JACK HENRY & ASSOCIATES INC — Call Transcript 2026

Good morning, and welcome to the Jack Henry third quarter fiscal year 2026 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Vance Sherard, Vice President, Investor Relations. Please go ahead. Thank you, Danielle. Good morning, and thank you for joining the Jack Henry third quarter fiscal 2026 earnings call. Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer. Following my opening remarks, Greg will provide an overview of our business along with updates on our strategic initiatives. Mimi will then discuss the financial results and updated fiscal 2026 guidance provided in yesterday's press release, which is available in the investor relations section of the jackhenry.com. Afterward, we will open the lines for a Q&A session. Please note that this call includes forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from our expectations. The company is not obligated to update or revise these statements. For a summary of risk factors and additional information that could cause actual results to differ materially from such forward-looking statements, refer to yesterday's press release and the risk factors and forward-looking statements sections in our 10-K. During this call, we will discuss non-GAAP financial measures such as non-GAAP revenue and non-GAAP operating income. Reconciliations for these measures are included in yesterday's press release. Now I will hand the call over to Greg. Thank you, Vance. Good morning, and thank you for joining today's call. As always, I want to begin by recognizing our associates for their hard work and dedication. They consistently go above and beyond to serve our clients and drive our success. I will share three key takeaways from the quarter and will then provide additional detail on our overall business. First, our financial performance. We produced record third-quarter results with non-GAAP revenue of $616 million, up 7.3% over last year's third quarter. Our non-GAAP operating margin was a strong 22.9% on par with last year's Q3. Second, our sales performance. Our sales and marketing team delivered an outstanding quarter with 17 competitive core wins, including five institutions with more than $1 billion in assets. This represents our strongest third quarter for new core wins in seven years and ties our best third quarter ever in over $1 billion wins. Year-to-date, we have won 43 core deals, 11 of which are institutions over $1 billion. That's up from 28 wins and eight over $1 billion at this point last year. Based on our strong momentum, we are highly confident that we will exceed the 51 core wins achieved last year. Third, our higher value core wins. We continue to see a higher number of trifecta solution wins. So far this year, 25 of our core wins, or 58% of the total, have included digital banking and card solutions. At this time last year, we only had eight core deals that included digital banking and card solutions, just 29% of the total won. This healthy growth in trifecta wins reinforces the strength of our integrated platform and supports deeper, more valuable client relationships. Turning to our broader business. I will begin with our use of artificial intelligence, followed by updates on several innovative solutions and specific products. As I have shared at recent investor conferences, we view AI as a significant strategic opportunity and have been operating and expanding our capabilities for more than 3.5 years by establishing strong governance processes that support a responsible, bold, and balanced approach. Today, close to 100 AI tools are approved for internal use, ranging from general productivity platforms such as Gemini and Copilot to specialized business and development tools across all areas of our company. These tools support over 500 distinct use cases, delivering meaningful and measurable impacts. A few examples to share. In lending, developers working on our new Jack Henry origination solution online account opening solution have increased productivity by roughly 90%, driven by faster coding and quicker issue resolution. In digital, as part of the new Jack Henry platform, we have built an AI-assisted recommendation system for exception item processing that is in closed beta with three banks. They all report that AI is reducing the time to close exceptions each day by 70%-80%. In customer service, our AI advisor bot is supporting our frontline representatives and has assisted with more than 3,700 complex support interactions over the past two months with a 96% success rate, surfacing answers in seconds from our knowledge resources. To further accelerate adoption, we have deployed an internal team of AI coaches who work directly with our associates through workshops and hands-on support. We are also seeing meaningful productivity and efficiency gains from natural language development, sometimes referred to as vibe coding. For example, a non-technical associate recently developed an internal application for our travel program, allowing us to meet a business need without licensing additional software. This is one example of many where our teams have independently built more efficient ways to address specific business challenges. Overall, we believe our approach to AI education and adoption significantly helps us minimize competitive risks. Additionally, regulatory requirements, network certifications, and our role as the system of record make the banking industry very difficult to disintermediate. Shifting to our innovative solutions, we continue to make strong progress on our stablecoin strategy. Beta testing with clients to send and receive USDC is going well, and at this point, we are largely awaiting final regulatory guidance to proceed more expeditiously. We are delivering stablecoin processing through the public cloud-native Jack Henry platform. This is important because the platform is connected to all of our core systems, serving as a bridge between emerging capabilities and our foundational cores. This provides our clients fast, integrated access to capabilities such as stablecoin and our initial SMB solutions, Tap2Local and Rapid Transfers. Tap2Local, our SMB merchant payment solution, continues to see significant tractions as clients look to better serve SMBs, increase deposits, and recapture business from Fintechs. At the end of April, more than 700 banks and credit unions were live with Tap2Local. Since beginning targeted marketing just a few days ago, active merchants have doubled to more than 1,600, with several thousand additional merchants currently in the enrollment process. We intentionally waited to begin marketing so we could ensure the product and infrastructure were fully operational. With that foundation now in place and marketing beginning to ramp up, we expect adoption to accelerate in the coming months. Client feedback has been very positive, particularly around Tap2Local's differentiated capabilities, including easy enrollment, tap-to-pay on both iOS and Android devices, and continuous account reconciliation. As an additional validation to the product's uniqueness, Tap2Local recently won the FinTech Breakthrough Award for Small Business Payments Solution of the Year. We are also seeing strong early momentum with Jack Henry Rapid Transfers, which enables both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets. Rapid Transfers is now live with over 110 banks and credit unions, with an additional 190 at various stages of onboarding. Transaction volumes have been healthy, particularly given that marketing has not yet begun. The average transaction size is approximately $260, which is double our original projections, and it's being driven by stronger than anticipated inbound transfers. Larger inbound transfers deliver one of the key value propositions, increased deposits for the financial institution. With higher average transaction sizes and consistent monthly activity without any marketing, Rapid Transfers is currently tracking well ahead of our initial modules, though we are still in the early innings of the rollout. As another key part of the Jack Henry platform, we are developing a cloud-native deposit-only core. Client testing is underway and development was completed six months ahead of our original schedule announced in February of 2022. We will continue to broaden our testing as the year progresses. I also want to highlight early progress on our enhanced embedded payments capabilities following the acquisition of Victor Technologies last fall. The Victor platform, now branded as Jack Henry Payments Orchestrator, enables financial institutions to embed payment capabilities directly into third-party non-bank brands such as Fintechs and commercial customers. In Q3, we signed one bank and onboarded three Fintechs to the platform and have quickly grown our sales pipeline to more than 40 banks and or Fintechs. Moving on to our reporting segments. In core, in addition to the 17 competitive wins I mentioned earlier, we also secured four on-premise to private cloud contracts, including one institution over $1 billion. So far this year, we have signed 23 in-to-out contracts, with eight being institutions over $1 billion. In payments, we continue to see strong growth in faster payments. Over the past year, our clients' adoption of Zelle grew by 25%, RTP by 26%, and FedNow by 31%. In the third quarter, payment transaction volume across these channels increased 47% year-over-year. In complementary, we signed 36 new Financial Crimes Defender and Faster Payment Module contracts during the quarter. As of March 31, we have completed 168 Financial Crimes Defender installations and another 68 in various stages of implementation. We've also installed 168 Faster Payment Modules with an additional 256 in progress. The Banno Digital Platform had another strong quarter with 23 retail and 34 Banno Business signings. In total, we have 1,028 clients live on Banno, including 466 on Banno Business. The platform now serves more than 15.5 million registered users, up 13% from a year ago. As a reminder, all of our Banno wins and growth thus far has occurred within our core base. As we look ahead, we believe we are at a meaningful inflection point. We now have a competitive feature set along with increased willingness among certain competitors to operate as open providers. As a result, we see an opportunity to begin expanding Banno beyond our existing base and more closely align it with our payment product strategy, where we have successfully sold outside the base for many years. We will provide more updates as we progress with this strategy. On the technology spending front, we recently released results from our eighth annual strategy benchmark survey, which highlights technology spending priorities. While we monitor a number of industry surveys, this one is particularly meaningful because it reflects direct input from the CEOs of our bank and credit union clients. The results point to a clear and growing commitment to technology investment. 88% of respondents expect to increase their technology budgets over the next two years, up from 76% last year. Of those, the largest segment, 41%, plans to increase investments between 6% and 10%. These trends are consistent with other industry surveys pointing to increased technology spending. We asked CEOs where they plan to prioritize those investments. For the first time, artificial intelligence ranks as the top priority, cited by nearly 50% of the respondents, followed by digital banking and data analytics. These priorities align directly with where Jack Henry has been investing in delivering innovation. Last week, we highlighted our differentiated innovation at the Jack Henry Annual Strategic Insight Symposium in Salt Lake City. We featured presentations and panels that included both Jack Henry leaders and well-known industry experts covering key topics such as the macroeconomic environment, the Jack Henry Benchmark survey, our technology priorities and progress, fraud initiatives, AI education and use cases, the impact of stable coins and tokens, and meeting the needs of Gen Z. We will provide updates on many of these topics along with additional innovation updates at our Investor Day on September 15th in our Dallas offices. We recently completed and published our 2026 sustainability report. The report is an outstanding information source on Jack Henry and is available to review on the investor relations page on jackhenry.com. The report coincides with our 50th anniversary. It reflects our continued focus on preserving long-term value for our associates, clients, communities, stockholders, and the environment through responsible business practices. As part of our 50th anniversary celebration, our board is looking forward to ringing the closing bell at Nasdaq tomorrow, May 7th. This is one of the many activities we are doing throughout the year to mark this significant milestone. In closing, we remain focused on culture, service, innovation, strategy, and execution. These key differentiators will enable Jack Henry to continue to drive industry-leading revenue growth and margin expansion. With strong sales momentum, increased client technology spending, and a disciplined execution, we believe Jack Henry is extremely well positioned to capture the opportunities ahead. With that, I will turn it over to Mimi for more detail on our financials. Thank you, Greg, and good morning, everyone. I would like to begin by thanking our associates who continually deliver value to our financial institution clients. The result is another quarter of solid revenue and earnings growth and continued momentum as we approach the end of our fiscal year. I will begin with our healthy Third quarter results, then conclude with our updated fiscal 2026 guidance. Q3 GAAP revenue increased 9%. Non-GAAP revenue increased 7% for the quarter and 8% year-to-date, a continuation of consistently strong performance. Third quarter deconversion revenue of approximately $19 million, which we previously announced, was up approximately $9 million for the quarter, reflecting a steady pace of M&A activity among financial institutions. As a reminder, the dollar amount of deconversion revenue has little correlation with the number of transactions or annual revenue impact. The absolute amount of deconversion revenue can vary greatly quarter-to-quarter. We continue to see industry consolidation as largely neutral to slightly positive for our business. Now, let's look more closely at the details. GAAP services and support revenue increased 10% for the quarter, while non-GAAP increased 8%. Service and support growth during the quarter was primarily driven by strength in data processing and hosting revenues for both private and public cloud. Specific callouts include implementation services and license revenue. Private and public cloud offerings continue to drive strong growth. Cloud revenue increased 9% in the quarter. This recurring revenue contributor is 33% of our total revenue. Shifting to processing revenue, which is 43% of total revenue and another strategic component of our long-term growth model. We saw solid performance with 7% GAAP and 6% non-GAAP growth for the quarter. Consistent with recent results, quarterly drivers included increased digital, card, and faster payments processing revenue. Leading commentary on revenue, I would highlight total recurring revenue was 91% for the quarter. Moving to expenses. Beginning with cost of revenue, which increased 7% on a GAAP and non-GAAP basis for the quarter. Drivers for the quarter are consistent with recent previous quarter results and include higher personnel costs, direct costs growing consistent with lines of revenue, and increased amortization of intangible assets. For modeling purposes, amortization of acquisition-related intangibles was $6 million for the quarter. R&D expense increased 15% for GAAP and 12% on a non-GAAP basis for the quarter. Quarterly increase was primarily due to the net personnel costs driven by an increase in headcount over the trailing 12 months. Ending with SG&A expense for the quarter on a GAAP basis, it increased 9% and an increase of 8% on a non-GAAP basis. Results reflect an increase in personnel costs, specifically from headcount additions over the 12 months. We remain focused on generating annual compounding margin expansion. Q3 delivered consistent non-GAAP margin at 23%. Year-to-date non-GAAP margin improvement was 195 basis points with a non-GAAP margin of 25%. Non-GAAP margin benefits inherently from the leverage in our business model, strategic cost management, and leveraging our existing workforce as we continue to focus on enterprise process improvement and AI utilization. These strong quarterly results produced a fully diluted GAAP earnings per share of $1.71, up 12%. For the year-to-date period GAAP, period GAAP earnings per share was $5.41, an increase of 20%. Reviewing the four operating segments, we see positive performance across the board. Core segment non-GAAP revenue increased 9% for the quarter, with operating margin contraction of 27 basis points due to temporary product mix of lower margin revenue sources such as implementation and work orders. Payment segment quarterly non-GAAP revenue increased 5%. The segment again had outstanding non-GAAP operating margin growth with quarterly results of 159 basis points. Card processing revenue showed steady growth and was partly offset by lower network incentive revenue. The segment also benefited from continuing shift and significant growth from faster payments. The complementary segment quarterly non-GAAP revenue increased an impressive 7%, with healthy 99 basis points of non-GAAP margin expansion. Quarterly revenue growth continued to reflect demand for our digital solutions and a beneficial product mix with sales sourced from new core wins, existing core customers, and non-core financial institutions. For the quarter, corporate services, formerly corporate and other, non-GAAP revenue increased 27%. This is primarily the result of increased hardware sales. Since the segment reflects expenses not allocated to other segments, we will not be discussing operating margins as it provides no meaningful insight. A review of cash flow and capital allocation. Q3 operating cash flow was $186 million, a 72% increase over the prior fiscal year Q3. Quarterly free cash flow of $122 million delivered a 137% increase over the prior fiscal year Q3. Our consistent dedication to value creation resulted in a trailing 12-month NOPAT return on invested capital of 23%, compared to the 20% in the third quarter of the prior year. We are very proud of the durability of this metric and how it reflects our high-quality allocation of capital for our shareholders. I would highlight the following significant year-to-date capital decisions resulting from our strong free cash flow generation. $284 million in share repurchases, $127 million in dividends paid, plus the asset acquisition of Victor Technologies. We're proud to return meaningful cash to investors while maintaining a conservative balance sheet. The average purchase price of the shares repurchased was $160. We ended the quarter with debt of $90 million, consistent with normal course of the business revolver usage, but expect to end the year, the fiscal year debt-free, barring acquisitions or other opportunities. During the quarter, we established a new $1 billion revolver credit facility to support future growth opportunities. I will now discuss our third consecutive increase to full-year guidance. As you are aware, yesterday's press release included updated increases to fiscal 2026 full-year GAAP guidance. The conversion guidance will continue to follow the conservative methodology introduced in fiscal 2024. Fiscal 2026 deconversion revenue guidance has been increased to $37 million. Full-year GAAP revenue growth guidance increases to a range of 6.1%-6.6%. Based on our strong year-to-date results, we have tightened the range of non-GAAP annual revenue growth guidance, resulting in a new outlook of 6.6%-7.1%. Consistent with our budget plan and year-long messaging, Q4 will see relatively lower non-GAAP revenue growth compared to the previous three quarters. Drivers include projected digital revenue slowing from lower active user growth, card revenue growth, seeing pressure from risk management, and less one-time network incentive revenue. Expenses during the fourth quarter are expected to reflect relatively higher pressure from medical cost benefits returning to historical levels, cloud migration, infrastructure expense, and commission. Our expectation on fourth quarter revenue are below current analyst consensus. At the same time, full-year revenue growth consensus is aligned. Reflecting that part of the difference is that some of the revenue analysts expected in the fourth quarter shifting to the third quarter. Margins are projected to contract in the fourth quarter based on previously disclosed factors. However, based on the full-year revenue growth and our robust financial model, we are increasing full-year guidance for non-GAAP margin expansion to a range of 75-95 basis points from the original 20-40 basis points on the August call. As a reminder, we see fluctuations in quarterly results related to software usage license components along with the timing of implementation. Therefore, the correct performance indicator for our business is the consistently strong fiscal year financial results. Q4 results are not aligned with our early expectations for fiscal 2027. The presented results and guidance metrics are indicative that our business operations remain healthy and sound with growth opportunities across all four operating segments. The full-year GAAP tax rate estimate for fiscal 2026 is 23.25%. The above increased guidance metrics result in a stronger full-year outlook for GAAP EPS of $6.78-$6.87 per share, a growth of 9%-10%. As a reminder, even updated deconversion revenue guidance potentially understates GAAP EPS growth. Full-year free cash flow conversion outlook for 95%-105% for fiscal 2026, with a bias towards the upper end of the range. In concluding, Q3 reflects another exceptional performance from our associates, leading to increased guidance. We're pleased by the continued performance momentum and resulting fiscal year outlook. We remain strongly convinced that demand for our solutions, aligned with continued technology spend by our clients and prospects, all supported by industry-leading service excellence from our associates, will drive outstanding financial results and superior shareholder value. We appreciate the contributions of our dedicated associates that produce these superior results and our investors for their ongoing confidence. Danielle, please open the line for questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. The first question comes from Vasundhara Govil from KBW. Please go ahead. Hi, thank you for taking my question. Greg, first one for you. It was another very strong quarter on new core wins. I'm curious what's driving this trend, and if you are starting to already see some benefits from the competitive platform consolidation or if that's still on the come? Yeah, thanks for the question. Yeah, I think it's a combination of both. We've been talking a lot about, you know, what we've been doing on the innovative side, and so that's continued to play out with the products, the solutions. Obviously, our customer service hasn't wavered a bit. I will tell you, of the 17 core wins, 13 of them came from one provider, one competitive provider. I will say that most of those, as you can imagine, you know, the core processing contracting side takes anywhere from 9-12 months, typically. A lot of those were already in motion ahead of whatever announcements were made. We did take some from really everybody, just so you know. We had some wins from really all of our competitors. But again, the bulk of them came from one. Thank you for the color. Then maybe a quick one for you on the margin guide. You know, the guide obviously implies a meaningful step down in the fourth quarter, and I caught your comment on the normalized medical expenses you're baking in. Any other drivers there or just trying to get a sense of whether there's any conservatism baked into the guide? Thank you. Yeah, you're welcome. Yes, you're accurate, and I appreciate you hearing the commentary regarding Q4, which is not indicative of the full-year performance, but more so due to some unique factors in Q4 that were expected as we thought about for the cadence of the year. You're right to call out the medical expenses returning to normalized levels. We also had some commission shift where we saw some benefit earlier in the year. We expect based on the timing of those implementations for the commissions some of that to hit in Q4. Additionally, just some of the mix we're seeing from some of the lower margin business, some of it related to work orders and implementation also lead to Q4 having less margin expansion or in fact margin contraction for the year. Again, the right metric for our business is the annual, and we're pleased to be able to increase guidance on full-year margin expansion. Appreciate the response. Thank you. The next question comes from Peter Heckmann from D.A. Davidson. Please go ahead. Morning. Thanks for taking my question. I wanted to talk a little bit about Anthropic's Mythos. Has Jack Henry been able to set up a timetable to access Mythos to look at their own systems to identify any cyber vulnerabilities? Do you think that's something that bank core customers are increasingly gonna demand from their vendors on a periodic basis? Yeah, Pete, this is Greg. A couple things on Mythos. We've been, you know, heavily involved ever since it came out. I actually did a call with a lot of our competitors and others with the head of cybersecurity in Washington. We had, you know, as soon as everything was announced, you know, we were pulled in. Our cyber teams are, you know, been involved in a multitude of meetings. You know, Project Glasswing, which is now called Mythos Workshop, our teams are getting information associated with that and joining various meetings. We've obviously done a whole host of things that we need to do for operational readiness across the organization. Candidly, you know, we were doing that already. You know, the other thing is that you probably heard that on April 29th, the Trump administration raised some objections. You know, there's still some delay on where some of this utilization will get done. Our teams are heavily involved both with not only at our organization and with Mythos, but also across the entire landscape of our industry. All of our competitors and Jack Henry are working together with Washington to make sure that we protect our banks and credit unions. Greg, if I could add on to that. Mythos is just the current kind of attention in the industry, but we've made significant investments in fortifying and stepping up from a cybersecurity, from an awareness and observability, and a zero trust kind of resiliency philosophy over the last several years. We feel like we're in a much stronger position today than we had been over the last several years to be able to handle this type of situation. The next question comes from Jason Kupferberg from Wells Fargo. Please go ahead. Hey, good morning, Greg and Mimi. This is Tyler DuPont on for Jason. Thanks for taking our questions. I wanted to just start by piggybacking off of the core questions and commentary. You know, given you signed 43 takeaways so far, fiscal year-to-date, you know, how should we be thinking about upside to that 50-55 annual target? You know, if I heard correctly in the prepared remarks, Greg, you suggested that you have confidence in exceeding last year's number. Given last 4Q, you guys won 23 deals, that would imply over 60 this year. I guess just, you know, given the success you've seen so far year-to-date, I'm wondering if you can help put sort of a finer point on expectations as we look to the rest of the year. Thank you. I appreciate the question. I can't really give a finer point. I can tell you that I'm very confident that we will be north of 51 and probably north of 55, somewhere in that range. I don't know exactly. You know, contracts are interesting as far as timing to go get them done. We've been completing a couple contracts recently that took a lot longer than we expected, and sometimes they get, you know, kind of turned over to the next quarter. In reality, it's not just the number of wins we have, but also the size of the wins. You know, as we referenced, we had 11 over multi-billions, but we've also won just this past quarter, we won $3.5 billion, we've won $5 billion, we've won $7.5 billion. Just recently, we just won a almost $10 billion client that is coming with 1.2 million accounts, which is actually about 25% larger than any customer we have today, including our largest asset size and the number of accounts. Those contracts took a long, long time to secure. As you continue to go upmarket, contracts, you know, take longer. It's really hard to give you a definitive answer. The answer I'll give you is, our sales team is really kicking butt right now. You know, obviously, a lot of the things that are going on in the industry are providing opportunities for us, and I think the best is still to come, based on feedback and pipelines that we have. Our pipelines are extremely strong, not just in core, but in payments and complementary as well. We're very bullish on that. Great. You know, that's great to hear. I guess just as a quick follow-up, I just want to touch on free cash. You know, the $122 million in the quarter was pretty meaningfully above, it looks like both consensus and even your own historical trends. Can you maybe just touch on how we should be thinking about free cash flow going forward versus the 90%-100% conversion guide, sort of both as we look down the barrel to the final quarter and as we try to hone our models for next year? I would say, Tyler, there were a couple of things as we look at trailing 12 months, you know, free cash flow. First and foremost, a tremendously strong operational foundation that led to strong cash. There was also impact, positive impact from the tax law, tax bill change that we saw come to clarity, as well as some small asset sales. Overall, we feel great, as we are improving the color this year for free cash flow conversion to that 95%-105% with a bias to the high side, sitting at around 109%, you know, 108%, 109%, year-to-date from a trailing 12 months. You know, we feel very good that we're returning to the historical norm levels of our free cash flow. Great. I appreciate all the color. Thanks so much. The next question comes from Rayna Kumar from Oppenheimer. Please go ahead. Good morning. Thanks for taking my question. Just given the volatile macro and political environment, as you talk to banks and credit unions, how are they thinking about IT spending for the next 6-12 months? Then, you know, separately, any initial read on FY 2027 revenue growth and margins? Thank you. Rayna, I'll take the first one. You know, kind of as we talked about in my prepared remarks, and we just came out of our strategic initiatives meeting with our top 150 or so clients. The focus and we actually had somebody from Washington come in and talk to our clients as well. It's based on what's going on in the macro environment, honestly, it's not affecting the banks and credit unions' focus on what they need to get done in the tech spending. As we referenced in our own benchmark survey that just came out, we had 88% said that they were going to increase their spending as compared to 76% last year. With that average of, I think it was 41% is actually at 6%-10% of an increase. That, you know, really coincides with everything that we've been talking about for the last, you know, two or three surveys that we've referenced on our calls, Bank Directors and others surveys. That remains. The only difference is really where they're talking about spending the money. AI, for the first time, became the number one priority for them. Obviously deposits, digital banking, in particular, fraud, other components are still up at the top. We're seeing it. I mean, again, you know, our pipelines are very, very robust right now, again, in all parts of our business, not just core. Again, we're getting larger institutions. As I referenced, just, you know, just this year, we've already won, you know, the one I just referenced that was almost $10 billion in assets, but 1.2 million accounts, which is significantly larger than any one we have, which that comes with a lot of other products with it. Things along that line that continue to, you know, make us believe that the robustness of the technology spending will continue. Rayna, I can take the second half of your question on building on that positive outlook that Greg just framed. It's a little premature to talk about FY 2027. We're just excited about ending 26 in a great spot. Again, I would just call out that the quarterly pace of the year is not indicative of any kind of launching off pad for 2027. Although we are calling for a weaker Q4, it does not mean anything diminishes from our positive outlook for the full year and then next year. Even at roughly 91% recurring revenue, you would think a budgeting process would be easier, but we have a very comprehensive budgeting process here at Jack Henry. We are still working with each of our operational leaders to talk about next year's plan, and rigorous prioritization around investment and spending. We will give more color to that when we talk about full year results, next quarter. Overall, we're thinking a positive direction for FY 2027. Very helpful. Thank you. The next question comes from Madison Suhr from Raymond James. Please go ahead. Hey, good