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

[indiscernible] fintech research team with a focus on fintech software. It's my pleasure to host Jack Henry today. With us, we have Dave Foss, Board Chair and CEO; and Greg Adelson, President and COO but incoming CEO as well. Thank you, both, for joining us.

Yes. You bet. Thank you, Andrew.

Thank you for having us.

So I think, first of all, congrats, you both, on your respective transitions. It was well-orchestrated. So thank you for that.

Maybe just start with Dave. You've been with the company since 1999, became CEO in 2016. Been quite a run obviously. Maybe just talk about top learnings from your tenure at the company. And then what are the most important ways in which the company or end market have changed? Or maybe conversely, what hasn't changed?

Yes. So I think it's an interesting question and I could probably talk for a long time on this topic, but I want to make sure you get the airtime with Greg. So it's been an interesting run for me. Some people know, when I was first approached by the Board of Jack Henry to become the next CEO, my answer was no, I don't want that job. I always viewed myself as an operator. Loved the operations side. Never really viewed myself as a CEO. And so it took a little while to convince me to take on the role. And now the irony for me is I absolutely love this job. I love being the CEO of this company. Part of it is just -- is the role but the biggest part is the company itself. The people at this company who really come to work every day to take care of our customers and take care of each other and ultimately take care of our shareholders. It is ingrained in our culture. It is who we are. It's who the people are. And so for me personally, just really kind of learning the CEO role, understanding it and learning that I could really enjoy being the CEO. But as far as the company and the market overall, so it's been -- so my degree is computer science. I started out as a programmer 4 companies ago. I've been a technologist my entire career. And I've told a lot of people, the past 5 years or so have been the most exciting in my career. The changes in technology today are so interesting, so exciting if you're a technologist, and you can kind of see the future and what the future looks like. And so one of the things that I really wanted to do before I retired was set the company up with a technology strategy that would help us be successful for the next 47 years. We're a 47-year-old fintech, but now what does the next 47 years look like? And so I really spend a lot of time trying to make sure we had a solid strategy for the future that I could leave as I walk out the door and say, this is going to be the thing that helps this company drive top line growth, sustained customer success and continue to build this wonderful company. And I really feel strongly that we've done that now. And so that is something that I feel good about. I didn't know when I took the job that, that was going to be something that I was really going to have to focus on. But now as I walk out the door, that's a key thing that I think is going to help us be successful for the long term. And I would say, the only other thing, so when I took this role, I certainly had an understanding of culture and the importance of culture in the company. But when you're in the chair, the culture and what it -- the strength of our culture and what that can do, getting you through tough times and sustaining relationships with customers as they're going through rocky times, that kind of thing, it's really, really important. And so that was a significant, I think, learning for me along the way as CEO, to understand the importance of culture and understand what that can do for you when you have a really strong corporate culture, which, of course, we do.

Yes, got it. Very helpful. And then maybe over to Greg, maybe talk about how your experience has sort of prepared you for this role. And then you clearly have had a product-first kind of approach. Maybe talk about your priorities coming aboard here.

Yes, sure. So I think a couple of things. So one, I have a similar story. So my -- I actually have an accounting degree and so I kind of started on the accounting side and got into payments and other things. But I've led some privately held companies both at a president level and COO level. So when I came to Jack Henry, fortunately for me, I've had 1 boss at Jack Henry and it was Dave, so I've worked for him for the 13 years that I've been here. So as you kind of look and listen to his leadership style, we have a very similar style, which is why I think we clicked as well as we do on how we operate both from an associate-first mindset, making sure we take care of our customers and taking care of our shareholders, the mantra that we've had for 47 years at this company. So when I took over as COO 4 years ago, 4.5 years ago, I had an opportunity to really kind of take some of the things that we were putting strategies to and operationalize them. And so the good news is, is that I've had a very deep involvement in our strategy, a deep involvement in making sure we execute on our strategy and where we're going in the future. So I'm super excited about having the opportunity to sit in that seat. When Dave approached me a couple of years ago about my interest level, I actually was excited about doing it. So I was very interested. But fortunately for me, I've had a really good mentor. And again, so I think as you -- the question around what might change. Well, really not much, right? So we're kind of in the middle of a strategy that we've undertaken that again, I was part of helping build. We're very early on our tech modernization strategy. We've executed. We've worked on a One Jack Henry mindset that when I took over as COO, to really kind of have us look more like 1 company to our customers, create more career paths for our associates. And it's really starting to pay dividends and further differentiate us from our competition because we are focused on doing that.

