirement that we need to do any acquisition in order to complete the tech modernization strategy, that is we baked this all out without any anticipation of doing acquisitions. So as we think through acquisitions, there are things that will dovetail into the tech monetization strategy, they better or we wouldn't do the acquisition. But other than that, there isn't a requirement for us to find anything in order to complete the strategy rollout.

I wanted to drill into the cross-sell component of the revenue walk on Slide 55. Specifically, how much of that 2.5% is coming from cross-sell within your existing customer base versus outside of your customer base? And if you could provide some color around the products that are -- and solutions that are the biggest drivers of the cross-sell, I think that would be helpful as well.

So I mean the vast majority of that is going to be to our existing customers, is cross-sell. As we continue to roll out new products like our treasury management and cash management and the new fraud solutions we're getting ready to go into beta with and some of those things, so I mean as we continue to roll out -- and I mean we've got some fairly low penetration of a lot of our products in our existing base. And the other thing that you'll remember is we've got close to 7,000 customers. They are ProfitStars customers that we've -- the average, I think Dave said, was 2.9 products.

2.9 -- yes. Well, I'm going to show that slide a little bit. It's 2.96, is the product penetration into all those thousands, literally, of customers who are not an existing core customer. So...

And within ProfitStars, we've got well over 100 products to sell those customers. So I mean there's just an enormous amount of opportunity, which is -- as Dave alluded to, I mean, we don't need to do an acquisition to get the growth that we're projecting. Yes, J.D.?

John Davis, Raymond James. Kevin, I want to ask the acquisition question a little bit differently. So how important is growth? I mean at 8.5%, if you could do an acquisition that could get you over 10%, is that something you guys contemplate?

I mean, is this something we talk about with the Board? Yes. I mean we have our annual strategy at the Board. We talk about is 8% to 9%, is that fast enough growth? We think it is. I mean could we go out and do an acquisition and maybe grow 10%? It's possible. But it's got to be the right acquisition that makes sense, that we -- that brings us something that we can cross-sell to all of our existing customers or it doesn't make sense.

I just had a question, is there anything that could change in the accounting over time, segment-wise or anything, with the new strategy? Or is it just more stuff falling into the cloud?

Just more of the cloud. Yes. I mean it's not going to change anything. I mean it's -- and we're going to be -- actually become even higher in recurring revenue than we are today.

Yes. Okay. And then a follow-up. Just in the 10-Q, there's a held-for-sale asset of $20 million that you're trying to sell, and you said you're going to get a gain on it. And is -- I guess, 2 parts to this question. One, is this something that could have a significant gain? Like is your real estate worth a lot more than what's on the books? And could there be more real estate because I see lease expenses coming down, too?

Yes. So Dave, you actually reviewed my Q. Yes. So we do have property held-for-sale, and we've got an offer on the table for it. So we know what the gain is. Is it going to be significant? I don't know that I can say that it's going to be huge and significant. But obviously, we'll point it out and break it out separately from our operations, so you'll see what it is. But we feel like -- well, we know we're going to get a decent gain on that. But you're absolutely right. I mean with the change in the workforce and everything else -- and we are going through a complete real estate rationalization for our facilities, both owned and leased, nationwide because -- like the facility that is being held for sale, we only need -- and Shanon, help me out here, but we probably only need about 1/3 of the space now that we had before pre-COVID. That's it? We got a follow-up.

Just as we think about the technology modernization strategy, is there anything in how you will be implementing those modules for clients, which could actually help the margins? I'm guessing like if clients are sort of buying small components, the implementation burden might not be as large. And could that potentially help the margins?

It very well could, yes, as we sell the separate components because there will be, obviously, implementation revenue tied to each one of those. So yes, I mean it could help drive revenue and help our margins on implementations.

Quick follow-up on the modularization trend. Wanted to get your perspective on demand in the market and how you think about adoption. Over time, I would think that -- at least initially, I would think that some -- many of your customers will stick with the status quo. But while there is demand in the near term, I'm just curious how you think about that ramp up and ramp up over time.

Well, I mean, obviously, as Dave has pointed out many times, I mean this is a long-term strategy for us. So I mean we're going to have a couple of components out now in beta, and we're just going to continue to roll those out. So it's going to be a slow ramp-up of both sales and implementations of those solutions. But you're absolutely right, I mean -- and I'll just make a prediction that 10 or 15 years now, we're still going to have a lot of our customers that are on our SilverLake and our Episys core solutions, and they're just happy as punch to be on them. I mean they don't want to change. But there's going to be others that look at this new strategy that are going to want to have the most up-to-date components so they can build their own strategy on where they're going and just have the absolute best solutions that they need for their strategy. It's Greg Adelson.