morning. I appreciate you taking the questions. I just wanted to start on the trifecta wins. I think you mentioned 58% of wins this year were those trifecta wins. Just given what you're seeing in the pipeline, I mean, do you think this elevated level of cross-sell is sustainable not only for the quarter, but just as we think about kind of the next year or so? I do. I appreciate you asking the question. I mean, I think we've seen the results of all the work and innovation that we put into both our digital platform and our card platform. We've made a lot of changes through the years and, you know, you've heard us reference over the last couple in particular about getting to a level of feature parity that we needed to compete with some of the larger digital-only providers, and we're starting to see that. We're starting to get some wins from all of the players, candidly. They're not just coming in core wins, which is great, obviously, but you have to wait for those to be installed. We're also getting some current Jack Henry clients that were on competitive digital platforms that are now making the decision to move to Jack Henry Banno instead. Short answer to your question is, I do feel very strongly that the work that we've done and are continuing to add with features like, you know, Rapid Transfers and Tap2Local that are not available anywhere else, are big differentiators for us to winning deals. Okay, great. I did want to follow up just on the payments business. you know, it grew 5% in the quarter. Just curious from your guys' vantage point, what kind of the key buckets or key things that could accelerate growth in payments from here, just given I know that mid-single is maybe slightly below where you guys want to be. Thank you. We continue to see steady growth in card, the resilience of the consumer spending. On top of that, you get a boost from continued rebounded growth in remit and bill pay. Bill pay, I would call out, even though it's not huge growth numbers, the increase has been quite positive, and that's a signaling of the resurgence post-acquisition of Payrailz. On top of that, you have just tremendous growth, almost 50% growth in faster payments. It's across the board. Volumes for card are good. You have extra growth from other areas of the business. Okay. Thank you so much, guys. The next question comes from Dominick Gabriele from Loop Capital. Please go ahead. Hey, good morning, everybody. Thanks for taking the question. I guess, you know, Jack Henry is always focused on an open platform versus a walled garden. I think that's really been a benefit to the business over time in gaining customers. You know, do you expect to partner with various AI potential financial providers with their products? You know, how would you think about that relationship? Would you take it similar to the types of partnerships for with third parties, allowing their products to be on your platform and really focusing on, you know, Jack Henry's added value when the customers ultimately decide to choose Jack Henry products regardless? Thanks so much. Yeah, it's a good question. I appreciate. A couple things. We are doing that today. Several of the AI-related companies are partnering with us today. That's how we're using some of the tools and also some of the we're incorporating some of it into some of the products that we are working on. We are being very careful on that. You know, partner is a really difficult word to use because in some cases, a partnership infers a lot of revenue changing hands on both sides. A lot of what I would call it is more of a integrated relationship. In some cases, they're creating more financial gains for both of us and others. They're just creating opportunities for us to leverage tools that we're licensing. That is happening today and will continue to happen. We have a whole host of folks that we have hired to evaluate those tools and doing that. We're being very careful because everybody's got, you know, something new to talk about. That will continue. To your point, we've been by far the most open platform through the years. We look at AI, we look at fintech opportunities, we look at Fintechs that are using AI that's already embedded into their solutions as opportunities. We'll evaluate them one at a time. Great. Maybe just as a follow-up, you know, if you look at the various growth rates of the segments, you know, core's been doing quite well. You know, outside of the comments you just made on payments complementary, you know, double-digits. I'm just curious of the quarter-over-quarter kind of implied reduction in the other two pieces of the business, given there is some momentum there. If you could just help walk through kind of that, I'd really appreciate it. Thanks so much. Sure. You know, as we always say, not to look at one quarter, but to look at the full year, particularly because some of these products, as you look at the install calendar, and even though we're thrilled to be looking at over 50 for wins, the revenue we're getting today is based on the wins we had, especially for core that we locked in last year. Some of the complementary products can be installed sooner. But the profile of those customers does impact the revenue. If you have years where the size of the install base is different, or the mix of the products they're taking, it can impact both revenue and margin. On top of that, what we've seen is some of the one-time service revenue related to work orders and implementation is also, it's been a nice added revenue source. I would say that kind of varies as well, from quarter-to-quarter. That's really the biggest driver causing for the fourth quarter, in addition to just some grow over challenges from last year's strength. Thank you. The next question comes from Darrin Peller from Wolfe Research. Please go ahead. Hey, guys. Thanks. It's Darrin from Wolfe. I just wanted to understand a little bit more. When I, when I think about the beginning of the year, you guys had called out pricing, M&A, and some other variables, credit union account growth, as having been potential risks or headwinds that decelerated what otherwise would have been a 7%-8% algorithm for your year. Ended up doing better than that as the year is progressing and not seeing those headwinds as materially. You're seeing better core growth also, I think, than probably you anticipated at the beginning of the year. Putting all those pieces together, you know, where do you see the business positioned now in terms of your normal 7%-8% trajectory? Do you think you have enough pillars for that business to sustain 7%-8% in the next couple of years again, without specifically guiding to 2027? I'm just curious if you think the building blocks are there. [Darrin], appreciate the question. Yeah, that we haven't really talked about some of those headwinds as we progress through the year. We've grown over them. It's not that they've disappeared. We, we had it in our budget plan. We knew of some of the departures. We knew of some of the new contract renewals that were gonna face a bit of compression from a renewal perspective. We've just been able to grow over them. I don't wanna say, like, those pressures have abated. It's just we've been able to perform in spite of them. As we look at next year, again, too premature to put any refinement on it, but I think the growth algorithm is certainly still intact. As we've talked about, I think even on as much as on last quarter's call, the new exciting areas of innovation, and business opportunity, like the ones that Greg highlighted in SMB, faster payments, et cetera, it's gonna be a couple of years till that has a meaningful contribution to the revenue growth that would kind of push us towards the upper bound of our growth algorithm and beyond. We feel confident that next year is looking in line with the guidance we have historically given. Yeah. The only one thing I wanna add to that is that we did talk about that, you know, typically we start to even out over the year with M&A. That is starting to play out exactly as we had said. We had some in the early parts of the fiscal year when we were finishing our budgets and everything else, we had a little bit more of an upside down, but that started to balance itself out like we thought. The other thing is we referenced the changes we made in the renewal processes- Yep. with how we went to renewals, and that has worked really, really well, candidly. Right. I do think what Mimi just referenced with some of the new products and services that are still in earlier stages, but starting to gain some traction, that's where we get a lot of our confidence for the longer term in getting to the numbers you're talking about. Okay. Thanks. Greg, I just want one follow-up on the core wins. It came up a couple of times, I still feel a little bit hungry for an understanding of what's actually driving the incremental step up in the magnitude of the wins, then the run rate. Like you said, these were basically formed from probably a few quarters ago in terms of the deals being signed or at least close to signed. It wasn't really the industry changes we're hearing from competitors right now that caused the increase. What did cause it to really kick in a few quarters ago already? Because it seems like if you add on what we're seeing in the competitive landscape, that could be additive even more so than the 55 going into next year, you know, when you take the two together. Yeah, I agree with you. I mean, you know, I think you all have heard me enough talk about the differentiators of, you know, I bring them up every time because we're still getting some folks that don't fully understand it. We are building things that nobody else is building, and we're doing it at a level of execution that nobody else is doing. When you get an industry that's completely full right now of competitive uncertainty that is happening specifically with our largest competitors, we are the provider that is absolutely executing on the things that we said we were gonna do and hasn't lost a step in customer service and never has. You know, I mean, I'm getting inbound calls from larger institutions that wanna talk to us. I'm getting inbound calls from the largest consulting firms in the world that wanna learn more about what we're doing. We've been showing these large consulting firms our technology, and their quote is, "We are blowing them away." They never thought a core provider could do what we were doing with what we built on the platform. You know, when you take all of that and the years of a lot of effort of building out the technology and now to a point where we can actually demonstrate it and have live products, that is really, you know, driving it. Again, with the unrest of what's going on with our competitors. I do believe it's gonna continue because we're gonna continue to execute as we have been, and our products are only gonna get further and further ahead of where our competition is. Yeah. Makes sense. Thanks, Greg. Thanks, Mimi. Sure. The next question comes from Ken Suchoski from Autonomous Research. Hey, good morning, guys. Thanks for taking the question here. I wanted to get your high-level thoughts on how AI can play a role in the core processing industry. We noticed one bank with over $25 billion in assets expanding its collaboration directly with OpenAI. I'm curious to get your take just on, one, how much of a risk is there that banks or credit unions work directly with these AI companies? Two, how involved is the core provider if that does happen, or how does the core provider's role change in that scenario? Thank you. Yeah. I think there's a couple things. I think you referenced the $25 billion institution, and I do think the larger institutions, as you continue to move up, they probably have more opportunity, more wherewithal, money-wise and talent-wise, to work with some of these providers directly. You may see that. I can tell you in the community bank space, as I said on our benchmark survey, the number one priority was AI. Our community and regional banks that Jack Henry works with, they don't have the wherewithal in most of the cases to build that out. They're relying on us, which is why we've taken such a proactive way of doing this for the last three and a half years. As I mentioned, you know, not only are we building the level of efficiency and effectiveness inside of the organization, we have 14 different POCs that we have going on right now with products. We have a whole host of things that we've built in our financial crimes solution, including things like SAR reports, you know, suspicious activity reports that go out and doing those using AI. Creating things that provide efficiency gains for our banks and credit unions with various tools, like exception item processing that I referenced in the script. Things along that line that I think will continue to drive opportunities for people like us, at least that are very innovative and building out that level of innovation with our customers. Could there be a few that go around? Yes, maybe, but they're gonna be fewer and far between than they are at the larger institution side. Yeah, that makes sense, Greg. Maybe just one for Mimi, just on the payments non-GAAP revenue growth rate, just because we're getting some questions on. I think I heard lower network incentives this quarter. Is that more of a one-time issue, or does that carry through to future quarters? Just trying to think through the growth rate there and if it can accelerate from the 5%. Thank you. Yeah, of course. The network incentive thresholds are kind of negotiated kind of year-by-year and sometimes intra-year. I don't see that as a headwind kind of going forward in any kind of structural change way. It just happens that it has more of an impact this year in Q4 on top of a throwover from an already strong year. To me, the underlying trends of the strength in card volume, the strength in our enterprise payments business makes me feel comfortable about the ongoing growth rate in that segment. Perfect. Thank you, Mimi. Of course. The next question comes from Cris Kennedy from William Blair. Please go ahead. Good morning. Thanks for taking the question. It's great to hear about the larger wins. Seems like you're making a lot of progress there. Can you just remind us of the dynamics and/or the economics to Jack Henry as you move up market? Thanks. Thanks, Cris. The economics obviously change based on the amount of products that they buy with us. Again, you know, I just referenced this larger one that we just literally won, was not part of the count that I gave you, we just won over the last couple of weeks. That one is, you know, asset size isn't, it's roughly $10 billion in assets, which for us would be the second-largest win in our history as a brand-new core as far as asset size. More importantly, it's the number of accounts. They have 1.2 million accounts, which is, like I said, 25% greater than any of our current customers. They're buying a whole host of products from Jack Henry, so that creates a larger scale of opportunity for us than, you know, maybe some of the other institutions that are buying, you know, only a handful. The key of why I keep referencing trifecta is because trifecta for us really is the, you know, the opportunity for us to drive three of our largest revenue products in with a single client. Really the rest of it becomes gravy. It really does depend, Cris, but when we go in to sell a deal, we try to sell them everything we have. Some of it also could be timing. If the contract terms on some of the other products are not coterminous with the core, you sometimes have to wait to go back and win the digital or the card or other things like that to drive that. Economics really truly vary. Like I just said, the $10 billion opportunity could look a lot greater than a lot of our other opportunities, and it's smaller in asset size. Great. Thanks for taking the question. Appreciate it. Sure. The next question comes from Will Nance from Goldman Sachs. Please go ahead. Hey, thanks for squeezing me in here. Mimi, I wanted to ask another kind of guidance-oriented question. You know, very clear that, you know, the fourth quarter is not kind of indicative of a jumping-off point. I just wanted to pressure test a couple of things in the fourth quarter on that statement. When we think about some of the things you called out, I think on the complementary side, lower digital account growth, and then on the margin side, you know, normalization of commissions and healthcare as well as the commencement of some of the of some of the public cloud spend and some of the duplicative costs there. I was wondering if you could just maybe talk to either why those wouldn't continue into next year or, you know, if they are and, you know, we're supposed to kind of take from that, you know, you're factoring that into the budgeting process as you go through it. You know, if you could just kind of speak to your confidence about, like, levers that you have to offset those things because, you know, you obviously have pretty good visibility on them as of today. Thank you. Yeah. Happy to, Will. Appreciate your acknowledgement that it's a little early for FY 2027. Yeah, I think particularly some of the headwinds that we see in Q4, around the digital account growth, it just happens to be the size of some of the wins previously. We have some bluebirds that are scheduled to come on, and we'll see what the mix for the remaining year of the sales team wins look like as it impacts next year's implementation. No concerns there at all. You know, as Greg mentioned, we feel great from a competitive parity perspective, and our both the robustness of the pipeline and the wins we're getting. No concerns there of that being a carryover into FY 2027. On some of the expenses that you mentioned, we mentioned, you know, in previous quarters that some of that savings, you know, particularly around some of the timing on the commissions as well as some of the timing from the expense, medical claims being lower, really just created an opportunity for more of like a one-time windfall, if you will. We've seen that the beginning of the year, we talked about the 20-40, and we're now set to deliver 75-95. We'll see where we start next year. We always start conservative with the ambition that that's the floor, and look to produce more. Nothing structural, but you're right, we expect kind of a normalization that should probably produce a little bit of a front half grow over challenge relative to the savings we saw this past year. We continue to look at every position and every project with a refined eye to making sure it makes sense for the business. Hey, Will, one thing I do want to emphasize related to the digital backlog is that, you know, the importance of us winning these deals from with existing Jack Henry clients from our competitors is why we continue to emphasize this. Right now in our digital backlog, the digital wins with existing Jack Henry clients from competitors is twice the size of the backlog for the core wins. That puts that in perspective of again, we are winning some larger deals back in the Jack Henry base of deals that we did not win years ago. Got it. That's super helpful. I appreciate all that color. Maybe if I could just ask a little bit more longer term of a question, and I share your knowledge, you know, despite some of the headwinds that you mentioned earlier this year, you know, this is one of the best years that Jack Henry has put up from a margin expansion perspective in many years, you know, and that's despite, you know, a more flattish back half of the year. I just wanna acknowledge that you're kind of doing that with some of the headwinds that I think an earlier question mentioned. Just wondering, as you look out, you know, particularly in the context of the acceleration and core wins and a lot of the sales momentum that you have, you know, how do you kind of think about that long-term margin expansion target? You know, just given what could be a faster pace of top-line growth, like is there, you know, is there room to operate at the higher end of that margin expansion target, you know, while the sales momentum is going strong? Thank you, and nice job today. Yeah. I think your goals are in line with our goals. You know, we know that margin expansion is one of the key pillars from a shareholder value creation, and we are highly motivated to drive that. Not talking about any particular year, so this is not a reference to 2027, but more of kind of the near-term horizon. We've talked about there is a number of great tailwinds that will help us, whether that is the mix of the new products coming to fruition at higher margins, whether that is, you know, moving to a public cloud environment, whether that is AI and continuous improvement efficiencies. We think there's, you know, definitely opportunities to improve the margin profile of the company. Got it. Appreciate you taking the question. Of course. The next question comes from Dave Koning from Baird. Please go ahead. Yeah. Hey, guys. Thanks. Nice job. One thing corporate, just that segment grew super fast. Hardware you called out, I think that's pretty lumpy. You made a comment that you expect growth in all four segments. Historically, corporate was kind of a decliner. Is there something that's changed there, and is it maybe less lumpy or is there some extra growth you expect? Maybe just discuss that a little bit. Yeah. I appreciate the question, Dave. You know, I agree, hardware can be lumpy. We saw that as a big headwind this, you know, last year. It's hard to say, you know, what we expect for next year yet in terms of hardware. We did have an increase a little bit this year that's produced some wins. I would say in general that segment, while we manage it, you know, quite tightly, it doesn't have the same operating characteristics as our other segments. It tends to be a little bit more ancillary services than key areas of revenue. Yeah. That's, that's fair. Just one last one on network. The network incentives, I get what they are. Just from a magnitude standpoint, I know it's lumpy, but is that like a 1%-2% headwind in Q3 and Q4, just so we can understand kind of normalized? Yeah. You know, I would say probably, you know, combined, looking at it from a combination perspectively and holistically across it, I would focus more on the card volume itself as being more of an indicator forward. You know, that strength, that continued strength of the consumer, we think will lead to network incentives. This year, just the threshold was pretty high. Yeah. The other thing is on network incentives. It's an aggregate of all of our card association relationships, and a lot of it is also predicated on average spend, not necessarily transactions. We get paid on transactions. Obviously, the interchange is generated at the larger spend dollars. Some of that is predicated on spend dollars going down, but not necessarily our transactions going down. For the network incentives. Got you. No, that makes sense. Thank you. The next question comes from Kartik Mehta from Northcoast Research. Please go ahead. Hey, good morning, Greg and Mimi. Hey, Greg, I realize there hasn't been as much M&A activity, at least so far in 2026 as some anticipated. If M&A activity picks up, do you think that impacts at all the number of RFPs that might be there for the core over the next couple of years? I do. I do think that a lot of opportunities that tend to happen are folks that are undetermined on what they're going to do in the long term on whether potentially being acquired is an alternative or kind of preparing themselves for that through the process. As you can tell, a lot of folks that maybe are going to be potentially looking to be purchased, they're gonna be less likely to do an RFP at that point in time. It can have an impact on both ways. Based on what we have seen, to answer your question, Kartik, we've seen a really steady dose. I think that if you take the average number of RFPs that we typically talk about in a year, which is roughly 200, I think that number will be closer to 250-275 over the next couple of years with, one, the unrest that's going on at some of the competitors, but also just the whole M&A story itself. Even with increased in M&A, it should actually increase your opportunities. In both ways, right? Yeah. We typically win more than we lose, right, in the M&A side. I think with the opportunities for us to continue to win our fair share of pure competitive takeaways. Hey, then just one last question for you or Mimi. In the past, you've talked about whenever there is some kind of a economic event, you know, if banks get a little skittish, there's a portion of the business that might be impacted because it's a little bit faster sales cycle than the core or some of your other products. You know, at this point in time, you know, what percentage of the business do you think could be at risk if the economy slows or banks get a little bit worried about what's happening? Yeah, overall, we have not seen volatility related to the economic, related to global, issues happening. I would say, and something we've mentioned historically is the card business has the most sensitivity to macroeconomic. Overall, we have not seen a big change in the mix of that kind of exposure, if you will, to the economy. Yeah. Perfect. Consumer sentiment drives a lot. As you know, we have the bulk of our business is debit, and that tends to be the one that gets pushed. But regardless, I mean, I don't know any of the products that we've seen, and again, the we just came out of our SI event in Salt Lake, and the feedback from our clients was, I mean, they're gonna spend more and more because they know that that's their way to combat a lot of things. You know, technology solves a lot of their problems. Thank you both. Appreciate it. Thank you. The next question comes from James Faucette from Morgan Stanley. Please go ahead. Thank you very much. Greg, I want to circle back to a comment you made a few minutes ago that you're seeing increased engagement with consulting and systems integrators. You know, just wondering with those conversations, if you view that as a potential source of better implementation efficacy, especially if you can enlist the SIs to do a lot more of the work. Then, just thinking about that as a potential incremental channel or point of leverage. I'm really glad you asked the question. Thank you. Absolutely. The things that we have found through these conversations, and we've had a multitude of conversations with two particular firms in, in, you know, in particular. I would say that, one, they are able to help validate the things that we were doing in the space as compared to others, and giving us, that feedback. We feel really good about that. Two is what you described, which is they're providing an entree into some of the larger institutions. In fact, I had two inbound calls, from institutions that came as references from these, consulting firms, and we haven't even inked a deal with either one of them yet. They're providing that level of validation that, hey, Jack Henry can play, you know, in this larger market. Thirdly, to your point, do they become potential implementation partners or other aspects? The answer is yes. We're entertaining all of those things as opportunities present themselves. Thanks for that additional commentary there, Greg. Greg or Mimi, I just wanted to touch quickly on some of the things that you're doing in the payment segment. Continue to be intrigued by those. I'm wondering, excuse me, how we should think about the margin profile of Tap2Local relative to the current segment margin. Is the move economics model initially dilutive because of onboarding support, or can it be accretive because of the way the distribution runs through existing Banno and FI relationships? How should we think about those trajectories over time? Thanks for asking the question, James. I would say that some of those new growth initiatives are exciting on two fronts, both from a top-line revenue perspective, still very early days. Greg shared some of the exciting momentum metrics, from a revenue contribution perspective, it's still very small, and expected to grow quite nicely over the next several years. From a margins perspective, because of the nature of the rev share, because of the limited amount of development work we've had to do to get that solution in market, because of the partnerships we have on the marketing side, with the network, it's gonna be great margin. Excited when that comes to fruition. When I look about long-term growth momentum drivers for the business, those are certainly areas that I think will continue to accelerate payment size within our business and overall growth rate. Thanks so much, guys. Thank you. Thank you. The next question comes from Timothy Chiodo from UBS. Please go ahead. Great. Thanks a lot. I apologize if this was already addressed. I'm joining late from another earnings call. I realize it's maybe challenging to talk a little bit about large name competitors, but it's just coming up in a lot of investor discussions with the recent Wells Fargo win for Pismo and Visa overall. I was hoping you could just let us in the investment community know how you're thinking about them as a potential new competitor that might not have been a part of the thought process maybe two years ago and now appears to be gaining some degree of traction. Thanks. Yeah. It has not been asked, Tim, we'll forgive you for going to the other one first. That's okay. Hey, here's the answer to the question. You know, Pismo is not a full core. You know, if you even compare it to, I think some folks had made comparisons to Finxact and Thought Machine and others. By the way, they left us out of there from a comparison standpoint with the things that we've built in the platform. What I would say is that it is the term core is really what's been the challenging component here. It has the ledgering capability. That is it. It does not have any of the other. People are calling it a headless core because of the UI and lacking of that. It doesn't have any of the pure functionality of a core itself, which is why somebody like Wells Fargo can spend the money to build that out based on the Visa relationship that they have, and they can hold them accountable for executing based on the Visa relationship that they have. I think there's a lot of dynamics in a deal like that that are way more impactful than just what, you know, they're supposedly gonna be doing with building out a potential core. I really believe that they could be using some of it more as a side core solution set, using the general ledger as a baseline for that. There isn't any true deposit capabilities or lending capabilities in Pismo today. I validated that with Visa. I mean, you know, we obviously have a strong relationship with Visa, and I have validated that at very top levels. I think there's a little bit of an overreaction to what is truly going on with Pismo today. You know, we are not seeing them. I actually talked to our sales folks and I said, "Do we see them in any single deal?" The answer is no. Obviously, we do see them in card deals sometimes with what they're trying to do with DPS, and bringing those two things together. You know, that's my answer for today based on what I know, based on conversations I've had with Visa directly and what our sales team has brought back to me. Okay. Well, thank you, Greg. I'm glad we tackled that one because I think that really helps. Really great answer. Thank you. Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Vance Sherard for closing remarks. Thank you, Danielle. Management will be participating in multiple investor events over the next two months, and we look forward to our conversations with investors. As Greg mentioned, we will be having our Investor Day on September 15th at our office in Dallas, and that will obviously be webcast. However, if you would like to attend in person, please reach out to Steve Fine on our IR team for more information. In conclusion, we extend our appreciation to all Jack Henry associates for their outstanding efforts, which have set us up to finish a successful fiscal 2026. Thank you for joining us today. Danielle, please provide the replay number. The replay number for today's call is 855-669-9658. The access code is 4124634. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker 11: Good morning, and welcome to the Jack Henry third quarter fiscal year 2026 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Vance Sherard, Vice President, Investor Relations. Please go ahead. Good morning, and welcome to the Jack Henry third quarter fiscal year 2026 earnings conference call. good morning and welcome to the jack henry third quarter fiscal year 2026 earnings conference call All participants will be in a listen-only mode. all participants will be in a listen-only mode Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. should you need assistance please signal a conference specialist by pressing the star key followed by zero After today's presentation, there will be an opportunity to ask questions. after today's presentation there will be an opportunity to ask questions To ask a question, you may press star then one on your telephone keypad. to ask a question you may press star then one on your telephone keypad To withdraw your question, please press star then two. to withdraw your question please press star then two Please note this event is being recorded. please note this event is being recorded I would now like to turn the conference over to Vance Sherard, Vice President, Investor Relations. i would now like to turn the conference over to vance sherard vice president investor relations Please go ahead. please go ahead

