We were talking about earlier. We're just kind of on a tight schedule between meetings. So I appreciate all of you joining us today to have the conversation with Mimi Carsley, CFO of Jack Henry. I'm James Foss, a lead fintech analyst out of the U.S., covering Jack Henry. So thank you very much for joining us here again at the Nasdaq Conference, Mimi. So for those that aren't familiar with your business, Mimi, could you provide a quick overview of the three core businesses at Jack Henry, as well as some cohort of bank and credit union customers that you serve? Sure. So firstly, Jack Henry is a well-rounded financial technology firm. We serve U.S.-based, primarily U.S.-based credit unions and banks with technology solutions. So we have three main operating segments. The core segment, think about your processing systems to take deposits, open accounts, record interest, kind of essentially your GL, if you will, plus ancillary services for processing. That's our core system. That's about a third of our business. We have a third of our business that is our payments business. So that's both card issuance and processing, so primarily debit cards. And then we have enterprise payment services, as well as bill pay and now faster payment services. So that's another roughly, call it a third. And then if it's not core and it's not payments, it falls under our complementary bucket. And that's a whole host of services that helps a bank or credit union. So fighting fraud, doing lending, treasury, digital offerings, and the like. So pretty much with the exception of wealth management and actual mortgage underwriting, we provide banks and credit unions with all of the solutions they need for their strategy. Got it. So interestingly, it's a market that I think is always, I find fascinating because particularly on the core portion of the software, about 100 banks a year switch cores. You guys win about half of those pretty consistently over the last 10 years plus. But one of your core competitors recently announced that they're going to start to consolidate a lot of their different platforms. I think they have more than a dozen and a half that they're going to try to bring down. And that seems like that could create a lot of incremental at-bat opportunities for Jack Henry or incremental opportunities to win. Sorry about the baseball analogy. We don't play a lot of baseball here. But so as those platforms are sunset and your competitors attempt to migrate them to new platforms, so can you talk to us about how you think about that opportunity, the size, what it would mean incrementally, et cetera? Yeah. So first, I respect them for doing it. It's an incredibly challenging thing to do. Jack Henry has one core for our credit unions and one flagship core for banking, and then two other cores that are more bespoke if you're, let's say, a smaller institution or you want less customization. We have two other solutions, but we primarily have one flagship banking and one flagship credit union. That's not the same with our competitors who have through acquisitions many, many cores. And Jack Henry has both built cores and bought cores, but it takes a real disciplined effort to do that consolidation. So first, I commend them for the effort because it's not an easy undertaking. It also puts a ton of your customers in flight. So in a situation where it's already a tough landscape, unlike being a Jack Henry, if you're at another core vendor, you may not be getting innovation, you may not be getting great service, and now you're being told you have to make a change. And so that definitely puts a great opportunity at Jack Henry. As you said, we have a fantastic win rate that comes from both the level of service that we have been known for, as well as the level of clarity and transparency and technology innovation. And so they have not set a date as a sunset date. Many core contracts typically are about seven, could be as long as 10 years in length. So this is not all a rush to a December 31st opportunity. In fact, we're quite excited because we think it'll be a multi-year opportunity for us to build on top of that already large roughly 50 wins we do a year. So depending on how big of a lift it is, I suspect that some of that 1,400 core customers will have an easier software upgrade type path of migration. But a lot of those customers will be faced with a challenge of completely upholding their whole organization. If you think about all of the processing, every screen you do for every process within the bank is now changed. And because their systems are all very different, moving from one system to another within their shop may be quite a different experience and be the same amount of lift of going to a different provider. So to me, it really opens the door to customers taking our calls, considering an RFP. And then once you open up that consideration set and you see the options before you, you see the level of innovation, you see where our roadmap is going from a public cloud usage. We really think we have the capabilities to both on the sales side, the marketing side, as well as the operational capacity to handle the migrations that may come before us to take advantage of this historic. And it has been many years, probably since Y2K, that you had this many customers in flight. To your point, that probably only 200 customers even send out an RFP on an annual basis with only about 100 of those making a core decision and Jack Henry winning about 50 a year. So this is a lot of extra potential customer opportunities before us. So let's dig in a little bit on a couple of those elements. Do you have any historical examples, either external to Jack Henry or maybe even with your own experience, where as platforms are sunset, et cetera, what those churn rates might look like? So the example you just gave, in any given year, there's call it 200 RFPs, maybe half of those decide to stay with their existing provider, the other half choose to move to somebody else with you taking about half of those. How does that compare normally to what those percentages might look like when there's an actual sunsetting of a