Right, yes. As you articulated, multi-generation company, so passing the baton is very important.

We have succession plans that we've built through the years that helped us do that very successfully.

Got it. Maybe to switch gears to the demand environment, and I don't know if Greg or Dave, you want to take this, but maybe just bring us up to speed in terms of what you're seeing regarding end market demand. A very broad question, but just you're seeing any sales cycle hesitation? Doesn't sound like it. Or is it more business as usual?

Yes, no sales cycle hesitation. In fact, so I reported on the most recent earnings call, that our fiscal Q2, which is the December quarter, was the largest December quarter we've ever had in the history of the company, second largest sales quarter in the history of the company. So our largest sales quarter was the Q4 of -- so the June quarter of last year. It was the largest in the history of the company, but second largest in history and the largest Q2 was the December quarter. Absolutely no slowdown in the demand environment. And in fact, we came out of that really huge sales quarter in December with a pipeline that's larger than it's ever been in, in the history of the company. So what that tells you is you drain the pipe with all these record sales, but then they fill the pipe even more than it was before that record sales quarter. So we ended Q2 and entered Q3 with the largest pipeline in the history of the company. So absolutely no slowdown. We rely on a number of different surveys to kind of predict what's happening in our space and the increase in spending and so on. So there's several of them that we -- that I've quoted on earnings calls and so on. The 2024 projection is somewhere between 5% and 10% spending increase in technology in our space, and with one of the surveys really leaning heavily toward 10% but several of the others in the 8-ish, 8% range. So I think that bodes well. And the reason people will ask me, "Well, how can that continue? There was about almost a 10% increase last year. How can that keep happening?" Well, my answer is if you're running a bank or credit union today, almost any problem you have, technology is the solution to that problem, right? If you're trying to raise deposits because you see some loan demand, you don't stuff envelopes with a promotional mailer and mail it out anymore. You use technology, you track people through an online presence, you do something online. If you're trying to introduce efficiency in the back room, you use technology. We have a workflow solution, for example, that helps with back office efficiency. And so almost any problem, almost any direction you turn today, if you were the CEO of a bank or credit union, technology is the answer to the problem you're trying to solve. And of course, we have this broad suite of solutions that can help them solve those problems. So I think just based on reading the tea leaves, I talk to lots of CEOs regularly, everything I feel right now is that demand environment is just going to continue because it has to.

Yes. And it's interesting, you alluded to some of this, but I was sitting in a meeting earlier and someone -- software investor says, looking at the software space and a lot of the companies I cover, investment has pulled back. The bank technology seems to be accelerating, so which is an interesting observation. So maybe the question is, in your view, what's driving sort of elevated demand? Because you're seeing it, some others are also seeing it. Obviously, there's execution factors that you're clearly delivering on, but there's also kind of market factors, demand for deposits, things like that. Maybe talk about that.

