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

Well, thank you all very much for coming back. My name is Dan Perlin. I head up the fintech practice here at RBC. And I am delighted to have David Foss with us, who is the CEO of Jack Henry. Super timely time to be talking about technology within the banking sector given all the -- we call it a lot of different things. But at a minimum, a little disruption that took place.

Do not use the word crisis.

I'm not going to go crisis. I've got another way to say it, and ask what you think. It might work, it may not. We'll get to that in a second.

But what I often do when we have you is if you could just start kind of in a one-liner talking about the demand environment that you're seeing in core, in payments and then your complementary services, just to level set where we're heading.

Yes. So I think it's counterintuitive to a lot of people as far as what we're seeing on the sales side right now at Jack Henry, and this may be unique to Jack Henry. I don't run any other companies. I can't speak for anybody else. But I know a lot of people have come in to meet with me and point it out that other companies are saying they are seeing elongated sales cycles or slowing in sales or whatever. We're absolutely not seeing that at Jack Henry. Right now, regardless of solutions we offer, whether it's core or the other payments or complementary solutions that we offer, we are not seeing a slowdown of any kind when it comes to sales. In fact, in February, I pointed out on the call in February that we, at that point, had a larger pipeline than we ever had in the history of the company, and I was feeling very good about that in February. Well, we had a terrific fiscal Q3. So we're on a fiscal June 30 year-end. So our Q3 was the March quarter. Had a great sales quarter in Q3. I end up on the May call reporting that not only had we refilled the pipeline after that terrific sales quarter, but our pipeline was now much larger than it was even in February. And so we've come into June with a much larger pipeline than we've ever had in the history of the company, and that's really across the board. So it's not focused on any particular segment. People have asked me if we have more core activity going on today than traditionally. I would say, yes, but it's not 60% more or something like that, just a little bit more. We certainly have more activity in our complementary segment, and that's all those solutions that we offer that are not core and are not payments. It's the grab bag of all the other things that we provide. So a lot of activity in that space. And then our payments offerings continue to be really a good performance for us and strong offerings. And so I don't know if it's -- like I say, I don't know if it's unique to Jack Henry. I'm starting to feel like it is because I keep hearing these people talking about other companies saying their sales are slowing, and that is just not what we're experiencing.

Yes. No, I think you stand out. I mean, we obviously cover several others, and then we obviously pay attention to a lot of ones that we don't. But there seems to be a distinction between what you're seeing in your business and maybe where others are playing. All right. So we're going to try and call it liquidity challenges or deposit run, what do you think?

Liquidity challenges or deposit run?

Yes, what do you think? Instead of a crisis, would that -- would those work?

You can use either one of those.

All right, all right. So we're good. And I got that one past you. I'm thinking about that all day. So in that context, maybe talk about the health of what you're seeing. You're very involved in terms of the CEO of these companies. You've got all these surveys you guys do. So tell us what's really happening out there.

Yes. So it's been interesting, obviously, since Silicon Valley Bank happened March 11 or 10, or whatever that was. At that time, during that week, none of us knew what was happening long term. We certainly recognized that it was a run on the bank. It was frustrating at the time because there was this real confluence between the idea of capitalization and liquidity. A lot of people confused about those 2 concepts. And of course, they're 2 totally different concepts. And so for the 2 weeks or so after that happened, there was a lot of angst, a lot of concern that anybody who wasn't one of the big 8 banks in the country, they're all going to go away, and there was no reason for these banks. And of course, that's the market that we serve. But that certainly has not proven out. So since Silicon Valley, really, almost no impact to -- when you look at the kind of the grand scheme of things, almost no impact to the banks in our space and really no impact to the credit unions. We're the largest provider of technology to large credit unions in the country. Really, no impact at all to the credit unions. And when you look at our banks on balance, over time now, really, no impact. There was a lot of concern about deposits moving out, and everybody is moving their deposits to the big banks. We do not see that on our base. There was no major outflow of deposits or anything like that. There's been a lot of interesting questions about people spreading their deposits. The assumption seems to be that the average American has more than $250,000 in deposit on their bank, and they've got to spread it out. Of course, the average American does not have more than $250,000, so there was not some great distribution of deposits because of that. Now I will say that a lot of commercial businesses, so larger commercial businesses, did have a concentration of deposits with a single institution. And so we saw some growth on the commercial side of deposits, but that isn't -- that doesn't fuel like a huge influx of new [indiscernible]. And so when we look at our banks today, now 2 months or so after Silicon Valley, they're continuing to perform well and really not impacted in any significant way by what happened with Silicon Valley. And so it certainly was not a nonevent. It was certainly an event. But when you look at the overall health of our institutions, no impact that's really measurable.