platform? Yeah. So in the sunsetting, everyone has to make a decision. So whether you're deciding to stay with your current vendor but move to a completely different product, which is the same level of complexity of the migration, or they might actually decide some of them that they're just want to retire. Maybe it's an older management team. Maybe this raises the bar for just operating complexity. Maybe it's just an opportunity to just not go through the upheaval. And they decide to M&A, which also benefits Jack Henry because a lot of our customers are looking for growth and they would love to buy another institution. And for Jack Henry, we really win. We win over the cycle of M&A because typically over the cycle, more of our customers are the acquirers than the acquirees. But where we really win in M&A is when they acquire someone who's not a Jack Henry bank. So this could be both a win from our sales team, but could also be a win from an M&A perspective. Got it. And then I'm going to put your feet to the fire a little bit here. So let's imagine that this competitor starts to talk to their customers about potential migration beginning of 2026, right? So basically in the next month or so. How quickly could we start to see incremental benefit to the P&L for Jack Henry, would you think? We're already taking a large share of this customer's clients every year. A lot of our wins come from this competitor. So any of the wins we're seeing now, we just signed one last week, in fact, started way before this announcement. Typically, again, your contract's somewhere between seven to 10 years. You're not going to start any conversations about contemplating a vendor change until you're about two years inside of the remaining life. At that point, you're going to do all of the RFP, all of the work, all the recontracting. It's at that point that it then starts the timeline for the actual migration. And then that's somewhere between 12 months and 18 months. And that timing is really dependent on the financial institution. It's not Jack Henry. The amount of lift we do from a mapping, we've mapped every core out there. It's really around that training, reprocessing, redocumenting of procedures that the bank institution needs to have. So there's certainly customers already that we've been in talks with that now heard this news that maybe it spurs a decision for them. But again, since there's no sunset date, we expect this to be a multi-year impact because no one's likely to leave a contract with a ton of remaining life left on it because they'd have to pay the penalty. Right. And then talking about multi-year impact, how should we think about the incremental complementary attached to cores? Because we're talking about the core debits and credit systems of these institutions, but there's a lot of other functionality that can be appended and should in most cases will be appended to those. Do those complementary attached products tend to come at the time of a core switch, or do they come subsequent and provide further tailwind for more years? Yeah. So winning a core, you're exactly right, James. Winning a core is just the beginning. So no one really takes core in a vacuum. So let's say we have over 200 solutions. Someone is going to take on average 30 to 50, depending on if they're a bank or credit union, solutions at the time of their contract. Now, they may do some day one with the core. Let's say they want to do digital and core together, but some they may want to do as a day two project. Maybe it's six months down the line. Maybe it's a year after they've done the core to let their organization kind of embrace the magnitude of the change. So there's certainly a windfall not only for our core segment growth and our cloud growth, because most of these new customers are going to be on our private cloud. Today, over 77% of our customers are, but we rarely get an on-premise new win today because most people don't want to be running the data center business game. So it's going to be cloud processing revenue in the core segment, maybe even some contracting, consulting work orders that go around the implementation. And then it's going to probably be with a bundle of other products, likely card and likely digital for sure, but then treasury, Financial Crimes Defender. And then there's a whole host of other products. If you think about document imaging and e-sign and account opening and a whole host of things that help workflow of day-to-day operations within a bank. So they'll probably take that whole package of opportunity. The great thing for Jack Henry is because we have a whole roster of core agnostic solutions within our complementary segment, we have relationships with most banks and credit unions in the U.S. today. So we have 1,700 core customers in our core segment, but we have 5,800 customers that are either a payments or a non-core product, a complementary product. So likely we have existing relationships with all of these new prospects who already have experienced the Jack Henry award-winning service, who know how we operate, who give us a leg into potentially a heads-up on that prospect. Got it. So we've talked about maybe the opportunity that maybe created that's idiosyncratic to a change in strategy and approach from a competitor, but let's talk about the overall demand environment, kind of the generalized macro. You've routinely referenced the Bank Director survey and noted that the median growth in tech spend is still really quite healthy. I'm curious, just given where we are in the deposit cycle and the prospect that the market seems to be anticipating for accelerating loan growth next year, I'm hoping you could help us stratify the difference in demand for your customers in kind of this deposit attraction retention tools versus lending and kind of how you think about where you want to allocate resources from a product development and selling standpoint. Yeah. So the top three strategic areas of focus for most banks and credit unions from our survey over the last several years have been gathering deposits, lending, and efficiency within their organization. Then fraud