So a few things. Well, so first off, let me kind of segment our market just a little bit. So let's talk about core for a moment. We'll say to me, how can Jack Henry continue to post all of these core -- competitive core wins, competitive core takeaways? Well, one of the reasons is you look around the landscape in our industry today, a lot of the core systems out there have gotten really old. They're not receiving investment. So you've got a lot of frustrated banks and credit unions saying we're running a core that's old, and nobody is really -- there's no care and feeding for this core. We need to get somebody who's really going to focus on taking care of us on the core side. That's what's driving a lot of demand that we see in our -- the core aspect of our business. You see, and I say this regularly, for all of you in the audience here, I have no idea who you bank with. I don't care who you bank with. But I would bet you $1 that the experience that you have when you're having an online interaction with your bank or credit union, I bet you $1, the experience you have when you're on your PC is different from the experience you have on your phone. People are frustrated by that all the time. I can do things on my PC I can't do on my phone. It looks different on my PC from the way it looks on my phone or my tablet. Jack Henry, we've solved that problem. Most banks and credit unions are trying to figure out, how do I address this because customers, both commercial businesses and consumers, are frustrated by the fact that the experience is different in those 2 environments. At Jack Henry with Banno, it's a single platform, public cloud native. The user experience is the same, whether you're on your phone, your tablet or your PC, all the functionality is the same. So that's a driver for us, in particular, because people are trying to figure out how do they modernize that experience. Fraud is a driver, right? So every bank and credit union out there is trying to figure out how to deal with fraud. We just rolled out Financial Crimes Defender recently, brand-new, ground-up, public cloud-native fraud solution with artificial intelligence built in to help detect fraud in real time as opposed to after the transaction is already posted. So there are a number of drivers like that. And then specifically to your point, as customers are trying to address the deposit demand, so they'll do creative things as far as online account opening, right? Nobody wants to go into a branch anymore to open an account. They want to be able to do that online. They want to have an easy experience. So we've been delivering on that expectation as well. So it's across the board. The thing that I think is key for Jack Henry is we've done a lot of innovation in the last several years. If you go back and look at transcripts or press releases, we've rolled out a whole bunch of brand new solutions over the past 3, 4 years. Jack Henry developed solutions, public cloud-native solutions, brand-new treasury management solution that's mobile-first, the first new treasury management solution in at least 12 years in the industry, right? So we've been focused on delivering all these new solutions to help satisfy demand for those new technologies among our customer base that's being driven by the demands of their customers.

Right. That's very helpful. And I think you alluded to this, but part of it is number of prospects and RFPs and core wins, but the other part is being able to sell more in more products and solutions. So is the attach rate? You mentioned Banno is obviously the poster child for this. When you sell core, is your attach rate much higher than it's been historically because of the adjacent value adds or no?

Sure. Yes, I think there's -- it's continuing to grow because of the new product sets that we're adding. But in average, kind of our flagship banking core is SilverLake, and then, of course, we only have 1 credit union core, Symitar. So we see, on average, about 50 complementary products that attach to a core win on the banking side and about 35 on the credit union side. And that continues to go up because of your point of the stickiness. Several things that come with the Banno application, things that we kind of bring together with our card solution through our card issuing solution, our fraud solution. All of those are really nice sets of -- product sets that add additional feature functionality and add to that additional product set.

Got it. When we look at the market in credit unions and banks, you do have a fair amount of penetration in the credit union side. You have 45%, let's call it. Banks, less penetrated, opportunity to move upmarket. Is there -- and maybe you don't think about the market this way, but is there more opportunity that you see on the bank side versus credit unions, given that lower penetration? Or is it more equally weighted when we think about revenue opportunity?

So I think there's a couple of things. So I think on the banking side, so we're right around 26% penetrated on the multibillion-dollar market. So we roughly have over 250 institutions that are over $1 billion in assets. On the credit union side, there just aren't as many large credit unions, right, so when you talk about we're roughly 50% honestly on the credit union side. So I think there's opportunities in the smaller credit union market, so still in the over $1 billion but into the $10 billion. There's a lot of credit unions that still have opportunity. And candidly, even some of our complementary products have some penetration opportunities in that credit union market. The banking side, though, our ability to go upmarket because there's a lot more is really why we're focused right on the tech modernization strategy. And our ability to get -- right now, Dave talked about this on the earnings call, we have three $20 billion-plus prospects that are in our pipeline today. We, to date, have never sold a client over $20 billion. We have clients that are over $30 billion and $40 billion today that have grown with us but we haven't sold one. So to have 3 in the prospect list right now as we're working is a strong testament to our story and what Dave had talked about earlier. The innovation that we're building, the service reputation that we already have, you couple those 2 things together, it's creating more and more opportunities for us to go upmarket specifically in the banking side.