Yes. It's amazing to think because, at that moment time, it felt like it was just going to really be a ripple.

Yes. The world was incomprehensible.

I mean, I had another one of those ending moments.

And the frustration about that was so much that was fueled by social media, right? So you had so many people speculating about things, and social media just took off and it was unfortunate. A lot of bankers running really good quality financial institutions who were fielding phone calls from customers who were watching the news and wringing their hands saying, "Oh my gosh, is the world going to come to an end?" And of course, they were able to allay those fears pretty easily.

Yes. Well, you bring up a good point, which is technology in this regard was very much responsible for the speed with which money can be moved in and out of a financial institution.

That's true.

Social media feeding this idea with technology that is enabling the movement of that. So what do you think happens in terms of technology and things? And I'll just give you the example. Recently, the CFPB, right, put out this kind of advisory thing to consumers that said these very popular cash app, Venmo, those kind of things, maybe are not FDIC insured. Do you see big changes that could be happening on this?

Consumer behavior is what it is. Whether or not people are paying attention to what the CFPB says or not, I mean, it depends on the individual. I don't see any major changes in consumer behavior happening as a result of any of that. They're still -- it's all about convenience for the average consumer, and so they're still using those applications. Our opportunity is to provide solutions to our banks and credit unions that essentially compete with those types of things. So for example, we did the Payrailz acquisition in September. So Payrailz has a P2P payment functionality, account-to-account functionality and bill pay functionality. And the nice thing about that platform, as far as we were concerned, was it's differentiated from anybody else out there because both the receiver and the sender don't have to be in network, meaning if your bank is a Payrailz customer and my bank is not, you can still send me money. Whereas with things like Zelle, both banks have to be in network. They both have to be on the system. And so we're trying to build out those offerings to make sure that our bankers have something that's readily available to compete with things like Venmo, but consumer behavior is a tough thing to change. And...

I agree. Venmo is cool, and everybody don't. It's pretty cool.

Yes. I would -- I have to send my son money through it all the time.

I wanted to go back to your point about your sales bookings and just the strength of that. I mean, the magnitude is -- I think it was your second quarter, you had a record. This post quarter, you were almost at a record, but it was a record for that quarter. It's not the end market necessarily, so it's something you guys are doing. So what are some of the things that you've done or incentivize salespeople, pivot in certain products? Can you just talk about that a little?

Yes, it's not incenting salespeople differently, so that's not what's driving this. And what Dan is alluding to is the December quarter for us, our Q2, was an all-time record sales quarter for the company. And then as I just referenced, Q3 was a very strong sales quarter. It was a record Q3. So the best Q3 we've ever had. It wasn't a record sales quarter, but the best Q3 we've ever had. And as I mentioned, the pipeline would give you some confidence that Q4 is looking pretty good. So it's not -- we haven't changed the incentive plan to try and drive salespeople to do something differently. I think there are a few things, though, that are driving this. Number one, we have been taking share on the core side of the industry for a long time now, and you know this. So we signed 50 to 55 new logos a year generally on the core side of our business. That's important because when somebody buys a core system from us, they generally buy probably 40 other solutions at the same time from Jack Henry. So you're not just selling the core system, you're selling them a whole bunch of other products that wrap around the core. So continuing to be so successful in that space is important for us and is certainly one of the key drivers of the success that we're having today. And by the way, we're outperforming the rest of the market by a mile. I mean we -- that 50 to 55 new logos a year, well ahead of anybody else in the space. So the second piece is we have rolled out several new technology solutions in the past couple, 3 years that are getting a lot of traction right now. We're a technology company, so we create new solutions all the time. We always have new things on the drawing board. There are some technology companies out there who really depend on acquisition to fuel new ideas. We certainly do acquisitions opportunistically, but we are -- we develop a lot of new things additionally. And so we rolled out several of those. They're all SaaS offerings. They're public cloud native, latest technology. So examples would be the treasury management solution we've rolled out a few years ago, getting a lot of the traction there. Our online commercial lending, digital commercial lending solution, getting great traction there. Our Banno Digital Banking solution, which I hope we'll come back to in our conversation.

