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Jack Henry & Associates Inc  (NASDAQ:JKHY)
Q2 2019 Earnings Conference Call
Feb. 06, 2019, 8:45 a.m. ET

Contents:

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Jack Henry & Associates Second Quarter FY 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we'll conduct the question-and-answer session and then instructions will follow at that time. (Operator Instructions) As a reminder, this call will be recorded.

I would now like to introduce your host for today's conference Kevin Williams. Please go ahead.

Kevin D. Williams -- Chief Financial Officer and Treasurer

Thanks, Chris. Good morning. Thank you for joining for us today for the Jack Henry & Associates second quarter fiscal 2019 earnings call. I'm Kevin Williams, CFO and Treasurer. And on the call with me today is David Foss, our President and CEO.

The agenda for this morning will be opening comments by me, and then I will turn the call over to Dave to provide some of his thoughts about the state of the business and our performance for the quarter. Then I will provide some additional thoughts and comments regarding the press release that was put out yesterday after market close and then we'll open the lines up for Q&A.

I need to remind you that remarks or responses to questions concerning future expectations, events, objectives, strategies, trends or results constitute forward-looking statements or deal with expectations about future. Like any statement about the future, these are subject to a number of factors, which could cause actual results or events to differ materially from those which we anticipate, due to a number of risks and uncertainties. And the Company undertakes no obligation to update or revise these statements. For a summary of these risk factors and additional information, please refer to yesterday's press release and the sections in our 10-K entitled Risk Factors and Forward-looking Statements.

With that I'm going to turn the call over to Dave.

David B. Foss -- President and Chief Executive Officer

Thank you, Kevin. Good morning everyone. We are pleased to report another quarter with record revenue and earnings. As always, I'd like to begin today by thanking our associates for all the hard work that went into producing those results for our second fiscal quarter.

Total revenue increased 8% for the quarter and increased 9% excluding the impact of deconversion fees from both quarters. Year-to-date, revenue was also up 8% and is up 9% year-to-date if you exclude the impact of deconversion fees. We had a very solid quarter in the core segment of our business. Revenue increased by 5% for the quarter and increased by 6% if you exclude the impact of deconversion fees from both quarters. Our payments segment performed extremely well posting a 14% increase in revenue this quarter and a 13% increase excluding the impact of deconversion fees.

We also had a strong quarter in our complementary solutions businesses, posting a 7% increase in revenue this quarter and a 9% increase excluding the impact of deconversion fees. On the topic of deconversion revenue, I'm sure you've noticed that in both Q1 and Q2 this line of revenue was down meaningfully year-over-year. We expect that trend to continue as we look forward to the second half of the year with Q3 significantly lower year-over-year and Q4 slightly lower.

In many respects this is a good problem to have, because although we experienced a short-term revenue impact, it indicates that far fewer customers are deconverting and their long-term revenue contribution stays in place. As we've discussed many times in the past, deconversion revenue is largely outside our control and very difficult to forecast. But, Kevin will provide more detail regarding what we see on the horizon in his remarks.

Our sales teams again had a very solid quarter in Q2. We booked 13 competitive core takeaways and signed 19 customers to our new debit processing solution. None of those 19 customers had used Jack Henry for debit processing in the past. We also saw very strong bookings in our payments and complementary solutions segments. Several of our newer solutions including our Banno Digital Suite, our commercial lending automation solution and treasury management saw strong demand. We also booked 17 in-to-out deals between banking and Symitar. The sales organization ended the first half of the fiscal year at 109% of quota and they've built a solid pipeline for the remainder of the year. The pipeline is up 26% over where we ended June 30 of 2018.

Regarding our new debit and credit processing solution, we now have 214 customers live on the debit platform, including 21 customers installed as new rather than as a migration. We also have three new credit customers live on the platform. So far, all of these migrations and new installations have been successful and our program continues to progress well. As we discussed on the last call, we suspended our migrations during the holidays but we have already completed a group migration in January and remain on track to complete the migration process sometime in the first half of calendar 2020.

As most of you are aware, we branded our industry-leading digital suite as Banno. The second quarter was significant for our Banno team because we brought 45 new clients live on one or more of the Banno modules, including a $35 billion bank that went live with the complete Banno solution. Today we have 27 banks and credit unions running on the complete suite, which includes Banno online, Banno mobile and Banno conversations. We have an additional 155 financial institutions live on Banno mobile only.

We are seeing a 95% month-over-month return rate with the Banno applications, which indicates that once a consumer downloads the app, they are extremely likely to keep using it each month. This is a very high percentage for a consumer-facing application. Our Banno conversations module is receiving particularly high marks. So we're excited about the Banno suite as a true differentiator for our banks and credit unions as they serve their customers in highly competitive digital world.