Let me add 1 thing here, Andrew. So this conversation has been about core. We have about 1,700 core customers today. But I want to be clear, we have about almost 7,500 total customers at Jack Henry, right? So we have more than 5,000, 6,000 customers who are not running at Jack Henry core but they are running something else from Jack Henry. So we have a broad swath of solutions, noncore solutions that we can sell to banks and credit unions regardless of what core system they're running. And we're constantly focused on continuing to push those products into a broader audience as well. So I think that's an important thing for customers to understand -- or for investors to understand about Jack Henry, people tend to talk about us as a core provider as that's the only thing we do -- as if that's the only thing we do. And that before we could sell anything, they have to have a core, and that is absolutely not true. We have a number of solutions, bill pay is an example. We probably have 4,000 -- 3,500 clients running our bill pay. 60% of them are not running a Jack Henry core, but the bill pay business is a very successful high-margin business for us. And so I think it's important to -- especially the people who don't know the Jack Henry story, to understand, there's a lot more to the story than just core even though the core business is a great business for us.

And I'll be brief. Just so you know, so some of those complementary products, we are already selling to large customers. So we have a $70 billion asset bank that buys some of our complementary products. We have a $200 million credit union that buys some of our complementary products. So we've already been able to prove that we can sell to that base. We just need to move the core components, too.

Right. No, that makes sense. And then to tap on to that point, I think there's some well-known opportunities in terms of going outside the core. Banno is obviously one of them, and you've talked about some of the other assets you saw outside the core. Beyond Banno, what do you feel like top 3 solutions of opportunity? I think we talked about over time, maybe treasury management being an interesting opportunity but what...

So treasury definitely is one. I think though, before we get to treasury, our plan for, and we've communicated on the last earnings call, is to bring Banno outside of the Jack Henry base, to bring Financial Crimes Defender outside of the Jack Henry base, and to bring our card processing opportunities outside the Jack Henry base. Now the only caveat to that is that we bring -- we're going to be very strategic on attacking 3 specific cores that we won't talk about today. But we're going to attack 3 specific cores with a bundled approach because if you think about digital card and fraud being a really sticky bundle, getting in there creates an opportunity. And as I like to say, what are the 3 hardest things for a client or for one of our clients to do on a conversion, core being the hardest, digital being the second hardest, card being the third hardest. So if we can get 2 of those 3 out of the way, moving core becomes a lot less of a problem.

Sure. No, that makes sense. And on your point about moving upmarket, and it's great to understand the pipeline in terms of those large opportunities, but when we think about the new cohorts, new core cohorts that you've added over the last year, has the average size increased? Because then you talk about average, but just the new cohorts, have you seen those go up also in terms of size?

We have. So on the banking, our average asset size has gone from roughly $1 billion-ish, a little less than $1 billion to $1.2 billion. So a lot of that's organic but also size of the customers we've sold. And then the credit union size, roughly gone from about $750 million, $800 million to really close to $1 billion. So we've seen a couple of hundred million dollars of asset growth over the last year just from both sales and organic growth of our customer base.

Got it. And maybe we can segue into competition. I do agree that over time, those who invest can separate from those who don't invest. And I think we'll talk about your technology modernization initiative, and I think that's 1 thing that can be a separator. But maybe talk about what you've seen over the last year from a competitive intensity perspective. Has it changed at all? It sounds like we're actually in a more favorable environment for various reasons. But maybe you can talk about what you're seeing across your end market.

Yes. So I think what we've seen is, honestly, Dave alluded to this, so some of our largest competitors have been a bit distracted with some of the things that they've done on the merchant side of the business. And so when you take some of that level of distraction with some lack of level of development on the financial service side or the core side of their business, and candidly, some of their service has continued to degrade as well, it's created lots of opportunities with frustrated clients that are out in the market that say, "All right. Well, Jack Henry has always been known as a great service provider." And now, as Dave alluded to, the last 5 years, as we've rolled out a lot of these really compelling innovative products, our technology and our service have now fully aligned as leaders in the market. So it's creating opportunities from things that are honestly a byproduct of what's happening with some of our competition. One of our other competitors has now gone under the private side. So they do focus more on the smaller size institutions but it's created opportunities with some of their larger base for us. So candidly, our ability to take everything that we've built with a solid strategy, a solid execution strategy and a solid service strategy, why you're seeing the number of wins.