We'll get to that. Don't jump in.

Okay. Banno Digital Banking gets a lot of attention, and that's been in market for about 6 years. The new twist with Banno is that we're just now bringing to market Banno Business. So Banno has been a consumer offering. Now Banno Business comes to market next quarter. So we've been doing beta testing with a wide group of customers, and many of them are signing contracts in anticipation of Banno Business being released next quarter. We have a brand-new financial fraud solution that's ground-up, brand-new technology. To the best of my knowledge, nobody has written anything like this in at least 15 years, a full financial fraud solution that does BSA, so Bank Secrecy Act, and AML, anti-money laundering, brand-new cloud-native technology. So we're -- we've been in beta on that, and that rolls out next quarter as well. So it's a combination of winning share in the core base, all these new technologies that we have. The existing technology that we have, things that aren't brand-new, that have this great reputation continue to drive new sales. And then I think there's this general churn that's happening in our space, and it's no secret that our larger competitors have had some challenges. And so I think there's a flight to quality, with Jack Henry being a really solid provider, best reputation for customer service in the industry, reputation for being a great partner. There's this real move among banks and credit unions to talk to Jack Henry about becoming their primary technology provider.

Yes. Let me test this theory on you. So you guys are definitely winning a lot more cores than everyone else, and that's been pretty consistent, but it feels like it's even accelerated. But the question I have is -- and it's hard for me to prove this, but I feel like during the actual financial crisis, right, during COVID, so to speak, when the banks really had to make a quick pivot, they realized that some of their core service providers didn't provide a lot of service as quickly as was necessary. Do you feel like you were able to take advantage of that moment in time, and that's providing you some of these incremental share gains today?

I think the reputation that we continue to maintain during that period has helped. One of the things -- I would really hesitate to say, well, somebody made a core decision based on that because the core decision, I say it all the time, if you're the CEO of a bank or credit union, the hardest decision you will ever make when it comes to technology is to trade out your core system. Why? Because trading out your core is heart and lung surgery at the same time for your institution. I mean, it is incredibly disruptive. It's the entire back office is changing, and that impacts everything front office, and it impacts every one of your customers. So every employee of the bank or credit union is impacted, and every customer is impacted when you make a change like that. So it's a really big deal. The pain level has to be really high for you to say, "Oh, I think I'm going to go through all that." The other thing that banks and credit union CEOs tell me all the time is when they look at a core conversion, they normally think in terms of putting every other project they have on hold for probably 1 year to 1.5 years. So any other strategic initiative they have, they got to put on hold because they got to focus on this, because they're trying to learn all this new technology and run the bank or credit union at the same time, right? Everybody has a day job, and yet they're trying to learn all this new stuff. So with that backdrop, the fact that it's such a big decision and a disruptive decision, what I like to say that, because of what we did during pandemic, people just immediately said, "Hey, we're going to go to Jack Henry," I'd love to say that. But it's a much bigger kind of harder discussion that they go through than something like that. I will say for some of the complementary solutions that we offer that are noncore, they're an easier decision. So we're going to change bill pay or we're going to change out our loan deposit capture. We're going to change out our asset liability management. Those types of decisions are much less impactful. They're easier for the CEO to make, and having the reputation that we have definitely helps us when it comes to those types of decisions.