All right. Well, welcome. I -- for some of you that don't know, I've been with the company about 11 years and ran our payments business. I've been the COO over the last 2.5 years and took on the President title about 3 months ago. But what I want to talk about is the things that we are doing within the company really to drive the tech modernization story but also support the story. And there's 2 things that kind of go hand in hand, and I'll talk a little bit about both of those. So one is Dave talked a little bit about our mission and purpose statement. I'm going to go into a little more detail how it's tied into the things that we're doing in the tech modernization story and what we do to support the 3 pillars that Dave talked about. Key areas of focus by each of our segments, just a couple of key things that we'll talk about. And then Dave mentioned our One Jack Henry initiative and what we're doing there, and I want to tie that into what we're doing in the tech modernization story as well. So really from a mission and purpose -- I'm not going to read these to you, but Dave talked about being a well-rounded financial technology company, but it also comes to being well-rounded in how we deal with our associates. So we want to make sure that we create an environment as part of our culture that everybody belongs. So we want to be well-rounded in the type of people that we hire, the type of ideas that we gather, and that's another part of what we want to be as far as being well-rounded. When you talk about kind of our mission statement, strengthening the connections between people and their financial institutions through technology and services is only part of it because when you think about it, when you want to create financial health, it has to start with the customers that you support. So really, the financial health starts with our customers, making sure that we're providing the right solutions and technology to ensure that they're -- got a fruitful environment and making sure that those components that we're creating are tied to their financial well-being as well. Kind of the purpose side, what we do? And why we do it? It's not only to gain financial freedom to move forward for the consumers or the communities that we support, but again, also to the associates that we work with, the folks that live in those communities, making sure that we create a path for them for financial freedom because everybody in this room and every one of the consumers has different paths and timing for financial freedom. You could have folks that are just having -- new parents, folks that are having kids in college, folks that are grandparents, everybody has a different time frame. And we want to make sure that we're supporting our customers and our associates at a time that they need that financial freedom, again, to move forward. Dave already talked about our founding philosophy. And again, that's entrenched into everything that we do here at the company. Strategic direction. The only reason why I'm really showing this slide is that if you've been in any of our conferences in the past, this slide hasn't significantly changed. And what has changed is our emphasis in the areas around the wheel where we're spending our time and focusing. And I'm going to spend a little bit more time talking about those products and initiatives. So Dave mentioned some of these already. I'll go into a little bit more detail about digital payments, fraud and data analytics, our enterprise online account opening, somebody was talking earlier about maybe some opportunities to reduce or improve some margins. Some of the things that we're doing, where we're taking some of our antiquated solutions that are old, that need to be facelift, and we're kind of taking them into the technology modernization story. And as a byproduct of that, we'll eliminate some of those solutions over time, which, again, as you're working on less and less solution set, you're going to have opportunities to raise margins at some point in time when those end up going back to the wayside. Enterprise lending, I'm going to talk a little bit about. Dave spent a ton of time on technology modernization. The other one I want to emphasize is our fintech engagement team. And that's something that's new, but it fits perfectly in with our plan for what we're doing with the technology modernization story and allowing our open strategy to be a big part of that. So in the past, somebody even asked some questions about how we address our fintechs that come into our base. And what we basically do is we do an evaluation. We'll decide whether they want to be part of just what we call a VIP integration. We may charge them a small fee, we may not, depending on the level of what they're bringing to the solution set. But also, it's just going to give us an early opportunity to look at these fintechs and make a determination on whether we want to maybe be an investor in those fintechs, maybe we want to build a stronger and deeper relationship with them than what we've done in the past. So this is a big part of what we're emphasizing today. We've kind of built some partnerships with several different companies to ensure that we can have an earlier look and a better look at some of these fintechs and where we're going. So some of the strategic priorities and, again, very high level, just to give you an idea, but in our banking group that's headed up by Stacey Zengel, we talked earlier about what we're doing in regional banking and opportunities that the tech modernization story is bringing to us, but it's also giving us opportunities in our existing core product. So we are spending a lot of time building out some key feature functionality within the core to drive us, to be able to go upstream with some of our existing customers, to get them prepared for -- if they're acquisitive and looking to do a merger of equals or whatever, may be coming down the pike, creating opportunities to improve on our already superior customer service. But again, as those larger institutions continue to grow, they're looking for different ways for us to service them and support their needs. And then, again, we're working with a lot of the key large consultants in the industry, the Accentures of the world and others, to make sure that they're well aware of the things that we are doing. We've hired a separate group in Stacey's world to come in, actually all ex-banking people, that are coming in to help us kind of drive this initiative. And we're already starting to have some success. We have 3 customers that are signed up. We have about 12 that we've identified in our existing customer base, and we'll continue to drive that internally first before we actually take it out to an external part of our market. So commercial services, really from the credit union side, key focus is that the times have changed, and there's a lot more focus now on commercial services, on the credit union side of our business. So Shanon and his team have been working on really repackaging the commercial lending and servicing that we do today within the core segment, within the core solution set. We're integrating with some of the stuff that we're doing in the digital, around our Banno business, and tying some of the key features there, which is really primarily ACH, wires and entitlements. Our Banno Conversations solution, which is really something that nobody else have, which is a securely authenticated way to do chat with the member or the customer, utilizing technology that Ben and his team created. It's really a game changer for us compared to our competitors and allows that financial institution, as Dave mentioned before, to be able to be at the member of the customer's moment of need or moment of relevance, utilizing that solution set. The LoanVantage integration, we're actually doing some things that we've done to build out an enterprise, consumer and commercial lending solution, and the Symitar team will be integrating into that. And then mortgage investor services is really just about the ability to report to all the different agencies. So I guess from a timing standpoint, we got that, it can be done over the next 18 months or so, but we've been working on that for the last 6 and making a lot of headway. Banno business. So a big part of what we need to continue to deliver, Dave talked about our 7.2 million users that are on the Banno solution today. We have a whole host of business customers ready to go live when we roll that out this summer. So we'll be rolling out our business component on our SilverLake platform this summer in a beta phase, and then we'll be rolling out in our credit union later this calendar year. And then really supporting the unified identity for all Jack Henry solutions. So basically, what that means is using a single user name and password to be able to access multiple applications at Jack Henry. A lot of our providers, you have -- or a lot of our competitors, you have to have multiple ways to authenticate into their applications. So you don't have a single way to go in and just use one user name and password to access that. And so we're changing where that's going and the ability to do that a lot more effectively within our own base of priorities here. And then, of course, the technology modernization strategy is completely supported and originally -- if you look at what we did in the Banno platform 5 years ago, it was really the foundation of building that single platform for this strategy. So in our payments business, payments as a service, so ability to really kind of componentize what we do in payments, giving API-driven solution sets to our third parties that we support as well as our customers, being able to support the payment solutions without having to buy a full package of that today. Again, you can componentize it. Dave has talked a lot about it on our earnings calls before, but we are -- from a real-time payments perspective, we are the leader on RTP with The Clearing House. We have 67% of all of the banks and credit unions that are live on real-time payments, our Jack Henry clients today. And Zelle, we're actually -- again, we have a large number of those as well. We've been working with the Fed for the last 2.5 years or so. We'll be ready to roll out when the Fed is ready to roll out and supporting both send and receive today in our solution sets. And then our card processing solution, we've talked a lot about what we've done over the last, I guess, 5 years since we signed that agreement and finished the migrations about a year ago, but we've been rolling out contactless and digital cards long before the pandemic ever hit, but that's been a big part of what our customers have really wanted to drive now in that kind of nonbranch environment. And then we've really been working on our fraud solutions. As you can imagine, fraud in the card world is something that's a never-ending story. So you're always spending time. We'll actually be using some of the components that we're doing in our new fraud solution and kind of tying some of that into our card business over time as well. And then we rolled out full-service credit offering about 1.5 years ago, and Dave talked recently about the number of wins we're getting. But one of the things that we wanted to add to that was an agent program. And an agent program really is for the smaller community institutions that don't have the skill set, don't have the people to really kind of want to run a full service. They would rather just take small portfolios and run that an agent. And that wasn't something that we offered in -- previously. We'll be rolling that out this summer as well, working with a third-party provider on that. And then our ProfitStars. So we talked a lot about our Jack Henry fraud solution. So this is a replacement to our -- over time, it will be kind of working with kind of -- stop selling our current Yellow Hammer solution. But we'll be rolling this out. It's a complete BSA, AML, real-time component of driving fraud solution for all of our institutions, will be institute -- or today, we're already utilizing the real-time component in our pay center offering today, and we'll continue to do that. And that will be ready to go in beta by the end of this calendar year. Our enterprise account opening strategy. Today, we have 8 or 9 different account opening strategies across the company. So again, an opportunity to consolidate that into a single strategy and part of our tech modernization. And then enterprise lending, as I mentioned earlier, we have a single consumer and commercial offering today that is available for our customers and eventually, again, outside the base as well. Somebody mentioned earlier about facilities. So we're spending a lot of time rightsizing facilities today. We've taken several of our locations and kind of reduced the footprint, several others that we've actually closed or sold. And as Kevin alluded to, we have several others in the making today. But at the right point in time, kind of as we work through the timing of when we go back to work and Dave mentioned, we'd be around 50% at the September time frame -- a little over 50%. So we'll kind of see what happens when folks get back into the office more regularly, and we'll make a determination. But there are several locations that we're already actively knowing that those locations and their sizes are far too big for what we would need long term. We're working on a multicloud strategy as part of our tech modernization. So today, we're already in all 3 of the majors, AWS, Google and Azure, Microsoft, but we're working on changing some of our product sets to ensure that they can be multicloud as well as part of this tech modernization. Then we're completely rationalizing what we're doing with our own data centers and making sure that in the long term, if we're going to be moving a lot of our products to the cloud, what do we want to do with our existing data centers and how many do we really need? So we're spending a lot of time on that, and we'll continue to drive some opportunities there, even with some additional third parties. And then Dave mentioned our sustainability report. And obviously, ESG and the initiatives around what we can do to improve our ESG numbers is a high focus for us, both in the infrastructure and across the rest of the company. So an initiative that I really want to talk about from what I think fits in perfectly with our tech modernization in a single platform is an initiative that we call One Jack Henry. And so we started this about 2.5 years ago, and it really was part of driving where we knew where we were going with our tech strategy. And to be able to execute on an A+ strategy, you need to make sure you got an A+ execution on the back end. So some of the things that we wanted to do was to kind of build more consistency across the organization. This created opportunities not only for our associates but better experiences for our customers and the folks that support our customers like consultants out in the marketplace. So one of the things that we really focused on was creating what we call the 4 tenets. I'll talk about that in a minute. But again, when you think about driving consistency to become One Jack Henry, it's around the entire company, the processes, the things that we want to do, eliminating the business silos that have been created, in some cases, over years of acquisitions and other components or just things that have happened with folks either working in different environments or different groups. And then elevating and unifying our brand, we're spending a lot of time on making sure that we're doing a better job on that. I think you're seeing more and more press releases. You're seeing more and more activity on what we're driving. And then developing solutions that will serve our clients' evolving needs. And that's all part of what we're doing with the tech story as well as some of the initiatives that we have underway. So again, the 4 tenets, really, it starts with what I say are -- is transparency. So transparency with our associates, our customers, everybody that we're dealing with. And the message is really around don't tell our associates, our customers what they want to hear. Tell them what they need to hear. And I think we're doing a much better job, and our customers are appreciating the opportunity to have more transparent conversations. Consistency, we've talked about that, developing similar and repeatable processes. Collaboration, working together across the groups. And again, a lot of our groups had built some walls up through the years. And so we've been spending more and more time kind of driving that collaboration across the organization and working as one. And then communication, ensuring important information is being communicated in a variety of mediums, and we're doing that on a regular basis. So a quick run-through of some things that we've already accomplished. We took 3 disparate call centers or contact centers. We brought them together, especially -- and actually, we did that right before the pandemic was really in its heyday, and it ended up helping us a lot with driving and bringing people into the organization. We got more consistent on how we hired. We got more consistent in the metrics that we utilize. We got more consistency in our SLAs with our customers. We created a customer success team, so one that was really focused on continuous improvement or process improvements around the organization. We took all of our education teams that today were disparate, and we're driven across the entire organization led by different people, and we brought them all under a single leader today. So now when our customers go live with various products at various times, they're not going through different processes and different things like that, again, building more consistency to benefit them. Customer experience in general, just making sure that we have a full focus on that. I'll talk a little bit about that at the end here. Road map consistency, this is something that a lot of people have -- our customers and consultants have given us a lot of accolades for. So we now have -- we used to have about 12 road maps that we published publicly out in what we call our 4 clients portal, but all of them were different. They all look different. Some of them were 12-month road map, some of them are 24 months. Some of them had no date. So it just was a road map. We now published over 60 different road maps, all look the same, and they're all in a 6-month horizon. And why is that important? Because our customers expect us to do what we say we're going to do. And so the only way to hold ourselves accountable is to be able to publicly put out what we say we're going to do. And they love it. Now are we 100% on hitting those dates all the time? No. But we are getting better and better because we're holding ourselves accountable. And they're feeling more confident that when they go back and talk to their superiors at their institution, that Jack Henry is going to do what they say they're going to do. We now have a common user interface group that's under Ben in his CTO role. So again, lots of groups, lots of consumer-facing products, lots of different user interfaces now being all managed under one group with one look and feel. Common product development life cycle is another key component of this. So again, each of the individual lines of business ran their own ways of bringing a product to market. So we now have created a product -- common product development life cycle across the entire company so each line of business operates exactly the same way. There's a couple of nuances for certain groups just based on things that they need. But you can kind of say that 80% to 85% of what every single group does today looks and feels exactly the same. So again, when a customer buys one of our solution sets and they want to understand how we're going to market, they don't have to guess based on each of the business units on what we're going to do. Case management. So again, Dave mentioned this earlier. We're not perfect in everything we do. We're pretty darn good. But in the end, when a case gets opened up and comes into our organization, there are times when, as within any organization, various folks are passing the buck to so-and-so and to so-and-so. We've changed the way we manage cases. Everybody now is measured on one metric, and that metric is time to resolution for the customer, meaning that if XYZ group didn't do their job and this group did, nobody won until the customer agrees that we have solved their case to their satisfaction. And again, that's another way to cut down silos, another way to get things done a lot more quickly. And we're using a kind of a -- I guess it's terminology, but it's also a concept called intelligent swarming. And so what's happening is because now everybody is measured on the same metric, they're all getting together to solve the problem instead of passing the buck and fingers across the organization. So a lot more, and again, we'll continue to help our service scores. And I talked a little bit about the enterprise-wide metric already. So consistent enterprise approach to implementations. Again, another component where you got 250-something different products, various groups do different with things with their implementation processes. This is a great opportunity for us to build consistency for the customer to have alike way to doing business with Jack Henry. And if those of you that are familiar with what's going on in the market, there's a lot of focus out there with both CFPB with ABA, ICBA, others about building more consistency in the organization for especially the core providers, and we're 2 years ahead of everybody else by doing the things that we've already done. Overall operational effectiveness, we've created a new group in our organization around change management, making sure that we are completely aligned when we're making changes in our systems, calendars, understanding what's going to affect all ends of the business. When you're as tightly as integrated as we are as a company, you'll find that certain things can knock other things out. So making sure that we're very tightly aligned is a big part of that. Ben has been focused on this since he's kind of taken over as the CTO of what we call unified observability. And that's our ability to see across the organization for outages, other things that we need to be focused on and giving that reporting and that same access to our customers as well, and then some things that we're doing with some internal processes around alerts. And then we've -- again, as a group now, it's going to be highly focused on what we do in the cloud. We're centralizing what we're doing in our cloud services team as well. So ultimately, it all comes down to a customer experience strategy. So we're all about making sure -- Dave talked a lot about how we listened to our customers. So we get -- we do surveys with our associates. We do a lot of surveys with our customers. We have a lot of different user groups with our customers. And so it's taking that data and information and making sure that you're actually doing something with it. We've done a pretty good job of that. We got to get better in certain areas. So taking that data, analyzing it, making sure that we're actually acting upon it and then continuing to evolve because providing a superior customer service is an evolution, and it's a consistent evolution. So we're making sure that everybody in our company is highly focused on driving this as part of our high-level initiatives. And then again, our one company philosophy -- or our company philosophy. So I went through that pretty quickly as well, but I just want to make sure if any questions or any comments that you all have. Yes.