As we begin the second half of our fiscal year, we continue to be optimistic about the strength of our technology solutions, our ability to deliver outstanding service to our customers, our ability to expand our customer relationships, the spending environment and our long-term prospects for success.

With that, I'll turn it over to Kevin for some detail on the numbers.

Kevin D. Williams -- Chief Financial Officer and Treasurer

Thanks, Dave. The service and support line of revenue increased 6% compared to the prior year restated quarter again -- all previous numbers have been restated for the new revenue recognition rules under ASC 606. We had a very strong quarter for license, in-house maintenance, software usage, software subscription and data processing hosting revenue all in this line of revenue. We do continue to have some headwinds from decreased implementation revenue, due to the vast majority of our core installs or electing our outsourcing model which the implementation revenue must be spread over a period of time according to the contract unlike under 605.

As Dave mentioned, our deconversion fees were down $3.1 million compared to year-ago quarter. And as we've discussed previously, we have no control over these and all of our deconversion fees were in this line of revenue. The process line of revenue grew 11% compared to the prior year quarter and had no impact of deconversion fees. Total revenue was up 8% reported and a little higher than 9% adjusting for the deconversion fees.

Our reported consolidated operating margins were down from 24% last year to 23% this quarter, as we discussed previously, there are two headwind impacts on operating margins this year. First, the additional cost of processing our debit card customers as we transition more to the new payments platform. And then the second is the additional cost for the employee performance plan that are being funded with a portion of the savings from the Tax Cuts Job Act that we discussed on previous calls.

Remember we have -- we had a benefit of the reduced federal income tax this year compared to last year, and our operating margin for the year remained flat at 25%. But as previously guided, there will be additional pressure on our margins because of these items as we continue to increase0 cost related to the migration of the payments platform in the second half of this year.

Our segments operating margins continue to be very solid with small fluctuations. The payments that will -- will see some increased margin headwind going forward, again, as we increase these double cost as we migrate these customers over to the new platform. Our effective tax rate was obviously impacted significantly by the TCJA for the quarter. The effective tax rate this year was 23% compared to a negative 90% last year. For the balance of the year our effective tax rate will increase slightly each quarter and our projected total year effective tax rate is expected to be approximately 23% by the time we wrap up this fiscal year.

For cash flow, included in the total amortization, which was disclosed in the press release, is cash flow -- is the amortization intangibles from acquisitions, which increased to $10.3 million year-to-date this fiscal year, compared to $7.4 million last year. Depreciation is down slightly for the quarter, but amortization up primarily due to more of our internally developed products being put into production, plus the acquisitions that we did in October that we announced previously. And remember when a product gets to our beta, we stop capitalizing according to the FASB rules and we began amortizing it at that time.

Our operating cash flow was $192 million for the first six months, which represents an 8% increase over last year. The significant increase in capital expenditures year-to-date was primarily due to the cash paid out in Q1, that we discussed on the last call. Our cash flows will have the same seasonality as historical, with significantly higher cash flows in Q1 and Q4 due to the collection of annual in-house maintenance billings.

We did invest $89.7 million back in our Company through CapEx and development products, which is up from $65.2 million a year ago with -- again with the vast majority of the increase due to the data center upgrades that we talked about in Q1. We did buy 150,000 shares of our stock with treasury during the quarter.

For guidance for the balance of the year as Dave and I had already mentioned, our deconversion fees were down compared to last year, both the first and second quarters, which is a good thing as that means we are not losing many customers through M&A, but it does create some challenges in year-over-year comparisons, which is why we backed them out to show non-GAAP true operations in the press release. It appears now that are deconversion fees in Q3 are going to be down significantly compared to last year. In fact, at this time, it appears that they could be down by as much as $13 million in Q2 -- Q3 compared to last year. Therefore, since each million dollars of deconversion fees essentially equates to approximately $0.01 of EPS, we need to bring the consensus EPS estimate down by approximately $0.13 for Q3 and the year, due to the significant decrease in these fees.

For the year we are projecting deconversion fees to be down roughly $20 million compared to last year at this time with -- which were down almost $6 million in the first half, which means we're going to be down about $14 million in the second half. However, with these headwinds, our GAAP revenue growth for the fiscal year should still wind up to be in the 5.5% to 6% range with operating income essentially flat due to both the decrease in deconversion fees and additional cost headwinds from our payments platform migration and the new pay performance plans that we previously talked about.

