Financial Data and Key Metrics Changes - The company reported record second quarter results with non-GAAP revenue of $611 million, an increase of 6.7% compared to the same quarter last year [5][21] - Non-GAAP operating margin was 25.1%, reflecting a margin expansion of 355 basis points year-over-year [6][25] - GAAP revenue increased by 8% for the quarter, while non-GAAP revenue increased by 7% for the quarter and 8% year-to-date [22][24] - Fully diluted GAAP earnings per share reached $0.72, up 29%, with a year-to-date GAAP earnings per share of $3.70, an increase of 24% [26][33] Business Line Data and Key Metrics Changes - Core segment non-GAAP revenue increased by 7% for the quarter, with operating margin increasing by five basis points [26] - Payment segment quarterly non-GAAP revenue increased by 6%, with significant growth in card-related services and faster payments [27] - Complementary segment quarterly non-GAAP revenue growth was 9%, reflecting strong demand for digital solutions and a beneficial product mix [27] Market Data and Key Metrics Changes - The number of financial institutions using Zelle grew by 22%, The Clearing House's RTP network by 26%, and FedNow by 32% [17] - Payment transaction volume through these channels increased by 49% year-over-year [17] - The company has relationships with over 80% of financial institutions in the U.S., enhancing its competitive position during market consolidation [9] Company Strategy and Development Direction - The company is focused on technology innovation, service excellence, and a people-first culture, which are key differentiators in the market [5] - Strategic initiatives include the development of cloud-native solutions like Tap2Local and Rapid Transfers, aimed at enhancing client offerings and attracting younger demographics [10][12] - The integration of Victor Technologies is progressing well, enhancing the company's embedded payments and banking-as-a-service capabilities [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong demand environment and robust sales pipeline, indicating confidence in continued growth [19][33] - The company anticipates that industry consolidation will remain neutral to slightly positive for its business, with ongoing opportunities arising from mergers and acquisitions [23][48] - Management highlighted the importance of AI in enhancing operational efficiency and product development, positioning the company favorably in the competitive landscape [42][66] Other Important Information - The company celebrated its 40th anniversary of being public and is preparing for its 50th anniversary of founding [19] - The company has increased its full-year guidance for GAAP revenue growth to a range of 5.6%-6.3% and non-GAAP revenue growth to 6.4%-7.1% [30][31] - Operating cash flow for Q2 was $153 million, a $63 million increase over the prior year [28] Q&A Session Summary Question: Expectations for Q3 sales results and impact from core consolidation news - Management noted that Q3 is starting off well, but it is too early to predict outcomes, emphasizing that Q2 results were minimally impacted by competitor announcements [36] Question: Changes in pricing for core systems and ancillary services - Management indicated that pricing has remained consistent over the past few years, with the recent wins demonstrating strong competitive positioning despite not being the lowest cost provider [38] Question: AI's impact on the business model - Management clarified that AI is being utilized to enhance technology development and operational efficiency, with a focus on integrating AI into new platform products [44][66] Question: Outlook on bank M&A and its impact on revenue - Management remains optimistic that bank M&A will be net neutral to positive, with ongoing opportunities arising from mergers and acquisitions [48] Question: Performance of revenue segments and expectations for the second half - Management expressed satisfaction with performance across all segments, noting that while the second half may present challenges, core and complementary segments are expected to continue performing well [53][56]

Financial Data and Key Metrics Changes - The company reported record second quarter results with non-GAAP revenue of $611 million, an increase of 6.7% compared to the same quarter last year [5][22] - Non-GAAP operating margin was 25.1%, reflecting a margin expansion of 355 basis points year-over-year [6][26] - GAAP revenue increased by 8% for the quarter, while non-GAAP revenue increased by 7% for the quarter and 8% year-to-date [22][26] - Fully diluted GAAP earnings per share reached $0.72, up 29%, with a year-to-date GAAP earnings per share of $3.70, an increase of 24% [26][33] Business Line Data and Key Metrics Changes - Core segment non-GAAP revenue increased by 7% for the quarter, with operating margin increasing by five basis points [26] - Payment segment non-GAAP revenue increased by 6%, with significant growth in card-related services and faster payments [26] - Complementary segment saw a 9% increase in non-GAAP revenue, with a healthy 58 basis points of margin expansion [26] Market Data and Key Metrics Changes - The number of financial institutions using Zelle grew by 22%, RTP network by 26%, and FedNow by 32% over the past year [17] - Payment transaction volume through these channels increased by 49% year-over-year [17] - The company has relationships with over 80% of financial institutions in the U.S., enhancing its