Ladies and gentlemen, thank you for standing by and welcome to Jack Henry & Associates First Quarter FY 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's call is being recorded. I would now like to hand the conference over to your speaker today, Kevin Williams. Sir, you may begin. Kevin D. Williams - Jack Henry & Associates, Inc.: Good morning. Thank you for joining us for the Jack Henry & Associates first quarter of fiscal 2021 earnings call. I'm Kevin Williams, CFO and Treasurer; and on the call with me this morning is David Foss, President and CEO. In a minute, I'll turn the call over to Dave to provide some of his thoughts about the state of our business, the performance for the quarter and some comments relating to the impacts of COVID-19 and other key initiatives that we have in place. Then after that, I will provide some additional thoughts and comments regarding the press release we put out yesterday after market close and also provide some comments regarding our guidance for our fiscal year 2021 provided in the release, and then we will open the lines for Q&A. First, I need to remind you that this call includes certain forward-looking statements, including remarks or responses to questions concerning future expectations, events, objectives, strategies, trends or results. Like any statement about the future, these are subject to a number of factors that could cause actual results or events to differ materially from those which we anticipate, due to a number of risks and uncertainties. The company undertakes no obligation to update or revise these statements. For a summary of these risk factors and additional information, please refer…

Our first question comes from the line of Dave Koning from Baird. Sir, your line is open. Please ask your question. David John Koning - Robert W. Baird & Co., Inc.: Yeah. Hey, guys. Nice job. And I guess my first question, when I looked at this, the support and service line this year that the last couple of years there was kind of this seasonal pattern where you grew, I think, 11% in Q1, then higher single digits Q2, Q3, and then kind of low to mid-single digits in Q4. This year you're starting Q1 at plus 4%. So, it seems like this year is going to shape up differently. Maybe you can talk about the progression through the year and why this Q1 wasn't like closer to that double-digit type range. Kevin D. Williams - Jack Henry & Associates, Inc.: Yeah, Dave. So, there are a couple of things. One, even though we had a nice increase in software subscriptions this quarter compared to year-ago quarter, it wasn't near as large a percent and part of that was due to some delayed implementations in the second half of last fiscal year which, as you remember, under ASC 606, you recognize 100% of the revenue. So, any of implementations in software subscription that would've been installed in the second half, that would have basically been a few months last year but we would've gotten a full 12 months on the renewal this year. So, that was part of it. The other part, Dave, is the continued headwind of license and hardware and implementation revenue, which is due both to the ongoing move of our in-house customer to outsourcing, but also due to some delays due to COVID because our installers couldn't go out and do some of these due…

Your next question comes from the line of Brett Huff from Stephens Corp. Sir, your line is open.

Good morning, Dave and Kevin. How are you guys? Kevin D. Williams - Jack Henry & Associates, Inc.: Good. Thanks, Brett. David B. Foss - Jack Henry & Associates, Inc.: Doing well.

Good. Dave, you may have highlighted this and (23:51) could you talk a little bit about the digital sales that you guys are seeing, how Banno is progressing, and then both the cash management and the treasury management businesses, how those things are selling versus core and things like that? David B. Foss - Jack Henry & Associates, Inc.: Okay. So, you were cutting in and out just a little bit, Brett, but I think I got the question. And you're right; I did highlight it in the opening comments. So, Banno, the digital performance has been very strong. I highlighted in my comments that we signed 29 new customers in Q1. And I also highlighted that we're on a pace, now, to install about 30 customers a month that we're bringing live; so, 30 financial institutions live per month. I also highlighted that we recently surpassed 3 million active monthly users. So, that isn't 3 million subscribers. The subscriber number is a lot higher – I'm sorry? Oh, subscriber number is a lot higher. So, that's 3 million active monthly users, which means they're using – they're actively in the system every month. So, we've exceeded that number, now. I also highlighted that FI Navigator, who reports on how consumers feel about the various applications, they've now got us as the highest rated digital banking application, with a 4.79 out of 5 stars in the App Store. So, tremendous success with the digital suite at Jack Henry, and we only see that continuing and getting better. As far as the other components you asked about, the treasury management, continuing to sign new customers on treasury management in the quarter. I think we signed four or five. We have about 50 financial institutions live, now, on treasury management. And continuing to enhance that product and continuing to roll that out; so, good success all around when it comes to digital.

