Financial Data and Key Metrics Changes - Revenue less ancillary services was $128.7 million in Q1 2025, representing a 16.8% year-over-year growth rate or 18.6% on an FX neutral basis [40] - Adjusted gross profit increased to $82.5 million during the quarter, up 14.6% year-over-year, with an adjusted gross margin of 64% [43] - GAAP net loss was $4.2 million, representing a year-over-year improvement of approximately $2 million [45] Business Line Data and Key Metrics Changes - Transaction revenues increased by 14% year-over-year, driven by a 28% increase in transaction-related payment volume [41] - Platform and other revenues increased by 35% year-over-year, primarily driven by platform fees and contributions from Certify [42] - The U.S. education business had its most successful quarter in terms of signed ARR from full suite SFS deals, securing five new deals in Q1 [30] Market Data and Key Metrics Changes - The UK education segment is now the largest market for the company, experiencing strong growth driven by the launch of new products [72] - Australia and Canada are expected to see high 20% year-over-year declines in education revenue due to market uncertainties [51] - The travel vertical continues to see strong momentum, with notable new clients and significant growth opportunities [34] Company Strategy and Development Direction - The company is focused on streamlining its structure and optimizing investments across products and geographies to drive efficiency [11] - A digital transformation initiative is underway to enhance data analytics and system capabilities, leveraging AI for operational efficiency [14] - The company aims to capitalize on the growing demand for international education and expand its footprint in emerging markets [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging macro environment but expresses confidence in the company's performance and future growth [5] - The company is proactively monitoring visa trends and adjusting strategies to capture additional payment flows in the U.S. education sector [28] - Management expects U.S. education revenue growth to be in the low single digits, with a cautious outlook due to geopolitical tensions [48] Other Important Information - The company repurchased 3.6 million shares for approximately $49 million under its stock repurchase program [45] - Certify contributed $4.7 million since acquisition, exceeding initial expectations [41] - The company is maintaining its full-year 2025 revenue guidance for FX neutral revenue growth in the range of 10% to 14% excluding Certify [50] Q&A Session Summary Question: FX guidance and growth expectations - The CFO explained the expected slowdown in Q2 due to Canadian payment timing and the anticipated acceleration in the second half of the year [57][60] Question: Impact of international student demand on sales cycles - The CEO noted that there has been no decline in demand, and clients are looking for ways to improve their technology [61][64] Question: Growth in the UK market - The CFO confirmed that the UK is now the largest market for education, with strong growth driven by new product offerings [72] Question: Sources of upside in revenue growth - The CFO highlighted travel as the number one driver of growth, with Australia also showing better-than-expected performance [78][80] Question: Competitive positioning in education - The CEO stated that the company continues to compete based on product performance and is not seeing aggressive price competition [95][96] Question: Operational review and margin implications - The CEO discussed ongoing efforts to streamline operations and the potential for margin expansion through cost savings [99]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Shift4 Payments identified as a strong candidate due to its favorable growth metrics and Zacks Rank [1][2]. Group 1: Earnings Growth - Shift4 Payments has a historical EPS growth rate of 138.8%, with projected EPS growth of 40.3% for the current year, significantly outperforming the industry average of 11.1% [4]. Group 2: Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 38.8%, which is substantially higher than the industry average of 4.3% [5]. - Over the past 3-5 years, Shift4 Payments has achieved an annualized cash flow growth rate of 119.9%, compared to the industry average of 12.8% [6]. Group 3: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Shift4 Payments, with the Zacks Consensus Estimate for the current year increasing by 17.3% over the past month [7]. Group 4: Overall Positioning - Shift4 Payments holds a Growth Score of B and a Zacks Rank of 2, indicating strong potential for outperformance in the growth stock category [9].

Core Viewpoint - Jack Henry (JKHY) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, suggesting that upward revisions can lead to increased buying pressure and higher stock prices [4][5]. - For the fiscal year ending June 2025, Jack Henry is projected to earn $5.85 per share, reflecting an 11.9% increase from the previous year, with a 0.7% rise in the Zacks Consensus Estimate over the past three months [8]. Zacks Rating System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Jack Henry's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term due to favorable earnings estimate revisions [10].