is usually like fourth or fifth. And those numbers may change in a given year of what's one versus two or three, but those are always the top three priorities for the last several years at an institution. So it's hard to say on a macro trend basis for deposits because a lot really varies geography to geography, which is why M&A sometimes can be such an opportunity if you're able to buy a growing deposit geographic base or a nice little pool of deposits in an acquisition. But overall, I would say deposit growth has been modest. It hasn't been tremendous. We've seen some deposits go to the larger mega banks, some of them to the neo fintechs. But for the most part, deposit growth has been pretty robust, like steady. What we do expect is that lending, particularly around mortgage and refi, to kind of pop up. In the U.S., we're now started a cycle of declining interest rates. There's a potential for a very large refinancing bubble that will occur over the next couple of years that will really help institutions on the lending side. Not as much on maybe autos and other lending, but certainly around mortgage and refi. Got it. Got it. I want to talk about, so we've talked a little bit about core. And as we said, that tends to be a pretty steady business, at least in terms of new wins per year, et cetera. But maybe there's some potential for acceleration in the coming few years. But at least relative to our estimates, where we've tended to see the most volatility over the last couple of years, or at least variance to our estimates, has been in the payments segment. So I'm wondering if you can kind of help set the stage for us, give us a quick overview of what Jack Henry does in the payments segment, how you're feeling about that business, and where kind of the variance versus your own expectations have come from, at least over the past couple of years. Sure. So as you say, our core business tends to be pretty steady. It tends to be, again, most are cloud-based. So it tends to be based on account size, like number of accounts, number of members, which don't have that much fluctuation like month-to-month. So tends to be a more durable, predictive kind of grower. The card business, about 60% of our payment segment is in card. We're more predominantly debit-focused than credit. We have about 1,000 customers using our debit products. We don't participate in interchange, so it's more a per transaction fee. So it tends to be more durable on downturns in spending than upturns where you see a larger basket size of a transaction. But there's a lot that's going on that's also driving that. So fraud alerts has been a healthy business. We like to say we like fraud alerts. We don't like fraud. We like helping our customers fight fraud. And there's other ancillary products to the card business. And then we have our enterprise payments. So whether that be where we're seeing great growth, double-digit growth, smaller dollars, but really growing and a great potential is in the faster rails in the U.S. So you have FedNow, you have RTP, you have Zelle, and that adoption has really been on the incline. So let's talk about some of those. You mentioned Rapid Transfer. A couple of other services that you've integrated have been Mastercard Move and Visa Direct. Those are now integrated. How are you thinking, putting all these together about the fiscal year 2026 transaction and that volume ramp that you just mentioned? And how should we be expecting that take rates could be impacted so we're prepared for that KPI? Yeah. So, so far, the U.S. consumer has been quite resilient, even more than maybe we would have expected two or three quarters ago. And so we're seeing still healthy spending trends. We expect that for the remainder of our fiscal year. So quite a positive outlook there that's partly contributing to the raising guidance. And we saw that in the first quarter results. I think where you're also seeing and has the potential to start kicking in in larger scale is those rapid transfer, whether that be RTP, whether that be Zelle, whether that be FedNow. You still are seeing much more on the receive side than you're seeing on the send side. But as people unlock and get to a stage of comfort on one, they tend to then use all of the rails, which is great. And so we're seeing more and more use cases for that. The other thing that we've launched, and it's still very early days, but we're quite excited, is our small business initiative. So there we have, through our partnership with Move, we have an ability through rapid transfers to go outside of financial institution and through your debit card move money instantaneously. So in the U.S., unlike Europe, that's quite challenging today. It takes several days. You're really getting, you think you're real time, but it's really memo posted. But this gives you true real-time access to move money. So I can move money on a debit card from one account of mine at one institution to another institution, which is a great opportunity for regional and financial institutions of our client base to attract deposits. The other part of that small business initiative we're doing is tap to local, which is a small business, and think about sole proprietor type size business to take payments through their phone, both iOS and Android phones, very low friction on setup, like four screens, accept button, you're in. Because we have all of the KYC, KYB information through the core, we're able to have a very efficient and very low time for setup. So unlike other competitors that may take four or five days, even more sometimes to set up, you can be taking payments in a half an hour. And so think about your local bakery. They might have a hardware device in the store today, but when they sell at the farmer's market or they do home delivery, this gives them another opportunity. And we think people will be multi-payment, so multimodal from a payments perspective. So there's a rev share opportunity for Jack Henry that's quite attractive. There's a rev share opportunity for the FI to participate. And there's a way for them to serve a very underserved segment of the market in the