Let me tag on to this. So I get asked often about new entrants into the market. Okay, who are going to be competitors to Jack Henry that are new entrants to the market? And the thing you need to understand, we've seen this over the years many times where people decide, hey, this would be really fun to be in the banking space because those companies make a lot of money and it's really sticky, and then they get into the banking space and say, "Hey, this ain't though that much fun because the regulatory environment is really difficult." And so we've seen companies come in and come out, come in and come out. International players that have come into the U.S., they think they're going to really establish a beach hold here. They realize how difficult the regulatory environment is and they back off. And so there's no -- we are constantly keeping an eye on anybody who might be new, either an upstart, domestic U.S.-focused, or somebody international who's coming into the U.S. There is nobody in that cohort that's really created any waves. They produce a lot of headlines and press releases. But as far as actually delivering things that are meaningful, there's nobody on the list that's really making any waves right now. But that's not to say that somebody might not come along. But I do think that the headlines and the press on those things way outweighs the actual performance. And so it's something that I always point out to investors that got to keep your eye on them, but there is nobody that's a real threat to what we're doing today from an upstart point of view.

Right. Much harder in a higher cost of capital world as well?

For sure, the other piece, yes.

Maybe to switch gears to tech modernization. I think it's been over 2 years since you publicly announced the tech modernization initiative. Obviously, you've been working on it prior to that. Maybe talk about how development and time lines have trended versus your expectations. Anybody can dig in.

Yes, so let me just talk about what it is, and then I'll ask Greg to kind of give you the where are we at. So just to get everybody level set here, so 2 years ago, and Andrew is exactly right on, February earnings call 2 years ago, what I announced at the time was that we had launched this initiative, which we refer to as technology modernization. And essentially, what we're doing is we're kind of redefining what core is. So historically, and I've been in this industry 39 years now, I've been delivering core systems, not all of that at Jack Henry, but for 39 years, I've been doing it. I know I don't look nearly that old but I have been doing this for 39 years. And all of those years, the various companies I've worked for, core was a thing. You buy a core system, it's loans, deposits, and general ledger. You install it as a system. That's the way it's always been. Well, as we were thinking about how do we reimagine core in a public cloud environment because we believe long term, everybody is going to want to take advantage of all the power of the public cloud, how do we reimagine that and maybe deliver that a little bit differently? And so essentially, we redefine the core to say, we're going to break the core apart. We're going to unbundle the core into about 30 discrete functions that have historically always been known as core functions, 30 discrete functions, and will allow people to kind of pick and choose which of those functions they want for whatever it is that they're trying to accomplish. So as an example, people ask a lot about neobanks or about side core banks, where it's a deposit gathering machine. You can do that in this platform. Or you want to run a full bank, you can do that on the platform as well. And we believe most customers, as we roll this out in the future, will choose a bundle that will look a lot like a traditional core system but we're giving them options. The other thing that we do with this strategy is we take advantage of the public cloud environment to expand the TAM. We can now deliver solutions that nobody has ever delivered in any core system historically because we can take advantage of some of the things that are inherent in the public cloud environment that you just couldn't do historically. And so when I announced this in February of '22, I said this is a strategy announcement. It's not revenue. It's not what's going to happen next quarter. This is a strategy announcement. I said at the time, you're not going to see a whole lot of revenue impact for probably 5 years. And by the way, this was 2 years ago so about 3 more years to go on the actual -- the significant revenue impact. But what I also said was we're going to start rolling out pieces along the way. So you're not going to wait for a big bang at the end of 5 years. We're going to roll components out along the way. And so you will start to see some adoption. You will start to see some revenue flow, and we'll have customers then that will become referenceable for us regarding the overall strategy. So as I said, Greg can update you on, okay, now where are we? I'm the one who made the big announcement. He's the guy who's actually had to deliver it.