That's helpful. And then, Kevin, I just want to make sure that I get the revenue acceleration at the back half. I know some of it is ASC 606. Some of it, it sounds like it's just timing of delayed implementations that maybe happened the last year that maybe now will flow not into one half, but more into second half. Are those the two primary drivers or am I – I want to make sure I'm not missing anything on that rev acceleration. Kevin D. Williams - Jack Henry & Associates, Inc.: So, Brett there's a couple of things and you hit most of them. But the other thing is the continued growth in our card business because we are now – with all of our core customers now migrated over, we're having pretty good success in the sales. As Dave mentioned, we signed several new ones – customers in Q1. So, we can now focus more on bringing new customers on. So, you're going to continue to see nice growth there. Digital is just going to continue to grow very nicely. So, our processing line of revenue is going to continue to grow at this pace and actually accelerate in Q4, based on what we're seeing. And then, the support and service line, we're going to lap some things. So, Q4 should be a little easier comp there. So, those are the primary drivers for the accelerated growth. Primarily in Q4 is where we anticipate seeing that growth rate. Now, again, as I said in my opening comments, that's all subject to the economy continuing to percolate and get along and not having another shutdown.

Okay. That's helpful. And then, just in terms of how the decision-making is happening at banks just generally, I assume it's still digital-focused. How are the core conversations going? Are those being put on the back burner at all as people focus on digital? Any kind of change in that dialogue at all? David B. Foss - Jack Henry & Associates, Inc.: Yeah. It's interesting. So, another thing I highlighted was the fact that in the Bank Director survey here with 64% of the respondents in the survey – with most of them being over $500 million in assets, 64% of the respondents had set their technology spending budgets – or increased their technology spending budgets by 5% to 15% as compared to their pre-pandemic, and that's what we're seeing now. The flow of RFPs has picked up, recently, particularly on the core side. So, we have a bunch of RFPs we're working right now on the core side. Continuing to sign new customers, but the rate of interest is increasing. And I think what's happening – so not only having good, solid success on digital and, certainly, with our payments platform with customers we're signing there, but just overall I think people are kind of settling in now to be – to doing business in the COVID world and they're finding those deficiencies and what they have with the technology they're currently operating, and so RFPs are starting to really ramp up. So, we'll see. The decision pace, I would say, is moving along well. Getting contracts finished is a little more challenging than it used to be because the attorneys are working remote from their house in one city and the CEO is working remote from their house in a different place, and some of that coordination is a little more challenging than it used to be. But deals are getting signed and there is a lot of interest in Jack Henry technology as evidenced by the RFP flow.

Great. That's what I needed. I appreciate the help, guys. David B. Foss - Jack Henry & Associates, Inc.: Yeah. Thanks, Brett.

Your next question comes from the line of Mr. David Togut from Evercore. Sir, your line is open.

Thank you. Good morning. Dave, you called out a somewhat slower pace of closing core deals. Could you bracket for us what the sale cycles are like today in the COVID environment versus pre-COVID in terms of number of months, for example, for a core signing? David B. Foss - Jack Henry & Associates, Inc.: Yeah. It's a good point. It's taking longer to get a core deal done. So, we did seven this quarter. We did seven the prior quarter. And so, it's definitely taking a little longer to get deals done. Once the deal is done, the actual conversion process isn't taking any longer because we're doing so much remote now. But I'd say we've probably added another month or so to the actual signing process. But as I just mentioned in the conversation with Brett, the RFP pipeline is very solid. It's amazing the number of RFPs that are coming in on the core side. So that's – I'm not just talking about other products, I'm talking about interest in Jack Henry core solutions. So, they're a little slower right now than they have been in the past but we're still seeing deals and we're still getting deals done.

Understood. And just as a follow-up, Kevin, you called out $195 million in cash on the balance sheet. You've clearly got a lot of potential to allocate capital now, whether it be acquisitions, dividends, buybacks. How do you rank your capital allocation priorities given your current balance sheet? And when you look at, let's say, the valuation of acquisition opportunities in the pipeline versus your own stock, how do you weigh that decision? Kevin D. Williams - Jack Henry & Associates, Inc.: Yeah. So, David, I mean, obviously, you've known us quite a while and you know that our first use would be to find the right acquisition, to bring additional products just to cross-sell to our customers and get a higher return to our shareholders. But you're absolutely right, the valuations continue to be a little high out there for what we're seeing. There's not a lot of really good assets that we're seeing out there right now. But we do continue to look and we will continue to look for the right acquisition. Having said that, with nothing out there, obviously we have a shareholders' meeting here in a couple weeks and our quarterly board meetings and we'll be discussing at that the use of cash. I'm sure we'll continue the dividend program and we typically increase the dividend in the February time period. So I don't see why we would change that. But again, that's up to the board. And I'm sure that we will continue to buy back some stock going forward as we don't see any more acquisitions on the horizon getting any closer.