Speaker 16: Thank you, Danielle. Good morning, and thank you for joining the Jack Henry third quarter fiscal 2026 earnings call. Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer. Following my opening remarks, Greg will provide an overview of our business along with updates on our strategic initiatives. Mimi will then discuss the financial results and updated fiscal 2026 guidance provided in yesterday's press release, which is available in the investor relations section of the jackhenry.com. Afterward, we will open the lines for a Q&A session. Please note that this call includes forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from our expectations. The company is not obligated to update or revise these statements. Thank you, Danielle. thank you danielle Good morning, and thank you for joining the Jack Henry third quarter fiscal 2026 earnings call. good morning and thank you for joining the jack henry third quarter fiscal 2026 earnings call Joining me today are Greg Adelson, President and CEO, and Mimi Carsley, CFO and Treasurer. joining me today are greg adelson president and ceo and mimi carsley cfo and treasurer Following my opening remarks, Greg will provide an overview of our business along with updates on our strategic initiatives. following my opening remarks greg will provide an overview of our business along with updates on our strategic initiatives Mimi will then discuss the financial results and updated fiscal 2026 guidance provided in yesterday's press release, which is available in the investor relations section of the jackhenry.com. mimi will then discuss the financial results and updated fiscal 2026 guidance provided in yesterday's press release which is available in the investor relations section of the jackhenry.com Afterward, we will open the lines for a Q&A session. afterward we will open the lines for a q&a session Please note that this call includes forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from our expectations. please note that this call includes forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from our expectations The company is not obligated to update or revise these statements. the company is not obligated to update or revise these statements For a summary of risk factors and additional information that could cause actual results to differ materially from such forward-looking statements, refer to yesterday's press release and the risk factors and forward-looking statements sections in our 10-K. During this call, we will discuss non-GAAP financial measures such as non-GAAP revenue and non-GAAP operating income. Reconciliations for these measures are included in yesterday's press release. Now I will hand the call over to Greg. For a summary of risk factors and additional information that could cause actual results to differ materially from such forward-looking statements, refer to yesterday's press release and the risk factors and forward-looking statements sections in our 10-K. for a summary of risk factors and additional information that could cause actual results to differ materially from such forward-looking statements refer to yesterday's press release and the risk factors and forward-looking statements sections in our 10-k During this call, we will discuss non-GAAP financial measures such as non-GAAP revenue and non-GAAP operating income. during this call we will discuss non-gaap financial measures such as non-gaap revenue and non-gaap operating income Reconciliations for these measures are included in yesterday's press release. reconciliations for these measures are included in yesterday's press release Now I will hand the call over to Greg. now i will hand the call over to greg

Speaker 5: Thank you, Vance. Good morning, and thank you for joining today's call. As always, I want to begin by recognizing our associates for their hard work and dedication. They consistently go above and beyond to serve our clients and drive our success. I will share three key takeaways from the quarter and will then provide additional detail on our overall business. First, our financial performance. We produced record third-quarter results with non-GAAP revenue of $616 million, up 7.3% over last year's third quarter. Our non-GAAP operating margin was a strong 22.9% on par with last year's Q3. Second, our sales performance. Our sales and marketing team delivered an outstanding quarter with 17 competitive core wins, including five institutions with more than $1 billion in assets. Thank you, Vance. thank you vance Good morning, and thank you for joining today's call. good morning and thank you for joining today's call As always, I want to begin by recognizing our associates for their hard work and dedication. as always i want to begin by recognizing our associates for their hard work and dedication They consistently go above and beyond to serve our clients and drive our success. they consistently go above and beyond to serve our clients and drive our success I will share three key takeaways from the quarter and will then provide additional detail on our overall business. i will share three key takeaways from the quarter and will then provide additional detail on our overall business First, our financial performance. first our financial performance We produced record third-quarter results with non-GAAP revenue of $616 million, up 7.3% over last year's third quarter. we produced record third-quarter results with non-gaap revenue of $616 million up 7.3% over last year's third quarter Our non-GAAP operating margin was a strong 22.9% on par with last year's Q3. our non-gaap operating margin was a strong 22.9% on par with last year's q3 Second, our sales performance. second our sales performance Our sales and marketing team delivered an outstanding quarter with 17 competitive core wins, including five institutions with more than $1 billion in assets. our sales and marketing team delivered an outstanding quarter with 17 competitive core wins including five institutions with more than $1 billion in assets This represents our strongest third quarter for new core wins in seven years and ties our best third quarter ever in over $1 billion wins. Year-to-date, we have won 43 core deals, 11 of which are institutions over $1 billion. That's up from 28 wins and eight over $1 billion at this point last year. Based on our strong momentum, we are highly confident that we will exceed the 51 core wins achieved last year. Third, our higher value core wins. We continue to see a higher number of trifecta solution wins. So far this year, 25 of our core wins, or 58% of the total, have included digital banking and card solutions. At this time last year, we only had eight core deals that included digital banking and card solutions, just 29% of the total won. This represents our strongest third quarter for new core wins in seven years and ties our best third quarter ever in over $1 billion wins. this represents our strongest third quarter for new core wins in seven years and ties our best third quarter ever in over $1 billion wins Year- to- date, we have won 43 core deals, 11 of which are institutions over $1 billion. year- to- date we have won 43 core deals 11 of which are institutions over $1 billion That's up from 28 wins and eight over $1 billion at this point last year. that's up from 28 wins and eight over $1 billion at this point last year Based on our strong momentum, we are highly confident that we will exceed the 51 core wins achieved last year. based on our strong momentum we are highly confident that we will exceed the 51 core wins achieved last year Third, our higher value core wins. third our higher value core wins We continue to see a higher number of trifecta solution wins. we continue to see a higher number of trifecta solution wins So far this year, 25 of our core wins, or 58% of the total, have included digital banking and card solutions. so far this year 25 of our core wins or 58% of the total have included digital banking and card solutions At this time last year, we only had eight core deals that included digital banking and card solutions, just 29% of the total won. at this time last year we only had eight core deals that included digital banking and card solutions just 29% of the total won This healthy growth in trifecta wins reinforces the strength of our integrated platform and supports deeper, more valuable client relationships. Turning to our broader business. I will begin with our use of artificial intelligence, followed by updates on several innovative solutions and specific products. As I have shared at recent investor conferences, we view AI as a significant strategic opportunity and have been operating and expanding our capabilities for more than 3.5 years by establishing strong governance processes that support a responsible, bold, and balanced approach. Today, close to 100 AI tools are approved for internal use, ranging from general productivity platforms such as Gemini and Copilot to specialized business and development tools across all areas of our company. These tools support over 500 distinct use cases, delivering meaningful and measurable impacts. A few examples to share. This healthy growth in trifecta wins reinforces the strength of our integrated platform and supports deeper, more valuable client relationships. this healthy growth in trifecta wins reinforces the strength of our integrated platform and supports deeper more valuable client relationships Turning to our broader business. turning to our broader business I will begin with our use of artificial intelligence, followed by updates on several innovative solutions and specific products. i will begin with our use of artificial intelligence followed by updates on several innovative solutions and specific products As I have shared at recent investor conferences, we view AI as a significant strategic opportunity and have been operating and expanding our capabilities for more than 3.5 years by establishing strong governance processes that support a responsible, bold, and balanced approach. as i have shared at recent investor conferences we view ai as a significant strategic opportunity and have been operating and expanding our capabilities for more than 3.5 years by establishing strong governance processes that support a responsible bold and balanced approach Today, close to 100 AI tools are approved for internal use, ranging from general productivity platforms such as Gemini and Copilot to specialized business and development tools across all areas of our company. today close to 100 ai tools are approved for internal use ranging from general productivity platforms such as gemini and copilot to specialized business and development tools across all areas of our company These tools support over 500 distinct use cases, delivering meaningful and measurable impacts. these tools support over 500 distinct use cases delivering meaningful and measurable impacts A few examples to share. a few examples to share In lending, developers working on our new Jack Henry origination solution online account opening solution have increased productivity by roughly 90%, driven by faster coding and quicker issue resolution. In digital, as part of the new Jack Henry platform, we have built an AI-assisted recommendation system for exception item processing that is in closed beta with three banks. They all report that AI is reducing the time to close exceptions each day by 70%-80%. In customer service, our AI advisor bot is supporting our frontline representatives and has assisted with more than 3,700 complex support interactions over the past two months with a 96% success rate, surfacing answers in seconds from our knowledge resources. To further accelerate adoption, we have deployed an internal team of AI coaches who work directly with our associates through workshops and hands-on support. In lending, developers working on our new Jack Henry origination solution online account opening solution have increased productivity by roughly 90%, driven by faster coding and quicker issue resolution. in lending developers working on our new jack henry origination solution online account opening solution have increased productivity by roughly 90% driven by faster coding and quicker issue resolution In digital, as part of the new Jack Henry platform, we have built an AI-assisted recommendation system for exception item processing that is in closed beta with three banks. in digital as part of the new jack henry platform we have built an ai-assisted recommendation system for exception item processing that is in closed beta with three banks They all report that AI is reducing the time to close exceptions each day by 70%-80%. they all report that ai is reducing the time to close exceptions each day by 70%-80% In customer service, our AI advisor bot is supporting our frontline representatives and has assisted with more than 3,700 complex support interactions over the past two months with a 96% success rate, surfacing answers in seconds from our knowledge resources. in customer service our ai advisor bot is supporting our frontline representatives and has assisted with more than 3,700 complex support interactions over the past two months with a 96% success rate surfacing answers in seconds from our knowledge resources To further accelerate adoption, we have deployed an internal team of AI coaches who work directly with our associates through workshops and hands-on support. to further accelerate adoption we have deployed an internal team of ai coaches who work directly with our associates through workshops and hands-on support We are also seeing meaningful productivity and efficiency gains from natural language development, sometimes referred to as vibe coding. For example, a non-technical associate recently developed an internal application for our travel program, allowing us to meet a business need without licensing additional software. This is one example of many where our teams have independently built more efficient ways to address specific business challenges. Overall, we believe our approach to AI education and adoption significantly helps us minimize competitive risks. Additionally, regulatory requirements, network certifications, and our role as the system of record make the banking industry very difficult to disintermediate. Shifting to our innovative solutions, we continue to make strong progress on our stablecoin strategy. Beta testing with clients to send and receive USDC is going well, and at this point, we are largely awaiting final regulatory guidance to proceed more expeditiously. We are also seeing meaningful productivity and efficiency gains from natural language development, sometimes referred to as vibe coding. we are also seeing meaningful productivity and efficiency gains from natural language development sometimes referred to as vibe coding For example, a non-technical associate recently developed an internal application for our travel program, allowing us to meet a business need without licensing additional software. for example a non-technical associate recently developed an internal application for our travel program allowing us to meet a business need without licensing additional software This is one example of many where our teams have independently built more efficient ways to address specific business challenges. Overall, we believe our approach to AI education and adoption significantly helps us minimize competitive risks. this is one example of many where our teams have independently built more efficient ways to address specific business challenges. overall we believe our approach to ai education and adoption significantly helps us minimize competitive risks Additionally, regulatory requirements, network certifications, and our role as the system of record make the banking industry very difficult to disintermediate. additionally regulatory requirements network certifications and our role as the system of record make the banking industry very difficult to disintermediate Shifting to our innovative solutions, we continue to make strong progress on our stablecoin strategy. shifting to our innovative solutions we continue to make strong progress on our stablecoin strategy Beta testing with clients to send and receive USDC is going well, and at this point, we are largely awaiting final regulatory guidance to proceed more expeditiously. beta testing with clients to send and receive usdc is going well and at this point we are largely awaiting final regulatory guidance to proceed more expeditiously We are delivering stablecoin processing through the public cloud-native Jack Henry platform. This is important because the platform is connected to all of our core systems, serving as a bridge between emerging capabilities and our foundational cores. This provides our clients fast, integrated access to capabilities such as stablecoin and our initial SMB solutions, Tap2Local and Rapid Transfers. Tap2Local, our SMB merchant payment solution, continues to see significant tractions as clients look to better serve SMBs, increase deposits, and recapture business from Fintechs. At the end of April, more than 700 banks and credit unions were live with Tap2Local. Since beginning targeted marketing just a few days ago, active merchants have doubled to more than 1,600, with several thousand additional merchants currently in the enrollment process. We are delivering stablecoin processing through the public cloud-native Jack Henry platform. we are delivering stablecoin processing through the public cloud-native jack henry platform This is important because the platform is connected to all of our core systems, serving as a bridge between emerging capabilities and our foundational cores. this is important because the platform is connected to all of our core systems serving as a bridge between emerging capabilities and our foundational cores This provides our clients fast, integrated access to capabilities such as stablecoin and our initial SMB solutions, Tap2Local and Rapid Transfers. this provides our clients fast integrated access to capabilities such as stablecoin and our initial smb solutions tap2local and rapid transfers Tap2Local, our SMB merchant payment solution, continues to see significant tractions as clients look to better serve SMBs, increase deposits, and recapture business from Fintechs. tap2local our smb merchant payment solution continues to see significant tractions as clients look to better serve smbs increase deposits and recapture business from fintechs At the end of April, more than 700 banks and credit unions were live with Tap2Local. at the end of april more than 700 banks and credit unions were live with tap2local Since beginning targeted marketing just a few days ago, active merchants have doubled to more than 1,600, with several thousand additional merchants currently in the enrollment process. since beginning targeted marketing just a few days ago active merchants have doubled to more than 1,600 with several thousand additional merchants currently in the enrollment process We intentionally waited to begin marketing so we could ensure the product and infrastructure were fully operational. With that foundation now in place and marketing beginning to ramp up, we expect adoption to accelerate in the coming months. Client feedback has been very positive, particularly around Tap2Local's differentiated capabilities, including easy enrollment, tap-to-pay on both iOS and Android devices, and continuous account reconciliation. As an additional validation to the product's uniqueness, Tap2Local recently won the FinTech Breakthrough Award for Small Business Payments Solution of the Year. We are also seeing strong early momentum with Jack Henry Rapid Transfers, which enables both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets. Rapid Transfers is now live with over 110 banks and credit unions, with an additional 190 at various stages of onboarding. We intentionally waited to begin marketing so we could ensure the product and infrastructure were fully operational. we intentionally waited to begin marketing so we could ensure the product and infrastructure were fully operational With that foundation now in place and marketing beginning to ramp up, we expect adoption to accelerate in the coming months. with that foundation now in place and marketing beginning to ramp up we expect adoption to accelerate in the coming months Client feedback has been very positive, particularly around Tap2Local's differentiated capabilities, including easy enrollment, tap-to-pay on both iOS and Android devices, and continuous account reconciliation. client feedback has been very positive particularly around tap2local's differentiated capabilities including easy enrollment tap-to-pay on both ios and android devices and continuous account reconciliation As an additional validation to the product's uniqueness, Tap2Local recently won the FinTech Breakthrough Award for Small Business Payments Solution of the Year. as an additional validation to the product's uniqueness tap2local recently won the fintech breakthrough award for small business payments solution of the year We are also seeing strong early momentum with Jack Henry Rapid Transfers, which enables both SMBs and consumers to quickly move funds between external accounts, eligible cards, and digital wallets. we are also seeing strong early momentum with jack henry rapid transfers which enables both smbs and consumers to quickly move funds between external accounts eligible cards and digital wallets Rapid Transfers is now live with over 110 banks and credit unions, with an additional 190 at various stages of onboarding. rapid transfers is now live with over 110 banks and credit unions with an additional 190 at various stages of onboarding Transaction volumes have been healthy, particularly given that marketing has not yet begun. The average transaction size is approximately $260, which is double our original projections, and it's being driven by stronger than anticipated inbound transfers. Larger inbound transfers deliver one of the key value propositions, increased deposits for the financial institution. With higher average transaction sizes and consistent monthly activity without any marketing, Rapid Transfers is currently tracking well ahead of our initial modules, though we are still in the early innings of the rollout. As another key part of the Jack Henry platform, we are developing a cloud-native deposit-only core. Client testing is underway and development was completed six months ahead of our original schedule announced in February of 2022. We will continue to broaden our testing as the year progresses. Transaction volumes have been healthy, particularly given that marketing has not yet begun. transaction volumes have been healthy particularly given that marketing has not yet begun The average transaction size is approximately $260, which is double our original projections, and it's being driven by stronger than anticipated inbound transfers. the average transaction size is approximately $260 which is double our original projections and it's being driven by stronger than anticipated inbound transfers Larger inbound transfers deliver one of the key value propositions, increased deposits for the financial institution. larger inbound transfers deliver one of the key value propositions increased deposits for the financial institution With higher average transaction sizes and consistent monthly activity without any marketing, Rapid Transfers is currently tracking well ahead of our initial modules, though we are still in the early innings of the rollout. with higher average transaction sizes and consistent monthly activity without any marketing rapid transfers is currently tracking well ahead of our initial modules though we are still in the early innings of the rollout As another key part of the Jack Henry platform, we are developing a cloud-native deposit-only core. as another key part of the jack henry platform we are developing a cloud-native deposit-only core Client testing is underway and development was completed six months ahead of our original schedule announced in February of 2022. client testing is underway and development was completed six months ahead of our original schedule announced in february of 2022 We will continue to broaden our testing as the year progresses. we will continue to broaden our testing as the year progresses I also want to highlight early progress on our enhanced embedded payments capabilities following the acquisition of Victor Technologies last fall. The Victor platform, now branded as Jack Henry Payments Orchestrator, enables financial institutions to embed payment capabilities directly into third-party non-bank brands such as Fintechs and commercial customers. In Q3, we signed one bank and onboarded three Fintechs to the platform and have quickly grown our sales pipeline to more than 40 banks and or Fintechs. Moving on to our reporting segments. In core, in addition to the 17 competitive wins I mentioned earlier, we also secured four on-premise to private cloud contracts, including one institution over $1 billion. So far this year, we have signed 23 in-to-out contracts, with eight being institutions over $1 billion. In payments, we continue to see strong growth in faster payments. I also want to highlight early progress on our enhanced embedded payments capabilities following the acquisition of Victor Technologies last fall. i also want to highlight early progress on our enhanced embedded payments capabilities following the acquisition of victor technologies last fall The Victor platform, now branded as Jack Henry Payments Orchestrator, enables financial institutions to embed payment capabilities directly into third-party non-bank brands such as Fintechs and commercial customers. the victor platform now branded as jack henry payments orchestrator enables financial institutions to embed payment capabilities directly into third-party non-bank brands such as fintechs and commercial customers In Q3, we signed one bank and onboarded three Fintechs to the platform and have quickly grown our sales pipeline to more than 40 banks and or Fintechs. in q3 we signed one bank and onboarded three fintechs to the platform and have quickly grown our sales pipeline to more than 40 banks and or fintechs Moving on to our reporting segments. moving on to our reporting segments In core, in addition to the 17 competitive wins I mentioned earlier, we also secured four on-premise to private cloud contracts, including one institution over $1 billion. in core in addition to the 17 competitive wins i mentioned earlier we also secured four on-premise to private cloud contracts including one institution over $1 billion So far this year, we have signed 23 in-to-out contracts, with eight being institutions over $1 billion. so far this year we have signed 23 in-to-out contracts with eight being institutions over $1 billion In payments, we continue to see strong growth in faster payments. in payments we continue to see strong growth in faster payments Over the past year, our clients' adoption of Zelle grew by 25%, RTP by 26%, and FedNow by 31%. In the third quarter, payment transaction volume across these channels increased 47% year-over-year. In complementary, we signed 36 new Financial Crimes Defender and Faster Payment Module contracts during the quarter. As of March 31, we have completed 168 Financial Crimes Defender installations and another 68 in various stages of implementation. We've also installed 168 Faster Payment Modules with an additional 256 in progress. The Banno Digital Platform had another strong quarter with 23 retail and 34 Banno Business signings. In total, we have 1,028 clients live on Banno, including 466 on Banno Business. Over the past year, our clients' adoption of Zelle grew by 25%, RTP by 26%, and FedNow by 31%. over the past year our clients' adoption of zelle grew by 25% rtp by 26% and fednow by 31% In the third quarter, payment transaction volume across these channels increased 47% year-over-year. in the third quarter payment transaction volume across these channels increased 47% year-over-year In complementary, we signed 36 new Financial Crimes Defender and Faster Payment Module contracts during the quarter. in complementary we signed 36 new financial crimes defender and faster payment module contracts during the quarter As of March 31, we have completed 168 Financial Crimes Defender installations and another 68 in various stages of implementation. as of march 31 we have completed 168 financial crimes defender installations and another 68 in various stages of implementation We've also installed 168 Faster Payment Modules with an additional 256 in progress. we've also installed 168 faster payment modules with an additional 256 in progress The Banno Digital Platform had another strong quarter with 23 retail and 34 Banno Business signings. the banno digital platform had another strong quarter with 23 retail and 34 banno business signings In total, we have 1,028 clients live on Banno, including 466 on Banno Business. in total we have 1,028 clients live on banno including 466 on banno business The platform now serves more than 15.5 million registered users, up 13% from a year ago. As a reminder, all of our Banno wins and growth thus far has occurred within our core base. As we look ahead, we believe we are at a meaningful inflection point. We now have a competitive feature set along with increased willingness among certain competitors to operate as open providers. As a result, we see an opportunity to begin expanding Banno beyond our existing base and more closely align it with our payment product strategy, where we have successfully sold outside the base for many years. We will provide more updates as we progress with this strategy. The platform now serves more than 15.5 million registered users, up 13% from a year ago. the platform now serves more than 15.5 million registered users up 13% from a year ago As a reminder, all of our Banno wins and growth thus far has occurred within our core base. as a reminder all of our banno wins and growth thus far has occurred within our core base As we look ahead, we believe we are at a meaningful inflection point. as we look ahead we believe we are at a meaningful inflection point We now have a competitive feature set along with increased willingness among certain competitors to operate as open providers. we now have a competitive feature set along with increased willingness among certain competitors to operate as open providers As a result, we see an opportunity to begin expanding Banno beyond our existing base and more closely align it with our payment product strategy, where we have successfully sold outside the base for many years. as a result we see an opportunity to begin expanding banno beyond our existing base and more closely align it with our payment product strategy where we have successfully sold outside the base for many years We will provide more updates as we progress with this strategy. we will provide more updates as we progress with this strategy On the technology spending front, we recently released results from our eighth annual strategy benchmark survey, which highlights technology spending priorities. While we monitor a number of industry surveys, this one is particularly meaningful because it reflects direct input from the CEOs of our bank and credit union clients. The results point to a clear and growing commitment to technology investment. 88% of respondents expect to increase their technology budgets over the next two years, up from 76% last year. Of those, the largest segment, 41%, plans to increase investments between 6% and 10%. These trends are consistent with other industry surveys pointing to increased technology spending. We asked CEOs where they plan to prioritize those investments. For the first time, artificial intelligence ranks as the top priority, cited by nearly 50% of the respondents, followed by digital banking and data analytics. On the technology spending front, we recently released results from our eighth annual strategy benchmark survey, which highlights technology spending priorities. While we monitor a number of industry surveys, this one is particularly meaningful because it reflects direct input from the CEOs of our bank and credit union clients. on the technology spending front we recently released results from our eighth annual strategy benchmark survey which highlights technology spending priorities. while we monitor a number of industry surveys this one is particularly meaningful because it reflects direct input from the ceos of our bank and credit union clients The results point to a clear and growing commitment to technology investment. 88% of respondents expect to increase their technology budgets over the next two years, up from 76% last year. the results point to a clear and growing commitment to technology investment 88% of respondents expect to increase their technology budgets over the next two years up from 76% last year Of those, the largest segment, 41%, plans to increase investments between 6% and 10%. of those the largest segment 41% plans to increase investments between 6% and 10% These trends are consistent with other industry surveys pointing to increased technology spending. these trends are consistent with other industry surveys pointing to increased technology spending We asked CEOs where they plan to prioritize those investments. we asked ceos where they plan to prioritize those investments For the first time, artificial intelligence ranks as the top priority, cited by nearly 50% of the respondents, followed by digital banking and data analytics. for the first time artificial intelligence ranks as the top priority cited by nearly 50% of the respondents followed by digital banking and data analytics These priorities align directly with where Jack Henry has been investing in delivering innovation. Last week, we highlighted our differentiated innovation at the Jack Henry Annual Strategic Insight Symposium in Salt Lake City. We featured presentations and panels that included both Jack Henry leaders and well-known industry experts covering key topics such as the macroeconomic environment, the Jack Henry Benchmark survey, our technology priorities and progress, fraud initiatives, AI education and use cases, the impact of stable coins and tokens, and meeting the needs of Gen Z. We will provide updates on many of these topics along with additional innovation updates at our Investor Day on September 15th in our Dallas offices. We recently completed and published our 2026 sustainability report. The report is an outstanding information source on Jack Henry and is available to review on the investor relations page on jackhenry.com. These priorities align directly with where Jack Henry has been investing in delivering innovation. these priorities align directly with where jack henry has been investing in delivering innovation Last week, we highlighted our differentiated innovation at the Jack Henry Annual Strategic Insight Symposium in Salt Lake City. last week we highlighted our differentiated innovation at the jack henry annual strategic insight symposium in salt lake city We featured presentations and panels that included both Jack Henry leaders and well-known industry experts covering key topics such as the macroeconomic environment, the Jack Henry Benchmark survey, our technology priorities and progress, fraud initiatives, AI education and use cases, the impact of stable coins and tokens, and meeting the needs of Gen Z. we featured presentations and panels that included both jack henry leaders and well-known industry experts covering key topics such as the macroeconomic environment the jack henry benchmark survey our technology priorities and progress fraud initiatives ai education and use cases the impact of stable coins and tokens and meeting the needs of gen z We will provide updates on many of these topics along with additional innovation updates at our Investor Day on September 15th in our Dallas offices. we will provide updates on many of these topics along with additional innovation updates at our investor day on september 15th in our dallas offices We recently completed and published our 2026 sustainability report. we recently completed and published our 2026 sustainability report The report is an outstanding information source on Jack Henry and is available to review on the investor relations page on jackhenry.com. the report is an outstanding information source on jack henry and is available to review on the investor relations page on jackhenry.com The report coincides with our 50th anniversary. It reflects our continued focus on preserving long-term value for our associates, clients, communities, stockholders, and the environment through responsible business practices. As part of our 50th anniversary celebration, our board is looking forward to ringing the closing bell at Nasdaq tomorrow, May 7th. This is one of the many activities we are doing throughout the year to mark this significant milestone. In closing, we remain focused on culture, service, innovation, strategy, and execution. These key differentiators will enable Jack Henry to continue to drive industry-leading revenue growth and margin expansion. With strong sales momentum, increased client technology spending, and a disciplined execution, we believe Jack Henry is extremely well positioned to capture the opportunities ahead. With that, I will turn it over to Mimi for more detail on our financials. The report coincides with our 50th anniversary. the report coincides with our 50th anniversary It reflects our continued focus on preserving long-term value for our associates, clients, communities, stockholders, and the environment through responsible business practices. it reflects our continued focus on preserving long-term value for our associates clients communities stockholders and the environment through responsible business practices As part of our 50th anniversary celebration, our board is looking forward to ringing the closing bell at Nasdaq tomorrow, May 7th. as part of our 50th anniversary celebration our board is looking forward to ringing the closing bell at nasdaq tomorrow may 7th This is one of the many activities we are doing throughout the year to mark this significant milestone. this is one of the many activities we are doing throughout the year to mark this significant milestone In closing, we remain focused on culture, service, innovation, strategy, and execution. in closing we remain focused on culture service innovation strategy and execution These key differentiators will enable Jack Henry to continue to drive industry-leading revenue growth and margin expansion. these key differentiators will enable jack henry to continue to drive industry-leading revenue growth and margin expansion With strong sales momentum, increased client technology spending, and a disciplined execution, we believe Jack Henry is extremely well positioned to capture the opportunities ahead. with strong sales momentum increased client technology spending and a disciplined execution we believe jack henry is extremely well positioned to capture the opportunities ahead With that, I will turn it over to Mimi for more detail on our financials. with that i will turn it over to mimi for more detail on our financials