Yes. What are some of the variables that go into a customer choosing between a private and public cloud? And then what kind of visibility do you have in kind of projecting whether customers will move to the public cloud? And how does that affect your strategy scheduling for your data centers?

So today, from a public cloud, we don't have -- we have some products that are in the public cloud, but they're permanently placed in the public cloud. So when they actually buy that product, it's actually -- it's in the public cloud as far as being based. As far as core customers, which would pick between a private and public, again, the public cloud offering is not available today. So they're either picking in-house. So they're either supporting that themselves or they're doing what we call outsource or outlink on the banking side or ease on the credit union side. Today, I think it's about 9 out of 10 or so. I don't know where Leo is, about 9 out of 10 are picking -- or maybe even more than that, 9.5 out of 10 are picking the private cloud offering over the in-house offering. Yes, David? Okay. Sorry.

Great. Dominick Gabriele from Oppenheimer. So I was just curious, has the sales force incentive structure changed in any way with the new strategy of unbundling? And if so, how? And I just have a follow-up.

Yes. So it hasn't changed today because, again, we're in a couple of beta products, and we actually just have a conversation over the weekend on some things around quota for that. But over time, there could be some changes related to how we would want to incent either various product sets or the bundle or whatever. But today and for the short period of time, there's not going to be anything significantly changed, at least heading into this upcoming fiscal year. Dave, I don't know if there's anything you want to add there. I think it's important to note that as we build out the pricing schemes for a lot of these, which we will over the next -- at least for some of the ones that we'll be producing, and Dave is -- or Ben is going to give you an idea of kind of some high-level things that we'll be working on over the next year. As those start to get to a point where we are pricing, we'll have whether it be incentives that we give to a particular sales rep for a period of time or changing the dynamic on things that we want to focus on. I will tell you straight up, though, when we go back to some of those slides that Dave showed and I showed around digital payments, fraud, enterprise lending, those are always going to be high-level and high-focus products for us as part of the solution set.

And then just really quickly, has the -- average contract size, how do you expect that to change over time from the private cloud versus the public cloud?

Yes. Sure. Yes. I don't know if -- our average contract size today is, what, 7 years, I guess. So I don't know if we know if that's going to change significantly to either at that 7-year or 5-year. I don't think we would look at doing too many things less than that. But I don't know if Dave if you have...

Well, the other thing I would mention, Dominick, is that the bookings -- if you're talking about the bookings, the dollar value of the contracts, those have definitely, on average, been going up over time. What the change will be, we'll have to see what -- which modules customers buy and what bundles we put together and those types of things. But we've definitely seen an increase in the average contract size. When you talk about a core customer and the equipment to Jack Henry and the number of things that they're buying at onetime, that has definitely gone up over the last several years, not only because the average assets of the Jack Henry customer has gone up, but because the bundle has changed, and they're kind of buying more of those components, particularly digital has had an impact on that contract value.

And I think it also depends on which products they buy. So a lot of our complementary solutions, the average is 3 to 5 years so -- where our core clients are an average of 7. So if they want to make a coterminous, a lot of those products get pushed up into a 7-year group. But if they're selling individually, that product individually, sometimes it's 3 or 5 years, especially for our ProfitStars solutions that gets sold outside of the Jack Henry core base.

David Togut, Evercore ISI. Two of the key themes in your presentation are improved effectiveness and improved efficiency, which seem to have direct implications to the pace of margin expansion going forward. So a question for you and Kevin, perhaps, should we expect that once these initiatives are implemented, the historic pace of margin expansion could actually be higher going forward than the 50 basis points-plus we've seen historically?

I know that I'll get pushed for that. I don't know if we'll -- but Dave, do you want to answer that?

Kevin pointed -- so as Greg pointed out in his opening comments here, this didn't just start now, right? He's been working on this for -- ever since he became Chief Operating Officer 2.5 years ago. This was the #1 initiative for Greg. As we were pulling together the tech modernization strategy, we said, okay, our whole operation strategy has to line up with that. So Greg has been working on this for a long time. Part of the margin expansion you're already seeing has been a result of what he outlined here today, and it's going to continue through all these different projects that he has lined up.

So various focus around continuous improvement in general, right? So there's things that we're working on to help drive. But then I also talked about some of the -- as the tech modernization takes hold, some of the older solution sets will kind of go by the wayside. And I think as we're only working and focusing on 1 or 2 different product sets versus 7 or 8 in the same kind of realm, that in, in itself will drive some margin improvement because you're just not working on as many different initiatives.

But is there an intention to change the magnitude of margin expansion going forward? If we tie this back to Kevin's slide on return on invested capital, should we expect that cadence to change?

So for the next fiscal year, no. Over time, maybe. But for the next fiscal year, I think the guidance that Kevin gave the other day on the earnings call is probably pretty accurate. And we'll continue to see where some of these things and how quickly we can move some of the needles to make that happen. It's break time, I think. Is that right?

Looks like we're good. Yes. So we're actually a little ahead of schedule. So why don't we take a 15-minute break and fire back up at 3:00? [Break]