competitive position during market consolidation [9] Company Strategy and Development Direction - The company is focused on technology innovation, service excellence, and a people-first culture, which are key differentiators in the market [5] - Strategic initiatives include the rollout of cloud-native solutions like Tap2Local and Rapid Transfers, aimed at enhancing client offerings and capturing market share [10][12] - The integration of Victor Technologies is progressing well, enhancing embedded payments and banking-as-a-service capabilities [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong demand environment and robust sales pipeline, indicating confidence in continued growth [19][33] - The company anticipates that industry consolidation will remain neutral to slightly positive for its business, with ongoing opportunities arising from mergers and acquisitions [23][48] - Management highlighted the importance of AI in enhancing operational efficiency and product development, positioning the company favorably in the competitive landscape [42][66] Other Important Information - The company celebrated its 40th anniversary of being public and is preparing for its 50th anniversary of founding [19] - The company has increased its full-year guidance for GAAP revenue growth to a range of 5.6%-6.3% and non-GAAP revenue growth to 6.4%-7.1% [30][31] - Operating cash flow for Q2 was $153 million, a $63 million increase over the prior year [28] Q&A Session Summary Question: Expectations for Q3 sales results and impact from core consolidation news - Management noted that Q3 is starting off well, but it is too early to predict if it will exceed Q2 results, with a growing pipeline of opportunities [36][37] Question: Changes in pricing for core systems and ancillary services - Management indicated that pricing has remained consistent over the last couple of years, with no significant changes due to competitive announcements [38] Question: AI's impact on the business model - Management emphasized that AI is being integrated into product development and operational efficiency, which is expected to enhance the company's competitive position [42][66] Question: Outlook on bank M&A and its impact - Management remains optimistic that bank M&A will be net neutral to positive, with opportunities arising from conversion merge activities [48] Question: Performance of revenue segments and expectations for the second half - Management reported strong performance across all segments, with expectations for some challenges in the payments segment in the second half [53][54] Question: Clarification on margin performance and medical insurance claims - Management acknowledged that lower medical insurance claims contributed to margin performance but does not expect this to continue in the second half [58][59] Question: Competitive dynamics in payments and card processing - Management noted that while new entrants are emerging, they have not disrupted the market significantly, and the company continues to see success in its solution offerings [74]

Financial Data and Key Metrics Changes - The company reported record second quarter results with non-GAAP revenue of $611 million, an increase of 6.7% compared to the same quarter last year [4] - Non-GAAP operating margin was 25.1%, reflecting a margin expansion of 355 basis points year-over-year [4][24] - GAAP revenue increased by 8% for the quarter, while non-GAAP revenue increased by 7% [19] - Fully diluted GAAP earnings per share reached $0.72, up 29% year-over-year [24] Business Line Data and Key Metrics Changes - Core segment non-GAAP revenue increased by 7% for the quarter, with operating margin increasing by five basis points [24] - Payment segment non-GAAP revenue grew by 6%, with significant growth in card-related services and faster payments [24] - Complementary segment non-GAAP revenue increased by 9%, reflecting strong demand for digital solutions [24] Market Data and Key Metrics Changes - The company has seen a 22% increase in the number of financial institutions using Zelle, a 26% increase in the RTP network, and a 32% increase in FedNow [15] - Payment transaction volume through these channels increased by 49% year-over-year [15] - The company has relationships with over 80% of financial institutions in the U.S., enhancing its market position during consolidation events [7] Company Strategy and Development Direction - The company is focusing on technology modernization and innovation, with a strong emphasis on cloud-native solutions and embedded payments [11][12] - The acquisition of Victor Technologies is progressing well, enhancing the company's capabilities in embedded payments and banking-as-a-service [11] - The company aims to leverage its technology to help financial institutions grow revenue and compete effectively in a consolidating market [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong demand environment and robust sales pipeline, indicating confidence in continued growth [17] - The company anticipates that the second half of fiscal 2026 will see lower non-GAAP revenue growth compared to the first half, primarily due to anticipated slower momentum in one-time revenue and card [28] - Management highlighted the importance of consistent execution and maintaining a people-first culture as key differentiators in the competitive landscape [4][17] Other Important Information - The company celebrated its 40th anniversary of being public and is preparing for its 50th