Speaker 10: Thank you, Greg, and good morning, everyone. I would like to begin by thanking our associates who continually deliver value to our financial institution clients. The result is another quarter of solid revenue and earnings growth and continued momentum as we approach the end of our fiscal year. I will begin with our healthy Third quarter results, then conclude with our updated fiscal 2026 guidance. Q3 GAAP revenue increased 9%. Non-GAAP revenue increased 7% for the quarter and 8% year-to-date, a continuation of consistently strong performance. Third quarter deconversion revenue of approximately $19 million, which we previously announced, was up approximately $9 million for the quarter, reflecting a steady pace of M&A activity among financial institutions. As a reminder, the dollar amount of deconversion revenue has little correlation with the number of transactions or annual revenue impact. Thank you, Greg, and good morning, everyone. thank you greg and good morning everyone I would like to begin by thanking our associates who continually deliver value to our financial institution clients. i would like to begin by thanking our associates who continually deliver value to our financial institution clients The result is another quarter of solid revenue and earnings growth and continued momentum as we approach the end of our fiscal year. the result is another quarter of solid revenue and earnings growth and continued momentum as we approach the end of our fiscal year I will begin with our healthy Third quarter results, then conclude with our updated fiscal 2026 guidance. i will begin with our healthy third quarter results then conclude with our updated fiscal 2026 guidance Q3 GAAP revenue increased 9%. q3 gaap revenue increased 9% Non-GAAP revenue increased 7% for the quarter and 8% year-to-date, a continuation of consistently strong performance. non-gaap revenue increased 7% for the quarter and 8% year-to-date a continuation of consistently strong performance Third quarter deconversion revenue of approximately $19 million, which we previously announced, was up approximately $9 million for the quarter, reflecting a steady pace of M&A activity among financial institutions. third quarter deconversion revenue of approximately $19 million which we previously announced was up approximately $9 million for the quarter reflecting a steady pace of m&a activity among financial institutions As a reminder, the dollar amount of deconversion revenue has little correlation with the number of transactions or annual revenue impact. as a reminder the dollar amount of deconversion revenue has little correlation with the number of transactions or annual revenue impact The absolute amount of deconversion revenue can vary greatly quarter-to-quarter. We continue to see industry consolidation as largely neutral to slightly positive for our business. Now, let's look more closely at the details. GAAP services and support revenue increased 10% for the quarter, while non-GAAP increased 8%. Service and support growth during the quarter was primarily driven by strength in data processing and hosting revenues for both private and public cloud. Specific callouts include implementation services and license revenue. Private and public cloud offerings continue to drive strong growth. Cloud revenue increased 9% in the quarter. This recurring revenue contributor is 33% of our total revenue. Shifting to processing revenue, which is 43% of total revenue and another strategic component of our long-term growth model. We saw solid performance with 7% GAAP and 6% non-GAAP growth for the quarter. The absolute amount of deconversion revenue can vary greatly quarter- to- quarter. the absolute amount of deconversion revenue can vary greatly quarter- to- quarter We continue to see industry consolidation as largely neutral to slightly positive for our business. we continue to see industry consolidation as largely neutral to slightly positive for our business Now, let's look more closely at the details. now let's look more closely at the details GAAP services and support revenue increased 10% for the quarter, while non-GAAP increased 8%. gaap services and support revenue increased 10% for the quarter while non-gaap increased 8% Service and support growth during the quarter was primarily driven by strength in data processing and hosting revenues for both private and public cloud. service and support growth during the quarter was primarily driven by strength in data processing and hosting revenues for both private and public cloud Specific callouts include implementation services and license revenue. specific callouts include implementation services and license revenue Private and public cloud offerings continue to drive strong growth. private and public cloud offerings continue to drive strong growth Cloud revenue increased 9% in the quarter. cloud revenue increased 9% in the quarter This recurring revenue contributor is 33% of our total revenue. this recurring revenue contributor is 33% of our total revenue Shifting to processing revenue, which is 43% of total revenue and another strategic component of our long-term growth model. shifting to processing revenue which is 43% of total revenue and another strategic component of our long-term growth model We saw solid performance with 7% GAAP and 6% non-GAAP growth for the quarter. we saw solid performance with 7% gaap and 6% non-gaap growth for the quarter Consistent with recent results, quarterly drivers included increased digital, card, and faster payments processing revenue. Leading commentary on revenue, I would highlight total recurring revenue was 91% for the quarter. Moving to expenses. Beginning with cost of revenue, which increased 7% on a GAAP and non-GAAP basis for the quarter. Drivers for the quarter are consistent with recent previous quarter results and include higher personnel costs, direct costs growing consistent with lines of revenue, and increased amortization of intangible assets. For modeling purposes, amortization of acquisition-related intangibles was $6 million for the quarter. R&D expense increased 15% for GAAP and 12% on a non-GAAP basis for the quarter. Consistent with recent results, quarterly drivers included increased digital, card, and faster payments processing revenue. consistent with recent results quarterly drivers included increased digital card and faster payments processing revenue Leading commentary on revenue, I would highlight total recurring revenue was 91% for the quarter. leading commentary on revenue i would highlight total recurring revenue was 91% for the quarter Moving to expenses. moving to expenses Beginning with cost of revenue, which increased 7% on a GAAP and non-GAAP basis for the quarter. beginning with cost of revenue which increased 7% on a gaap and non-gaap basis for the quarter Drivers for the quarter are consistent with recent previous quarter results and include higher personnel costs, direct costs growing consistent with lines of revenue, and increased amortization of intangible assets. drivers for the quarter are consistent with recent previous quarter results and include higher personnel costs direct costs growing consistent with lines of revenue and increased amortization of intangible assets For modeling purposes, amortization of acquisition-related intangibles was $6 million for the quarter. for modeling purposes amortization of acquisition-related intangibles was $6 million for the quarter R&D expense increased 15% for GAAP and 12% on a non-GAAP basis for the quarter. r&d expense increased 15% for gaap and 12% on a non-gaap basis for the quarter Quarterly increase was primarily due to the net personnel costs driven by an increase in headcount over the trailing 12 months. Ending with SG&A expense for the quarter on a GAAP basis, it increased 9% and an increase of 8% on a non-GAAP basis. Results reflect an increase in personnel costs, specifically from headcount additions over the 12 months. We remain focused on generating annual compounding margin expansion. Q3 delivered consistent non-GAAP margin at 23%. Year-to-date non-GAAP margin improvement was 195 basis points with a non-GAAP margin of 25%. Non-GAAP margin benefits inherently from the leverage in our business model, strategic cost management, and leveraging our existing workforce as we continue to focus on enterprise process improvement and AI utilization. These strong quarterly results produced a fully diluted GAAP earnings per share of $1.71, up 12%. Quarterly increase was primarily due to the net personnel costs driven by an increase in headcount over the trailing 12 months. Ending with SG&A expense for the quarter on a GAAP basis, it increased 9% and an increase of 8% on a non-GAAP basis. quarterly increase was primarily due to the net personnel costs driven by an increase in headcount over the trailing 12 months. ending with sg&a expense for the quarter on a gaap basis it increased 9% and an increase of 8% on a non-gaap basis Results reflect an increase in personnel costs, specifically from headcount additions over the 12 months. results reflect an increase in personnel costs specifically from headcount additions over the 12 months We remain focused on generating annual compounding margin expansion. we remain focused on generating annual compounding margin expansion Q3 delivered consistent non-GAAP margin at 23%. q3 delivered consistent non-gaap margin at 23% Year-to-date non-GAAP margin improvement was 195 basis points with a non-GAAP margin of 25%. year-to-date non-gaap margin improvement was 195 basis points with a non-gaap margin of 25% Non-GAAP margin benefits inherently from the leverage in our business model, strategic cost management, and leveraging our existing workforce as we continue to focus on enterprise process improvement and AI utilization. non-gaap margin benefits inherently from the leverage in our business model strategic cost management and leveraging our existing workforce as we continue to focus on enterprise process improvement and ai utilization These strong quarterly results produced a fully diluted GAAP earnings per share of $1.71, up 12%. these strong quarterly results produced a fully diluted gaap earnings per share of $1.71 up 12% For the year-to-date period GAAP, period GAAP earnings per share was $5.41, an increase of 20%. Reviewing the four operating segments, we see positive performance across the board. Core segment non-GAAP revenue increased 9% for the quarter, with operating margin contraction of 27 basis points due to temporary product mix of lower margin revenue sources such as implementation and work orders. Payment segment quarterly non-GAAP revenue increased 5%. The segment again had outstanding non-GAAP operating margin growth with quarterly results of 159 basis points. Card processing revenue showed steady growth and was partly offset by lower network incentive revenue. The segment also benefited from continuing shift and significant growth from faster payments. The complementary segment quarterly non-GAAP revenue increased an impressive 7%, with healthy 99 basis points of non-GAAP margin expansion. For the year-to-date period GAAP, period GAAP earnings per share was $5.41, an increase of 20%. for the year-to-date period gaap period gaap earnings per share was $5.41 an increase of 20% Reviewing the four operating segments, we see positive performance across the board. reviewing the four operating segments we see positive performance across the board Core segment non-GAAP revenue increased 9% for the quarter, with operating margin contraction of 27 basis points due to temporary product mix of lower margin revenue sources such as implementation and work orders. core segment non-gaap revenue increased 9% for the quarter with operating margin contraction of 27 basis points due to temporary product mix of lower margin revenue sources such as implementation and work orders Payment segment quarterly non-GAAP revenue increased 5%. payment segment quarterly non-gaap revenue increased 5% The segment again had outstanding non-GAAP operating margin growth with quarterly results of 159 basis points. the segment again had outstanding non-gaap operating margin growth with quarterly results of 159 basis points Card processing revenue showed steady growth and was partly offset by lower network incentive revenue. card processing revenue showed steady growth and was partly offset by lower network incentive revenue The segment also benefited from continuing shift and significant growth from faster payments. the segment also benefited from continuing shift and significant growth from faster payments The complementary segment quarterly non-GAAP revenue increased an impressive 7%, with healthy 99 basis points of non-GAAP margin expansion. the complementary segment quarterly non-gaap revenue increased an impressive 7% with healthy 99 basis points of non-gaap margin expansion Quarterly revenue growth continued to reflect demand for our digital solutions and a beneficial product mix with sales sourced from new core wins, existing core customers, and non-core financial institutions. For the quarter, corporate services, formerly corporate and other, non-GAAP revenue increased 27%. This is primarily the result of increased hardware sales. Since the segment reflects expenses not allocated to other segments, we will not be discussing operating margins as it provides no meaningful insight. A review of cash flow and capital allocation. Q3 operating cash flow was $186 million, a 72% increase over the prior fiscal year Q3. Quarterly free cash flow of $122 million delivered a 137% increase over the prior fiscal year Q3. Quarterly revenue growth continued to reflect demand for our digital solutions and a beneficial product mix with sales sourced from new core wins, existing core customers, and non-core financial institutions. quarterly revenue growth continued to reflect demand for our digital solutions and a beneficial product mix with sales sourced from new core wins existing core customers and non-core financial institutions For the quarter, corporate services, formerly corporate and other, non-GAAP revenue increased 27%. for the quarter corporate services formerly corporate and other non-gaap revenue increased 27% This is primarily the result of increased hardware sales. this is primarily the result of increased hardware sales Since the segment reflects expenses not allocated to other segments, we will not be discussing operating margins as it provides no meaningful insight. since the segment reflects expenses not allocated to other segments we will not be discussing operating margins as it provides no meaningful insight A review of cash flow and capital allocation. a review of cash flow and capital allocation Q3 operating cash flow was $186 million, a 72% increase over the prior fiscal year Q3. q3 operating cash flow was $186 million a 72% increase over the prior fiscal year q3 Quarterly free cash flow of $122 million delivered a 137% increase over the prior fiscal year Q3. quarterly free cash flow of $122 million delivered a 137% increase over the prior fiscal year q3 Our consistent dedication to value creation resulted in a trailing 12-month NOPAT return on invested capital of 23%, compared to the 20% in the third quarter of the prior year. We are very proud of the durability of this metric and how it reflects our high-quality allocation of capital for our shareholders. I would highlight the following significant year-to-date capital decisions resulting from our strong free cash flow generation. $284 million in share repurchases, $127 million in dividends paid, plus the asset acquisition of Victor Technologies. We're proud to return meaningful cash to investors while maintaining a conservative balance sheet. The average purchase price of the shares repurchased was $160. Our consistent dedication to value creation resulted in a trailing 12-month NOPAT return on invested capital of 23%, compared to the 20% in the third quarter of the prior year. our consistent dedication to value creation resulted in a trailing 12-month nopat return on invested capital of 23% compared to the 20% in the third quarter of the prior year We are very proud of the durability of this metric and how it reflects our high-quality allocation of capital for our shareholders. we are very proud of the durability of this metric and how it reflects our high-quality allocation of capital for our shareholders I would highlight the following significant year-to-date capital decisions resulting from our strong free cash flow generation. $284 million in share repurchases, $127 million in dividends paid, plus the asset acquisition of Victor Technologies. i would highlight the following significant year-to-date capital decisions resulting from our strong free cash flow generation $284 million in share repurchases $127 million in dividends paid plus the asset acquisition of victor technologies We're proud to return meaningful cash to investors while maintaining a conservative balance sheet. we're proud to return meaningful cash to investors while maintaining a conservative balance sheet The average purchase price of the shares repurchased was $160. the average purchase price of the shares repurchased was $160 We ended the quarter with debt of $90 million, consistent with normal course of the business revolver usage, but expect to end the year, the fiscal year debt-free, barring acquisitions or other opportunities. During the quarter, we established a new $1 billion revolver credit facility to support future growth opportunities. I will now discuss our third consecutive increase to full-year guidance. As you are aware, yesterday's press release included updated increases to fiscal 2026 full-year GAAP guidance. The conversion guidance will continue to follow the conservative methodology introduced in fiscal 2024. Fiscal 2026 deconversion revenue guidance has been increased to $37 million. Full-year GAAP revenue growth guidance increases to a range of 6.1%-6.6%. We ended the quarter with debt of $90 million, consistent with normal course of the business revolver usage, but expect to end the year, the fiscal year debt-free, barring acquisitions or other opportunities. we ended the quarter with debt of $90 million consistent with normal course of the business revolver usage but expect to end the year the fiscal year debt-free barring acquisitions or other opportunities During the quarter, we established a new $1 billion revolver credit facility to support future growth opportunities. during the quarter we established a new $1 billion revolver credit facility to support future growth opportunities I will now discuss our third consecutive increase to full-year guidance. i will now discuss our third consecutive increase to full-year guidance As you are aware, yesterday's press release included updated increases to fiscal 2026 full-year GAAP guidance. as you are aware yesterday's press release included updated increases to fiscal 2026 full-year gaap guidance The conversion guidance will continue to follow the conservative methodology introduced in fiscal 2024. the conversion guidance will continue to follow the conservative methodology introduced in fiscal 2024 Fiscal 2026 deconversion revenue guidance has been increased to $37 million. fiscal 2026 deconversion revenue guidance has been increased to $37 million Full-year GAAP revenue growth guidance increases to a range of 6.1%-6.6%. full-year gaap revenue growth guidance increases to a range of 6.1%-6.6% Based on our strong year-to-date results, we have tightened the range of non-GAAP annual revenue growth guidance, resulting in a new outlook of 6.6%-7.1%. Consistent with our budget plan and year-long messaging, Q4 will see relatively lower non-GAAP revenue growth compared to the previous three quarters. Drivers include projected digital revenue slowing from lower active user growth, card revenue growth, seeing pressure from risk management, and less one-time network incentive revenue. Expenses during the fourth quarter are expected to reflect relatively higher pressure from medical cost benefits returning to historical levels, cloud migration, infrastructure expense, and commission. Our expectation on fourth quarter revenue are below current analyst consensus. Based on our strong year-to-date results, we have tightened the range of non-GAAP annual revenue growth guidance, resulting in a new outlook of 6.6%-7.1%. based on our strong year-to-date results we have tightened the range of non-gaap annual revenue growth guidance resulting in a new outlook of 6.6%-7.1% Consistent with our budget plan and year-long messaging, Q4 will see relatively lower non-GAAP revenue growth compared to the previous three quarters. consistent with our budget plan and year-long messaging q4 will see relatively lower non-gaap revenue growth compared to the previous three quarters Drivers include projected digital revenue slowing from lower active user growth, card revenue growth, seeing pressure from risk management, and less one-time network incentive revenue. drivers include projected digital revenue slowing from lower active user growth card revenue growth seeing pressure from risk management and less one-time network incentive revenue Expenses during the fourth quarter are expected to reflect relatively higher pressure from medical cost benefits returning to historical levels, cloud migration, infrastructure expense, and commission. expenses during the fourth quarter are expected to reflect relatively higher pressure from medical cost benefits returning to historical levels cloud migration infrastructure expense and commission Our expectation on fourth quarter revenue are below current analyst consensus. our expectation on fourth quarter revenue are below current analyst consensus At the same time, full-year revenue growth consensus is aligned. Reflecting that part of the difference is that some of the revenue analysts expected in the fourth quarter shifting to the third quarter. Margins are projected to contract in the fourth quarter based on previously disclosed factors. However, based on the full-year revenue growth and our robust financial model, we are increasing full-year guidance for non-GAAP margin expansion to a range of 75-95 basis points from the original 20-40 basis points on the August call. As a reminder, we see fluctuations in quarterly results related to software usage license components along with the timing of implementation. Therefore, the correct performance indicator for our business is the consistently strong fiscal year financial results. Q4 results are not aligned with our early expectations for fiscal 2027. At the same time, full-year revenue growth consensus is aligned. Reflecting that part of the difference is that some of the revenue analysts expected in the fourth quarter shifting to the third quarter. at the same time full-year revenue growth consensus is aligned. reflecting that part of the difference is that some of the revenue analysts expected in the fourth quarter shifting to the third quarter Margins are projected to contract in the fourth quarter based on previously disclosed factors. margins are projected to contract in the fourth quarter based on previously disclosed factors However, based on the full-year revenue growth and our robust financial model, we are increasing full-year guidance for non-GAAP margin expansion to a range of 75-95 basis points from the original 20-40 basis points on the August call. however based on the full-year revenue growth and our robust financial model we are increasing full-year guidance for non-gaap margin expansion to a range of 75-95 basis points from the original 20-40 basis points on the august call As a reminder, we see fluctuations in quarterly results related to software usage license components along with the timing of implementation. as a reminder we see fluctuations in quarterly results related to software usage license components along with the timing of implementation Therefore, the correct performance indicator for our business is the consistently strong fiscal year financial results. therefore the correct performance indicator for our business is the consistently strong fiscal year financial results Q4 results are not aligned with our early expectations for fiscal 2027. q4 results are not aligned with our early expectations for fiscal 2027 The presented results and guidance metrics are indicative that our business operations remain healthy and sound with growth opportunities across all four operating segments. The full-year GAAP tax rate estimate for fiscal 2026 is 23.25%. The above increased guidance metrics result in a stronger full-year outlook for GAAP EPS of $6.78-$6.87 per share, a growth of 9%-10%. As a reminder, even updated deconversion revenue guidance potentially understates GAAP EPS growth. Full-year free cash flow conversion outlook for 95%-105% for fiscal 2026, with a bias towards the upper end of the range. In concluding, Q3 reflects another exceptional performance from our associates, leading to increased guidance. We're pleased by the continued performance momentum and resulting fiscal year outlook. The presented results and guidance metrics are indicative that our business operations remain healthy and sound with growth opportunities across all four operating segments. the presented results and guidance metrics are indicative that our business operations remain healthy and sound with growth opportunities across all four operating segments The full-year GAAP tax rate estimate for fiscal 2026 is 23.25%. the full-year gaap tax rate estimate for fiscal 2026 is 23.25% The above increased guidance metrics result in a stronger full-year outlook for GAAP EPS of $6.78 - $6.87 per share, a growth of 9%-10%. the above increased guidance metrics result in a stronger full-year outlook for gaap eps of $6.78 - $6.87 per share a growth of 9%-10% As a reminder, even updated deconversion revenue guidance potentially understates GAAP EPS growth. as a reminder even updated deconversion revenue guidance potentially understates gaap eps growth Full-year free cash flow conversion outlook for 95%-105% for fiscal 2026, with a bias towards the upper end of the range. full-year free cash flow conversion outlook for 95%-105% for fiscal 2026 with a bias towards the upper end of the range In concluding, Q3 reflects another exceptional performance from our associates, leading to increased guidance. in concluding q3 reflects another exceptional performance from our associates leading to increased guidance We're pleased by the continued performance momentum and resulting fiscal year outlook. we're pleased by the continued performance momentum and resulting fiscal year outlook We remain strongly convinced that demand for our solutions, aligned with continued technology spend by our clients and prospects, all supported by industry-leading service excellence from our associates, will drive outstanding financial results and superior shareholder value. We appreciate the contributions of our dedicated associates that produce these superior results and our investors for their ongoing confidence. Danielle, please open the line for questions. We remain strongly convinced that demand for our solutions, aligned with continued technology spend by our clients and prospects, all supported by industry-leading service excellence from our associates, will drive outstanding financial results and superior shareholder value. we remain strongly convinced that demand for our solutions aligned with continued technology spend by our clients and prospects all supported by industry-leading service excellence from our associates will drive outstanding financial results and superior shareholder value We appreciate the contributions of our dedicated associates that produce these superior results and our investors for their ongoing confidence. we appreciate the contributions of our dedicated associates that produce these superior results and our investors for their ongoing confidence Danielle, please open the line for questions. danielle please open the line for questions

