Henry (Jack) & Associates Investor Day 2026

First of all, I would like to wish everybody a great afternoon, and welcome to Jack Henry's 2026 Investor Day. It is the first one we have had in a couple of years. My name is Vance Sherard. I am Vice President of Investor Relations. To those on the webcast and those here in Dallas, we are very glad that you could join us. Greg just asked me a second ago, I think this is a record attendance, so we are glad for that as well. In addition to the investment community, today we are joined by several representatives of Jack Henry's board. I believe they and the management team, many of them are going to stay with us after the presentations are done for the reception, where we are going to do some demos and conversations can continue. Now I just need to do a little bit of business.

I have got the safe harbor statement up here. For today's presentation and any future use of these slides, including the appendix, which we will not be presenting today but is available to you online, we are going to be talking about non-GAAP measures and utilizing the safe harbor statement on the screen. We have got a full day. I am not going to speak very long. We have got four presenters who are going to provide a lot of insight into Jack Henry's operations and our financial outlook. In the middle, we are going to take a short break, where there will be some refreshments. We are not going to take questions at the end of every presentation. We would prefer to take them at the very end of the day.

Then if you will join us at the aforementioned reception, we are going to do demonstrations of six current products that I think you will find interesting. With all that, I am going to get out of everybody's way, and it is my pleasure to introduce Jack Henry's President and CEO, Greg Adelson.

Thank you, Vance. Thanks, everybody. As Vance said, just a pleasure to see all of you and to see this large of a crowd. We were really excited about trying to do this. We talk a lot about culture at Jack Henry, and for you to get a chance to be at one of our offices and to experience what one of our offices looks like and the people and the culture that we have here. Really excited about today. I am going to kick some things off, really starting off with what we are about. Basically, this company for 50 years, as you know, we are celebrating our 50th anniversary. For 50 years, we have built a foundation that started with Jack and Jerry and continues today.

We've added some nuances to that foundation that we'll talk about, and we've added a lot of things that we believe are the key differentiators for how this company is run. Not just in the Jack Henry Way, but also as compared to what the industry runs today. The one thing that's been consistent for us over the last 50 years is building on the foundation that Jack and Jerry started. That foundation really starts, first and foremost, with our people. You'll hear a lot about our people and a lot about our culture throughout today, because it is the foundation of how this company was built and how we continue to maintain the things that drive us to new levels. The second part is that we have never lost our way through the years on who we support.

We support community and regional financial institutions in the U.S. That's what we do, and that's all we do. I think from that standpoint, you'll see a lot of the focus and the priorities that you'll see later on come to make sure that our institutions are successful. Lastly, we've created a different kind of mindset around how we do industry-leading customer service and how we support our clients. It goes back to two founding principles that Jack and Jerry started with our company, doing the right thing and doing whatever it takes. In fact, I actually added my favorite quote from Jack Henry back in the day, that our clients are not in business to make Jack Henry successful. We are in business to make our clients successful.

That's something that we remember every single day as we try to move this company forward. The part that we've added to it, in 2019, we actually wanted to add a little bit to the foundation. We were working in a more remote environment, because if you can remember, right around the corner, COVID was coming. We were already 30% remote, but we wanted to make sure that we managed this company and led this company with four key tenets. Those tenets, you can read, are transparency, consistency, collaboration, and communication. It isn't just about how we led our company with inside, it's how we led conversations with our clients as well in that exact same manner. Again, today, those are big foundations for us to continue to move the company forward.

Last year, we added a nuance to that called the Jack Henry Way. If you think about The Ritz-Carltons and the Nordstroms and others that have great service reputations, we wanted to build something that was around that same type of mindset. Again, you can see here that everything of the company starts with our people. Making sure that our people are successful, have a chance to grow, and creates an atmosphere to where we continue on that service level that we support across the industry, which again, is far superior than what is happening with the rest of the industry today. We continue to elevate in that manner. Ultimately, it's about results. Nobody at this company, nobody in this room, cares about anything on a page other than to see the financial results and the sales results.

Ultimately, bringing the people, the service reputation, allows us to have the results that we have been driving over the last couple of years. One of the things that Jack and Jerry were pretty adamant about was building the foundations for our success, and it really starts with these three pillars. We have talked about people. As I said, we are going to talk about our people a lot. We believe that if we take care of our associates, our associates are going to be motivated to ensure that they provide that industry-leading customer service. As you can see over the history of our company, we have maintained a 99%-plus client retention rate minus M&A, but we have maintained 99%-plus client retention because we make sure our associates are motivated, and they do provide that level of customer service.

Ultimately, for our shareholders, we have continued to bring back positive returns, 22 consecutive years of dividend increase and increasing our shareholder return. On that subject, I am going to take just two quick slides on FY 2026, because nobody is here to talk about FY 2026. I do want to give you an opportunity to go back and understand that the foundation of what I just talked about helped us build the success that we had last year, which by the way, in our 50th year, was an historic year, both from a financial results and a sales results. As you can see, we finished the year at 7.3% organic growth. That was on a basis of a guidance that we gave back in August of that year, 5.8%-7%.

You can see the basis point margin growth that we had of 92 basis points, again, on the basis that we have provided over the last, now our fourth year is FY 2027, of 20 to 40. That is the third consecutive year, or that was the third consecutive year that we beat 60 basis points of margin expansion, again, coming out of the gate at 20 to 40. Return on invested capital, again, at 23.2%. I think all of you know in this room, anything over 20% in this industry is really, really good. Again, we really outperformed what our expectations were there. Same thing with free cash flow, and our GAAP EPS growth being double digit for three consecutive years in a row as well. On the sales performance. We talked a lot about our sales performance, and I do want to put a couple of things in your head to make sure that everybody fully understands.

When we report competitive core wins, it is much different than what you see in the rest of the industry. 58 competitive core wins included 52 logo changes and six de novo wins. Six of those were brand-new institutions that were coming in, and so we will not count those as competitive wins, but we did have to win against our competition, but they were not logo changes. 52 of them were.

What isn't counted in that number, which is counted, again, in a lot of our competition, is the fact that we had 36 in-to-outs, meaning that 36 of our customers moved from an in-house environment or on-prem environment to our outsourced environment in either Symitar EASE or our banking OutLink environment. 36 of those. We also had 14 institutions that moved out-to-out, meaning they moved from an existing Jack Henry platform, so let's take our CIF 20/20 core or our Core Director core, and they moved to our SilverLake core. So 14 of those. We also had over 40 institutions that moved from Jack Henry to Jack Henry in a merger. All of those numbers are not calculated into this particular. If you throw all those numbers together, you're up to about 125 to 130 opportunities that this company produced last year with their sales team.

14 of those were actually multi-billion dollar institutions. I got a slide later that I'll show you on why that level of significance. But 14 were multi-billion, and as it states here, we've had 45 of those over the last three years. Again, that's a big deal. Not only did we get 14 of them, we happened to win the largest deal in the history of Jack Henry from a banking perspective as a new deal. A $9.2 billion bank down in Houston, Texas, who decided to come to Jack Henry after working with one of our competitors, and you're going to learn the reasons why as Ben goes through his presentation on the things that we were able to show them that weren't just a PowerPoint or an item that we were going to do in the future.