Financial Performance - The company reported the strongest revenue performance in its history for both Q4 and the full year, with Q4 revenue of $227.1 million, a 14% increase year-over-year, and full-year revenue of $879.7 million, a 16% increase [7][9][10] - Adjusted gross profit for Q4 was $83.9 million, up 15% from the prior year, and adjusted EBITDA was $51.7 million, reflecting a 16% improvement [9][10][28] - For the full year, adjusted gross profit increased by 19% to $328.1 million, and adjusted EBITDA grew by 21% to $204.3 million [10][28] Business Segment Performance - The SMB segment generated Q4 revenue of $155.7 million, an 11.1% increase year-over-year, with adjusted gross profit of $32 million, up 0.4% [18][20] - The B2B segment saw revenue of $23.7 million, a 10.9% increase, with adjusted gross profit rising 24% to $6.4 million [22][23] - The Enterprise segment reported Q4 revenue of $48.7 million, a 27% increase, with adjusted gross profit also increasing by 27% to $45.6 million [24][25] Market Data - The company processed over $130 billion in annual transaction volume and managed over $1.2 billion in average daily account balances [7] - The percentage of adjusted gross profit from recurring revenues reached over 63% in Q4, nearly doubling since early 2022 [17] Company Strategy and Industry Competition - The company aims to sustain momentum in its acquiring, payables, and Enterprise segments, projecting 10% to 14% revenue growth for 2025 [8][36] - The focus remains on innovation in SaaS payments and banking solutions, with a commitment to refining customer experiences [12][41] - The company is positioned as an undervalued player compared to industry peers, with a strategy to leverage its public currency for potential acquisitions [18][42] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth despite potential headwinds from lower interest rates and a challenging macroeconomic environment [8][36] - The company is actively working to address a material weakness in internal controls over financial reporting, which did not affect the financial results [34][35] Other Important Information - The company redeemed its preferred stock, resulting in a fourth-quarter preferred dividend of $2.65 million [31] - A $10 million prepayment on the term loan was made post-quarter end, with plans to continue reducing the cost of capital [32][36] Q&A Session Summary Question: Capital allocation strategy between debt pay down and increased spending - Management will continue to evaluate the best use of capital, balancing debt pay down with potential M&A opportunities [50] Question: Impact of interest rate cuts on guidance - Management has factored in expected interest rate cuts into their 2025 guidance, taking a conservative approach [54][56] Question: Impact of tariffs on business - Management noted that tariffs have not significantly impacted the acquiring side, but there is increased demand for B2B strategies due to constrained working capital [67] Question: Explanation of gross margin decline in consumer payments - Management clarified that organic margins have increased, and the decline is due to residual purchases running off [73][78] Question: Magnitude of CapEx to OpEx shift - The expected impact from the CapEx to OpEx shift in 2025 is approximately $4 million [110]

Financial Data and Key Metrics Changes - The company reported net revenue of $9.5 billion, representing a 10% year-over-year increase, with EPS up 14% [7][29] - In constant dollars, overall payments volume grew 9% year-over-year, with U.S. payments volume increasing by 7% and international payments volume by 11% [7][28] - Cross-border volume, excluding intra-Europe, rose 16% in constant dollars, while processed transactions grew 11% year-over-year [9][28] Business Line Data and Key Metrics Changes - Consumer payments revenue growth was driven by improving payments volume, cross-border volume, and processed transaction growth [37] - New flows revenue grew 19% year-over-year in constant dollars, supported by strong commercial cross-border performance and Visa Direct transaction growth [38] - Commercial payments volume rose 6% year-over-year in constant dollars, primarily due to favorable days mix and strong cross-border volumes [38][21] Market Data and Key Metrics Changes - In Latin America, payments volume increased by 22%, while CEMEA saw an 18% rise, and Europe experienced a 13% increase [32] - Asia Pacific payments volume growth improved slightly to just above 1% year-over-year, reflecting a muted macroeconomic environment [32] - E-commerce volumes continued to benefit from strong retail performance, particularly during the holiday shopping season [33] Company Strategy and Development Direction - The company continues to focus on consumer payments, new flows, and value-added services as key strategic areas for growth [9][10] - The company is expanding partnerships and renewing agreements with major banks globally to enhance its market presence [14][15] - The strategy includes unbundling capabilities to deliver enhanced solutions to a broader array of clients and partners [72][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong Q1 results and the outlook for Q2, citing strong consumer spending and improved cross-border volumes [50][57] - The company anticipates continued growth in adjusted net revenue in the high single digits to low double digits for Q2 [42] - Management noted that the strong dollar has implications for travel patterns and consumer purchasing power, which could affect future spending [125] Other Important Information - The company completed the acquisition of FeatureSpace, enhancing its fraud prevention capabilities [26][43] - The company bought back approximately $3.9 billion in stock and distributed $1.2 billion in dividends to shareholders [39] - The company has a remaining buyback authorization of $9.1 billion as of the end of December [39] Q&A Session Summary Question: Improved outlook and volume growth sustainability - Management indicated that the improved outlook is based on strong Q1 results and expects growth rates to sustain [49][50] Question: Attribution of stronger spending results - Management attributed the acceleration in spending to strong holiday results and improved discretionary spending across various categories [53][55] Question: Trends in commercial spending and incentives - Management noted that incentives grew 13% in Q1 and expect this trend to continue as the renewal cycle progresses [61][64] Question: Value-added services and acquisitions - Management confirmed no change in emphasis on value-added services and highlighted the success of recent acquisitions like FeatureSpace and Pismo [71][72] Question: Impact of tariffs on spending - Management has not observed direct impacts from tariffs on consumer or commercial spending [115] Question: Cross-border business components - Management confirmed that Visa Direct transactions are growing faster than overall cross-border transactions, contributing positively to growth [88][90]