Speaker 11: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. The first question comes from Vasundhara Govil from KBW. Please go ahead. Thank you. thank you We will now begin the question- and- answer session. we will now begin the question- and- answer session To ask a question, you may press star then one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. The first question comes from Vasundhara Govil from KBW. to ask a question, you may press star then one on your telephone keypad. if you're using a speaker phone, please pick up your handset before pressing the keys. to withdraw your question, please press star then two. the first question comes from vasundhara govil from kbw Please go ahead. please go ahead

Speaker 17: Hi, thank you for taking my question. Greg, first one for you. It was another very strong quarter on new core wins. I'm curious what's driving this trend, and if you are starting to already see some benefits from the competitive platform consolidation or if that's still on the come? Hi, thank you for taking my question. hi thank you for taking my question Greg, first one for you. greg first one for you It was another very strong quarter on new core wins. it was another very strong quarter on new core wins I'm curious what's driving this trend, and if you are starting to already see some benefits from the competitive platform consolidation or if that's still on the come? i'm curious what's driving this trend and if you are starting to already see some benefits from the competitive platform consolidation or if that's still on the come

Speaker 5: Yeah, thanks for the question. Yeah, I think it's a combination of both. We've been talking a lot about, you know, what we've been doing on the innovative side, and so that's continued to play out with the products, the solutions. Obviously, our customer service hasn't wavered a bit. I will tell you, of the 17 core wins, 13 of them came from one provider, one competitive provider. I will say that most of those, as you can imagine, you know, the core processing contracting side takes anywhere from 9-12 months, typically. A lot of those were already in motion ahead of whatever announcements were made. We did take some from really everybody, just so you know. We had some wins from really all of our competitors. But again, the bulk of them came from one. Yeah, thanks for the question. yeah thanks for the question Yeah, I think it's a combination of both. yeah i think it's a combination of both We've been talking a lot about, you know, what we've been doing on the innovative side, and so that's continued to play out with the products, the solutions. we've been talking a lot about you know what we've been doing on the innovative side and so that's continued to play out with the products the solutions Obviously, our customer service hasn't wavered a bit. obviously our customer service hasn't wavered a bit I will tell you, of the 17 core wins, 13 of them came from one provider, one competitive provider. i will tell you of the 17 core wins 13 of them came from one provider one competitive provider I will say that most of those, as you can imagine, you know, the core processing contracting side takes anywhere from 9-12 months, typically. i will say that most of those as you can imagine you know the core processing contracting side takes anywhere from 9-12 months typically A lot of those were already in motion ahead of whatever announcements were made. a lot of those were already in motion ahead of whatever announcements were made We did take some from really everybody, just so you know. we did take some from really everybody just so you know We had some wins from really all of our competitors. we had some wins from really all of our competitors But again, the bulk of them came from one. but again the bulk of them came from one

Speaker 17: Thank you for the color. Then maybe a quick one for you on the margin guide. You know, the guide obviously implies a meaningful step down in the fourth quarter, and I caught your comment on the normalized medical expenses you're baking in. Any other drivers there or just trying to get a sense of whether there's any conservatism baked into the guide? Thank you. Thank you for the color. thank you for the color Then maybe a quick one for you on the margin guide. then maybe a quick one for you on the margin guide You know, the guide obviously implies a meaningful step down in the fourth quarter, and I caught your comment on the normalized medical expenses you're baking in. you know the guide obviously implies a meaningful step down in the fourth quarter and i caught your comment on the normalized medical expenses you're baking in Any other drivers there or just trying to get a sense of whether there's any conservatism baked into the guide? any other drivers there or just trying to get a sense of whether there's any conservatism baked into the guide Thank you. thank you

Speaker 10: Yeah, you're welcome. Yes, you're accurate, and I appreciate you hearing the commentary regarding Q4, which is not indicative of the full-year performance, but more so due to some unique factors in Q4 that were expected as we thought about for the cadence of the year. You're right to call out the medical expenses returning to normalized levels. We also had some commission shift where we saw some benefit earlier in the year. We expect based on the timing of those implementations for the commissions some of that to hit in Q4. Additionally, just some of the mix we're seeing from some of the lower margin business, some of it related to work orders and implementation also lead to Q4 having less margin expansion or in fact margin contraction for the year. Yeah, you're welcome. yeah you're welcome Yes, you're accurate, and I appreciate you hearing the commentary regarding Q4, which is not indicative of the full-year performance, but more so due to some unique factors in Q4 that were expected as we thought about for the cadence of the year. yes you're accurate and i appreciate you hearing the commentary regarding q4 which is not indicative of the full-year performance but more so due to some unique factors in q4 that were expected as we thought about for the cadence of the year You're right to call out the medical expenses returning to normalized levels. you're right to call out the medical expenses returning to normalized levels We also had some commission shift where we saw some benefit earlier in the year. we also had some commission shift where we saw some benefit earlier in the year We expect based on the timing of those implementations for the commissions some of that to hit in Q4. we expect based on the timing of those implementations for the commissions some of that to hit in q4 Additionally, just some of the mix we're seeing from some of the lower margin business, some of it related to work orders and implementation also lead to Q4 having less margin expansion or in fact margin contraction for the year. additionally just some of the mix we're seeing from some of the lower margin business some of it related to work orders and implementation also lead to q4 having less margin expansion or in fact margin contraction for the year Again, the right metric for our business is the annual, and we're pleased to be able to increase guidance on full-year margin expansion. Again, the right metric for our business is the annual, and we're pleased to be able to increase guidance on full-year margin expansion. again the right metric for our business is the annual and we're pleased to be able to increase guidance on full-year margin expansion

Speaker 17: Appreciate the response. Thank you. Appreciate the response. appreciate the response Thank you. thank you

Speaker 11: The next question comes from Peter Heckmann from D.A. Davidson. Please go ahead. The next question comes from Peter Heckmann from D.A. the next question comes from peter heckmann from d.a Davidson. davidson Please go ahead. please go ahead

Speaker 12: Morning. Thanks for taking my question. I wanted to talk a little bit about Anthropic's Mythos. Has Jack Henry been able to set up a timetable to access Mythos to look at their own systems to identify any cyber vulnerabilities? Do you think that's something that bank core customers are increasingly gonna demand from their vendors on a periodic basis? Morning. morning Thanks for taking my question. thanks for taking my question I wanted to talk a little bit about Anthropic's Mythos. i wanted to talk a little bit about anthropic's mythos Has Jack Henry been able to set up a timetable to access Mythos to look at their own systems to identify any cyber vulnerabilities? has jack henry been able to set up a timetable to access mythos to look at their own systems to identify any cyber vulnerabilities Do you think that's something that bank core customers are increasingly gonna demand from their vendors on a periodic basis? do you think that's something that bank core customers are increasingly gonna demand from their vendors on a periodic basis

Speaker 5: Yeah, Pete, this is Greg. A couple things on Mythos. We've been, you know, heavily involved ever since it came out. I actually did a call with a lot of our competitors and others with the head of cybersecurity in Washington. We had, you know, as soon as everything was announced, you know, we were pulled in. Our cyber teams are, you know, been involved in a multitude of meetings. You know, Project Glasswing, which is now called Mythos Workshop, our teams are getting information associated with that and joining various meetings. We've obviously done a whole host of things that we need to do for operational readiness across the organization. Candidly, you know, we were doing that already. Yeah, Pete, this is Greg. yeah pete this is greg A couple things on Mythos. a couple things on mythos We've been, you know, heavily involved ever since it came out. we've been you know heavily involved ever since it came out I actually did a call with a lot of our competitors and others with the head of cybersecurity in Washington. i actually did a call with a lot of our competitors and others with the head of cybersecurity in washington We had, you know, as soon as everything was announced, you know, we were pulled in. we had you know as soon as everything was announced you know we were pulled in Our cyber teams are, you know, been involved in a multitude of meetings. our cyber teams are you know been involved in a multitude of meetings You know, Project Glasswing, which is now called Mythos Workshop, our teams are getting information associated with that and joining various meetings. you know project glasswing which is now called mythos workshop our teams are getting information associated with that and joining various meetings We've obviously done a whole host of things that we need to do for operational readiness across the organization. we've obviously done a whole host of things that we need to do for operational readiness across the organization Candidly, you know, we were doing that already. candidly you know we were doing that already You know, the other thing is that you probably heard that on April 29th, the Trump administration raised some objections. You know, there's still some delay on where some of this utilization will get done. Our teams are heavily involved both with not only at our organization and with Mythos, but also across the entire landscape of our industry. All of our competitors and Jack Henry are working together with Washington to make sure that we protect our banks and credit unions. You know, the other thing is that you probably heard that on April 29th, the Trump administration raised some objections. you know the other thing is that you probably heard that on april 29th the trump administration raised some objections You know, there's still some delay on where some of this utilization will get done. you know there's still some delay on where some of this utilization will get done Our teams are heavily involved both with not only at our organization and with Mythos, but also across the entire landscape of our industry. our teams are heavily involved both with not only at our organization and with mythos but also across the entire landscape of our industry All of our competitors and Jack Henry are working together with Washington to make sure that we protect our banks and credit unions. all of our competitors and jack henry are working together with washington to make sure that we protect our banks and credit unions

Speaker 10: Greg, if I could add on to that. Mythos is just the current kind of attention in the industry, but we've made significant investments in fortifying and stepping up from a cybersecurity, from an awareness and observability, and a zero trust kind of resiliency philosophy over the last several years. We feel like we're in a much stronger position today than we had been over the last several years to be able to handle this type of situation. Greg, if I could add on to that. greg if i could add on to that Mythos is just the current kind of attention in the industry, but we've made significant investments in fortifying and stepping up from a cybersecurity, from an awareness and observability, and a zero trust kind of resiliency philosophy over the last several years. mythos is just the current kind of attention in the industry but we've made significant investments in fortifying and stepping up from a cybersecurity from an awareness and observability and a zero trust kind of resiliency philosophy over the last several years We feel like we're in a much stronger position today than we had been over the last several years to be able to handle this type of situation. we feel like we're in a much stronger position today than we had been over the last several years to be able to handle this type of situation

Speaker 11: The next question comes from Jason Kupferberg from Wells Fargo. Please go ahead. The next question comes from Jason Kupferberg from Wells Fargo. the next question comes from jason kupferberg from wells fargo Please go ahead. please go ahead

Speaker 15: Hey, good morning, Greg and Mimi. This is Tyler DuPont on for Jason. Thanks for taking our questions. I wanted to just start by piggybacking off of the core questions and commentary. You know, given you signed 43 takeaways so far, fiscal year-to-date, you know, how should we be thinking about upside to that 50-55 annual target? You know, if I heard correctly in the prepared remarks, Greg, you suggested that you have confidence in exceeding last year's number. Given last 4Q, you guys won 23 deals, that would imply over 60 this year. I guess just, you know, given the success you've seen so far year-to-date, I'm wondering if you can help put sort of a finer point on expectations as we look to the rest of the year. Thank you. Hey, good morning, Greg and Mimi. hey good morning greg and mimi This is Tyler DuPont on for Jason. this is tyler dupont on for jason Thanks for taking our questions. thanks for taking our questions I wanted to just start by piggybacking off of the core questions and commentary. i wanted to just start by piggybacking off of the core questions and commentary You know, given you signed 43 takeaways so far, fiscal year- to- date, you know, how should we be thinking about upside to that 50-55 annual target? you know given you signed 43 takeaways so far fiscal year- to- date you know how should we be thinking about upside to that 50-55 annual target You know, if I heard correctly in the prepared remarks, Greg, you suggested that you have confidence in exceeding last year's number. you know if i heard correctly in the prepared remarks greg you suggested that you have confidence in exceeding last year's number Given last 4Q, you guys won 23 deals, that would imply over 60 this year. given last 4q you guys won 23 deals that would imply over 60 this year I guess just, you know, given the success you've seen so far year- to- date, I'm wondering if you can help put sort of a finer point on expectations as we look to the rest of the year. i guess just you know given the success you've seen so far year- to- date i'm wondering if you can help put sort of a finer point on expectations as we look to the rest of the year Thank you. thank you

Speaker 5: I appreciate the question. I can't really give a finer point. I can tell you that I'm very confident that we will be north of 51 and probably north of 55, somewhere in that range. I don't know exactly. You know, contracts are interesting as far as timing to go get them done. We've been completing a couple contracts recently that took a lot longer than we expected, and sometimes they get, you know, kind of turned over to the next quarter. In reality, it's not just the number of wins we have, but also the size of the wins. I appreciate the question. i appreciate the question I can't really give a finer point. i can't really give a finer point I can tell you that I'm very confident that we will be north of 51 and probably north of 55, somewhere in that range. i can tell you that i'm very confident that we will be north of 51 and probably north of 55 somewhere in that range I don't know exactly. i don't know exactly You know, contracts are interesting as far as timing to go get them done. you know contracts are interesting as far as timing to go get them done We've been completing a couple contracts recently that took a lot longer than we expected, and sometimes they get, you know, kind of turned over to the next quarter. we've been completing a couple contracts recently that took a lot longer than we expected and sometimes they get you know kind of turned over to the next quarter In reality, it's not just the number of wins we have, but also the size of the wins. in reality it's not just the number of wins we have but also the size of the wins You know, as we referenced, we had 11 over multi-billions, but we've also won just this past quarter, we won $3.5 billion, we've won $5 billion, we've won $7.5 billion. Just recently, we just won a almost $10 billion client that is coming with 1.2 million accounts, which is actually about 25% larger than any customer we have today, including our largest asset size and the number of accounts. Those contracts took a long, long time to secure. As you continue to go upmarket, contracts, you know, take longer. It's really hard to give you a definitive answer. The answer I'll give you is, our sales team is really kicking butt right now. You know, as we referenced, we had 11 over multi-billions, but we've also won just this past quarter, we won $3.5 billion, we've won $5 billion, we've won $7.5 billion. you know as we referenced we had 11 over multi-billions but we've also won just this past quarter we won $3.5 billion we've won $5 billion we've won $7.5 billion Just recently, we just won a almost $10 billion client that is coming with 1.2 million accounts, which is actually about 25% larger than any customer we have today, including our largest asset size and the number of accounts. just recently we just won a almost $10 billion client that is coming with 1.2 million accounts which is actually about 25% larger than any customer we have today including our largest asset size and the number of accounts Those contracts took a long, long time to secure. those contracts took a long long time to secure As you continue to go upmarket, contracts, you know, take longer. as you continue to go upmarket contracts you know take longer It's really hard to give you a definitive answer. it's really hard to give you a definitive answer The answer I'll give you is, our sales team is really kicking butt right now. the answer i'll give you is our sales team is really kicking butt right now You know, obviously, a lot of the things that are going on in the industry are providing opportunities for us, and I think the best is still to come, based on feedback and pipelines that we have. Our pipelines are extremely strong, not just in core, but in payments and complementary as well. We're very bullish on that. You know, obviously, a lot of the things that are going on in the industry are providing opportunities for us, and I think the best is still to come, based on feedback and pipelines that we have. you know obviously a lot of the things that are going on in the industry are providing opportunities for us and i think the best is still to come based on feedback and pipelines that we have Our pipelines are extremely strong, not just in core, but in payments and complementary as well. our pipelines are extremely strong not just in core but in payments and complementary as well We're very bullish on that. we're very bullish on that

Speaker 15: Great. You know, that's great to hear. I guess just as a quick follow-up, I just want to touch on free cash. You know, the $122 million in the quarter was pretty meaningfully above, it looks like both consensus and even your own historical trends. Can you maybe just touch on how we should be thinking about free cash flow going forward versus the 90%-100% conversion guide, sort of both as we look down the barrel to the final quarter and as we try to hone our models for next year? Great. great You know, that's great to hear. you know that's great to hear I guess just as a quick follow-up, I just want to touch on free cash. i guess just as a quick follow-up i just want to touch on free cash You know, the $122 million in the quarter was pretty meaningfully above, it looks like both consensus and even your own historical trends. you know the $122 million in the quarter was pretty meaningfully above it looks like both consensus and even your own historical trends Can you maybe just touch on how we should be thinking about free cash flow going forward versus the 90%-100% conversion guide, sort of both as we look down the barrel to the final quarter and as we try to hone our models for next year? can you maybe just touch on how we should be thinking about free cash flow going forward versus the 90%-100% conversion guide sort of both as we look down the barrel to the final quarter and as we try to hone our models for next year

Speaker 10: I would say, Tyler, there were a couple of things as we look at trailing 12 months, you know, free cash flow. First and foremost, a tremendously strong operational foundation that led to strong cash. There was also impact, positive impact from the tax law, tax bill change that we saw come to clarity, as well as some small asset sales. Overall, we feel great, as we are improving the color this year for free cash flow conversion to that 95%-105% with a bias to the high side, sitting at around 109%, you know, 108%, 109%, year-to-date from a trailing 12 months. You know, we feel very good that we're returning to the historical norm levels of our free cash flow. I would say, Tyler, there were a couple of things as we look at trailing 12 months, you know, free cash flow. i would say tyler there were a couple of things as we look at trailing 12 months you know free cash flow First and foremost, a tremendously strong operational foundation that led to strong cash. first and foremost a tremendously strong operational foundation that led to strong cash There was also impact, positive impact from the tax law, tax bill change that we saw come to clarity, as well as some small asset sales. there was also impact positive impact from the tax law tax bill change that we saw come to clarity as well as some small asset sales Overall, we feel great, as we are improving the color this year for free cash flow conversion to that 95%-105% with a bias to the high side, sitting at around 109%, you know, 108%, 109%, year- to- date from a trailing 12 months. overall we feel great as we are improving the color this year for free cash flow conversion to that 95%-105% with a bias to the high side sitting at around 109% you know 108% 109% year- to- date from a trailing 12 months You know, we feel very good that we're returning to the historical norm levels of our free cash flow. you know we feel very good that we're returning to the historical norm levels of our free cash flow

Speaker 15: Great. I appreciate all the color. Thanks so much. Great. great I appreciate all the color. i appreciate all the color Thanks so much. thanks so much

Speaker 11: The next question comes from Rayna Kumar from Oppenheimer. Please go ahead. The next question comes from Rayna Kumar from Oppenheimer. the next question comes from rayna kumar from oppenheimer Please go ahead. please go ahead

Speaker 13: Good morning. Thanks for taking my question. Just given the volatile macro and political environment, as you talk to banks and credit unions, how are they thinking about IT spending for the next 6-12 months? Then, you know, separately, any initial read on FY 2027 revenue growth and margins? Thank you. Good morning. good morning Thanks for taking my question. thanks for taking my question Just given the volatile macro and political environment, as you talk to banks and credit unions, how are they thinking about IT spending for the next 6 - 12 months? just given the volatile macro and political environment as you talk to banks and credit unions how are they thinking about it spending for the next 6 - 12 months Then, you know, separately, any initial read on FY 2027 revenue growth and margins? then you know separately any initial read on fy 2027 revenue growth and margins Thank you. thank you

Speaker 5: Rayna, I'll take the first one. You know, kind of as we talked about in my prepared remarks, and we just came out of our strategic initiatives meeting with our top 150 or so clients. The focus and we actually had somebody from Washington come in and talk to our clients as well. It's based on what's going on in the macro environment, honestly, it's not affecting the banks and credit unions' focus on what they need to get done in the tech spending. As we referenced in our own benchmark survey that just came out, we had 88% said that they were going to increase their spending as compared to 76% last year. Rayna, I'll take the first one. rayna i'll take the first one You know, kind of as we talked about in my prepared remarks, and we just came out of our strategic initiatives meeting with our top 150 or so clients. you know kind of as we talked about in my prepared remarks and we just came out of our strategic initiatives meeting with our top 150 or so clients The focus and we actually had somebody from Washington come in and talk to our clients as well. the focus and we actually had somebody from washington come in and talk to our clients as well It's based on what's going on in the macro environment, honestly, it's not affecting the banks and credit unions' focus on what they need to get done in the tech spending. it's based on what's going on in the macro environment honestly it's not affecting the banks and credit unions' focus on what they need to get done in the tech spending As we referenced in our own benchmark survey that just came out, we had 88% said that they were going to increase their spending as compared to 76% last year. as we referenced in our own benchmark survey that just came out we had 88% said that they were going to increase their spending as compared to 76% last year With that average of, I think it was 41% is actually at 6%-10% of an increase. That, you know, really coincides with everything that we've been talking about for the last, you know, two or three surveys that we've referenced on our calls, Bank Directors and others surveys. That remains. The only difference is really where they're talking about spending the money. AI, for the first time, became the number one priority for them. Obviously deposits, digital banking, in particular, fraud, other components are still up at the top. We're seeing it. I mean, again, you know, our pipelines are very, very robust right now, again, in all parts of our business, not just core. With that average of, I think it was 41% is actually at 6%-10% of an increase. with that average of i think it was 41% is actually at 6%-10% of an increase That, you know, really coincides with everything that we've been talking about for the last, you know, two or three surveys that we've referenced on our calls, Bank Directors and others surveys. that you know really coincides with everything that we've been talking about for the last you know two or three surveys that we've referenced on our calls bank directors and others surveys That remains. that remains The only difference is really where they're talking about spending the money. the only difference is really where they're talking about spending the money AI, for the first time, became the number one priority for them. ai for the first time became the number one priority for them Obviously deposits, digital banking, in particular, fraud, other components are still up at the top. obviously deposits digital banking in particular fraud other components are still up at the top We're seeing it. we're seeing it I mean, again, you know, our pipelines are very, very robust right now, again, in all parts of our business, not just core. i mean again you know our pipelines are very very robust right now again in all parts of our business not just core Again, we're getting larger institutions. As I referenced, just, you know, just this year, we've already won, you know, the one I just referenced that was almost $10 billion in assets, but 1.2 million accounts, which is significantly larger than any one we have, which that comes with a lot of other products with it. Things along that line that continue to, you know, make us believe that the robustness of the technology spending will continue. Again, we're getting larger institutions. again we're getting larger institutions As I referenced, just, you know, just this year, we've already won, you know, the one I just referenced that was almost $10 billion in assets, but 1.2 million accounts, which is significantly larger than any one we have, which that comes with a lot of other products with it. as i referenced just you know just this year we've already won you know the one i just referenced that was almost $10 billion in assets but 1.2 million accounts which is significantly larger than any one we have which that comes with a lot of other products with it Things along that line that continue to, you know, make us believe that the robustness of the technology spending will continue. things along that line that continue to you know make us believe that the robustness of the technology spending will continue