Welcome back. Good to be with you all. My name is Ben Metz, Chief Technology and Digital Officer at Jack Henry. I came to Jack Henry via acquisition 8 years ago. I was the Chief Technology Officer of Banno, helped build Banno. My joke is that Jack Henry is my first real job, my first like 401(k), my first time I've had real insurance, all that kind of stuff. I has been my status my whole life. And then parked here at Jack Henry to work on what I'm going to talk to you about today. Quick preparatory remark. You'll see a lot of similarities in my slides with Dave's. Dave showed you the outside of the car. My job is to show you the inside. Lift the hood up a little bit, going to take a look at the engine. He talked about what we're doing. My job is to help you understand how and then sort of how you break these things apart and actually do it. Real quick quiz. Anybody know what Conway's law is? Anybody know Conway's law? All right. I'm just going to give you the Wikipedia definition. Any organization that designs a system will produce a design who structures a copy of the organization structure. So I always open with that because it's super important that Greg and Dave are doing what they're doing organizationally or I couldn't do what my job is technically. Makes sense, right? So if I say that in a more simple sort of Iowa terms, like my terms, the software ends up looking like the organization. And if you take a look at Jack Henry software today, it does look like organization. So in order for us to make the kind of technological transformation that Dave explained and described, what Greg just walk you through is required. I would not be successful without that. So also, preparatory mark, last one, I'm really bad with PowerPoint. So this is my first slide. I'm not even kidding. This is my first PowerPoint presentation, I think, ever solely PowerPoint. I usually use my iPad, and I draw. So I'm going to do a quick test of my technology here. Yes. No. I know. Okay. Can you all see that little thing? You're not going to see it on these screens, so that's useless. Okay. I'm going to be fast here. Okay. First is this is a picture. This is Downtown Cedar Falls. I love this picture. What I try to do here is explain what's happening across the United States. I'm going to go to the next one. That was 10 years ago, the same corner. I kind of like just going back and forth like this. See, I'm already getting used to this clicker. 10 years ago, it was a Wells Fargo branch here, Downtown Cedar Falls. This is why we're so bullish on the future of the financial -- community financial institution. We're just bullish. And I'm going to chat a point at some of the stuff since I don't have a clicker. But if you look over here, like these apartment complexes didn't exist. This entire building didn't. Good. I love the irony of Wells Fargo just sort of sitting there in the corner where it's not a Wells Fargo branch in Cedar Falls anymore. The entirety of this infrastructure here -- by the way, the third floor of that building is where our digital offices are going in. A question earlier, I think, about real estate, we downsized maybe by about 60%, 70%. But offices are getting cooler. Customers fly in and meet us here. Also on the corner here is a financial institution, that's one of our customers. That customer helped fund and provide the commercial lending facilities for everything you see here downtown. So this is why we're so bullish. This is happening on every street corner in the United States. U.S. is not a better place without our community financial institutions, especially in times of crisis. And these times of crisis is painful and brutal as they are. They offer humongous opportunities. So one of the things -- there is questions about like what do we hear from CEOs? All of our CEOs of our financial institutions have new relationships with small businesses and commercial enterprises, all of them. Why? The outcome of what we just went through, okay? Quick introduction slide to a name. I'm going to talk about Origin. That's the internal name of the technology transformation project that we are undertaking internally inside Jack Henry. So I have gotten so used to calling it Origin that I just wanted to give you just a general introduction to like what we're calling this. This is the organization that I run. I was a CTO of Banno. When we were acquired, we were roughly 50 people. And then I had a lot to do with building that entire digital business, okay? So I've run that business for the last 6 years, right? Reporting into Greg and with all the help of both Dave and Greg and support from the entire team at Jack Henry. And what we've done now is we've merged the entire digital team into the CTO office. Now I'm going to explain over the next sort of 10, 15, 20 slides why. The basic idea is leverage, okay? We want to get the leverage of everything we built in the digital platform into the Origin project. Okay. You saw this slide in Dave's presentation. I just wanted to call out a few more things that are pretty interesting. One is that it's not just a transformation that we see amongst consumers. It's also a transformation that we see amongst the leaders in our financial institutions, okay? So we're going to go through the biggest leadership transformation that we've ever been through. We're also going to go to the largest wealth transfer that's ever happened in the history of mankind, ever. And you can look at any economic study that you can go find and verify that, right? So the other thing to mention why I put this person sort of scratching their head in the middle here is Gen X-ers and millennials are now the ones who have the money and also are building their financial assets that our customers are going to serve them with. The other thing that people forget about this slide is that banking works like insurance. My 17-year-old son has $13 in his account, needs to -- needs me to send him money for gas, and he's at the gas station. He doesn't know how ACH works or anything like that. He just knows how Square works. My mom, who I love, 72 years old, my mom and dad run businesses. They have 13 accounts. They got 5 properties, right? Okay. Is my son a cost center at the bank or credit union that we all are at? Yes. Is my mom? No. My mom pays for my son. That's how it works, all right? So we think we can propagate this as Jack Henry. We think this is a huge opportunity for us to actually go play really well here. Also a similar slide that you saw in Dave's presentation, but I wanted to give you, again, some more detail. We're taking a look inside the car. A lot of people ask me, why would you go build a new system? Why would you modernize technology? Why? Like, why don't you just take your RPG code and just take every line and turn it into a job and put it in the public cloud? Does that change anything? The answer is no. These systems -- by the way, all the systems were designed with a teller in mind. You have to remember, our community financial institutions compete on service relationships and trust. That's how they compete. So they competed at this metaphorical counter for that relationship, right? That's how they won. That's how they still win. So what we have to do is take that experience and we have to convert it into a digital one. And that's what we've done in Banno, okay? So we built Banno Conversations. You heard Greg talk about, you heard Dave talk about that. The back office that we built for digital becomes the back office of the new platform. Makes sense, right? So Banno Conversations becomes how you service customers. Why? Because the service experience on this graph is different, right? The bank is never going to see my son. How do they continue to build a relationship with him and sell him products? All right? Makes sense. They're going to see my mom. Love her, but she still goes to the branch. That's the other problem -- or the challenge that our community institutions face is how do they service my mom and my son and everybody in between? That's the hard part. Okay. So we can talk about Chime, which we will in a minute. Chime is not trying to bank my mom, right? All right. So what do we have to do? We have to build a digital-centric system, right? So we have to build a new system that's designed from the ground up, right, for the way our customers are going to compete in the future, okay, that's not teller-centric. So they did a good job of explaining that all the customers down here on the digital side, these systems were never designed for this, okay? So they never designed for Internet-based access. This is just for fun, like if you're wondering if digital banking matters, there's just some numbers from Cornerstone for your perusal later. A couple of things we're pretty serious about, pandemic fast-forwarded payments engagement by at least 5 years, all right? There are 2 Jack Henry banks that will be minting and issuing stablecoins within 120 days, actually just went into the third, okay? The way we see crypto is we actually see stablecoin rails being new payment rails for the U.S. dollar. Does that make sense to everyone? They become new payment rails. You can actually move the dollar on Bitcoin. It's called the Lightning Network. We don't have time to talk crypto today. We can over wine, if you want. But we see these as new payment rails, and we see cross-settlement and interim settlement as being very important. Let me give you an intuition for this. How many of you all know that the card system ultimately settles back to the merchant over the wire system, right? Okay. How many of you know that Zelle actually settles over ACH? Okay, just want to make sure, right? So when we talk about settlement and cross-settlement, what happens if we get 3 new payment rails for the U.S. dollar? Will we have to cross-settle those back to things like ACH and wire? Yes is the answer. Will we have to cross-settle between them? Probably, okay? So we want to make sure we build a system that can do this. One very quick side note that's really important. Technology moves at the pace of regulation. I'll say again, technology moves at the pace of regulation in our world, okay? We are a highly regulated company. We'll come back to that. We also believe the fintech ecosystem will provide leverage for our customers, big time, and we'll explain that. This is 1985. This is a golden age like -- we had like 100 years of the golden age at community institutions. If a community institution was competing on that same Main Street picture I showed you, they're competing with big FIs or regional FIs, right? Is there anybody else? Is there anybody else in 1985? Like JCPenney credit card, something I don't know, Sears. They're gone. Okay. This is what it looks like now. I'm going to go back just for fun. That's what it looks like now. So in any time -- sort of any time in history, if you study economics and you're -- I'm interested, I'm not an economist by any stretch, but I'm a technologist that has done a number of start-ups. And any time you miss time to market, you lose, right? So wherever -- technology also is dependent upon the capital market to converge. So technology transformation that we're talking about, the capital markets have to converge for that, right? The competitive landscape has to converge in order for any kind of technical advancement. I'll just give you a quick story. Banno was an open-banking platform. That was our idea. We pitched open banking to Greg Adelson and David Foss and like, that was 11 years ago. They didn't care about open banking at the time. They just said, "Wow, that's great. Then can you build mobile on top of that?" And I thought that sounds easy. Of course, it wasn't. So we think there's 10x upside. Any time there's disruption, we just think there's tremendous upside, and we're going to explain that. From the consumer experience in 1989, fast forward, and I picked this year because this is when we released SilverLake, just to give you some history. We released SilverLake in 1989, we started building it in 1985. Episys, which is our flagship credit union core, had our first customer in 1985. Here's the key thing to understand about this slide. They're all running on legacy infrastructure, everybody here. There's not a single brand here that doesn't somewhere, somehow end up touching infrastructure that was built before the Internet. Almost the entire U.S. financial system runs on infrastructure that was built before the Internet, okay? As evidenced -- wrong button. Okay. So the consumer experience back in 1989 when we were offering SilverLake was really large bank community institution, right? Now we think the consumer experience looks like this. You saw some of Dave's slides. It doesn't. They're completely confused. And none of this stuff connects, okay, doesn't connect. They don't -- there's only one consumer experience that any of these customers can go get all their accounts in one place, and that's called Mint, right, which is very disruptive. So just a reminder, just a quick -- like some data points you can look up, look up online. If you look at SoFi, they've acquired 2 companies, they're infrastructure companies, Galileo, right, and Technisys. All right, just a quick question. Do you know who else on this page uses Galileo? That would be a good thing to look up, okay? I'm not going to give you answers, but you can go find that out for yourself. The infrastructure landscape is actually an inhibitor for fintech, I'm going to explain. What we think we can do at Jack Henry is really put the financial institution at the center, which you saw in Dave's slides. I have a little bit more detail here. Dave explained this, but how many of you all use Venmo? Okay, or have used it, or Square would be an equivalent. When you connect your bank account, you are using effectively Plaid to do that. The log-in system that you see when you put your user name and password in for your bank account, that's Plaid's system. Okay? All right? How many of you all have seen some of the features that you can sort of add your bills and like your mortgage payments and stuff in Experian? It's called Experian Boost. Okay, that's powered by Finicity, all right? How does that connect back to your bank account? Same way. What we said 2 years ago was we built an API platform, which I'll dig into a second, let's go get deals done with all of these providers. We're the only one to do it, like Dave said. But when we think about this disruptive ecosystem, we're big enough as a company to go get these deals done, okay? It's turning out to be quite prudent and because, well, if you're from -- you can also look up like Dodd-Frank 1033 if you want some more homework. I didn't mean to give you homework today, but Dodd-Frank 1033, we're ahead. Jack Henry is ahead on major regulatory fronts, right, because we've been working really hard at this. We now are going to drill into how. How do we get there? The future must be built before it can be bought. I think you know this is Jack and Jerry. These are our founders. That's a quote from Tim O'Reilly, I believe, called What's the Future, and we believe we've got to build, okay, for our customers. So we're going to break down what unbundling of banking means, a couple of preparatory remarks. Technical things in here. This is not a technical presentation, all right? I will use some technical terms because I have no choice. If you want to know what they mean, you can ask me questions later or over wine and drinks, I can explain like what things like Kubernetes mean, all right. How many of you know Andreessen Horowitz, a16z? You can go read this on their website. This is what they say is the past, today and the future. The past is kind of what Dave described to you, big monolithic core systems. And they say, today, we have banking as a service. And they say, tomorrow is banking primitives as a service. I have a lot of respect for a16z, a lot of respect for them. I just think they're wrong about today. That's all. They're correct about the past. We totally agree with them on the future. It's just the problem is today, okay? So I had our designers recreate that slide in our own design. So past, present, future, and then I'm going to explain what I mean. The future is still being built on past technology, okay? This is true for everything. This is true for everything. I'll give you an explanation here. What you see on the upper left-hand corner, if that's a bank, okay? That's a larger bank in the middle and then you get to fintech. Now you got bigger fintech, okay? If you turn big fintech to the side and you start to look at how big fintechs work, they actually connect back through to banks, all right? That's what I mean, okay? Still being built on the past. That's actually what it looks like, right? So the current technology, like if you look at any fintech that's on my screen, I know a lot about this, a lot, because I have a lot of friends still in fintech, a lot of founder friends, a lot of folks I talk to, this is actually what it looks like. And we think we can go help our customers thrive in this environment. Quick, just refresher, we built