small business market in the U.S. So I want to just spend a couple of minutes there because I do think that the Move partnership is quite interesting, right? And you talked about that, some of the benefits. But if you think about what Move's trying to do, it seems like they're trying to provide an alternative to that micro merchant segment, while at the same time, by way of it, the partnership with Jack Henry allowed the banks and your FI partners to better serve that group, which is a lot of times, if you look, one of the companies we cover is Block with Square, and they kind of start to take over a lot of that financial, the financial services that go along with that. So can you talk a little bit about what your aspirations are ultimately with the Move partnership? Can we start to see material impact to the payment segment from that partnership in 2026 or 2027, or how you're thinking about timing that way? Sure. So for a long time, we were questioned our strategy of not going into merchant acquisitions. And we did so intentionally because we said, we don't serve the dry cleaner, and we don't serve the plumber, and we don't serve the bakery. We don't know what it's like to serve these people. We serve banks and credit unions. And this now finally, this is a solution that we're going through the banks and credit unions. We're empowering banks and credit unions to serve their account holders and members. We're not going around them. We're going with them. So we're excited because this is a great, again, another deposit gathering strategy, another revenue diversification strategy for the banks and credit unions. Most people, when they start a small business, open it at their local FI, and then they feel the need to go somewhere else to do their day-to-day business banking. All those deposits leave our customers. In some of those cases, they're truly a walled garden where those deposits never go back on platform. This is an opportunity to get those deposits back into the local economies, back into the local and regional financial institutions. It's not only an attractive opportunity for Jack Henry, but it's a great opportunity for our clients from a revenue diversification and just the robustness of a solution. We're quite upbeat about it. It's still, again, very early days from a contribution to revenue perspective, but we think over the next five years has one of the potentials to be one of the largest sources of revenue in our payment segment. Got it. We could spend a lot more time talking about products, et cetera, but I do want to touch on profitability and margins and kind of the universal topic across is obviously AI and impact on profitability. It seems like it could be a reasonable assumption that around 60% of your expense base is personnel and software engineering. How do you think about the potential margin tailwinds to the business if and as you're able to deploy AI throughout the organization? And are there any early examples of returns or at least eyebrow-raising benefits that you're getting? Yeah. Yeah. So we have over 130 use cases in some stage of working with the business on today. Some of those are within products. Some of those are more on the corporate side of the house. Some are starting to be really interesting, not only for increasing the velocity of development because we're able to get more efficiency and just better throughput from a development cycle perspective. We're getting through our roadmaps faster and just being able to accelerate development, which is fantastic for our customers. But then on the corporate side of the house, we like to say we're doing more with the same. So we're not looking at this as a way to reduce hiring in terms of some companies making really blustery statements about saying they'll never have another HR person again. That's not Jack Henry. We're a very people-centric organization. But we are able to do more with the same. And so we've had less than 1% headcount growth with the exception of the year we had the Payrailz acquisition for over five years now. And so that's as we've continued to scale up the size of the business and the operations. And so if we're able to do migrations faster, if we're able to train people faster, if we're able to do all of the business functions more from a scale perspective, that is great from a margin. Got it. Last question here in the last minute or so, capital allocation. Historically, Jack Henry has really favored dividends, reinvestment, and selective M&A over, call it large-scale buybacks. How should we think about the magnitude of buybacks becoming a more meaningful lever to your capital allocation, especially given some of the recent tax-related free cash flow tailwinds you're now experiencing, et cetera? Just help us think through if and as those priorities may be shifting. Yeah. So first, it's great to be back in a free cash flow conversion range of 90%-100% plus back to our historical norms. We think that will continue. And so that's really opened the doors of possibility. First and foremost is a commitment for an R&D perspective. So we spend 14%-15% of revenue on R&D. So that's both CapEx and OpEx software development and others. So that is first and foremost. We believe that continuing that innovation train. The other is you did mention we do have a long-standing dividend policy that we've grown modestly over the last 20+ years, and we're committed to that. But this really does open the doors for both sizable buyback and M&A. And so we've been told by a lot of bankers that M&A is going to be heating up in terms of the upcoming calendar. But we just closed a deal in September for Victor FI that we're excited about that expands our capabilities and embedded payments, both for working with our banks and credit unions, but also the fintech community. So we're certainly open to whether that be an acquisition that would be an accelerant to our digital cloud native strategy to the segments we want. But I also think it allows for more sizable buybacks. That's great. Well, we're out of time, Mimi. Thank you very much for joining us today. Thank you. Thanks. Thank you.