Speaker 10: Rayna, I can take the second half of your question on building on that positive outlook that Greg just framed. It's a little premature to talk about FY 2027. We're just excited about ending 26 in a great spot. Again, I would just call out that the quarterly pace of the year is not indicative of any kind of launching off pad for 2027. Although we are calling for a weaker Q4, it does not mean anything diminishes from our positive outlook for the full year and then next year. Even at roughly 91% recurring revenue, you would think a budgeting process would be easier, but we have a very comprehensive budgeting process here at Jack Henry. Rayna, I can take the second half of your question on building on that positive outlook that Greg just framed. rayna i can take the second half of your question on building on that positive outlook that greg just framed It's a little premature to talk about FY 2027. it's a little premature to talk about fy 2027 We're just excited about ending 26 in a great spot. we're just excited about ending 26 in a great spot Again, I would just call out that the quarterly pace of the year is not indicative of any kind of launching off pad for 2027. again i would just call out that the quarterly pace of the year is not indicative of any kind of launching off pad for 2027 Although we are calling for a weaker Q4, it does not mean anything diminishes from our positive outlook for the full year and then next year. although we are calling for a weaker q4 it does not mean anything diminishes from our positive outlook for the full year and then next year Even at roughly 91% recurring revenue, you would think a budgeting process would be easier, but we have a very comprehensive budgeting process here at Jack Henry. even at roughly 91% recurring revenue you would think a budgeting process would be easier but we have a very comprehensive budgeting process here at jack henry We are still working with each of our operational leaders to talk about next year's plan, and rigorous prioritization around investment and spending. We will give more color to that when we talk about full year results, next quarter. Overall, we're thinking a positive direction for FY 2027. We are still working with each of our operational leaders to talk about next year's plan, and rigorous prioritization around investment and spending. we are still working with each of our operational leaders to talk about next year's plan and rigorous prioritization around investment and spending We will give more color to that when we talk about full year results, next quarter. we will give more color to that when we talk about full year results next quarter Overall, we're thinking a positive direction for FY 2027. overall we're thinking a positive direction for fy 2027

Speaker 13: Very helpful. Thank you. Very helpful. very helpful Thank you. thank you

Speaker 11: The next question comes from Madison Suhr from Raymond James. Please go ahead. The next question comes from Madison Suhr from Raymond James. the next question comes from madison suhr from raymond james Please go ahead. please go ahead

Speaker 9: Hey, good morning. I appreciate you taking the questions. I just wanted to start on the trifecta wins. I think you mentioned 58% of wins this year were those trifecta wins. Just given what you're seeing in the pipeline, I mean, do you think this elevated level of cross-sell is sustainable not only for the quarter, but just as we think about kind of the next year or so? Hey, good morning. hey good morning I appreciate you taking the questions. i appreciate you taking the questions I just wanted to start on the trifecta wins. i just wanted to start on the trifecta wins I think you mentioned 58% of wins this year were those trifecta wins. i think you mentioned 58% of wins this year were those trifecta wins Just given what you're seeing in the pipeline, I mean, do you think this elevated level of cross-sell is sustainable not only for the quarter, but just as we think about kind of the next year or so? just given what you're seeing in the pipeline i mean do you think this elevated level of cross-sell is sustainable not only for the quarter but just as we think about kind of the next year or so

Speaker 5: I do. I appreciate you asking the question. I mean, I think we've seen the results of all the work and innovation that we put into both our digital platform and our card platform. We've made a lot of changes through the years and, you know, you've heard us reference over the last couple in particular about getting to a level of feature parity that we needed to compete with some of the larger digital-only providers, and we're starting to see that. We're starting to get some wins from all of the players, candidly. They're not just coming in core wins, which is great, obviously, but you have to wait for those to be installed. I do. i do I appreciate you asking the question. i appreciate you asking the question I mean, I think we've seen the results of all the work and innovation that we put into both our digital platform and our card platform. i mean i think we've seen the results of all the work and innovation that we put into both our digital platform and our card platform We've made a lot of changes through the years and, you know, you've heard us reference over the last couple in particular about getting to a level of feature parity that we needed to compete with some of the larger digital-only providers, and we're starting to see that. we've made a lot of changes through the years and you know you've heard us reference over the last couple in particular about getting to a level of feature parity that we needed to compete with some of the larger digital-only providers and we're starting to see that We're starting to get some wins from all of the players, candidly. we're starting to get some wins from all of the players candidly They're not just coming in core wins, which is great, obviously, but you have to wait for those to be installed. they're not just coming in core wins which is great obviously but you have to wait for those to be installed We're also getting some current Jack Henry clients that were on competitive digital platforms that are now making the decision to move to Jack Henry Banno instead. Short answer to your question is, I do feel very strongly that the work that we've done and are continuing to add with features like, you know, Rapid Transfers and Tap2Local that are not available anywhere else, are big differentiators for us to winning deals. We're also getting some current Jack Henry clients that were on competitive digital platforms that are now making the decision to move to Jack Henry Banno instead. we're also getting some current jack henry clients that were on competitive digital platforms that are now making the decision to move to jack henry banno instead Short answer to your question is, I do feel very strongly that the work that we've done and are continuing to add with features like, you know, Rapid Transfers and Tap2Local that are not available anywhere else, are big differentiators for us to winning deals. short answer to your question is i do feel very strongly that the work that we've done and are continuing to add with features like you know rapid transfers and tap2local that are not available anywhere else are big differentiators for us to winning deals

Speaker 9: Okay, great. I did want to follow up just on the payments business. you know, it grew 5% in the quarter. Just curious from your guys' vantage point, what kind of the key buckets or key things that could accelerate growth in payments from here, just given I know that mid-single is maybe slightly below where you guys want to be. Thank you. Okay, great. okay great I did want to follow up just on the payments business. you know, it grew 5% in the quarter. i did want to follow up just on the payments business you know it grew 5% in the quarter Just curious from your guys' vantage point, what kind of the key buckets or key things that could accelerate growth in payments from here, just given I know that mid-single is maybe slightly below where you guys want to be. just curious from your guys' vantage point what kind of the key buckets or key things that could accelerate growth in payments from here just given i know that mid-single is maybe slightly below where you guys want to be Thank you. thank you

Speaker 10: We continue to see steady growth in card, the resilience of the consumer spending. On top of that, you get a boost from continued rebounded growth in remit and bill pay. Bill pay, I would call out, even though it's not huge growth numbers, the increase has been quite positive, and that's a signaling of the resurgence post-acquisition of Payrailz. On top of that, you have just tremendous growth, almost 50% growth in faster payments. It's across the board. Volumes for card are good. You have extra growth from other areas of the business. We continue to see steady growth in card, the resilience of the consumer spending. we continue to see steady growth in card the resilience of the consumer spending On top of that, you get a boost from continued rebounded growth in remit and bill pay. on top of that you get a boost from continued rebounded growth in remit and bill pay Bill pay, I would call out, even though it's not huge growth numbers, the increase has been quite positive, and that's a signaling of the resurgence post-acquisition of Payrailz. bill pay i would call out even though it's not huge growth numbers the increase has been quite positive and that's a signaling of the resurgence post-acquisition of payrailz On top of that, you have just tremendous growth, almost 50% growth in faster payments. on top of that you have just tremendous growth almost 50% growth in faster payments It's across the board. it's across the board Volumes for card are good. volumes for card are good You have extra growth from other areas of the business. you have extra growth from other areas of the business

Speaker 9: Okay. Thank you so much, guys. Okay. okay Thank you so much, guys. thank you so much guys

Speaker 11: The next question comes from Dominick Gabriele from Loop Capital. Please go ahead. The next question comes from Dominick Gabriele from Loop Capital. the next question comes from dominick gabriele from loop capital Please go ahead. please go ahead

Speaker 4: Hey, good morning, everybody. Thanks for taking the question. I guess, you know, Jack Henry is always focused on an open platform versus a walled garden. I think that's really been a benefit to the business over time in gaining customers. You know, do you expect to partner with various AI potential financial providers with their products? You know, how would you think about that relationship? Would you take it similar to the types of partnerships for with third parties, allowing their products to be on your platform and really focusing on, you know, Jack Henry's added value when the customers ultimately decide to choose Jack Henry products regardless? Thanks so much. Hey, good morning, everybody. hey good morning everybody Thanks for taking the question. thanks for taking the question I guess, you know, Jack Henry is always focused on an open platform versus a walled garden. i guess you know jack henry is always focused on an open platform versus a walled garden I think that's really been a benefit to the business over time in gaining customers. i think that's really been a benefit to the business over time in gaining customers You know, do you expect to partner with various AI potential financial providers with their products? you know do you expect to partner with various ai potential financial providers with their products You know, how would you think about that relationship? you know how would you think about that relationship Would you take it similar to the types of partnerships for with third parties, allowing their products to be on your platform and really focusing on, you know, Jack Henry's added value when the customers ultimately decide to choose Jack Henry products regardless? would you take it similar to the types of partnerships for with third parties allowing their products to be on your platform and really focusing on you know jack henry's added value when the customers ultimately decide to choose jack henry products regardless Thanks so much. thanks so much

Speaker 5: Yeah, it's a good question. I appreciate. A couple things. We are doing that today. Several of the AI-related companies are partnering with us today. That's how we're using some of the tools and also some of the we're incorporating some of it into some of the products that we are working on. We are being very careful on that. You know, partner is a really difficult word to use because in some cases, a partnership infers a lot of revenue changing hands on both sides. A lot of what I would call it is more of a integrated relationship. In some cases, they're creating more financial gains for both of us and others. They're just creating opportunities for us to leverage tools that we're licensing. Yeah, it's a good question. yeah it's a good question I appreciate. i appreciate A couple things. a couple things We are doing that today. we are doing that today Several of the AI-related companies are partnering with us today. several of the ai-related companies are partnering with us today That's how we're using some of the tools and also some of the we're incorporating some of it into some of the products that we are working on. that's how we're using some of the tools and also some of the we're incorporating some of it into some of the products that we are working on We are being very careful on that. we are being very careful on that You know, partner is a really difficult word to use because in some cases, a partnership infers a lot of revenue changing hands on both sides. you know partner is a really difficult word to use because in some cases a partnership infers a lot of revenue changing hands on both sides A lot of what I would call it is more of a integrated relationship. a lot of what i would call it is more of a integrated relationship In some cases, they're creating more financial gains for both of us and others. in some cases they're creating more financial gains for both of us and others They're just creating opportunities for us to leverage tools that we're licensing. they're just creating opportunities for us to leverage tools that we're licensing That is happening today and will continue to happen. We have a whole host of folks that we have hired to evaluate those tools and doing that. We're being very careful because everybody's got, you know, something new to talk about. That will continue. To your point, we've been by far the most open platform through the years. We look at AI, we look at fintech opportunities, we look at Fintechs that are using AI that's already embedded into their solutions as opportunities. We'll evaluate them one at a time. That is happening today and will continue to happen. that is happening today and will continue to happen We have a whole host of folks that we have hired to evaluate those tools and doing that. we have a whole host of folks that we have hired to evaluate those tools and doing that We're being very careful because everybody's got, you know, something new to talk about. we're being very careful because everybody's got you know something new to talk about That will continue. that will continue To your point, we've been by far the most open platform through the years. to your point we've been by far the most open platform through the years We look at AI, we look at fintech opportunities, we look at Fintechs that are using AI that's already embedded into their solutions as opportunities. we look at ai we look at fintech opportunities we look at fintechs that are using ai that's already embedded into their solutions as opportunities We'll evaluate them one at a time. we'll evaluate them one at a time

Speaker 4: Great. Maybe just as a follow-up, you know, if you look at the various growth rates of the segments, you know, core's been doing quite well. You know, outside of the comments you just made on payments complementary, you know, double-digits. I'm just curious of the quarter-over-quarter kind of implied reduction in the other two pieces of the business, given there is some momentum there. If you could just help walk through kind of that, I'd really appreciate it. Thanks so much. Great. great Maybe just as a follow-up, you know, if you look at the various growth rates of the segments, you know, core's been doing quite well. maybe just as a follow-up you know if you look at the various growth rates of the segments you know core's been doing quite well You know, outside of the comments you just made on payments complementary, you know, double- digits. you know outside of the comments you just made on payments complementary you know double- digits I'm just curious of the quarter-over-quarter kind of implied reduction in the other two pieces of the business, given there is some momentum there. i'm just curious of the quarter-over-quarter kind of implied reduction in the other two pieces of the business given there is some momentum there If you could just help walk through kind of that, I'd really appreciate it. if you could just help walk through kind of that i'd really appreciate it Thanks so much. thanks so much

Speaker 10: Sure. You know, as we always say, not to look at one quarter, but to look at the full year, particularly because some of these products, as you look at the install calendar, and even though we're thrilled to be looking at over 50 for wins, the revenue we're getting today is based on the wins we had, especially for core that we locked in last year. Some of the complementary products can be installed sooner. But the profile of those customers does impact the revenue. If you have years where the size of the install base is different, or the mix of the products they're taking, it can impact both revenue and margin. Sure. sure You know, as we always say, not to look at one quarter, but to look at the full year, particularly because some of these products, as you look at the install calendar, and even though we're thrilled to be looking at over 50 for wins, the revenue we're getting today is based on the wins we had, especially for core that we locked in last year. you know as we always say not to look at one quarter but to look at the full year particularly because some of these products as you look at the install calendar and even though we're thrilled to be looking at over 50 for wins the revenue we're getting today is based on the wins we had especially for core that we locked in last year Some of the complementary products can be installed sooner. some of the complementary products can be installed sooner But the profile of those customers does impact the revenue. but the profile of those customers does impact the revenue If you have years where the size of the install base is different, or the mix of the products they're taking, it can impact both revenue and margin. if you have years where the size of the install base is different or the mix of the products they're taking it can impact both revenue and margin On top of that, what we've seen is some of the one-time service revenue related to work orders and implementation is also, it's been a nice added revenue source. I would say that kind of varies as well, from quarter-to-quarter. That's really the biggest driver causing for the fourth quarter, in addition to just some grow over challenges from last year's strength. On top of that, what we've seen is some of the one-time service revenue related to work orders and implementation is also, it's been a nice added revenue source. on top of that what we've seen is some of the one-time service revenue related to work orders and implementation is also it's been a nice added revenue source I would say that kind of varies as well, from quarter- to- quarter. i would say that kind of varies as well from quarter- to- quarter That's really the biggest driver causing for the fourth quarter, in addition to just some grow over challenges from last year's strength. that's really the biggest driver causing for the fourth quarter in addition to just some grow over challenges from last year's strength

Speaker 4: Thank you. Thank you. thank you

Speaker 11: The next question comes from Darrin Peller from Wolfe Research. Please go ahead. The next question comes from Darrin Peller from Wolfe Research. the next question comes from darrin peller from wolfe research Please go ahead. please go ahead

Speaker 2: Hey, guys. Thanks. It's Darrin from Wolfe. I just wanted to understand a little bit more. When I, when I think about the beginning of the year, you guys had called out pricing, M&A, and some other variables, credit union account growth, as having been potential risks or headwinds that decelerated what otherwise would have been a 7%-8% algorithm for your year. Ended up doing better than that as the year is progressing and not seeing those headwinds as materially. You're seeing better core growth also, I think, than probably you anticipated at the beginning of the year. Putting all those pieces together, you know, where do you see the business positioned now in terms of your normal 7%-8% trajectory? Hey, guys. hey guys Thanks. thanks It's Darrin from Wolfe. it's darrin from wolfe I just wanted to understand a little bit more. i just wanted to understand a little bit more When I, when I think about the beginning of the year, you guys had called out pricing, M&A, and some other variables, credit union account growth, as having been potential risks or headwinds that decelerated what otherwise would have been a 7%-8% algorithm for your year. when i when i think about the beginning of the year you guys had called out pricing m&a and some other variables credit union account growth as having been potential risks or headwinds that decelerated what otherwise would have been a 7%-8% algorithm for your year Ended up doing better than that as the year is progressing and not seeing those headwinds as materially. ended up doing better than that as the year is progressing and not seeing those headwinds as materially You're seeing better core growth also, I think, than probably you anticipated at the beginning of the year. you're seeing better core growth also i think than probably you anticipated at the beginning of the year Putting all those pieces together, you know, where do you see the business positioned now in terms of your normal 7%-8% trajectory? putting all those pieces together you know where do you see the business positioned now in terms of your normal 7%-8% trajectory Do you think you have enough pillars for that business to sustain 7%-8% in the next couple of years again, without specifically guiding to 2027? I'm just curious if you think the building blocks are there. Do you think you have enough pillars for that business to sustain 7% - 8% in the next couple of years again, without specifically guiding to 2027? do you think you have enough pillars for that business to sustain 7% - 8% in the next couple of years again without specifically guiding to 2027 I'm just curious if you think the building blocks are there. i'm just curious if you think the building blocks are there

Speaker 10: [Darrin], appreciate the question. Yeah, that we haven't really talked about some of those headwinds as we progress through the year. We've grown over them. It's not that they've disappeared. We, we had it in our budget plan. We knew of some of the departures. We knew of some of the new contract renewals that were gonna face a bit of compression from a renewal perspective. We've just been able to grow over them. I don't wanna say, like, those pressures have abated. It's just we've been able to perform in spite of them. As we look at next year, again, too premature to put any refinement on it, but I think the growth algorithm is certainly still intact. [Darrin], appreciate the question. [darrin] appreciate the question Yeah, that we haven't really talked about some of those headwinds as we progress through the year. yeah, that we haven't really talked about some of those headwinds as we progress through the year We've grown over them. we've grown over them It's not that they've disappeared. it's not that they've disappeared We, we had it in our budget plan. we we had it in our budget plan We knew of some of the departures. we knew of some of the departures We knew of some of the new contract renewals that were gonna face a bit of compression from a renewal perspective. we knew of some of the new contract renewals that were gonna face a bit of compression from a renewal perspective We've just been able to grow over them. we've just been able to grow over them I don't wanna say, like, those pressures have abated. i don't wanna say like those pressures have abated It's just we've been able to perform in spite of them. it's just we've been able to perform in spite of them As we look at next year, again, too premature to put any refinement on it, but I think the growth algorithm is certainly still intact. as we look at next year again too premature to put any refinement on it but i think the growth algorithm is certainly still intact As we've talked about, I think even on as much as on last quarter's call, the new exciting areas of innovation, and business opportunity, like the ones that Greg highlighted in SMB, faster payments, et cetera, it's gonna be a couple of years till that has a meaningful contribution to the revenue growth that would kind of push us towards the upper bound of our growth algorithm and beyond. We feel confident that next year is looking in line with the guidance we have historically given. As we've talked about, I think even on as much as on last quarter's call, the new exciting areas of innovation, and business opportunity, like the ones that Greg highlighted in SMB, faster payments, et cetera, it's gonna be a couple of years till that has a meaningful contribution to the revenue growth that would kind of push us towards the upper bound of our growth algorithm and beyond. as we've talked about i think even on as much as on last quarter's call the new exciting areas of innovation and business opportunity like the ones that greg highlighted in smb faster payments et cetera it's gonna be a couple of years till that has a meaningful contribution to the revenue growth that would kind of push us towards the upper bound of our growth algorithm and beyond We feel confident that next year is looking in line with the guidance we have historically given. we feel confident that next year is looking in line with the guidance we have historically given

Speaker 5: Yeah. The only one thing I wanna add to that is that we did talk about that, you know, typically we start to even out over the year with M&A. That is starting to play out exactly as we had said. We had some in the early parts of the fiscal year when we were finishing our budgets and everything else, we had a little bit more of an upside down, but that started to balance itself out like we thought. The other thing is we referenced the changes we made in the renewal processes- Yeah. yeah The only one thing I wanna add to that is that we did talk about that, you know, typically we start to even out over the year with M&A. the only one thing i wanna add to that is that we did talk about that you know typically we start to even out over the year with m&a That is starting to play out exactly as we had said. that is starting to play out exactly as we had said We had some in the early parts of the fiscal year when we were finishing our budgets and everything else, we had a little bit more of an upside down, but that started to balance itself out like we thought. we had some in the early parts of the fiscal year when we were finishing our budgets and everything else we had a little bit more of an upside down but that started to balance itself out like we thought The other thing is we referenced the changes we made in the renewal processes- the other thing is we referenced the changes we made in the renewal processes-

Speaker 2: Yep. Yep. yep

Speaker 5: with how we went to renewals, and that has worked really, really well, candidly. with how we went to renewals, and that has worked really, really well, candidly. with how we went to renewals and that has worked really really well candidly

Speaker 2: Right. Right. right

Speaker 5: I do think what Mimi just referenced with some of the new products and services that are still in earlier stages, but starting to gain some traction, that's where we get a lot of our confidence for the longer term in getting to the numbers you're talking about. I do think what Mimi just referenced with some of the new products and services that are still in earlier stages, but starting to gain some traction, that's where we get a lot of our confidence for the longer term in getting to the numbers you're talking about. i do think what mimi just referenced with some of the new products and services that are still in earlier stages but starting to gain some traction that's where we get a lot of our confidence for the longer term in getting to the numbers you're talking about

Speaker 2: Okay. Thanks. Greg, I just want one follow-up on the core wins. It came up a couple of times, I still feel a little bit hungry for an understanding of what's actually driving the incremental step up in the magnitude of the wins, then the run rate. Like you said, these were basically formed from probably a few quarters ago in terms of the deals being signed or at least close to signed. It wasn't really the industry changes we're hearing from competitors right now that caused the increase. What did cause it to really kick in a few quarters ago already? Okay. okay Thanks. thanks Greg, I just want one follow-up on the core wins. greg i just want one follow-up on the core wins It came up a couple of times, I still feel a little bit hungry for an understanding of what's actually driving the incremental step up in the magnitude of the wins, then the run rate. it came up a couple of times i still feel a little bit hungry for an understanding of what's actually driving the incremental step up in the magnitude of the wins then the run rate Like you said, these were basically formed from probably a few quarters ago in terms of the deals being signed or at least close to signed. like you said these were basically formed from probably a few quarters ago in terms of the deals being signed or at least close to signed It wasn't really the industry changes we're hearing from competitors right now that caused the increase. it wasn't really the industry changes we're hearing from competitors right now that caused the increase What did cause it to really kick in a few quarters ago already? what did cause it to really kick in a few quarters ago already Because it seems like if you add on what we're seeing in the competitive landscape, that could be additive even more so than the 55 going into next year, you know, when you take the two together. Because it seems like if you add on what we're seeing in the competitive landscape, that could be additive even more so than the 55 going into next year, you know, when you take the two together. because it seems like if you add on what we're seeing in the competitive landscape that could be additive even more so than the 55 going into next year you know when you take the two together

Speaker 5: Yeah, I agree with you. I mean, you know, I think you all have heard me enough talk about the differentiators of, you know, I bring them up every time because we're still getting some folks that don't fully understand it. We are building things that nobody else is building, and we're doing it at a level of execution that nobody else is doing. When you get an industry that's completely full right now of competitive uncertainty that is happening specifically with our largest competitors, we are the provider that is absolutely executing on the things that we said we were gonna do and hasn't lost a step in customer service and never has. You know, I mean, I'm getting inbound calls from larger institutions that wanna talk to us. Yeah, I agree with you. yeah i agree with you I mean, you know, I think you all have heard me enough talk about the differentiators of, you know, I bring them up every time because we're still getting some folks that don't fully understand it. i mean you know i think you all have heard me enough talk about the differentiators of you know i bring them up every time because we're still getting some folks that don't fully understand it We are building things that nobody else is building, and we're doing it at a level of execution that nobody else is doing. we are building things that nobody else is building and we're doing it at a level of execution that nobody else is doing When you get an industry that's completely full right now of competitive uncertainty that is happening specifically with our largest competitors, we are the provider that is absolutely executing on the things that we said we were gonna do and hasn't lost a step in customer service and never has. when you get an industry that's completely full right now of competitive uncertainty that is happening specifically with our largest competitors we are the provider that is absolutely executing on the things that we said we were gonna do and hasn't lost a step in customer service and never has You know, I mean, I'm getting inbound calls from larger institutions that wanna talk to us. you know i mean i'm getting inbound calls from larger institutions that wanna talk to us I'm getting inbound calls from the largest consulting firms in the world that wanna learn more about what we're doing. We've been showing these large consulting firms our technology, and their quote is, "We are blowing them away." They never thought a core provider could do what we were doing with what we built on the platform. You know, when you take all of that and the years of a lot of effort of building out the technology and now to a point where we can actually demonstrate it and have live products, that is really, you know, driving it. Again, with the unrest of what's going on with our competitors. I do believe it's gonna continue because we're gonna continue to execute as we have been, and our products are only gonna get further and further ahead of where our competition is. I'm getting inbound calls from the largest consulting firms in the world that wanna learn more about what we're doing. i'm getting inbound calls from the largest consulting firms in the world that wanna learn more about what we're doing We've been showing these large consulting firms our technology, and their quote is, "We are blowing them away." They never thought a core provider could do what we were doing with what we built on the platform. we've been showing these large consulting firms our technology and their quote is "we are blowing them away." they never thought a core provider could do what we were doing with what we built on the platform You know, when you take all of that and the years of a lot of effort of building out the technology and now to a point where we can actually demonstrate it and have live products, that is really, you know, driving it. you know when you take all of that and the years of a lot of effort of building out the technology and now to a point where we can actually demonstrate it and have live products that is really you know driving it Again, with the unrest of what's going on with our competitors. again with the unrest of what's going on with our competitors I do believe it's gonna continue because we're gonna continue to execute as we have been, and our products are only gonna get further and further ahead of where our competition is. i do believe it's gonna continue because we're gonna continue to execute as we have been and our products are only gonna get further and further ahead of where our competition is