a digital platform, and we scaled it to 7.2 million users. We did that in 4 years, it's the fastest, I think, that's been done. Somebody can correct me on that if you find somebody who's done it faster. So from scratch, inside of Jack Henry, this is really important to understand. Yes, Jack Henry bought some great technology from -- when they bought Banno. And there's a lot of cool stuff that we had. We went back to the drawing board to build a platform. And I'm going to explain this. When Jack Henry acquired Banno, this is basically what we have. We have 4 cores and 2 middleware solutions. That was basically it. So we were like, okay, so in order to build a new digital platform, we have to build on top of this. The problem with that is if you look at this today and the way the evolution of banking systems evolved, you had the Internet on the left, okay, so that's mobile, online, on the left. And then you have this -- you just have this branch experience over here on the right, which is still here. What you end up with is a bifurcated experience because features in the teller system are not available in the middleware. You will find this ubiquitously across most systems that you connect to, okay? Now Jack Henry was a bit of an exception because the Jack Henry team had worked really hard. So if you talk to Shanon and Stacey, these guys are heroes of mind because they worked really hard to make sure that they service-enabled this. One of the big stories that hasn't been told enough is that these guys built probably several hundred features, and we built a digital platform from the ground up, inside the company on top of this ecosystem. I'm going to give you an example to plumb your intuition. Balance back to device is a problem. If you want some fun analysis, just go to any large bank and load the app, hopefully, you have an account -- probably -- I'm sure -- pretty much everybody has accounts with a large bank. It doesn't matter, credit card or a deposit account. Deposit is more interesting because they tend to be slower. And just time, the amount of time it takes to load the app and see a transaction before you can see the last transaction you made, in general, for large banks, it can be anywhere from 13 to 50 seconds. If you're a P&C customer like I am, it can be up to 30 to 40 seconds before you can get to a transaction. Why? Because P&C has legacy technology too, everybody does, right? And these systems were never designed to get balance back to device. Well, the advantage we have inside Jack Henry is I can go talk to Stacey and Shanon and say, "Hey, this part's slow, this part's slow. This part's slow, let's fix it." So we've been doing that for 5 years. So when we talk about modernization, we've been modernizing down here. By the way, what you see down here is a core system, as you can see. We were modernizing here for a long time. We really believe that open banking and ease of integration was going to be a big deal, and we would need leverage in the fintech market. So we knew we would need that. And what everybody ends up doing is they end up building this outside of Jack Henry. So all the digital providers build something out like you see on the left, they build it outside. And we were like, let's build it inside, and let's make it just part of this software stack. People always -- I get frustrated by this. It's like, what my joke is like nobody walks around saying online Facebook and mobile Instagram, do they? Nobody says that. That's not a thing, right? That's not a thing. We've invented it in banking. I think mainly because the systems that we use in banking were just all designed before the Internet, and we basically bolted the Internet on top of these systems. So what -- I've been asking the question that we've asked internally is like, okay, what would we do today if a guy like me, before I was acquired by Jack Henry, what would I want from Jack Henry? Well, I'm on the inside and we can figure that out together. So we built an API gateway. We built an identity solution. We built banking as a service on top of the existing core systems and middleware. But we did more than that. We modernized our middleware. So the middleware solutions that we run today, a very large percentage of them already run in the cloud, okay? We had to when we had to scale those things. You'll see these little blue blocks floating from the core system kind of up the stack. That's the technology modernization path. Make sense? All right. They come moving up into the system. Now there's a lot to try to get through on this slide. But I want to give you some examples here. First of all, having an API gateway that's built properly, these are -- now we're into some technical terms, okay, you can ask me about over wine. OAuth 2, OpenID Connect, almost nobody in banking has this. I don't know why. Google thought it was a good idea. Microsoft thought it was a good idea. LinkedIn thought it was a good idea, Twitter thought it was a good idea, and everybody in banking decided it wasn't, I don't know why. But we know how to do auth on the Internet. So we said, okay, we'll be an OAuth 2 provider. Why does that matter? Well, during PPP, in our digital platform, we had a bank that was able to integrate Salesforce in like 2 hours, with a feature they had built for their customers and they integrated in less than 2 hours. The way to think of these technology pieces that we have built here and modernized already is that they make integration easier for our customers and for fintech. That API gateway and the advent of credential stuffing -- how many of you all know we're in a serious credentially stuffed world, okay? We stopped -- that API gateway today stops 1,800 fraudulent logins per second, okay? So when we say we're already -- we already have a lot of cloud expertise, that entire stack runs in the cloud. This blue stack that you see that we built runs across the Kubernetes cluster that's about 3,700 containers. So one of the largest Kubernetes clusters in the Azure today in financial services, okay? So we have a lot of experience scaling, okay? We understand how this stuff works. A couple of other things. We said, in a faster payments world -- how many of you all know we got faster payments, right? In a faster payments world, what do you have if you have faster payments? Fast fraud, right? And we get to see that. We're the only company that's getting near real-time data out of that stack and out, and we make it available to internal products at the same time that we make it available to fintech integrators. We are the first provider to get real-time data, to my knowledge. If you all really smart people find other people that have done this sooner, like let me know. Happy to be second. But right now, to my knowledge, we are the first to get real-time data out to a fraud provider who can analyze that data in near real-time. And then because we have an API gateway and banking as a service and an identity platform, they can reach in, if they want to, and stop the user, okay? If that user is somewhere they shouldn't be with access to a completely compromised device, which we -- remember, I told you, 1,800 per second. We can now allow fraud providers to stop this. It's not just internal Jack Henry products, okay? It's external products. Now this is an important thing, I think, for investors to understand. As we build these services, these are also then -- these are shared services. And modern IT speak, shared services are what? Leverage, really important. So now as our fraud teams that Greg was talking about start building out new fraud products, guess what? We have what? Near real-time data coming off our system. Make sense? All right. But because of -- this is one of the big reasons I love being at Jack Henry. They are so serious about being open and allowing fintech to connect. This is what gives and provides leverage even in situations where we're competing, all right? A couple of other things here. We already have 50 active fintech projects on that API gateway. More than 100 single sign-ons that are integrated there. That layer also easily integrates with Okta and Auth0. Again, these are technical things. Okay? And things like Salesforce and anything that supports OAuth 2. Okay. Sorry, jeez, wrong button. Okay, Plaid and Autobooks. This is really important. Autobooks integrates with our payments as a service. This is a big deal. So Autobooks provides 1 key feature. You saw in that disruption slide that we -- our banks and credit unions are competing against PayPal, Square, right? PayPal, Square, both and other products offer a really simple feature that's not offered in common online banking solutions, which is called, hey, I need you to pay me some money, so I'm going to send some -- a request for money. It's a request for payment. Or send invoice, get paid, that's the other term people use. And we said, okay, we need that in our products. Autobooks does a really good job of doing that. Autobooks processes all their payments through Jack Henry, okay? We were able to offer send invoice, get paid, hey, I need money -- I call it the hey-I-need-money feature -- hey, I need money. And that can be now offered to all of our digital customers. Meanwhile, we make money on the payment side. Autobooks makes money on the payment side, and it's a win-win-win. We really believe that building software this way gets a win-win-win. Our customers, fintech, Jack Henry wins, and then really, the consumer wins, right, in a big, big way because they have optionality with their local community financial institution, which we think is, net-net, better for them. Okay. Get the right button here. We started moving this real-time data extraction down the stack. There's a project underway today for both of our major cores to get data off the core systems in real time. That's happening today. That work is underway, not completed yet, okay? As that happens, it's a really important building block as we start to modernize. Now you see, oh, things just got a little brighter. Notice the core system, things are still peeling off there. We're going to get into that in a second. I'm going to point your attention up to that blue circle up there. What is that? We have our first customer, first financial institution that says, you know what, I've got this use case. I don't need the Banno apps, but I need this platform that you built Banno on top of. Greg likes to say, we drank our own champagne. I say we ate our own dog food, okay? The way that you can all go see this today is jackhenry.dev. This is on the public Internet. Our goal is to be as good as Stripe for public APIs. We want to be as good as they are. And we're getting there. The other thing we realized is that to solve the user experience, we have to open up our design system, right? Because we can't have a UI that looks like X and a UI that looks like B and they don't work well together. Make sense? So the Autobooks integration that they did looks and feels like a Banno UI. Why? Because we opened up our design system. If you go to jackhenry.design, if you know what design systems are, Google has one, Microsoft has one like all the big brands have one. We now have our own. All new products get built in that design system. That was what Greg was referring to. Make sense? We're opening that up so that fintech can use it. And then jackhenry.dev is where all the APIs are. It's where all the payments APIs are now. So you're going to see this is where the full realization of this platform starts to become real. The other thing you'll notice when you go to jackhenry.dev, this is brand new. We now have developer sign up and they can start working like this. There was a question about developer vetting and fintech vetting. We offer due diligence for -- we call it VIP program. It's a great program and our institutions can use it to vet a fintech that wants to build on top of our platform. We still need to do that, but we need to make it easy to solve the chicken-and-egg problem because I -- remember I was Banno. When I was little Banno, it was like 11 of us and I'm writing tons of code. I'd go talk to Jack Henry bank, they'd be like, "Well, have you been through the VIP program?" I like go to Jack Henry, "Can I get in the VIP program?" And "Well, where's your product?" I'm like, "I don't have a product." "Go back to the bank." You see, right? That's the chicken-and-egg problem. So what we want to do is let developers get started, so we have a complete sandbox environment that we have built for developers, okay? They get started. That way, they can build a product for our customers, and then they can come join the VIP program and they go, "We have a product," right? So we solve it. Okay. There's a note in -- this is funny. I think some of the notes that you read from me weren't intended to be there. I think that's pretty obvious. If you're smart, you're going to read that. But there was a note about NYDIG. That announcement, I think, is landing this afternoon. So you just got a little sneak preview of it. So it's not just these 2 providers. By the way, Plaid, so Plaid is now using our login. It's our login experience. It's the same one. If you add a Jack Henry bank on Banno, then you use that login, you would have the same login experience if you go to Plaid. And Plaid is not keeping those credentials anymore like Dave was explaining. So we've created a better world, but there's one more because there was a question about visibility of fintech in this ecosystem. One of the most important things about what we're doing is we're exposing the full visibility for all these apps that customers actually use. Does that make sense to everybody? Because we're API-integrated. Okay. Really close. Now you noticed this starts to flatten, notice wires showing up in this layer. We're launching wires here. It's available in beta today. We have our first couple of customers, and we're going live in July with international. So you can see that wires now is going to utilize our API gateway. It's going to utilize our identity platform, make sense? It's going to utilize all the stuff that we built for digital. Remember, nobody says online Facebook and mobile Instagram, right? This is just technology. Notice this platform, we're also connecting it to non-Jack Henry core systems, and I'll let you use your imagination. Notice wires is there and it could work with noncore systems, it's like we're building a core-agnostic core system. It's interesting, isn't it? All right. This is what it looks like over time. Now we're into the future, and this is what it starts to look like. Notice that core system is still there, right? Other core systems are involved. Remember what I said about interim settlement, I wanted to explain how we get there. We will build a store and forward system in this layer, and we will be able to interim-settle, okay? That will be in the future. But -- and then these core systems, notice we just keep lifting up this technology, bringing it into this layer and utilizing everything that I just talked to you about. And we think we can actually get here for the consumer experience. This is really important. Jack Henry has enough scale to go do the deals to be able to make this happen. It's not just a technology play, it's the deals that we're able to go get done, get -- yes, to accomplish, okay? We have enough scale because we have this large digital platform, people want to be on it, people of all sizes. And we get there and we get here. So that's how we get to the slide that Dave talked about and the question that everybody asks is, well, when. So I gave you a little bit of a preview. There's only a couple of folks that have seen this. I'm going to walk through this superfast, then I'll be done. So on the left is where we are today. One year from now is where we are on the right, okay, April 2023. We have developer access and wires domestic beta. Those things are already done. Entitlements, I could talk about entitlements for an hour but no legacy banking system has entitlements, okay? No one can entitle a commercial enterprise properly across 100 employees for financial access to a banking system. It wasn't built into the core systems. We're going to build it as an add-on to our existing core systems. Video chat, you might say, well, why did you include video chat? You got to remember, our back office, our what we call Banno People, which is our Banno back office, becomes the back office for this new platform. We've already integrated it with the existing banking back-office systems. So that's already done, right? Wires international. I have Banno commercial because we're a service enabling more of the core for commercial. Does that make sense? So more stuff is moving up off the core system. We're enabling that. That makes our commercial platform more powerful, same for treasury. AMS, identity, those 2 things go hand-in-hand. Native transaction enrichment, compliance as code, native outbound access, Banno commercial for our credit unions and then product definition. A bunch more stuff coming, a bunch more stuff in flight. Questions? I've learned your names, David, right?