Thank you. Just a quick final question if I could. Dave, would appreciate your perspective on open APIs in the banking industry and how you're, let's say, making the core available through open APIs to the extent a best-in-breed provider wants to connect into a customer for a point solution. David B. Foss - Jack Henry & Associates, Inc.: Yes. I'm glad you asked that, David. We are big believers in that concept and have been since the founding of this company. Before the term API was a term, the concept of Jack Henry has always been to be open. We've always been committed to the idea of making our platforms available to others through easy connectivity. We don't set up artificial walls to keep people out. And a lot of people over the years have viewed that as being very counterintuitive. But I think the philosophy of Jack Henry has always been that we're here to make our customers successful. They're not here to make us successful. And so, if we're going to help make them successful, we should provide the tools that enable them to connect to whoever they want to connect to. I think the best example of this in something you can see is for people who go to our client conferences, and this has been true forever at Jack Henry, you go to a Jack Henry client conference, you go into the exhibit hall and you will see hundreds of exhibitors in there. And almost every one of them competes with Jack Henry. We don't allow core vendors in there, but other than that, pretty much anybody else is allowed in. And so, you've got digital vendors and you've got payments vendors and everybody under the sun in our space has a booth in the exhibit hall and they will all tell our customers that they love working with Jack Henry because we are the ones that have always been truly committed to the idea of open connectivity. So today, APIs are the preferred tool. But prior to that, we had point-to-point integration that we supported readily and made available to our customers.

Understood. Thanks very much. David B. Foss - Jack Henry & Associates, Inc.: You bet.

Your next question comes from the line Kartik Mehta from Northcoast Research. Your line is open.

Hey, good morning. Dave, I know you've been kind of asked this question in the past, but I'm wondering, I know in the short run there's a lot of talk about using digital technology. I'm wondering as you have conversations with your customers what they think might be a permanent shift in behavior or changes and how that maybe benefits Jack Henry or how Jack Henry might have to change to adapt to any changes that are going to occur as a result of the current pandemic. David B. Foss - Jack Henry & Associates, Inc.: Yeah. Well, it's a good question. The key thing, and I think it's evidenced in that survey that I cited from Bank Director, we have all these CEOs and board members of banks – and credit unions were not included in the survey, so I'll just talk banks for a moment. All these CEOs and directors who through that survey have indicated that they really are shifting their focus to digital because they know that their consumers aren't necessarily going to come into the branch for all the banking services going forward like they did in the past. And so, enabling a digital lending experience, which we have done, and I've talked about many times on this call our commercial lending center suite in the past, and enabling full consumer functionality and business functionality through the digital channel is a key part of their strategy and a key part of our strategy. Now, one of the things we talk about a lot and I've talked about it on this call a few times is, okay, if your consumer is going to start interacting with you, the bank digitally, how do you ensure – as a community bank or credit union, how do you ensure that your experience is differentiated from the majors. And so that's where we've really put a lot of focus and that's why I think we're having so much success with the Banno Platform is because we've created a differentiated experience for the consumer. The digital experience with Banno is not the same as with all the other vendors out there, because we've tried to create an experience that comes close to the same experience the consumer would have if they were in the branch, meaning direct personal service which is what community banks and credit unions have always used to differentiate themselves from their major competitors. We've created that similar experience through the digital channel. And so, it truly has differentiated us and our platform. And I think as customers really start to understand that, whether they're Jack Henry core customers or not, as they really start to understand that and that need to differentiate themselves in the digital environment, they will really look seriously at our platform.

And then, Kevin, I know you've talked about this. Just I'm wondering on long-term margins, obviously this year you're being impacted by COVID-19, you're being impacted by the fact that you're transitioning your credit and debit platform. But as you finish that and we go into next fiscal year, I'm wondering what you think long-term margin prospects or medium-term margin prospects look like. Kevin D. Williams - Jack Henry & Associates, Inc.: Well, I mean, like I said, Kartik, we're going to see a lift in Q4 as we've been stating for the last two and a half, three years as we go through this payment migration. So, we'll get a lift in Q4. And then from that and just the increased sales and implementations of our card platforms, both debit and credit and digital, we should continue to see margin improvement, the continued shift of customers from our in-house to outsourcing which also drives margin improvement. So, I mean, I haven't sat down and just tried to put a fence around it to figure out exactly what that margin is going to look like in FY 2022, Kartik, but it's going to be up nicely from FY 2021, again, depending on the pandemic and COVID and all that. But if everything remaining equal, we'll see a nice margin uplift in 2022 compared to full year 2021.