Yes. So let's talk about visibility that your model has as a result of these core wins, which I think sometimes gets lost in the discussion given all the noise around what's going on in the end market. So your revenue build over the next 12 months, when you think about your implementation cycles and what you see, I mean, you're winning deals today, but those deals are going into, what, next year's numbers and maybe even a year further. So if you could just talk to what you see today in terms of visibility and then how that rolls forward.

Yes. It's a great point. And it's one of the things I love about the model that we've built is that we do have a lot of visibility into what's coming. So we'll talk about the core side of the business for a moment. I just got done describing how difficult it is for somebody to decide to change their core. Well, that -- a big part of that is because once they sign a contract for a core with Jack Henry or anybody, but we'll use Jack Henry as the example here, you sign the contract, you're probably not going to go through the actual conversion for at least 12 months. Why is it that long? It's not that Jack Henry is such a backlog or that we're slow or anything like that. It's because every employee at the institution has to go through training. Everybody is going to learn how to do their job differently because of this change in technology. And as I just mentioned, they all have day jobs. They're all trying to continue to run the bank or credit union, while they're going through this massive project. And so normally, when we sign a deal, we can see the revenue will start in about 12 months. Sometimes, it's 9 months. But normally, it's more like 12 months. So we have a lot of visibility into what that revenue stream is going to be 9 to 18 months out from today on the core side. When they sign other deals with us -- and by the way, the other thing I'll mention, a core contract averages about 7 years. So it's a SaaS agreement. So you sign the contract today. We put you in production a year from today. That contract is going to run now for 7 years on average, okay? So on payment solutions that we offer, so you sign a contract for payments offering today. Chances are we'll have you installed and starting to run whatever that is within, we'll say, 60 to 90 days. Not nearly as impactful. Not nearly as big a deal. But chances are there is some conversion involved because if you're doing -- if you're signing with Jack Henry for bill pay, for example, you probably have a bill pay solution that you've been running. And so we got to convert that over. People have to learn, and there has to be communication out to the bank or credit union to customers to tell them a change is coming, and here's what's going to happen. So -- but probably 90 days-ish, you'll start to see revenue. So again, we have a lot of visibility there. And then if you look at all the complementary solutions that we offer, and there are 250 of them or so, it's a wide variety of complementary solutions, those solutions, often times, you'll start to see revenues -- revenue coming in within 45 to 60 days, but then there are some of them that are longer that maybe 6 months before revenue starts to flow. But in every one of those instances, we're selling SaaS offerings. So our impact in the quarter when they sign is essentially nothing. Our impact when we get them installed, that's when the recurring revenue engine starts, and it will run for years. Payments contracts generally average 3 years to 5 years. Complementary solution contracts generally last 5 years. So again, once you put them in place, you start the clock. Those contracts are going to run long term, and customers are locked into a long-term payment. And so because of the way the model is built and because we have so -- such a small dependence on licensed software anymore and maintenance revenue, we have a very predictable model with this long-term view of how revenue is going to flow and when it's going to work into the P&L.

Yes. That's amazing visibility. I think it's underappreciated. I want to move to this concept of modularity and tech modernization. You have been at the forefront of this. You've kind of pushed this agenda in a much bigger way than, I think, a lot of others had within the industry. Why is it so important to do that today certainly versus the past? And then just remind us why unbundling a core is a good thing for you guys economically. And it seems intuitively like it's been -- it might be right for the end market, but it seems bad for you guys.