David Togut, Evercore ISI. You briefly mentioned international in your remarks. And Jack Henry, as far as I know, doesn't really have any international revenue, or not material, sorry. So are you talking about becoming an open-banking provider in Europe? What's the long-term plan with international?

No, this is international wires. International wires specifically, yes. Yes, so the answer is the same as Dave's answer. We have no plans or intent to move beyond the U.S. But our customers -- we have a lot of customers that really need international wire capabilities, and that's what we're releasing the summer.

Got it. And then one common theme of your presentation, Greg's and Dave's presentation was increased focus on the consumer and the consumer experience. What are the implications from a tech development standpoint? What do you need to become more consumer-centric as a technology organization and as a company? Because the company's really built on bank-centricity and you're talking about more of a consumer-centric model.

Very smart question. I think we're going to a transformation internally quite extensively across all groups and working really hard to make sure we understand the customer. What banks CEOs tell us every day, bank and credit union CEOs, they say, Ben, you're now the front door of our bank. You're now the front door of our credit union. And so we have had to internally work really hard about how we think about that. In terms of what we do, it was inherent in my presentation, but I'll just call out a few things, like bounce back to device, making sure we enable the customer to service the -- so one of the ways we think of it, I'll just maybe use this. If you wake up in the morning and you have fraud on your account, and you see three transactions you don't think you made and you see that on your device, do you want to talk to a chat bot or a phone line or an automated phone system or AI of any kind? No. We call that a moment of need. So there's a place where -- there's a place where self-service breaks. We want to be absolute world-class at self-service. And we think we've proven that we are at least best-in-class. We're in there. We're in the front-running horses for self-service in terms of our digital platform. But where we want to be the absolute best, and we believe we are, is where self-service breaks, makes sense? Now you got a real need. Now that's where the community financial institution can really help you. So then how do we bring technology to bear there? And that can be -- and open platforms really matter because now you can enable, for example, workflow that sees a workflow could see the fact that you just woke up, and then you type in, hey, I think I have fraud in my account, you have the transactions because one of the cool things about Banno Conversations, you can attach stuff. You don't have to talk -- you don't have to type. You say these 3 transactions, you could just say fraud. Banno Conversations is the least interesting thing about it is chat. So you can literally attach any noun that you see. If you see a bad ACH payment, you can attach that. You see a bad bill pay, where you have a question about why an RDC didn't go through yet, you can just attach it and say, what happened? Well, we've enabled Banno Conversations with workflow. We've done this already with the stack that I explained to you. That triggers an event. Now the bank can automate a bunch of things because now they can say, notify the fraud department, right, notify front line support and then they can be working on your case by the time you actually get through the phone system, right, or you go to a branch or however you engage, makes sense? We think we can embed unbelievable consumer experiences in the future with what I just showed you. But it takes all those pieces. We had to build Banno Conversations first. We had to build like all this infrastructure. It's a very long answer to your question, but...

Let me add one thing to that. So Ben, I agree with everything Ben said, and it was totally accurate as far as I'm concerned. I don't want anybody to walk out of this room thinking that we have any intention of going direct to consumer with anything we're doing. Our strategy is always work through the financial institution. We are not a direct-to-consumer company, nothing that Ben outlined here is with the intent that we would go direct to consumer. There's no change in strategy in that regard.

That's really important. We realize -- and we've known this for a long time, but we really represent their brand. We really are now front and center in partnership with their brand. We're not even Intel Inside, like nobody knows who we are. But we have to be perfect. We have to enable an amazing brand experience for those customers is the way I would say it.

Ben, I don't understand most of this, so I apologize. But I'm wondering, you've talked a lot about the technology lead you have a lot of your competitors. So when you go into a bank and you're pitching Banno, what are some of the reasons that people pick something other than Banno? What reasons do banks give when they see your technology road map to say, "Hey, I'd rather pick a competitor?"

That's a really easy question as we're just finishing our commercial platform. We built a retail platform faster than anybody did, and we grew it to 7.2 million users faster than anybody, I think, has grown it, and we've been systematically building commercial and treasury. Now it's taken us a little bit longer because of this strategy. We want to make sure we build it right for the future. We don't want to take a bunch of shortcuts. Does that make sense? We don't want to build it outside of the Jack Henry ecosystem. We wanted to be coherent. So it's taking us a little bit longer. But the #1 reason people don't buy Banno is we don't have the commercial features. So that's why they're so important.

Nik Cremo from Credit Suisse with an open banking question. So how do you see the upcoming release of the CFPB's rule making process on Dodd-Frank 1033 impacting things like product development, innovation and competition when it's in full force just across the industry?

Yes. So before this happened with the CFPB, full disclosure, I've been in conversations with the CFPB about this, like they've reached out to us, and we've had conversations. Before all this developed, what we really thought inside Jack Henry is that we would see some variation of what happened in Europe and around GDPR. We figured that, that would eventually make its way in the United States. The United States is so peculiar. We do things our own way. We knew that would be probably a more organic process. So a big part of why we built this open API gateway and all that stuff is to be thinking ahead of what would happen when the regulatory body has gotten serious about consumer access. And so we think we are ready for that. I would argue that we're way far ahead because of the technology that we've built. If you don't have an API Gateway, you can't do a deal with Plaid and get it integrated. The other problem I didn't mention, there's a lot of systems, I'm not trying to -- I would never say exactly, but a lot of systems are single tenant. We have a multi-tenant banking-as-a-service platform. That's really important. So we can do all of this in 1 place. So we get Plaid integrated once. It's a really important thing. But we feel ready. It's always hard to know how the regulation is going to pan out and what they're going to require, but we certainly feel like we're really well positioned. Also, data standards because a big part of GDPR is standards. So we're really -- I didn't mention this, but we're really serious about financial data exchange, and we're doing some projects already with Financial Data Exchange making sure we support the existing best known standard we have which is FDX. Good question. Thank you everybody. Appreciate it. Survived PowerPoint.