Yeah. And then just one last question, Dave. Obviously, there's some conversation about Google partnering with banks to have its own branded checking account. And there's stories about maybe Amazon doing something similar. Any concerns from your customers as to how that might impact them or is there anything you can do to help them that could benefit Jack Henry? David B. Foss - Jack Henry & Associates, Inc.: Anything we could do to help our customers or help Google?

Help your customers, or even Google if you want to. David B. Foss - Jack Henry & Associates, Inc.: I just wanted to make sure you were – in terms of where you were trying to take this conversation. So, yes, we have spoken with some of our customers. Interestingly, in Google's solution, they're partnering with a couple of credit unions and they're trying this in several different ways. So, we've talked with some of our customers. No immediate threat that they perceive with what's happening there, as also I think they've seen with all the other neo-bank experiences that are available in the United States today. But we're keeping a close eye on that. We're trying to make sure that we're ahead of the game to help our customers if there are opportunities. It is – again, I'll go back to our complete online digital lending platform that we rolled out a couple, three years ago. We did that because we saw what was happening with OnDeck and Kabbage and the potential for those solutions to disintermediate the commercial borrower from our customers. So, we were very successful with that and helping those customers who needed to fend off those competitors. And we'll do similar things here as we see those opportunities.

Thank you very much. Appreciate it.

Your next question comes from the line of Dominick Gabriele from Oppenheimer. Your line is open. Dominick Gabriele - Oppenheimer & Co., Inc.: Great. Hey, guys. Thanks so much for taking my question. Have you talked to your bank or credit union partners about perhaps excess capital that they may have on their balance sheets if net charge-offs don't materialize in the same magnitude for which they've reserved and what they may do with this potentially large amount of excess capital? Have they talked about increased tech investments with a portion of that with you? Thanks. David B. Foss - Jack Henry & Associates, Inc.: So, I wouldn't say they've specifically said we expect to have excess capital and we're going to use that for technology. I think the discussion about increasing technology spending is more about their requirement, their need to remain relevant as customers are moving away from doing business in branch and moving more toward an online experience. So, I think it's pretty premature for most of our customers to be thinking about the idea that they may have excess capital. Most of them are ensuring that they're in a good capital position to fend off any losses that may happen as the pandemic continues to unfold. So, I view those conversations as kind of two separate conversations. There's the making sure you're well capitalized in case there are issues on the loan side, and then this need for increased spending separate and apart from that to ensure that you remain relevant to your consumer and that they want to continue to do business with you in a digital environment. Dominick Gabriele - Oppenheimer & Co., Inc.: Okay. Great. That makes a lot of sense. And if you just think about the implementation of the core products,…

Next question comes from the line of Mr. John Davis from Raymond James. Your line is open. John Davis - Raymond James & Associates, Inc.: Hey, guys. Good morning. So I really just wanted to start on Q1 results, specifically on the top line. I think last quarter, you guys guided for the full year; said first half adjusted net revenue would be 3% to 5%. It did actually just slightly north of 5%. So what went better in the quarter? Was it installations – or implementations rather? Just what kind of exceeded your expectations relative to your guide? Kevin D. Williams - Jack Henry & Associates, Inc.: Yeah. JD, it was primarily card and digital were the two that exceeded our expectations. So, it was primarily all in the processing line. And to be quite honest, the headwinds in the support service line were a little stronger than we thought they were going to be. So – but all the uplift was in the processing line of revenue. John Davis - Raymond James & Associates, Inc.: Okay. And then, other revenue was down 23% in the quarter. Just curious, is that kind of the new run rate? How should we think about that going forward, because that was a little bit surprising? Kevin D. Williams - Jack Henry & Associates, Inc.: So, JD, that's primarily in the corporate segment. And this is – to answer actually yours and David Koning's question from earlier, the big part of that is related to our education conference/user group was the biggest chunk of that. And then the other part of it is just pass-through costs from our travelers not being out for go out for billable travel to pass through. So, those are the two primary drivers of other being down. As…

There are no follow-up questions at this time, sir. Please continue. David B. Foss - Jack Henry & Associates, Inc.: Thank you, I appreciate it. Again, we were pleased with the overall results from our ongoing operations. I want to thank all of our associates for the way they have handled these challenges, by taking care of themselves and our customers and continue to work hard to improve our company on all fronts for the future. All of us at Jack Henry continue to focus on what is best for our customers and shareholders. With that, thanks again for joining us. And operator, will you please provide the replay number for the call.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.