Yes. So a lot of things we do are counterintuitive. So we've been -- for example, for a year -- many years, we've been known as the most open provider in our space, meaning fintechs can connect into our platforms. We try to make that easy. We try to make it inexpensive. And a lot of people will say to me once in a while, "Why don't you make that harder, so they have to buy your stack? Why don't you make it really expensive?" Well, we could do that, but that's not in keeping with the way we manage relationships with our customers. We view our job as making our customers successful. Our job is to make our customers successful and have a great partnership with them. That's what's led to these -- all these years of success at Jack Henry. We have a 99.8% retention rate with customers. People don't leave our company when they get here, and I think it's because they view us as a really good partner who's really trying to help them be successful. And so that's what's led to the philosophy around open connectivity. As frustrating as counterintuitive it is to a lot of people, it really works, and it really helps create that relationship. So as we looked at this tech modernization, and essentially what we're doing with tech modernization is replatforming everything we do, all of our technology to be public cloud native, meaning written on the public cloud, using the public cloud technology and tools, we're not doing a lift and shift. We're not taking something we have and making it work on the public cloud. That is not the way to go about this. It is rewriting the technology. And so we started on this path 6 years ago or something like that, trying to figure out, okay, on the core side, if we're going to rewrite this to be public cloud native, what's the best model not only for us, but for our customers, and we settled on this idea of unbundling the core. So today, anybody who sells a core system, they sell it as a thing. You buy the core. It's got loans processing, deposit processing, GL, it's got a number of different functions, wire origination, that kind of stuff. There's a bunch of different things in the core. But with this -- the ability to move to a public cloud, now that it's real and it's something that we can take advantage of, there are so many advantages to us unbundling the core in that we can use the technology more effectively for our customers. So for example, in the public cloud environment, you can do what's called DevOps. In a DevOps environment, you can do rapid release of software. So today in the core world, core providers do 1, maybe 2 new releases of software a year. In a DevOps environment, and we're doing it today with our digital banking offering, you can do 20 releases a month. You can do a release a day if you want to. So having that flexibility to serve our customers and deliver new functionality to them, it just expands tremendously as we get over to the public cloud. So as we kind of thought all that through and what are the implications of that, we settled on this idea of unbundling the core. So what we're doing is we've taken the core, and we've kind f parsed it down to about 30 primary functions that are in a traditional core system, and that's been true for 40 years. Cores have always been this way. Kind of parsed it out into 30 different functions, and we're writing those functions as discrete components on the public cloud, so that people can consume them as they want to consume them. So then you would say, "Well, okay, they're probably only going to consume 3 things from you, whereas before they were getting 30 things from you." That's not the way bankers operate. It's not the way they think. And I've said in many instances, most banks and credit unions will consume a bundle on the public cloud offering that looks an awful lot like the core that they're getting today. So that's just the way banks operate. But what this does, this flexibility does for us, it allows us to expand the TAM for Jack Henry. It allows us to offer modules into customer instances. People who wouldn't have done business with Jack Henry in the past, most likely, now we can attract them because of these discrete components that are best of breed, brand-new technology. They can start to consume some of those things from us because they're discrete components that they can use in different ways in their financial institution. What that we believe will lead to is if you're a $50 billion bank, for example, or an $80 billion bank who traditionally wouldn't have called Jack Henry to be your primary provider, if you can start to consume some of those components and build up a suite of solutions with Jack Henry, you are much more likely to move your business to Jack Henry. I use that example because that is exactly what's happening now. So I started talking about this in February of last year. I went public in February. At the time, it was confusing to everybody. And I was like, "Okay, nobody has done this before. What are you guys doing?" In the intervening period since then now, we've had a bunch of larger financial institutions who are not Jack Henry customers, who have done deep dives on what we're doing, the strategy, the technology, they've compared us to everybody else in the industry, including the startups, the international startups, and they've come back to us and said, "Okay, you guys are way ahead of anybody else as far as the technology vision here and what we, as a larger financial institution, could do with this technology." So we still have to prove this all out. It's all still theory. It's all still being developed. But the early indicators are really positive for us as far as a long-term growth strategy for Jack Henry. The other thing this offers us the opportunity to do is expand the TAM by offering services that were never available in a core system, that in a public cloud environment, there are things that people will want to and need to do that was never even a thought in the core system before. So there are new functions that will roll out, that will just expand the opportunity to take wallet share because nobody has been offering it ever before.