Good, okay. Thank you, Ben. I said earlier, having Ben use PowerPoint is like asking one of your kids to use a rotary dial phone. It's just like -- it's not what I do. Ben's the draw pictures guy on his iPad normally. So -- but thank you. That was great. So last formal presentation here today. And then, of course, we have Q&A, and we have the demo stations that will be set up. If you want to go see some product demos. I'm going to give you a little bit of an update on the sales environment, the demand environment. I mentioned in my opening comments that we had recently named a new Chief Sales and Marketing Officer, but he wasn't here yet. Well, he is here now. So Brian Otte is back here. Brian is our Chief Sales and Marketing Officer, but I didn't think it was fair to throw him into the shark tank quite yet. So I'm going to do this presentation and give you a review of what we're seeing as far as demand is concerned. So I'll walk through some sales highlights, what have we seen so far this fiscal year, then we'll talk about what's happening in the industry. I'll cite for you some of the details out of the Cornerstone report that I've highlighted, I think, on the February call; then some growth strategies that we're focused on for our customers; some marketing highlights, particularly here recently, we've had a lot of engagement; and then we'll wrap this up with Q&A for anybody who's been on stage. So first off, as far as sales highlights are concerned. Jack Henry Banking, we've signed 22 new core customers so far this year, including 4 de novo customers, de novo banks, meaning start-up institutions. Those de novos are important, and I usually try to highlight them on the earnings calls because, today, when somebody charters a new bank, their plan is not to get to $100 million in 5 years. Their plan is to get to $2 billion in 5 years. I mean they always come in with really well capitalized, really frothy growth plans. And so those are great customers for us to sign as a start-up because they grow quickly and, of course, their contract with Jack Henry then grows. We also have signed 14 on-prem customers that have signed to move to the private cloud. Symitar is the other big bubble, so go over 2 bubbles there, 13 new core customers, all of them were competitive takeaways. So there isn't really anything happening as far as start-up credit unions these days, but 13 new core logos and 22 on-site customers moving to our private cloud environment. Banno, 117 new platforms sold so far year-to-date. And then for ProfitStars, I alluded to this number earlier, we're now at 2.96 products per customer on the ProfitStars side. So that's our noncore customers. We roughly have I guess, 6,000 or so of those customers and 30 new customers. So when you have 8,500 of the 11,000 customers that are in the United States that are already Jack Henry customers in one way, shape or form, you don't tend to add a whole lot of new customers that haven't done anything with you in the past. So to get 30 customers that don't have an existing contract with Jack Henry in some way, shape or form is pretty outstanding. That's the year-to-date number now as far as ProfitStars is concerned. So as we think about sales performance, we have had great success replenishing and building our sales pipeline, despite these record sales achievements. So you all heard me on the earnings call, highlight the fact that our Q2, the December quarter was the all-time record sales quarter in the history of Jack Henry. And then Q3, the quarter we just completed, was the all-time highest third quarter, 40% larger bookings than the same quarter last year. So the sales team has just been knocking it out of the park. And yet the pipeline, as I stand here today, is larger than it was when we were starting Q3. So the sales team is doing a really good job of refilling the pipeline and making sure that we have deals that we can close in the current quarter. We focus on ensuring that all 3 brands exceed their respective quotas. So just as a reminder, we go to market with 3 sales organizations. They're Jack Henry Banking, there's Symitar and there's ProfitStars, all with segments of the market that they're focused on. So all 3 brands are functioning extremely well. We are early in the RFP process in most engagements. We work very closely with the consultant community. They're a challenge to work with. They're out there to do a good job for their customers, but we engage with them very regularly. So we have a high degree of engagement with the consultant community and work collaboratively with them as best we can. On the bottom here, we are focused on closing more than half of de novo banks. And in the past couple of years, well, probably in the past 5 years, I would bet, we have exceeded that goal. So we are generally the winner. I've given all the different players out there when it comes to a de novo bank, more than half the time Jack Henry wins the deal when it's a de novo bank. We have a really, really terrific area of focus there, a really terrific team and a long track record of success in signing those de novo banks. We are focused on averaging at least 13 new core logos per quarter, and that's lumpy, as I say all the time, it comes and goes and comes and goes. It's one per week is the goal. But overall, over the course of the year, 50 to 55 new core logos is what we really focus on as a target. And then increasing our prospect and customer attendance at client conferences. We have learned over the years that when we have customers who engage with us at our big client conference, particularly in the fall, or prospects who come to those conferences, they tend to do more business with Jack Henry prospects. We have a very high win rate when a prospect comes to a client conference because what we do is we've introduced them and then we turn them loose. We don't follow them around. We don't tell them who they could talk to. They just go talk freely to Jack Henry customers, and they walk away saying, okay, this is a company that I want to do business with. So we have a strong track record of success there. We're very focused on ensuring that we continue to engage with our customers at our client conferences. And by the way, I think some of you know, we have a smaller conference, our strategic conference here in this hotel starting tomorrow. So the next 2 days, we have some of our -- just a small group of customers we invite in every year for a highly strategic session. So they'll be here with us over the next couple of days. As far as technology spending, so based on the Cornerstone Advisors, what's going on in banking report, a few key areas of focus, one is improving efficiency. Account holder experience is another area that's a top area of focus for banks and credit unions, and I'll show you some statistics here in just a minute. Our financial institutions, regardless of whether they're a Jack Henry client today or working with somebody else, they know those relationships with the providers is critical to their success because they depend on vendors like us for innovation, digital transformation and new technologies that they can deploy for their customers. And then digital account opening, I think Greg highlighted that fact that, that's a key area of focus for us. And certainly, it is for buyers in our space. So in this most recent study, the numbers look like this, and I highlighted just kind of the roll-up numbers on one of the earnings calls, the February earnings call. But this is how will your institutions tech spending change in the upcoming year as compared to the prior year. And so what you'll see here on the banking side, 83% of the respondents plan to increase their spending 23%, out of the 83%, 23% were more than 10% increase year-over-year. And on the credit union side, it was 86%. We're going to increase their spending and 25% portion of that number was going to increase greater than 10%. So really good buying signs. And I think that's indicative of what we're seeing now as far as sales performance at Jack Henry. These results are why we set an all-time record in December. These results are why we saw such a tremendous uptick in sales bookings for the third fiscal quarter, the March quarter. I mean it's certainly reflected in these numbers that came out of the Cornerstone study. What are they spending their money on as far as the coming year and coming years, improving the customer and member experience as far as service delivery is high on the list, getting more out of their relationship, improving efficiency, all those are major topics for buyers in our space. And of course, Jack Henry technology solutions are designed to deliver efficiency in many areas of solutions that we offer. And so we check the box on that one for many of them. And then hopefully, as they move to digital, we deliver a much better experience for their customers and members as well. So we really play well into the areas of focus for the respondents to the survey. As far as solutions that we are focused on, that we're arming our sales team with to sell to customers going forward. Jack Henry Lending is a key area of focus. So David asked a question earlier about how we stack up against digital commercial lending platforms, Jack Henry today has a terrific win rate. And in fact, we're featuring that here, Vance, yes? Lending, LoanVantage? Yes. So for those of you who stick around, you can see our LoanVantage solution here while you're here, but a terrific response to our solution for online commercial lending quick decision offering as well, but it's origination, decisioning and portfolio management for commercial loans. Of course, you've heard a lot today about our digital platform, Banno and all the great success that we're having there. Jack Henry Payments, Greg highlighted just a little bit, but PayCenter has become a real win for Jack Henry because our customers see the value in having a single hub to connect up to real-time payments and P2P platforms, including when Fed now rolls up. They can buy a single hub and connect all these things into it and then only have to do reconciliation with one platform. Tech modernization down at the bottom there. Of course, you've heard me talk a lot about that today. And then financial crimes and fraud. Greg alluded to this, this is a major initiative that we're putting in the hands of our sales reps. So all of these things are solutions that are in the hands of our sales reps to go talk to customers about today that we believe will deliver certainly success for our customers and success for our company. Over on the right-hand side, just a reminder, $7.2 million on Banno, more than 850 fintechs today integrated into our solutions through our integration platforms. And then Greg highlighted the number down at the bottom there. More than 60% of the FIs today that are running real-time payments in the United States are doing that through Jack Henry's platform. I think the actual number is 67% today. So really having great success there. On the marketing side, particularly as we've rolled out all this information about tech modernization, we really, really changed the messaging and have expanded messaging to customers and prospects. So we've been featured in now close to 40 different articles and podcasts in the past couple of months. Audio podcast and video podcast in addition to a whole bunch of articles. I've told my team that even I'm getting tired of listening to me on these things. So hopefully, you're not getting tired of listening to me. That has increased social media engagement by 26% just since we did this latest rollout. And all these publications and all these podcasts have a reach now of 53 million people that have been exposed to the Jack Henry strategy and the Jack Henry story here just since February. So really great response, great uptake on what Jack Henry is doing, a lot of excitement about the changes that we're making and the path forward that we're laying out for customers in our market space. And so as I look at the sales organization, similar to the company overall, we have a highly engaged sales force. One unique thing here, you hear companies talk all the time about the fact of the great resignation and turnover and trying to find talent and all that kind of stuff. And certainly, we've been impacted some by that same issue that everybody else has been impacted. The sales organization, however, has had almost no impact. Very, very stable organization as far as our sales team is concerned, that's great for continuing with that -- keeping that engine running as far as sales are concerned. We're in an attractive spending environment. I can't predict the future. I'm not exactly sure what's going to happen here as rates go up. But for the moment, and as I continue to talk to customers and prospects in our space, they are planning to spend and they're happy to spend with Jack Henry. We have a very robust sales pipeline. The technology strategy is resonating in our market. And of course, these sales teams have a very long track record of success, and I don't expect that to slow down in any way here going forward. So with that, that's just a brief look at what's happening with the sales organization. I'm happy to answer questions regarding sales or any, let's see. We'll just do sales for now, and then we'll open it up, but we'll get Kevin and Ben and everybody else, and Greg standing up here.

This is Anthony Cyganovich from UBS. With your tech modernization strategy and your ongoing focus on providing your customers the best technology, what are you doing to continue to attract the best engineering talent in this competitive market? And how do you balance that against achieving margin expansion?

Yes. So it's not just all about money. I mean, certainly, compensation is a piece of that puzzle. And compensation for high-tech talent has gone up. I've said to several of you in individual meetings that it was really spring of last year, so about a year ago, where we really saw and felt the impact of what was happening as far as compensation levels. We dealt with that, I think, pretty well last spring and into the summer. So today, that's all moderated, I think, for Jack Henry, and that's all been built in to the financials that you've seen and the guidance that we're giving. And so we're in pretty good shape as far as that's concerned. The nice thing about Jack Henry to a prospective employee, not only a competitive compensation package, a great benefit package, a commitment to continuing to allow remote work. What a lot of those folks are finding now is, okay, some of these companies who really embrace remote work during the pandemic, now they're not embracing it quite so much. And they're kind of not really willing to commit to what Jack Henry is willing to commit to. And the reason we're willing to commit to it is because pre-pandemic, we were almost 30% full-time work from home pre-pandemic. And a lot of those folks were high-tech developers. So we know that it works. We know how to manage in that environment. So when you look at the complete package with benefits, the pay package, the willingness to support work from home and the reputation that we have now for doing all these really innovative things, cool things that high-tech developers want to be working in, all those things are attractive. Still a competitive environment, it's not like we have people lining up at the door saying, let me in. It's a competitive environment, but we're having good success in continuing to attract and retain that talent.

Paul Hogan, Fenimore Asset Management. Two questions. First of all, you mentioned that you had 14 on-premise to private cloud migrations. And is that the usual path that those take? And why does it go to private cloud rather than public cloud?

So normally in a given year, we do around 50, 55 between bank and credit union, around 50 to 55 in a year. So the 14, if I remember correctly, was just for banking. So I had 2 numbers there, banking and credit union. But normally between the two of them in a year, it's 50 to 55. And this year, we'll end up somewhere in that range when we finish through the last quarter. And so the reason that people on the core side are moving to private cloud is because that's where we support our cores today. So the tech modernization is building the public cloud offering but it's -- there are very few bank CEOs and credit union CEOs who say, I want to put everything in the public cloud today. We know they're going to get there in the future but almost never does anybody say, I'm going to put all of my crown jewels in the public cloud because they're still concerned about how do they deal with the regulators. They're not confident yet today that they want to have everything out there in that public cloud environment. So we're committed to supporting our private cloud environment. We're moving them to our private cloud. And over time, as they want to adopt public cloud, we will have that offering available to them.

Okay. And just a point of clarification on the margin expansion that you talked about. How do we think about how much of that flows through from all the initiatives that you're employing to get those margin savings?

So I think we'll have to continue to relay that over time. We've committed so far as far as margin expansion. And by the way, every one of the Jack Henry leaders in this room is highly incented to make sure that we continue to focus on margin expansion over time. But you'll see that -- we'll telegraph that to you. We'll share guidance with you as we start to see all of our budgets to roll out. We start -- we just completed sales budgeting last week. We start financial budgeting as -- well, all the groups are already working on their financial budgets for FY '23, but we will come together in June to consolidate all those budgets and really make sure that we have a concise message that we can convey to you as far as what our expectations are on margin expansion. But I think that, Kevin, the message that he delivered on last week's earnings call is right in that range of what you should expect.