Yes. No, and Dave's right. So the good news is, so we've been delivering exactly to the T. So one of the things that we're pretty proud of is we publish road maps for our customers. It's not public for everybody but for our customers. So we publish over 70 road maps every 6 months and show what our customers what we're going to work on and that I hold our teams accountable, they hold us accountable to customers. So we are -- have executed flawlessly, honestly, on what we said we were going to get done over that 2-year period. So we've rolled out wires. We've already talked about that. Last earnings call, we talked about a new solution called Data Broker, which candidly was not even really thought of until the last year or so. And basically, what it is, is a central repository with all of the data from Jack Henry: core, payments, digital, fraud, all into 1 central repository that allows with AI, generative AI, assist from the Google BigQuery solution to allow our customers to go in and utilize that data in a very simple format. So that's something that we're rolling out that again is ahead of schedule. Our general ledger, Dave mentioned that as one of the components. It again will be AI-assisted general ledger. So something that's very unique out in the marketplace. We're going to deliver that this year as well. So short answer is we are delivering on what we said we were going to do. We got several other things that we have on the road map for the next several years to get to the full core that we're planning to have at that time frame. But it's been a really good execution by the team.

What is it -- to drill down on that, you mentioned AI-assisted ledger. What does that mean? Is it advanced analytics? Is it intelligence?

It's both of those but also the ability to truly ask questions, to be able to query verbally into various components. So there's a whole component of this that will allow a lot of value to both the component itself but also into the Data Broker solution as well. So our whole goal is that our community institutions, they can't afford data scientists and have those folks on staff. So we want to create the ability for them to have access to this data in a very simple way where they don't need to worry about having data scientists to go figure all that out.

Got it. No, that's super interesting. So you touched on this, but what sort of milestones should we look for over the next, let's call it, 3 years? You mentioned 5 years to revenue impact. So does that mean we should expect to have a viable, let's call it, core, working core over the next 2 years? Or what are the milestones that you think about? I know you don't publish the road map but just at a high level.

So I think we're on track to deliver, in that next 3-year period, a core with the functions that we've designed as part of that offering. So the short answer is we are on track for that. Each of the components, I'm not -- I don't want to talk about individually until we actually start working on. The ones that I was willing to share for this year, I did share on the earnings.

Got it. Okay, super helpful. I appreciate that. And understanding that the shift to the private cloud is more of a shift from on-prem to private cloud and the shift to the public cloud is a little more modularized, are there any corollaries that we can draw or is it relatively distinct?

From as far as the revenue impact, you mean?

Revenue impact.

Yes, so there's definitely an uplift when you go from private cloud to public cloud. It won't be the same dramatic impact that we've seen from on-prem to private cloud. And the reason for that is when you go on-prem to private cloud, you eliminate a whole bunch of expense at the bank, right? You don't need the staff anymore to run everything in-house. You don't need the hardware in-house. So there's a real positive for the bank when they go from on-prem to private cloud. When they go from private cloud to public cloud, there certainly are enhancements in the functionality and the overall deliverable to the customer, but there isn't this great big cost savings for the institution like you see when they go from on-prem to private cloud. But the way we've modeled this is there's definitely an uplift. And then as I said earlier, we've also expanded the TAM at the same time. So there's an uplift to what they had normally done, but now they have new options through these new functions that we're delivering to buy more things that we believe they will find essential, some of the things Greg just outlined. We believe they'll find those to be essential. And so that will create more revenue opportunity for us as well.

And I had asked about this on the earnings call but hosted another session with ICBA in a tech vendor. And the perspective there was that FIs care less about private versus public. Once you're private, it can be public. I think there's different opinions on that because of PII and things like that and storing the GL in the cloud. But I think the point is I think attitudes are starting to change. Maybe talk about -- and true there's acceptance because all of these point solutions in the public cloud.