Yes. What's the time line on this? Like when we think about -- as an outsider looking in, I mean, you're clearly operationally ready to do a lot of those kinds of things.

We are, yes. So we have some of the components in production now, and I shared that time line on the -- at our Investor Day. So by the way, anybody who wants to go out and look at the Investor Day presentation, that's on jackhenry.com on the Investors site. So we have some of these components in production now. We'll be continuing to roll out the components because we don't have to wait for a big bang at the end to roll out a core system. These components will roll out over time. So within -- probably within 2, 2.5 years from now, you will see deposit-only banks that are -- there will be enough functionality out there, that if you have a deposit gathering bank, you can run everything you need on this platform. And then within another year or so after that, you'll see full banks in full production doing lending and the whole thing, something like that. So it's still several years to go, but we've proven the model now because we have customers in real production with some of the initial modules, and it's going great.

That's awesome. Well, you wanted to go to Banno early, but I waited. I held you off for a little, so let's get there.

I was just want us to get there at some point.

Yes. But now you get to have Banno, so -- all kidding aside. So Banno Retail, I think people are a little more familiar with. Banno for Business, I think people are less familiar with. You can choose whatever flavor you want to describe, but you're having great success in both.

We are, yes. So Banno, and the reason I love to talk about Banno, and you can tell, I'm very excited about it, and Dan knows this. So we rolled out Banno for Consumer about 3 years ago or something like that and had just a tremendous response to the solution. So one of the things I always say when I'm talking about Banno is, and I'll just do this with this audience here, I don't know who any of you bank with. I don't care who you bank with. But I would bet you a dollar. Whoever you bank with, your experience when you sit down at your PC when you're interacting with your bank is totally different from what you have on your phone. The user experience is different. The functions are different. You can do things on your PC that you can't do on your phone. You get online on your phone, and you're trying to move money or something. You go, "Oh, my gosh, I can't do that on the phone. I got to log on my PC." It happens all over the place. Banno solves that problem. Banno was a single public cloud native offering that is the same experience, regardless of form factors. So if you're on your PC, on your tablet, on your phone, you have the same experience, the same general look and feel. Obviously, an iPhone is different as far as the operating system from a PC, but it's the same general design and the same functionality. And so nobody else in the industry has that today as far as the offering that we had with Banno. So we're getting a ton of attention just because of the design. We've been recognized by far as the fastest application in the industry. So most -- and again, I'll challenge all of you. Think about your mobile banking experience. When you log on your phone, from the time you enter your credentials till the time you can do a transaction, the average mobile banking offering is 7 seconds between when you finish entering your credentials and when you can actually do something with that application. With Banno, we measure in milliseconds, so less than a second. So it's the fastest application in the industry. So we're getting rave reviews with this solution. And one of the things that gets a lot of attention is what's called Banno Conversations. So with Banno Conversations, you -- one of the things we talk about is when do you ever want to interact with somebody at your financial institution? It's in your moment of need. There's something happening that you don't understand. There's a transaction that you're looking at saying, "This isn't my transaction. What is this?" Or you're stuck on something. The last thing you want is a bot to try and deal with something in your moment of need. You want an actual human at that time that you want to deal with. So in Banno Conversations, you've struck that moment of need in the application, which is already -- you're already authenticated, and it's already secure. We know who you are. There's no debate about it. You can have a conversation through the application with somebody at the call center or the bank and say what is this that's going on. And we have this technology in there where you can share a widget of whatever it is you're looking at with whoever is in the call center that you're interacting with. And so it creates this higher level of engagement between the customer and the banker regarding challenging issues. So I've had bankers say to me -- CEOs saying, "This has totally revolutionized the way we serve customers because people aren't coming into the branch anymore, right?" We need to have a way to differentiate our service through the digital presentation layer, and Banno provides that opportunity. The follow-on to what I just described is what's called Banno Business. So Banno Business is the business offering. Similar to the consumer offering, the business offering for digital banking. It's designed for small and medium business customers. So we have a treasury management solution that's designed for large commercial customers. That's a totally different offering. Banno Business is designed for small and medium business, but it's that same type of functionality, but it's for a business account as opposed to a consumer account. And one of the things that's getting a lot of attention there is, let's say that you're the CEO of a medium-sized business, I'm the CFO, and we're debating about -- I'm debating with somebody of the bankers -- somebody at the bank is asking me whether or not I want to authorize a transaction. Well, I can't authorize it without talking to you. We can engage in that conversation with the banker using the application. You may be in New York. I may be at home in Dallas, and I'm talking to my banker in Dallas. We can engage in that conversation through the application. You can approve in the application, communicating with me and the banker, and it's all logged, and we have that entire transaction for reference later on. And so nobody else in the industry is doing anything like this. It's really a special offering, and that's what's getting so much attention for Jack Henry right now.