anniversary of founding [17] - The company has increased its full-year guidance for GAAP revenue growth to a range of 5.6%-6.3% and non-GAAP revenue growth to 6.4%-7.1% [27][28] Q&A Session Summary Question: Expectations for Q3 sales results and impact from core consolidation news - Management noted that Q3 is starting off well, but it is too early to predict if results will exceed Q2 [32] Question: Changes in pricing for core systems and ancillary services - Management indicated that pricing has remained consistent over the last couple of years, with no significant changes due to recent announcements [34] Question: AI's impact on the business model - Management emphasized that AI is being utilized to enhance technology development and operational efficiency, but it is not a straightforward process [40][62] Question: Outlook on bank M&A and its impact - Management remains optimistic that bank M&A will be neutral to positive for the business, with opportunities arising from mergers [43] Question: Performance of different segments and expectations for the second half - Management expressed satisfaction with performance across all segments but anticipates challenges in the payments segment in the second half [50][51]

Financial Data and Key Metrics Changes - In Q4, non-GAAP revenue increased by 7.5%, and non-GAAP operating margin was 23.2%, reflecting a margin expansion of 146 basis points compared to the previous year [7][8] - For the fiscal year, non-GAAP revenue reached $2.3 billion, and non-GAAP operating income was $541.1 million, marking record revenue and operating income [8][24] - GAAP revenue for Q4 increased by 10%, while full-year growth was 7% on a GAAP basis and 6% on a non-GAAP basis [24][25] Business Line Data and Key Metrics Changes - Core non-GAAP segment revenue increased by 7% for Q4, with operating margin increasing by 274 basis points [31] - Payments non-GAAP segment revenue grew by 6% for both Q4 and the full year, with non-GAAP margin expansion of 99 basis points [33] - Complementary segment non-GAAP quarterly revenue increased by 11%, with a margin expansion of 155 basis points [34] Market Data and Key Metrics Changes - The company signed 51 new core deals in fiscal year 2025, including 31 banks and 20 credit unions, indicating strong market demand [10] - The company now hosts 77% of its core clients in its private cloud environment, reflecting a shift towards cloud solutions [10] - Total recurring revenue exceeded 91%, showcasing the stability of the revenue model [28] Company Strategy and Development Direction - The company is focused on technology innovation and execution to drive sales and maintain a competitive edge in the market [8][22] - A strategic phased approach to stablecoin solutions is being adopted, ensuring compliance with upcoming regulations while leveraging existing infrastructure [20][21] - The company aims to increase share repurchases and remain open to M&A opportunities, supported by a strong balance sheet with zero debt [34][107] Management's Comments on Operating Environment and Future Outlook - Management anticipates slight revenue headwinds due to industry consolidation, renewal pricing pressure, and macroeconomic uncertainty, but remains optimistic about margin expansion and free cash flow [8][39] - The company expects to generate sustainable, accretive sources of margin, with guidance for annual non-GAAP margin expansion of 20 to 40 basis points [38][39] - Management emphasized that the long-term growth opportunities remain intact despite short-term headwinds from bank M&A activity [66][67] Other Important Information - The company achieved a record operating cash flow of $642 million for fiscal year 2025, with free cash flow conversion at an impressive 90% [34] - The company received recognition in multiple publications for its workplace culture, reflecting its commitment to employee satisfaction [12] - The successful migration of Fedwire funds to ISO 20022 was highlighted as a significant achievement, enhancing capabilities in fraud detection and data sharing [13] Q&A Session Summary Question: Aggregate demand environment and implementation cycles - Management noted improvements in consulting engagements and implementation cycles, with some delays from the previous quarter now resolved [46][48] Question: Revenue guidance range - The wider revenue guidance range was introduced to provide more operational flexibility in light of macroeconomic variables [50][51] Question: Fiscal 2026 revenue outlook by segment - Core segment is expected to remain solid, while payments may experience slight headwinds, and complementary segment is anticipated to grow at the higher end of the growth range [55][57] Question: Impact of bank M&A on revenue outlook - Management indicated that while there are short-term revenue headwinds from bank M&A, the long-term growth opportunities remain solid [60][66] Question: Pricing pressure on renewals - Pricing pressure is observed in both renewals and new contracts, but management is implementing strategies to manage this effectively [77][80] Question: Progress of partnership with Move - The partnership has exceeded expectations, with significant interest and excitement from Visa and MasterCard regarding the rapid certification process [82][84] Question: Key levers for margin expansion - Key components for margin expansion include process improvement, efficiency in headcount management, and migration to cloud solutions [88][91]