Speaker 2: Yeah. Makes sense. Thanks, Greg. Thanks, Mimi. Yeah. yeah Makes sense. makes sense Thanks, Greg. thanks greg Thanks, Mimi. thanks mimi

Speaker 5: Sure. Sure. sure

Speaker 11: The next question comes from Ken Suchoski from Autonomous Research. The next question comes from Ken Suchoski from Autonomous Research. the next question comes from ken suchoski from autonomous research

Speaker 8: Hey, good morning, guys. Thanks for taking the question here. I wanted to get your high-level thoughts on how AI can play a role in the core processing industry. We noticed one bank with over $25 billion in assets expanding its collaboration directly with OpenAI. I'm curious to get your take just on, one, how much of a risk is there that banks or credit unions work directly with these AI companies? Two, how involved is the core provider if that does happen, or how does the core provider's role change in that scenario? Thank you. Hey, good morning, guys. hey good morning guys Thanks for taking the question here. thanks for taking the question here I wanted to get your high-level thoughts on how AI can play a role in the core processing industry. i wanted to get your high-level thoughts on how ai can play a role in the core processing industry We noticed one bank with over $25 billion in assets expanding its collaboration directly with OpenAI. we noticed one bank with over $25 billion in assets expanding its collaboration directly with openai I'm curious to get your take just on, one, how much of a risk is there that banks or credit unions work directly with these AI companies? i'm curious to get your take just on one how much of a risk is there that banks or credit unions work directly with these ai companies Two, how involved is the core provider if that does happen, or how does the core provider's role change in that scenario? two how involved is the core provider if that does happen or how does the core provider's role change in that scenario Thank you. thank you

Speaker 5: Yeah. I think there's a couple things. I think you referenced the $25 billion institution, and I do think the larger institutions, as you continue to move up, they probably have more opportunity, more wherewithal, money-wise and talent-wise, to work with some of these providers directly. You may see that. I can tell you in the community bank space, as I said on our benchmark survey, the number one priority was AI. Our community and regional banks that Jack Henry works with, they don't have the wherewithal in most of the cases to build that out. They're relying on us, which is why we've taken such a proactive way of doing this for the last three and a half years. Yeah. yeah I think there's a couple things. i think there's a couple things I think you referenced the $25 billion institution, and I do think the larger institutions, as you continue to move up, they probably have more opportunity, more wherewithal, money-wise and talent-wise, to work with some of these providers directly. i think you referenced the $25 billion institution and i do think the larger institutions as you continue to move up they probably have more opportunity more wherewithal money-wise and talent-wise to work with some of these providers directly You may see that. you may see that I can tell you in the community bank space, as I said on our benchmark survey, the number one priority was AI. i can tell you in the community bank space as i said on our benchmark survey the number one priority was ai Our community and regional banks that Jack Henry works with, they don't have the wherewithal in most of the cases to build that out. our community and regional banks that jack henry works with they don't have the wherewithal in most of the cases to build that out They're relying on us, which is why we've taken such a proactive way of doing this for the last three and a half years. they're relying on us which is why we've taken such a proactive way of doing this for the last three and a half years As I mentioned, you know, not only are we building the level of efficiency and effectiveness inside of the organization, we have 14 different POCs that we have going on right now with products. We have a whole host of things that we've built in our financial crimes solution, including things like SAR reports, you know, suspicious activity reports that go out and doing those using AI. Creating things that provide efficiency gains for our banks and credit unions with various tools, like exception item processing that I referenced in the script. Things along that line that I think will continue to drive opportunities for people like us, at least that are very innovative and building out that level of innovation with our customers. Could there be a few that go around? Yes, maybe, but they're gonna be fewer and far between than they are at the larger institution side. As I mentioned, you know, not only are we building the level of efficiency and effectiveness inside of the organization, we have 14 different POCs that we have going on right now with products. as i mentioned you know not only are we building the level of efficiency and effectiveness inside of the organization we have 14 different pocs that we have going on right now with products We have a whole host of things that we've built in our financial crimes solution, including things like SAR reports, you know, suspicious activity reports that go out and doing those using AI. we have a whole host of things that we've built in our financial crimes solution including things like sar reports you know suspicious activity reports that go out and doing those using ai Creating things that provide efficiency gains for our banks and credit unions with various tools, like exception item processing that I referenced in the script. creating things that provide efficiency gains for our banks and credit unions with various tools like exception item processing that i referenced in the script Things along that line that I think will continue to drive opportunities for people like us, at least that are very innovative and building out that level of innovation with our customers. things along that line that i think will continue to drive opportunities for people like us at least that are very innovative and building out that level of innovation with our customers Could there be a few that go around? could there be a few that go around Yes, maybe, but they're gonna be fewer and far between than they are at the larger institution side. yes maybe but they're gonna be fewer and far between than they are at the larger institution side

Speaker 8: Yeah, that makes sense, Greg. Maybe just one for Mimi, just on the payments non-GAAP revenue growth rate, just because we're getting some questions on. I think I heard lower network incentives this quarter. Is that more of a one-time issue, or does that carry through to future quarters? Just trying to think through the growth rate there and if it can accelerate from the 5%. Thank you. Yeah, that makes sense, Greg. yeah that makes sense greg Maybe just one for Mimi, just on the payments non-GAAP revenue growth rate, just because we're getting some questions on. maybe just one for mimi just on the payments non-gaap revenue growth rate just because we're getting some questions on I think I heard lower network incentives this quarter. i think i heard lower network incentives this quarter Is that more of a one-time issue, or does that carry through to future quarters? is that more of a one-time issue or does that carry through to future quarters Just trying to think through the growth rate there and if it can accelerate from the 5%. just trying to think through the growth rate there and if it can accelerate from the 5% Thank you. thank you

Speaker 10: Yeah, of course. The network incentive thresholds are kind of negotiated kind of year-by-year and sometimes intra-year. I don't see that as a headwind kind of going forward in any kind of structural change way. It just happens that it has more of an impact this year in Q4 on top of a throwover from an already strong year. To me, the underlying trends of the strength in card volume, the strength in our enterprise payments business makes me feel comfortable about the ongoing growth rate in that segment. Yeah, of course. yeah of course The network incentive thresholds are kind of negotiated kind of year- by- year and sometimes intra-year. the network incentive thresholds are kind of negotiated kind of year- by- year and sometimes intra-year I don't see that as a headwind kind of going forward in any kind of structural change way. i don't see that as a headwind kind of going forward in any kind of structural change way It just happens that it has more of an impact this year in Q4 on top of a throwover from an already strong year. it just happens that it has more of an impact this year in q4 on top of a throwover from an already strong year To me, the underlying trends of the strength in card volume, the strength in our enterprise payments business makes me feel comfortable about the ongoing growth rate in that segment. to me the underlying trends of the strength in card volume the strength in our enterprise payments business makes me feel comfortable about the ongoing growth rate in that segment

Speaker 8: Perfect. Thank you, Mimi. Perfect. perfect Thank you, Mimi. thank you mimi

Speaker 10: Of course. Of course. of course

Speaker 11: The next question comes from Cris Kennedy from William Blair. Please go ahead. The next question comes from Cris Kennedy from William Blair. the next question comes from cris kennedy from william blair Please go ahead. please go ahead

Speaker 1: Good morning. Thanks for taking the question. It's great to hear about the larger wins. Seems like you're making a lot of progress there. Can you just remind us of the dynamics and/or the economics to Jack Henry as you move up market? Thanks. Good morning. good morning Thanks for taking the question. thanks for taking the question It's great to hear about the larger wins. it's great to hear about the larger wins Seems like you're making a lot of progress there. seems like you're making a lot of progress there Can you just remind us of the dynamics and/or the economics to Jack Henry as you move up market? can you just remind us of the dynamics and/or the economics to jack henry as you move up market Thanks. thanks

Speaker 5: Thanks, Cris. The economics obviously change based on the amount of products that they buy with us. Again, you know, I just referenced this larger one that we just literally won, was not part of the count that I gave you, we just won over the last couple of weeks. That one is, you know, asset size isn't, it's roughly $10 billion in assets, which for us would be the second-largest win in our history as a brand-new core as far as asset size. More importantly, it's the number of accounts. They have 1.2 million accounts, which is, like I said, 25% greater than any of our current customers. Thanks, Cris. thanks cris The economics obviously change based on the amount of products that they buy with us. the economics obviously change based on the amount of products that they buy with us Again, you know, I just referenced this larger one that we just literally won, was not part of the count that I gave you, we just won over the last couple of weeks. again you know i just referenced this larger one that we just literally won was not part of the count that i gave you we just won over the last couple of weeks That one is, you know, asset size isn't, it's roughly $10 billion in assets, which for us would be the second-largest win in our history as a brand-new core as far as asset size. that one is you know asset size isn't it's roughly $10 billion in assets which for us would be the second-largest win in our history as a brand-new core as far as asset size More importantly, it's the number of accounts. more importantly it's the number of accounts They have 1.2 million accounts, which is, like I said, 25% greater than any of our current customers. they have 1.2 million accounts which is like i said 25% greater than any of our current customers They're buying a whole host of products from Jack Henry, so that creates a larger scale of opportunity for us than, you know, maybe some of the other institutions that are buying, you know, only a handful. The key of why I keep referencing trifecta is because trifecta for us really is the, you know, the opportunity for us to drive three of our largest revenue products in with a single client. Really the rest of it becomes gravy. It really does depend, Cris, but when we go in to sell a deal, we try to sell them everything we have. Some of it also could be timing. They're buying a whole host of products from Jack Henry, so that creates a larger scale of opportunity for us than, you know, maybe some of the other institutions that are buying, you know, only a handful. they're buying a whole host of products from jack henry so that creates a larger scale of opportunity for us than you know maybe some of the other institutions that are buying you know only a handful The key of why I keep referencing trifecta is because trifecta for us really is the, you know, the opportunity for us to drive three of our largest revenue products in with a single client. the key of why i keep referencing trifecta is because trifecta for us really is the you know the opportunity for us to drive three of our largest revenue products in with a single client Really the rest of it becomes gravy. really the rest of it becomes gravy It really does depend, Cris, but when we go in to sell a deal, we try to sell them everything we have. it really does depend cris but when we go in to sell a deal we try to sell them everything we have Some of it also could be timing. some of it also could be timing If the contract terms on some of the other products are not coterminous with the core, you sometimes have to wait to go back and win the digital or the card or other things like that to drive that. Economics really truly vary. Like I just said, the $10 billion opportunity could look a lot greater than a lot of our other opportunities, and it's smaller in asset size. If the contract terms on some of the other products are not coterminous with the core, you sometimes have to wait to go back and win the digital or the card or other things like that to drive that. if the contract terms on some of the other products are not coterminous with the core you sometimes have to wait to go back and win the digital or the card or other things like that to drive that Economics really truly vary. economics really truly vary Like I just said, the $10 billion opportunity could look a lot greater than a lot of our other opportunities, and it's smaller in asset size. like i just said the $10 billion opportunity could look a lot greater than a lot of our other opportunities and it's smaller in asset size

Speaker 1: Great. Thanks for taking the question. Appreciate it. Great. great Thanks for taking the question. thanks for taking the question Appreciate it. appreciate it

Speaker 5: Sure. Sure. sure

Speaker 11: The next question comes from Will Nance from Goldman Sachs. Please go ahead. The next question comes from Will Nance from Goldman Sachs. the next question comes from will nance from goldman sachs Please go ahead. please go ahead

Speaker 18: Hey, thanks for squeezing me in here. Mimi, I wanted to ask another kind of guidance-oriented question. You know, very clear that, you know, the fourth quarter is not kind of indicative of a jumping-off point. I just wanted to pressure test a couple of things in the fourth quarter on that statement. When we think about some of the things you called out, I think on the complementary side, lower digital account growth, and then on the margin side, you know, normalization of commissions and healthcare as well as the commencement of some of the of some of the public cloud spend and some of the duplicative costs there. Hey, thanks for squeezing me in here. hey thanks for squeezing me in here Mimi, I wanted to ask another kind of guidance-oriented question. mimi i wanted to ask another kind of guidance-oriented question You know, very clear that, you know, the fourth quarter is not kind of indicative of a jumping-off point. you know very clear that you know the fourth quarter is not kind of indicative of a jumping-off point I just wanted to pressure test a couple of things in the fourth quarter on that statement. i just wanted to pressure test a couple of things in the fourth quarter on that statement When we think about some of the things you called out, I think on the complementary side, lower digital account growth, and then on the margin side, you know, normalization of commissions and healthcare as well as the commencement of some of the of some of the public cloud spend and some of the duplicative costs there. when we think about some of the things you called out i think on the complementary side lower digital account growth and then on the margin side you know normalization of commissions and healthcare as well as the commencement of some of the of some of the public cloud spend and some of the duplicative costs there I was wondering if you could just maybe talk to either why those wouldn't continue into next year or, you know, if they are and, you know, we're supposed to kind of take from that, you know, you're factoring that into the budgeting process as you go through it. You know, if you could just kind of speak to your confidence about, like, levers that you have to offset those things because, you know, you obviously have pretty good visibility on them as of today. Thank you. I was wondering if you could just maybe talk to either why those wouldn't continue into next year or, you know, if they are and, you know, we're supposed to kind of take from that, you know, you're factoring that into the budgeting process as you go through it. i was wondering if you could just maybe talk to either why those wouldn't continue into next year or you know if they are and you know we're supposed to kind of take from that you know you're factoring that into the budgeting process as you go through it You know, if you could just kind of speak to your confidence about, like, levers that you have to offset those things because, you know, you obviously have pretty good visibility on them as of today. you know if you could just kind of speak to your confidence about like levers that you have to offset those things because you know you obviously have pretty good visibility on them as of today Thank you. thank you

Speaker 10: Yeah. Happy to, Will. Appreciate your acknowledgement that it's a little early for FY 2027. Yeah, I think particularly some of the headwinds that we see in Q4, around the digital account growth, it just happens to be the size of some of the wins previously. We have some bluebirds that are scheduled to come on, and we'll see what the mix for the remaining year of the sales team wins look like as it impacts next year's implementation. No concerns there at all. You know, as Greg mentioned, we feel great from a competitive parity perspective, and our both the robustness of the pipeline and the wins we're getting. Yeah. yeah Happy to, Will. happy to will Appreciate your acknowledgement that it's a little early for FY 2027. appreciate your acknowledgement that it's a little early for fy 2027 Yeah, I think particularly some of the headwinds that we see in Q4, around the digital account growth, it just happens to be the size of some of the wins previously. yeah i think particularly some of the headwinds that we see in q4 around the digital account growth it just happens to be the size of some of the wins previously We have some bluebirds that are scheduled to come on, and we'll see what the mix for the remaining year of the sales team wins look like as it impacts next year's implementation. we have some bluebirds that are scheduled to come on and we'll see what the mix for the remaining year of the sales team wins look like as it impacts next year's implementation No concerns there at all. no concerns there at all You know, as Greg mentioned, we feel great from a competitive parity perspective, and our both the robustness of the pipeline and the wins we're getting. you know as greg mentioned we feel great from a competitive parity perspective and our both the robustness of the pipeline and the wins we're getting No concerns there of that being a carryover into FY 2027. On some of the expenses that you mentioned, we mentioned, you know, in previous quarters that some of that savings, you know, particularly around some of the timing on the commissions as well as some of the timing from the expense, medical claims being lower, really just created an opportunity for more of like a one-time windfall, if you will. We've seen that the beginning of the year, we talked about the 20-40, and we're now set to deliver 75-95. We'll see where we start next year. We always start conservative with the ambition that that's the floor, and look to produce more. No concerns there of that being a carryover into FY 2027. On some of the expenses that you mentioned, we mentioned, you know, in previous quarters that some of that savings, you know, particularly around some of the timing on the commissions as well as some of the timing from the expense, medical claims being lower, really just created an opportunity for more of like a one-time windfall, if you will. no concerns there of that being a carryover into fy 2027. on some of the expenses that you mentioned we mentioned you know in previous quarters that some of that savings you know particularly around some of the timing on the commissions as well as some of the timing from the expense medical claims being lower really just created an opportunity for more of like a one-time windfall if you will We've seen that the beginning of the year, we talked about the 20-40, and we're now set to deliver 75-95. we've seen that the beginning of the year we talked about the 20-40 and we're now set to deliver 75-95 We'll see where we start next year. we'll see where we start next year We always start conservative with the ambition that that's the floor, and look to produce more. we always start conservative with the ambition that that's the floor and look to produce more Nothing structural, but you're right, we expect kind of a normalization that should probably produce a little bit of a front half grow over challenge relative to the savings we saw this past year. We continue to look at every position and every project with a refined eye to making sure it makes sense for the business. Nothing structural, but you're right, we expect kind of a normalization that should probably produce a little bit of a front half grow over challenge relative to the savings we saw this past year. nothing structural but you're right we expect kind of a normalization that should probably produce a little bit of a front half grow over challenge relative to the savings we saw this past year We continue to look at every position and every project with a refined eye to making sure it makes sense for the business. we continue to look at every position and every project with a refined eye to making sure it makes sense for the business

Speaker 5: Hey, Will, one thing I do want to emphasize related to the digital backlog is that, you know, the importance of us winning these deals from with existing Jack Henry clients from our competitors is why we continue to emphasize this. Right now in our digital backlog, the digital wins with existing Jack Henry clients from competitors is twice the size of the backlog for the core wins. That puts that in perspective of again, we are winning some larger deals back in the Jack Henry base of deals that we did not win years ago. Hey, Will, one thing I do want to emphasize related to the digital backlog is that, you know, the importance of us winning these deals from with existing Jack Henry clients from our competitors is why we continue to emphasize this. hey will one thing i do want to emphasize related to the digital backlog is that you know the importance of us winning these deals from with existing jack henry clients from our competitors is why we continue to emphasize this Right now in our digital backlog, the digital wins with existing Jack Henry clients from competitors is twice the size of the backlog for the core wins. right now in our digital backlog the digital wins with existing jack henry clients from competitors is twice the size of the backlog for the core wins That puts that in perspective of again, we are winning some larger deals back in the Jack Henry base of deals that we did not win years ago. that puts that in perspective of again we are winning some larger deals back in the jack henry base of deals that we did not win years ago

Speaker 18: Got it. That's super helpful. I appreciate all that color. Maybe if I could just ask a little bit more longer term of a question, and I share your knowledge, you know, despite some of the headwinds that you mentioned earlier this year, you know, this is one of the best years that Jack Henry has put up from a margin expansion perspective in many years, you know, and that's despite, you know, a more flattish back half of the year. I just wanna acknowledge that you're kind of doing that with some of the headwinds that I think an earlier question mentioned. Got it. got it That's super helpful. that's super helpful I appreciate all that color. i appreciate all that color Maybe if I could just ask a little bit more longer term of a question, and I share your knowledge, you know, despite some of the headwinds that you mentioned earlier this year, you know, this is one of the best years that Jack Henry has put up from a margin expansion perspective in many years, you know, and that's despite, you know, a more flattish back half of the year. maybe if i could just ask a little bit more longer term of a question and i share your knowledge you know despite some of the headwinds that you mentioned earlier this year you know this is one of the best years that jack henry has put up from a margin expansion perspective in many years you know and that's despite you know a more flattish back half of the year I just wanna acknowledge that you're kind of doing that with some of the headwinds that I think an earlier question mentioned. i just wanna acknowledge that you're kind of doing that with some of the headwinds that i think an earlier question mentioned Just wondering, as you look out, you know, particularly in the context of the acceleration and core wins and a lot of the sales momentum that you have, you know, how do you kind of think about that long-term margin expansion target? You know, just given what could be a faster pace of top-line growth, like is there, you know, is there room to operate at the higher end of that margin expansion target, you know, while the sales momentum is going strong? Thank you, and nice job today. Just wondering, as you look out, you know, particularly in the context of the acceleration and core wins and a lot of the sales momentum that you have, you know, how do you kind of think about that long-term margin expansion target? just wondering as you look out you know particularly in the context of the acceleration and core wins and a lot of the sales momentum that you have you know how do you kind of think about that long-term margin expansion target You know, just given what could be a faster pace of top-line growth, like is there, you know, is there room to operate at the higher end of that margin expansion target, you know, while the sales momentum is going strong? you know just given what could be a faster pace of top-line growth like is there you know is there room to operate at the higher end of that margin expansion target you know while the sales momentum is going strong Thank you, and nice job today. thank you and nice job today

Speaker 10: Yeah. I think your goals are in line with our goals. You know, we know that margin expansion is one of the key pillars from a shareholder value creation, and we are highly motivated to drive that. Not talking about any particular year, so this is not a reference to 2027, but more of kind of the near-term horizon. We've talked about there is a number of great tailwinds that will help us, whether that is the mix of the new products coming to fruition at higher margins, whether that is, you know, moving to a public cloud environment, whether that is AI and continuous improvement efficiencies. We think there's, you know, definitely opportunities to improve the margin profile of the company. Yeah. yeah I think your goals are in line with our goals. i think your goals are in line with our goals You know, we know that margin expansion is one of the key pillars from a shareholder value creation, and we are highly motivated to drive that. you know we know that margin expansion is one of the key pillars from a shareholder value creation and we are highly motivated to drive that Not talking about any particular year, so this is not a reference to 2027, but more of kind of the near-term horizon. not talking about any particular year so this is not a reference to 2027 but more of kind of the near-term horizon We've talked about there is a number of great tailwinds that will help us, whether that is the mix of the new products coming to fruition at higher margins, whether that is, you know, moving to a public cloud environment, whether that is AI and continuous improvement efficiencies. we've talked about there is a number of great tailwinds that will help us whether that is the mix of the new products coming to fruition at higher margins whether that is you know moving to a public cloud environment whether that is ai and continuous improvement efficiencies We think there's, you know, definitely opportunities to improve the margin profile of the company. we think there's you know definitely opportunities to improve the margin profile of the company

Speaker 18: Got it. Appreciate you taking the question. Got it. got it Appreciate you taking the question. appreciate you taking the question

Speaker 10: Of course. Of course. of course

Speaker 11: The next question comes from Dave Koning from Baird. Please go ahead. The next question comes from Dave Koning from Baird. the next question comes from dave koning from baird Please go ahead. please go ahead

Speaker 3: Yeah. Hey, guys. Thanks. Nice job. One thing corporate, just that segment grew super fast. Hardware you called out, I think that's pretty lumpy. You made a comment that you expect growth in all four segments. Historically, corporate was kind of a decliner. Is there something that's changed there, and is it maybe less lumpy or is there some extra growth you expect? Maybe just discuss that a little bit. Yeah. yeah Hey, guys. hey guys Thanks. thanks Nice job. nice job One thing corporate, just that segment grew super fast. one thing corporate just that segment grew super fast Hardware you called out, I think that's pretty lumpy. hardware you called out i think that's pretty lumpy You made a comment that you expect growth in all four segments. you made a comment that you expect growth in all four segments Historically, corporate was kind of a decliner. historically corporate was kind of a decliner Is there something that's changed there, and is it maybe less lumpy or is there some extra growth you expect? is there something that's changed there and is it maybe less lumpy or is there some extra growth you expect Maybe just discuss that a little bit. maybe just discuss that a little bit