Yes. It's amazing. You lose sight sometimes about how things are -- actual transactions are being made in the back and who has to approve what, and you kind of -- you think it just all happens in the...

Yes. That's the thing about banking is there's a lot of heavy lifting, a lot of dirty work that needs to happen in banking. And a lot of fintech startups, they come in thinking, "Oh, I got cool technology," and it really looks good, but you actually have to deal with the business of banking with those things. And oftentimes, fintechs forget about that. They're all focused on the user experience, but not thinking about the actual banking that has to take place underneath.

Definitely. So let's spend a second on FedNow. It's going to be increasingly topical mid-July launch, I guess. You guys are operationally ready with some banks now, a pretty reasonable amount it sounds like. So I'm wondering how do you think FedNow will change the banking industry, both in terms of, to your point, consumer-facing applications, the pace of type -- product innovation that could be on the back of this? And then is there a concern or not -- or less concerned for nonbank deposit gatherers?

Yes, there's a lot in that question. We don't have much time here.

Yes. I know but you can go.

We -- so we are -- we see a good opportunity for FedNow if the Fed executes. A lot of bankers feel like they were burned with Zelle. Zelle is not a Fed product, but they're kind of in that same camp about it. This -- we got to wait and see if this is actually going to perform, is the user experience is going to be good, that kind of stuff. But assuming all of that works well and the rollout works well, I think it's going to be interesting to see where this goes because there are definitely use cases that are being built out regarding FedNow. It's real-time payments essentially is what FedNow offers with the Fed. So you think about every bank and credit union, they have a relationship with the Fed. They have a Fed account already. So they already have the ability to move money back and forth into those accounts. They already reconcile those accounts. They manage those accounts. So having a different rail in order to do that, which is real-time payments as opposed to anything else they've ever done with the Fed, intuitively, you would think there would be a good pickup on that, and it would be popular. The question is, what are the use cases going to be? Are people that are not the bank, are they actually going to start to use this platform? One of the interesting things, so I was in Washington, D.C. about a month ago now, met with the Fed presidents and with the FedNow team. I was the only technologies there, by the way, and we started talking about some of those use cases. And the interesting thing to me that I hadn't heard before was the Fed Presidents are really encouraging the idea that the federal agencies use FedNow as the only way to get money from the federal government. So for example, you want your VA payment. You have to accept it through FedNow. You want your Medicare and Medicaid reimbursement. You have to accept it through FedNow. Now that's the direction they're headed. You want an IRS refund. You have to accept it through FedNow. If they really are successful in pushing that, that's going to drive demand, and it's going to create a whole new level of interaction and need. It's just a question of, does that happen, when does it happen. They can't mandate this, but they're really going to try, I think, to push this idea.

So I want my tax return, so I'll go ahead and sign up.

I wish I could get it for you. Just pay.

Good point, good point. Well, look, we're out of time. But Dave, it's always a pleasure. Thank you so much for being here, and it sounds like you've got great momentum. So best of luck to you.

Okay. Thank you.

Thank you.