Jack Henry & Associates Inc. (NASDAQ:JKHY) Q3 2018 Earnings Conference Call - Preliminary Transcript
May 02, 2018 • 08:45 am ET
Kevin D. Williams
Two questions. Number one, can you talk a little bit about the demand environment? Dave, you touched on it, but your two peers have been -- last couple of days have talked a little bit more enthusiastically about acceleration of demand, particularly sales over the last couple of quarters. And just wondered how that matched with what you all are seeing if there's a meaningful difference here in the last six months?
David B. Foss
No, we're seeing the same thing. I think on the last call, if I remember right, I pointed out that our pipeline was larger than it's ever been in the history of the company. And so I would say we're seeing the same things. In fact, I have a couple of charts that I'm going to show you guys at the Analyst Conference next week from a recent study that came out on that very topic.
But I would echo that. I think demand is strong. The sales pipeline is solid. The sales team has exceeded quota every quarter so far this year, which is remarkable as far as I'm concerned. So, things are good on the sales front.
That's helpful. And then the other question is, we're pretty focused and intrigued by the new card issuing processing product that you guys are developing. Two questions on that. One, is it still about a year-and-a-half out before we start getting some margin sort of moderate -- a margin impact moderation as we kind of close down some of the other two switches, number one? And then number two, I think you said 34 live. Can you give us a sense, are the banks bigger than you thought? Is the volume coming on faster than you thought and kind of how are the economics playing out relative to what you expected?
David B. Foss
Yeah. I think so, 34 live. We have, I think, 19 more that will be live by the time we get together next Monday. So, I can give you another update at the Analyst Conference on Monday, but it's a broad mix. So as with any project like this, it's probably logical to you that we wouldn't start with our largest customers. We would start with a few smaller ones. But so far, other than the first four, after that, it's been a good mix as far as volume, a good mix as far as number of cardholders. And these conversions, I should knock on wood when I say it, but they really have gone flawlessly and I think a big reason for that is because the consumer, there's no impact to the consumer.
They don't have to issue new cards. It's really a seamless conversion for the consumer, so progress will continue. We'll continue to give you updates on progress and a little more information on volumes as we get farther down the road. But so far, it's been extremely successful and the timeline at the beginning of your question, it's still in the ballpark. We'll