David Togut with Evercore ISI. Dave, a lot of the strategy that you and your colleagues laid out today to sort of decomponentize the offering into 30 modules, that seems to set Jack Henry up potentially to move up market more aggressively. One of your larger competitors, which is up market, had a lot of success 10 years ago initially with that strategy before they started to get the cores of some of these bigger banks. So is that an intentional part of the strategy to use this kind of new approach to move up market more aggressively? And how would you do that along with the treasury management system perhaps is the tip of the spear.

Yes. Well, I don't -- it's a great question. I don't know that I view treasury as the tip of the spear, but it is absolutely part of the strategy. A lot of that part of the discussion started several years ago when we had our existing customers who are highly acquisitive, who were getting into the $20 billion, $30 billion space coming to us saying, okay, we want to make sure that as we grow, we don't want to have to leave Jack Henry. So how are you guys going to ensure that we can continue to grow and you will be there? We want you to be our partner. We want to make sure that as we grow into the $50 billion, $60 billion, $100 billion space, Jack Henry is there. So we launched the regional banking office that Greg talked about a little while ago. That's part of the strategy. This technology strategy is part of it, some of the solutions we've focused on. So Banno has been built industrial strength to handle large volumes and process those successfully. The treasury solution is one of those. The loan origination solution that I alluded to earlier, absolutely one of those supporting much larger banks today. So all of those things together kind of create this story for the larger regional financial institutions to do business with Jack Henry. Couple that with the fact that they can take a bite at the apple at a time with this strategy. So I can start doing wires with Jack Henry. That's wires as part of core, but I could start doing wires with Jack Henry because that's a component of core that you guys are supporting on your public cloud platform, and I can start to work with Jack Henry. Oh, and I'm going to start doing some other piece of the core system with Jack Henry. And so a larger institution can minimize their risk of conversion because they can do it a piece at a time as opposed to a big bank conversion like they're all used to today. And so it gets them to the modern infrastructure, the public cloud infrastructure, but there isn't that high risk of doing the big bang because they can do it piecemeal with us over a period of time. So you put all those things together. Absolutely, that creates a pretty compelling story for a large regional bank.

And just a quick follow-up, can your strategy be extended to offer more of a core for, let's say, a $30 billion, $40 billion, $50 billion bank beyond, let's say, point solutions? Could you actually take over a core?

Oh, absolutely. Yes. So if you think about all those components, bundle them together, you've got the core. You can replace the entire core. So if they want to go through a big bank conversion, absolutely, we can do that. But I think at least what we're hearing so far from the large regionals is they're really intrigued by this idea of being able to minimize risk by doing a piece at a time as opposed to the whole thing. But if they want to do the whole thing, we absolutely can do that. And by the way, another piece of that strategy that Greg alluded to was, historically, Jack Henry hasn't engaged with the Accentures and the Deloittes and the other folks who do the consulting piece in a large regional bank because we just managed everything. We did all that stuff ourselves. Well, now we have relationships with all of them. They're all learning what we're doing. They're learning the platform so that they can be -- because they will be in the equation. If you have a large regional bank, working with Jack Henry, they will be in the equation, they're all coming up to speed now on what this platform is, how it works, how they can provide consulting services as we really start to roll all the pieces out. Okay. So let's -- and then we've kind of explored a number of things here, but this is the point where we say any question for anybody that's been on stage anyway, is open season. So Kevin, Greg, Ben, anybody have -- David has his hand up here.

So I had a question just about fraud in general. I remember, this goes way back now, but when companies were like at risk of really going out of business, like Heartland Payments that breach when it happened, I think Equifax some people felt. But it feels like largely, we're complacent. Like we see a breach now, it's like, oh, that will get figured out. No big deal. How big of a risk is that? And in the next 10 years, are there other companies like you guys that -- and maybe this is just for Ben...

Yes. No, no, keep going. I'm going to ask Greg to stand up because he's way more -- would you stand up and answer this one, Greg?

Yes. Like are we at a risk of -- probably not you, but are there going to be 2 out of 50 fintech type companies that might go bankrupt because something really bad is ready to happen?

Oh, the fintech going bankrupt because they will have been attack with fraud, you were saying? I was thinking you were thinking -- you're talking consumer fraud, you're talking about the fintech enabling a fraud or something like that?

Well, yes, just really anything. Are we at risk -- more risk than we all kind of think of any of the above, right, fraud, like massive fraud happening that put somebody out of business?

Yes. So we -- so the numbers -- the transaction fraud and just the bad guys, so cyber security and fraud, the numbers are staggering these days, and that's probably no shock to anybody. But did you want to chime in here, Ben?

Yes, I can probably -- I can talk -- I can speak to this a little bit just because I'm on the technical front lines of like what we see. The great thing is that we have an ecosystem of large banks in the United States. I talked a lot about community financial institutions, but I just want to give you an example. Credential stuffing is a big vector that we deal with. And any fintech or a company -- we consider ourselves to be a fintech. Anybody that's providing software on the public Internet is susceptible to a credential stuffing attack. Just to use this as an example, and we partnered up with NuDetect, which is a Mastercard company. But again, using all the open platform pieces, and we were able to stop one of the largest credential stuffing attacks in the United States against a single financial institution that was one of our banks.

So what is your opinion on the ability of these smaller providers, though, to David's question, to be able to do that kind of stuff?

We've already seen it. So we've seen some fintechs take it really hard. But what I would say to that is, overall, there's a better ecosystem. So for example, there's a wonderful company that I'm not going to name right now that we're talking to that does -- that's really figured out how to do -- how to solve synthetic fraud. There's just a lot of great new fraud companies. When these new vectors show up, you just get new companies, we think the answer really is making sure you build the right open platform and build everything that you just described here. We have been able to stop a few things for some existing situations we've seen, which I can't go into a lot of detail on. But yes, I mean, the question you're asking is a really good question. There is -- it's a big challenge. But again, we think that everything we're doing will be really helpful.

I got one thing to add there. So the one thing I would add is that I think back to the open strategy, so our ability to allow those fintechs to utilize some of the economies of scale that we get with the solutions that we have with a company like Mastercard, we can buy it at price points that nobody can. So there's a lot of people that want to come to us and utilize the network of what we've created and bolt it on to their solution. And we're okay with that. And so that's how I think that we can help kind of propel some of those fintechs to continue to evolve and also be options for us short term, long term, whatever acquisition opportunities, things along that line.

I just advise a pretty good-sized fintech company on like looking at NuDetect. And NuDetect provides credential stuffing protection for a lot of the large banks, as a reference point. Like so that's one of the advantages we have of like we think there's real leverage across the large bank sort of providers and bringing them in via deals to our smaller institutions so they can compete, yes. So not just them but fintech.

Dominic from Oppenheimer. Just staying with fraud actually, how big is that currently as a revenue opportunity within Jack Henry? This is arguably the largest or vast opportunity that exists in payments at least. And so maybe you could just talk about the opportunity in payments, not in payments, all these different things that we can start to categorize what we're going after?

Yes. So it's not slowing down. So there are a couple of key aspects of fraud. There's the payments fraud piece. And certainly, we are heavily involved in that space. Customers pay us to help them with their fraud detection and mitigation, and all the work we do there. So that is -- you hate to say it, but it's a growing business for anybody who's in this space. But then there's also the other side of fraud, there's identity and all that kind of stuff that isn't specific to a payment. So we have solutions that can help our customers there, anti-money laundering, another aspect of fraud. So that's the new -- the fraud solution that Greg was talking about. So we are currently -- and Greg alluded to it, we're currently developing a new fraud solution that we'll announce publicly later this year, and we'll kind of give all the details. But the whole idea behind that is a public cloud native solution that fits in with our tech modernization strategy, but has all the current bells and whistles in technology to help our customers with all aspects of fraud beyond specifically transactional fraud related to somebody taking over your debit account or something like that. So it's an opportunity, definitely. And then sadly, it's a growing opportunity, but it's an opportunity.

Will Preston from Fenimore Asset Management. Just one question as a generalist and viewing this from a third-party point of view. Is this Jack Henry sort of this modern technology strategy drastically different than what you're seeing with the FIS modern banking platform or the Thought Machine or some of these other startups in the core space?

Yes, drastically different from anybody else in the market with the possible exception of Thought Machine. So Thought Machine, I think, is on a similar path, they have a different -- they don't have the 45-year track record. There are no customers live, any of that kind of stuff. So a similar strategy or thought process, I think, but nobody else in the industry is close to what we're doing with this strategy. And I said that as the CEO, not the CTO, so maybe I should...

The only thing I would add to that is the digital platform that we have, everybody wishes they had, that they built -- because we've built in the last 4 years. So like there hasn't really been one at the scale built by any of -- any of the competitors, whether brand-new -- so everybody wishes they had a digital platform because that's the actual front door. And that's also a really hard piece of the puzzle. It's also why we're just blurring those lines. Does that make sense? So that's the advantage we have.

That's a great phrase. You've heard Ben say that a couple of times. We have a lot of customers thinking that way now. This is the front door to my institution. It is not the branch anymore. It's not the main bank. This is the front door. This is where I give the impression of who I am and how my financial institution operates. And so us having this cutting-edge leading digital platform is really, really helpful to the overall strategy for Jack Henry and certainly for our customers as well. So any other questions of any of us about anything from anybody? Look at that. Okay. I see no hands. So at 4:30, in 15 minutes, we have the tech showcase. And that's -- it's just right out here and okay, right around the corner. Okay. So people will direct you where to go. So if you want to stay and see some demos and have a glass of wine with Ben as he kept saying on stage here or you just visit with us, we'll be here. Before we all adjourn, I do want to make sure that you all recognize that chances are, I said on the last earnings call, we're still looking for a CFO. We're not there yet, but we're getting close. So chances are, this is Kevin's last Investor Day with Jack Henry. So I do want to acknowledge Kevin and thank Kevin for many years of service to this company. He's hosted a whole bunch of these today. He would normally be the guy on stage, but a little bit of a challenge to get around with that knee. But thank you, Kevin, for everything you've done for all of us in this room and certainly for the investors at Jack Henry. This has been a great run. And Kevin has no departure date yet. He's agreed to just kind of work with me until we figure this out, but pretty sure he won't be at this meeting next year. So thank you, Kevin, and thank you all for being here. We appreciate your time.