Speaker 10: Yeah. I appreciate the question, Dave. You know, I agree, hardware can be lumpy. We saw that as a big headwind this, you know, last year. It's hard to say, you know, what we expect for next year yet in terms of hardware. We did have an increase a little bit this year that's produced some wins. I would say in general that segment, while we manage it, you know, quite tightly, it doesn't have the same operating characteristics as our other segments. It tends to be a little bit more ancillary services than key areas of revenue. Yeah. yeah I appreciate the question, Dave. i appreciate the question dave You know, I agree, hardware can be lumpy. you know i agree hardware can be lumpy We saw that as a big headwind this, you know, last year. we saw that as a big headwind this you know last year It's hard to say, you know, what we expect for next year yet in terms of hardware. it's hard to say you know what we expect for next year yet in terms of hardware We did have an increase a little bit this year that's produced some wins. we did have an increase a little bit this year that's produced some wins I would say in general that segment, while we manage it, you know, quite tightly, it doesn't have the same operating characteristics as our other segments. i would say in general that segment while we manage it you know quite tightly it doesn't have the same operating characteristics as our other segments It tends to be a little bit more ancillary services than key areas of revenue. it tends to be a little bit more ancillary services than key areas of revenue

Speaker 3: Yeah. That's, that's fair. Just one last one on network. The network incentives, I get what they are. Just from a magnitude standpoint, I know it's lumpy, but is that like a 1%-2% headwind in Q3 and Q4, just so we can understand kind of normalized? Yeah. yeah That's, that's fair. that's that's fair Just one last one on network. just one last one on network The network incentives, I get what they are. the network incentives i get what they are Just from a magnitude standpoint, I know it's lumpy, but is that like a 1%-2% headwind in Q3 and Q4, just so we can understand kind of normalized? just from a magnitude standpoint i know it's lumpy but is that like a 1%-2% headwind in q3 and q4 just so we can understand kind of normalized

Speaker 10: Yeah. You know, I would say probably, you know, combined, looking at it from a combination perspectively and holistically across it, I would focus more on the card volume itself as being more of an indicator forward. You know, that strength, that continued strength of the consumer, we think will lead to network incentives. This year, just the threshold was pretty high. Yeah. yeah You know, I would say probably, you know, combined, looking at it from a combination perspectively and holistically across it, I would focus more on the card volume itself as being more of an indicator forward. you know i would say probably you know combined looking at it from a combination perspectively and holistically across it i would focus more on the card volume itself as being more of an indicator forward You know, that strength, that continued strength of the consumer, we think will lead to network incentives. you know that strength that continued strength of the consumer we think will lead to network incentives This year, just the threshold was pretty high. this year just the threshold was pretty high

Speaker 5: Yeah. The other thing is on network incentives. It's an aggregate of all of our card association relationships, and a lot of it is also predicated on average spend, not necessarily transactions. We get paid on transactions. Obviously, the interchange is generated at the larger spend dollars. Some of that is predicated on spend dollars going down, but not necessarily our transactions going down. For the network incentives. Yeah. yeah The other thing is on network incentives. the other thing is on network incentives It's an aggregate of all of our card association relationships, and a lot of it is also predicated on average spend, not necessarily transactions. it's an aggregate of all of our card association relationships and a lot of it is also predicated on average spend not necessarily transactions We get paid on transactions. we get paid on transactions Obviously, the interchange is generated at the larger spend dollars. obviously the interchange is generated at the larger spend dollars Some of that is predicated on spend dollars going down, but not necessarily our transactions going down. For the network incentives. some of that is predicated on spend dollars going down but not necessarily our transactions going down. for the network incentives

Speaker 3: Got you. No, that makes sense. Thank you. Got you. got you No, that makes sense. no that makes sense Thank you. thank you

Speaker 11: The next question comes from Kartik Mehta from Northcoast Research. Please go ahead. The next question comes from Kartik Mehta from Northc oast Research. the next question comes from kartik mehta from northc oast research Please go ahead. please go ahead

Speaker 7: Hey, good morning, Greg and Mimi. Hey, Greg, I realize there hasn't been as much M&A activity, at least so far in 2026 as some anticipated. If M&A activity picks up, do you think that impacts at all the number of RFPs that might be there for the core over the next couple of years? Hey, good morning, Greg and Mimi. hey good morning greg and mimi Hey, Greg, I realize there hasn't been as much M&A activity, at least so far in 2026 as some anticipated. hey greg i realize there hasn't been as much m&a activity at least so far in 2026 as some anticipated If M&A activity picks up, do you think that impacts at all the number of RFPs that might be there for the core over the next couple of years? if m&a activity picks up do you think that impacts at all the number of rfps that might be there for the core over the next couple of years

Speaker 5: I do. I do think that a lot of opportunities that tend to happen are folks that are undetermined on what they're going to do in the long term on whether potentially being acquired is an alternative or kind of preparing themselves for that through the process. As you can tell, a lot of folks that maybe are going to be potentially looking to be purchased, they're gonna be less likely to do an RFP at that point in time. It can have an impact on both ways. Based on what we have seen, to answer your question, Kartik, we've seen a really steady dose. I do. i do I do think that a lot of opportunities that tend to happen are folks that are undetermined on what they're going to do in the long term on whether potentially being acquired is an alternative or kind of preparing themselves for that through the process. i do think that a lot of opportunities that tend to happen are folks that are undetermined on what they're going to do in the long term on whether potentially being acquired is an alternative or kind of preparing themselves for that through the process As you can tell, a lot of folks that maybe are going to be potentially looking to be purchased, they're gonna be less likely to do an RFP at that point in time. as you can tell a lot of folks that maybe are going to be potentially looking to be purchased they're gonna be less likely to do an rfp at that point in time It can have an impact on both ways. it can have an impact on both ways Based on what we have seen, to answer your question, Kartik, we've seen a really steady dose. based on what we have seen to answer your question kartik we've seen a really steady dose I think that if you take the average number of RFPs that we typically talk about in a year, which is roughly 200, I think that number will be closer to 250-275 over the next couple of years with, one, the unrest that's going on at some of the competitors, but also just the whole M&A story itself. I think that if you take the average number of RFPs that we typically talk about in a year, which is roughly 200, I think that number will be closer to 250-275 over the next couple of years with, one, the unrest that's going on at some of the competitors, but also just the whole M&A story itself. i think that if you take the average number of rfps that we typically talk about in a year which is roughly 200 i think that number will be closer to 250-275 over the next couple of years with one the unrest that's going on at some of the competitors but also just the whole m&a story itself

Speaker 7: Even with increased in M&A, it should actually increase your opportunities. Even with increased in M&A, it should actually increase your opportunities. even with increased in m&a it should actually increase your opportunities

Speaker 5: In both ways, right? In both ways, right? in both ways right

Speaker 7: Yeah. Yeah. yeah

Speaker 5: We typically win more than we lose, right, in the M&A side. I think with the opportunities for us to continue to win our fair share of pure competitive takeaways. We typically win more than we lose, right, in the M&A side. we typically win more than we lose right in the m&a side I think with the opportunities for us to continue to win our fair share of pure competitive takeaways. i think with the opportunities for us to continue to win our fair share of pure competitive takeaways

Speaker 7: Hey, then just one last question for you or Mimi. In the past, you've talked about whenever there is some kind of a economic event, you know, if banks get a little skittish, there's a portion of the business that might be impacted because it's a little bit faster sales cycle than the core or some of your other products. You know, at this point in time, you know, what percentage of the business do you think could be at risk if the economy slows or banks get a little bit worried about what's happening? Hey, then just one last question for you or Mimi. hey then just one last question for you or mimi In the past, you've talked about whenever there is some kind of a economic event, you know, if banks get a little skittish, there's a portion of the business that might be impacted because it's a little bit faster sales cycle than the core or some of your other products. in the past you've talked about whenever there is some kind of a economic event you know if banks get a little skittish there's a portion of the business that might be impacted because it's a little bit faster sales cycle than the core or some of your other products You know, at this point in time, you know, what percentage of the business do you think could be at risk if the economy slows or banks get a little bit worried about what's happening? you know at this point in time you know what percentage of the business do you think could be at risk if the economy slows or banks get a little bit worried about what's happening

Speaker 10: Yeah, overall, we have not seen volatility related to the economic, related to global, issues happening. I would say, and something we've mentioned historically is the card business has the most sensitivity to macroeconomic. Overall, we have not seen a big change in the mix of that kind of exposure, if you will, to the economy. Yeah, overall, we have not seen volatility related to the economic, related to global, issues happening. yeah, overall we have not seen volatility related to the economic related to global issues happening I would say, and something we've mentioned historically is the card business has the most sensitivity to macroeconomic. i would say and something we've mentioned historically is the card business has the most sensitivity to macroeconomic Overall, we have not seen a big change in the mix of that kind of exposure, if you will, to the economy. overall we have not seen a big change in the mix of that kind of exposure if you will to the economy

Speaker 5: Yeah. Yeah. yeah

Speaker 7: Perfect. Perfect. perfect

Speaker 5: Consumer sentiment drives a lot. As you know, we have the bulk of our business is debit, and that tends to be the one that gets pushed. But regardless, I mean, I don't know any of the products that we've seen, and again, the we just came out of our SI event in Salt Lake, and the feedback from our clients was, I mean, they're gonna spend more and more because they know that that's their way to combat a lot of things. You know, technology solves a lot of their problems. Consumer sentiment drives a lot. consumer sentiment drives a lot As you know, we have the bulk of our business is debit, and that tends to be the one that gets pushed. as you know we have the bulk of our business is debit and that tends to be the one that gets pushed But regardless, I mean, I don't know any of the products that we've seen, and again, the we just came out of our SI event in Salt Lake, and the feedback from our clients was, I mean, they're gonna spend more and more because they know that that's their way to combat a lot of things. but regardless i mean i don't know any of the products that we've seen and again the we just came out of our si event in salt lake and the feedback from our clients was i mean they're gonna spend more and more because they know that that's their way to combat a lot of things You know, technology solves a lot of their problems. you know technology solves a lot of their problems

Speaker 7: Thank you both. Appreciate it. Thank you both. thank you both Appreciate it. appreciate it

Speaker 5: Thank you. Thank you. thank you

Speaker 11: The next question comes from James Faucette from Morgan Stanley. Please go ahead. The next question comes from James Faucette from Morgan Stanley. the next question comes from james faucette from morgan stanley Please go ahead. please go ahead

Speaker 6: Thank you very much. Greg, I want to circle back to a comment you made a few minutes ago that you're seeing increased engagement with consulting and systems integrators. You know, just wondering with those conversations, if you view that as a potential source of better implementation efficacy, especially if you can enlist the SIs to do a lot more of the work. Then, just thinking about that as a potential incremental channel or point of leverage. Thank you very much. thank you very much Greg, I want to circle back to a comment you made a few minutes ago that you're seeing increased engagement with consulting and systems integrators. greg i want to circle back to a comment you made a few minutes ago that you're seeing increased engagement with consulting and systems integrators You know, just wondering with those conversations, if you view that as a potential source of better implementation efficacy, especially if you can enlist the SIs to do a lot more of the work. you know just wondering with those conversations if you view that as a potential source of better implementation efficacy especially if you can enlist the sis to do a lot more of the work Then, just thinking about that as a potential incremental channel or point of leverage. then just thinking about that as a potential incremental channel or point of leverage

Speaker 5: I'm really glad you asked the question. Thank you. Absolutely. The things that we have found through these conversations, and we've had a multitude of conversations with two particular firms in, in, you know, in particular. I would say that, one, they are able to help validate the things that we were doing in the space as compared to others, and giving us, that feedback. We feel really good about that. Two is what you described, which is they're providing an entree into some of the larger institutions. In fact, I had two inbound calls, from institutions that came as references from these, consulting firms, and we haven't even inked a deal with either one of them yet. I'm really glad you asked the question. i'm really glad you asked the question Thank you. thank you Absolutely. absolutely The things that we have found through these conversations, and we've had a multitude of conversations with two particular firms in, in, you know, in particular. the things that we have found through these conversations and we've had a multitude of conversations with two particular firms in in you know in particular I would say that, one, they are able to help validate the things that we were doing in the space as compared to others, and giving us, that feedback. i would say that one they are able to help validate the things that we were doing in the space as compared to others and giving us that feedback We feel really good about that. we feel really good about that Two is what you described, which is they're providing an entree into some of the larger institutions. two is what you described which is they're providing an entree into some of the larger institutions In fact, I had two inbound calls, from institutions that came as references from these, consulting firms, and we haven't even inked a deal with either one of them yet. in fact i had two inbound calls from institutions that came as references from these consulting firms and we haven't even inked a deal with either one of them yet They're providing that level of validation that, hey, Jack Henry can play, you know, in this larger market. Thirdly, to your point, do they become potential implementation partners or other aspects? The answer is yes. We're entertaining all of those things as opportunities present themselves. They're providing that level of validation that, hey, Jack Henry can play, you know, in this larger market. they're providing that level of validation that hey jack henry can play you know in this larger market Thirdly, to your point, do they become potential implementation partners or other aspects? thirdly to your point do they become potential implementation partners or other aspects The answer is yes. the answer is yes We're entertaining all of those things as opportunities present themselves. we're entertaining all of those things as opportunities present themselves

Speaker 6: Thanks for that additional commentary there, Greg. Greg or Mimi, I just wanted to touch quickly on some of the things that you're doing in the payment segment. Continue to be intrigued by those. I'm wondering, excuse me, how we should think about the margin profile of Tap2Local relative to the current segment margin. Is the move economics model initially dilutive because of onboarding support, or can it be accretive because of the way the distribution runs through existing Banno and FI relationships? How should we think about those trajectories over time? Thanks for that additional commentary there, Greg. thanks for that additional commentary there greg Greg or Mimi, I just wanted to touch quickly on some of the things that you're doing in the payment segment. greg or mimi i just wanted to touch quickly on some of the things that you're doing in the payment segment Continue to be intrigued by those. continue to be intrigued by those I'm wondering, excuse me, how we should think about the margin profile of Tap2Local relative to the current segment margin. i'm wondering excuse me how we should think about the margin profile of tap2local relative to the current segment margin Is the move economics model initially dilutive because of onboarding support, or can it be accretive because of the way the distribution runs through existing Banno and FI relationships? is the move economics model initially dilutive because of onboarding support or can it be accretive because of the way the distribution runs through existing banno and fi relationships How should we think about those trajectories over time? how should we think about those trajectories over time

Speaker 10: Thanks for asking the question, James. I would say that some of those new growth initiatives are exciting on two fronts, both from a top-line revenue perspective, still very early days. Greg shared some of the exciting momentum metrics, from a revenue contribution perspective, it's still very small, and expected to grow quite nicely over the next several years. From a margins perspective, because of the nature of the rev share, because of the limited amount of development work we've had to do to get that solution in market, because of the partnerships we have on the marketing side, with the network, it's gonna be great margin. Excited when that comes to fruition. Thanks for asking the question, James. thanks for asking the question james I would say that some of those new growth initiatives are exciting on two fronts, both from a top-line revenue perspective, still very early days. i would say that some of those new growth initiatives are exciting on two fronts both from a top-line revenue perspective still very early days Greg shared some of the exciting momentum metrics, from a revenue contribution perspective, it's still very small, and expected to grow quite nicely over the next several years. greg shared some of the exciting momentum metrics from a revenue contribution perspective it's still very small and expected to grow quite nicely over the next several years From a margins perspective, because of the nature of the rev share, because of the limited amount of development work we've had to do to get that solution in market, because of the partnerships we have on the marketing side, with the network, it's gonna be great margin. from a margins perspective because of the nature of the rev share because of the limited amount of development work we've had to do to get that solution in market because of the partnerships we have on the marketing side with the network it's gonna be great margin Excited when that comes to fruition. excited when that comes to fruition When I look about long-term growth momentum drivers for the business, those are certainly areas that I think will continue to accelerate payment size within our business and overall growth rate. When I look about long-term growth momentum drivers for the business, those are certainly areas that I think will continue to accelerate payment size within our business and overall growth rate. when i look about long-term growth momentum drivers for the business those are certainly areas that i think will continue to accelerate payment size within our business and overall growth rate

Speaker 6: Thanks so much, guys. Thanks so much, guys. thanks so much guys

Speaker 5: Thank you. Thank you. thank you

Speaker 10: Thank you. Thank you. thank you

Speaker 11: The next question comes from Timothy Chiodo from UBS. Please go ahead. The next question comes from Timothy Chiodo from UBS. the next question comes from timothy chiodo from ubs Please go ahead. please go ahead

Speaker 14: Great. Thanks a lot. I apologize if this was already addressed. I'm joining late from another earnings call. I realize it's maybe challenging to talk a little bit about large name competitors, but it's just coming up in a lot of investor discussions with the recent Wells Fargo win for Pismo and Visa overall. I was hoping you could just let us in the investment community know how you're thinking about them as a potential new competitor that might not have been a part of the thought process maybe two years ago and now appears to be gaining some degree of traction. Thanks. Great. great Thanks a lot. thanks a lot I apologize if this was already addressed. i apologize if this was already addressed I'm joining late from another earnings call. i'm joining late from another earnings call I realize it's maybe challenging to talk a little bit about large name competitors, but it's just coming up in a lot of investor discussions with the recent Wells Fargo win for Pismo and Visa overall. i realize it's maybe challenging to talk a little bit about large name competitors but it's just coming up in a lot of investor discussions with the recent wells fargo win for pismo and visa overall I was hoping you could just let us in the investment community know how you're thinking about them as a potential new competitor that might not have been a part of the thought process maybe two years ago and now appears to be gaining some degree of traction. i was hoping you could just let us in the investment community know how you're thinking about them as a potential new competitor that might not have been a part of the thought process maybe two years ago and now appears to be gaining some degree of traction Thanks. thanks

Speaker 5: Yeah. It has not been asked, Tim, we'll forgive you for going to the other one first. That's okay. Hey, here's the answer to the question. You know, Pismo is not a full core. You know, if you even compare it to, I think some folks had made comparisons to Finxact and Thought Machine and others. By the way, they left us out of there from a comparison standpoint with the things that we've built in the platform. What I would say is that it is the term core is really what's been the challenging component here. It has the ledgering capability. That is it. Yeah. yeah It has not been asked, Tim, we'll forgive you for going to the other one first. it has not been asked tim we'll forgive you for going to the other one first That's okay. that's okay Hey, here's the answer to the question. hey here's the answer to the question You know, Pismo is not a full core. you know pismo is not a full core You know, if you even compare it to, I think some folks had made comparisons to Finxact and Thought Machine and others. you know if you even compare it to i think some folks had made comparisons to finxact and thought machine and others By the way, they left us out of there from a comparison standpoint with the things that we've built in the platform. by the way they left us out of there from a comparison standpoint with the things that we've built in the platform What I would say is that it is the term core is really what's been the challenging component here. what i would say is that it is the term core is really what's been the challenging component here It has the ledgering capability. it has the ledgering capability That is it. that is it It does not have any of the other. People are calling it a headless core because of the UI and lacking of that. It doesn't have any of the pure functionality of a core itself, which is why somebody like Wells Fargo can spend the money to build that out based on the Visa relationship that they have, and they can hold them accountable for executing based on the Visa relationship that they have. I think there's a lot of dynamics in a deal like that that are way more impactful than just what, you know, they're supposedly gonna be doing with building out a potential core. I really believe that they could be using some of it more as a side core solution set, using the general ledger as a baseline for that. It does not have any of the other. it does not have any of the other People are calling it a headless core because of the UI and lacking of that. people are calling it a headless core because of the ui and lacking of that It doesn't have any of the pure functionality of a core itself, which is why somebody like Wells Fargo can spend the money to build that out based on the Visa relationship that they have, and they can hold them accountable for executing based on the Visa relationship that they have. it doesn't have any of the pure functionality of a core itself which is why somebody like wells fargo can spend the money to build that out based on the visa relationship that they have and they can hold them accountable for executing based on the visa relationship that they have I think there's a lot of dynamics in a deal like that that are way more impactful than just what, you know, they're supposedly gonna be doing with building out a potential core. i think there's a lot of dynamics in a deal like that that are way more impactful than just what you know they're supposedly gonna be doing with building out a potential core I really believe that they could be using some of it more as a side core solution set, using the general ledger as a baseline for that. i really believe that they could be using some of it more as a side core solution set using the general ledger as a baseline for that There isn't any true deposit capabilities or lending capabilities in Pismo today. I validated that with Visa. I mean, you know, we obviously have a strong relationship with Visa, and I have validated that at very top levels. I think there's a little bit of an overreaction to what is truly going on with Pismo today. You know, we are not seeing them. I actually talked to our sales folks and I said, "Do we see them in any single deal?" The answer is no. Obviously, we do see them in card deals sometimes with what they're trying to do with DPS, and bringing those two things together. You know, that's my answer for today based on what I know, based on conversations I've had with Visa directly and what our sales team has brought back to me. There isn't any true deposit capabilities or lending capabilities in Pismo today. there isn't any true deposit capabilities or lending capabilities in pismo today I validated that with Visa. i validated that with visa I mean, you know, we obviously have a strong relationship with Visa, and I have validated that at very top levels. i mean you know we obviously have a strong relationship with visa and i have validated that at very top levels I think there's a little bit of an overreaction to what is truly going on with Pismo today. i think there's a little bit of an overreaction to what is truly going on with pismo today You know, we are not seeing them. you know we are not seeing them I actually talked to our sales folks and I said, "Do we see them in any single deal?" The answer is no. i actually talked to our sales folks and i said "do we see them in any single deal?" the answer is no Obviously, we do see them in card deals sometimes with what they're trying to do with DPS, and bringing those two things together. obviously we do see them in card deals sometimes with what they're trying to do with dps and bringing those two things together You know, that's my answer for today based on what I know, based on conversations I've had with Visa directly and what our sales team has brought back to me. you know that's my answer for today based on what i know based on conversations i've had with visa directly and what our sales team has brought back to me

Speaker 14: Okay. Well, thank you, Greg. I'm glad we tackled that one because I think that really helps. Really great answer. Thank you. Okay. okay Well, thank you, Greg. well thank you greg I'm glad we tackled that one because I think that really helps. i'm glad we tackled that one because i think that really helps Really great answer. really great answer Thank you. thank you

Speaker 5: Thank you. Thank you. thank you

Speaker 11: This concludes our question-and-answer session. I would like to turn the conference back over to Vance Sherard for closing remarks. This concludes our question- and- answer session. this concludes our question- and- answer session I would like to turn the conference back over to Vance Sherard for closing remarks. i would like to turn the conference back over to vance sherard for closing remarks

Speaker 16: Thank you, Danielle. Management will be participating in multiple investor events over the next two months, and we look forward to our conversations with investors. As Greg mentioned, we will be having our Investor Day on September 15th at our office in Dallas, and that will obviously be webcast. However, if you would like to attend in person, please reach out to Steve Fine on our IR team for more information. In conclusion, we extend our appreciation to all Jack Henry associates for their outstanding efforts, which have set us up to finish a successful fiscal 2026. Thank you for joining us today. Danielle, please provide the replay number. Thank you, Danielle. thank you danielle Management will be participating in multiple investor events over the next two months, and we look forward to our conversations with investors. management will be participating in multiple investor events over the next two months and we look forward to our conversations with investors As Greg mentioned, we will be having our Investor Day on September 15th at our office in Dallas, and that will obviously be webcast. as greg mentioned we will be having our investor day on september 15th at our office in dallas and that will obviously be webcast However, if you would like to attend in person, please reach out to Steve Fine on our IR team for more information. however if you would like to attend in person please reach out to steve fine on our ir team for more information In conclusion, we extend our appreciation to all Jack Henry associates for their outstanding efforts, which have set us up to finish a successful fiscal 2026. in conclusion we extend our appreciation to all jack henry associates for their outstanding efforts which have set us up to finish a successful fiscal 2026 Thank you for joining us today. thank you for joining us today Danielle, please provide the replay number. danielle please provide the replay number

Speaker 11: The replay number for today's call is 855-669-9658. The access code is 4124634. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. The replay number for today's call is 855-669-9658. the replay number for today's call is 855-669-9658 The access code is 4124634. the access code is 4124634 The conference is now concluded. the conference is now concluded Thank you for attending today's presentation. thank you for attending today's presentation You may now disconnect. you may now disconnect