So yes, it's a great point. And this is another thing that I talked about when I made the announcement in February of '22. At that point in time, if we had, had a public cloud, a fully public cloud-enabled core in February of '22, nobody would buy it. Why? Because the regulators were not ready to say, stamp of approval and go for it, you're good to go. It just was not a thing. So one of the positives about this strategy is we're kind of bringing the regulatory entities along with us and kind of showing what we can deliver and how we deliver in the public cloud environment. Our plan, our hope is that their -- kind of their acceptance of this type of lineup with when we're ready to have everything running in the public cloud. But along the way here, we've been delivering these point solutions like Banno, for example. Banno is completely public cloud-native. It was written from the ground up as a public cloud-native application. Financial Crimes Defender, totally public cloud-native. Treasury management, public cloud-native. So we're delivering these complementary solutions already on the public cloud. And we've had to work through with some of the examiners. We had training sessions in our office for examiners when we were first delivering Banno because they didn't know how to do an exam on a solution that was delivered in that tech stack. And so we know there will be more of that along the way. But we have a number of things now that are public cloud-native that are -- we're not lift and shift. We didn't take some old stuff and make it work in the public cloud. We actually rewrote these things and wrote them ground-up new. And we've been passing exams with the regulators. And so we're very active and getting acceptance for our customers in that environment. And customer interest is building along the way because they're seeing all these things now that are starting to come live in the public cloud. They're not as concerned, as nervous about passing a regulatory exam anymore. And so -- but that still has a ways to go as far as the shift toward acceptance of public cloud as a viable, secure option for banks and credit unions.

Got it. No, that's helpful. Somebody said, you're helping bring these FIs along on this journey, obviously, which is not easy. And maybe just a high-level revenue and margin question. Obviously very steady rev and algo, long-lived visibility. But what does it take to tick that growth rate up a little bit? Or conversely, what's the risk that it could tick down? Talking about small movements either way, but maybe you talk about the sensitivity of the model.

So you're talking about revenue specifically? So revenue, so we've talked about all these new solutions that we've rolled out. One of the things I get questions once in a while about, okay, so you rolled this solution out 6 years ago and so you're probably getting to some level of saturation. What are you going to do about that? Revenue is going to drop as a result. No. That's why we're filling the funnel on the other end with brand new solutions. And if you watch, we've been kind of staging these about every year, kind of timing these things out about every year to come out with a new solution or 2, and that creates a whole new set of opportunities for us to make sure we maintain that leading, by the way, growth rate that we have in our space, 7% to 8% top line. And so I don't see anything in the near term that would cause any slowdown in our top line revenue growth rate because we already have so many things in the funnel. And we have more things that we haven't even talked about that are going to come out later in '24 and into '25 that are new solutions that create that opportunity. So I'm not worried about a big slowdown or any slowdown in the top line revenue growth rate. So then the question would be, okay, what could you do to juice the top line revenue growth rate? Are there potentially some things that might grow faster than what we have projected today? There are, maybe. But I think what you hear from us today when we issue guidance, I think, is a good, well-informed and a reasonably conservative projection of what we can do for the near and longer term.

That's -- go ahead, please.

All I was going to say is that in those projections, because we're still following through with what we're going to do outside the base with these key product sets, they're not in those projections. So there could be opportunity, to Dave's point, some level of conservatism because we don't know what we don't know at this point until we actually start to really kind of take those out.

Yes. So visible, so multi, multiyear planning process in terms of refilling and then not putting some of these, like, less probable items in?

Right.

Yes. And I guess just a question to close out because I think this does tie in the margin question. How do you think about balancing sort of market expansion versus sort of investments? Because I guess tying to what you're talking about because it does require investments to refill the funnel. It's not easy.

Exactly right. So we get the question once in a while, well, what would be the easy lever to pull that could juice margin expansion? Well, you quit spending so much on development. But we feel strongly about walking that line. We think long term and everything we do, what are we doing to make sure that we increase and prolong the viability of this business for our customers, for our shareholders? And so we're walking that line constantly. But there are things that we're working on, on the operations side, in particular, without slowing down on R&D, without slowing down on our service levels or anything like that, that are important to our customers, what are the things we can do internally? As an example, taking advantage of AI internally to become more efficient. Any products that we need to quit supporting because they're not -- they were great 10 years ago but they're not really a go-forward solution. So we have those conversations regularly. And as we work into the budget process now in May, June, that will be part of the planning for our fiscal '25.

And the tech strategy is going to drive a lot of that decision-making for us because it truly isn't something we want to take to the public cloud and it truly isn't something strategic, then we're going -- yes, we'll continue to migrate off. And our strategy itself creates kind of a shared services model, which helps us save on building things only once instead of multiple times like we used to.

Right. Any closing remarks, Greg, Dave?

No, not for me.

Yes, thanks for having us. Thank you.

Thank you very much for joining me. Thank you, everyone.