On a non-GAAP basis, our revenue growth should still be in line with the original guidance of approximately 7% for the year with some leverage to our operating income line. Then obviously with the reduction of our effective tax rate this year to the full year projected 22% to 23% from adjusted 28% last year, our EPS will still be up nicely for the year compared to last year, after adjusting out the TCJA impact on the deferred taxes last year.

With that, we'll now open this call up for comments. Chris will you please open the lines up.

Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from David Togut with Evercore ISI. Your line is now open.

David Togut -- Evercore ISI -- Analyst

Thank you. Good morning, Kevin and Dave.

Kevin D. Williams -- Chief Financial Officer and Treasurer

Good morning.

David B. Foss -- President and Chief Executive Officer

Good morning.

David Togut -- Evercore ISI -- Analyst

What's your assessment of the competitive impact on your business from fire service announced acquisition of First Data? And then just as a related question, any impact expected on your joint venture with First Data and PSCU as a result?

David B. Foss -- President and Chief Executive Officer

Okay. Dave, this will probably be a little bit of a long answer but I'll take a shot of both of those questions. So first off, as far as the overall competitive impact, we've talked many times in the past about the fact that our two major competitors are larger than we are. They have been larger than us for a long time. We have a very long track record of winning against them, even though, they both have been very significantly involved in the payments side of the business, and they are core competitors, of course, on both the banking and the credit union side of our business. So, with the competitive landscape they are much larger than they were before assuming this deal closes. But as far as we're concerned, it's business as usual competing with them. And again, we have been winning significant market share, and I expect us to continue to do that.

As far as the existing partnerships, so a few things that you need to keep in mind with regard to the First Data partnership that we have. First off, the role of First Data in the partnership was simply to process transaction. So, they're not reselling, we're not -- they are not active in the sale process with us. They don't install anything. They don't support anything. They never talk to our Jack Henry customer. The model was that Jack Henry sells, installs and supports the solution, the front-end tools that the Jack Henry customer uses come from PSCU. The First Data role was to process transactions.

So, our expectation is that when we are assuming that deal is completed that the -- that the processing engine will still be in place and that they will continue process transaction for us. So we sell, we install, we support as a Jack Henry solution, they just happened do the processing engine underneath with the PSCU tools laying over the top. So that's the model. Just to make sure we're clear on what it is that we're doing with First Data.

The other thing I would point out is, so now First Data becomes part of Fiserv. We have -- again we don't talk about it a lot, but we work in a cooptation environment every day. So, people we cooperate with one day and we're competing with the next, and that's been our role with Fiserv for many years. So I don't think we've ever mentioned it on one of these calls, but we were partnered with them for years on their cash head solution. We just recently got out of that partnership because, we inherited a better answer through another solution, but we had a very successful partnership for years. And so my anticipation is that we can do the same thing here.

We have a long-term agreement in place today with First Data, that includes pricing and service level agreements, and so on. I've talked to the executive leadership team at First Data several times since this deal was announced, just to ensure that everything stays in place going forward and I'm confident that the processing requirements continue as we go forward, and we would become a significant customer for Fiserv, so that's not a smart thing for you to make trouble for a significant customer, obviously, we'll have to work through all that as time goes by, but it's in their best interest to make sure that we are happy and successful working with them.

So, I think if you put all those things together, the future is still bright for Jack Henry. We have -- we're totally committed to this platform. We're having great success already, and I don't see that changing as a result of this acquisition.

David Togut -- Evercore ISI -- Analyst

Understood. Thanks for that. If I could just dig into the gross margins a bit. Kevin, I appreciate all the helpful call outs on operating margin impacts, but was there anything specific behind the 100 basis point decline in gross margin year-over-year. Was that the new pay for performance program?

Kevin D. Williams -- Chief Financial Officer and Treasurer

Well, that was part of -- there is also the increased cost in our pay -- our move to the new payments platform, Dave, I mean, we were continuing to add resources in the first half of the year. In fact we're still adding some. And then, remember we are unable to take any cost out at this point, because we still have to keep the two platforms employees, we have to keep all the developers employees whereas continue to keep those compliant with the cards payments requirements. And as we've -- now, as Dave mentioned, we've now moved 207 of our existing customers over to the new platform. We're now having to pay a per click fee on every transaction that those 207 customers are processing.

So, the cost are going to continue to increase in continuing to put headwind on our margins, and so we are able to get all of our customers off one of those platforms, so we can shut one of them down, and start taking costs out. So that was in my opening comments, is we're going to continue to see increased margin pressure especially in the payments segment for the next year for us and so we can get through this migration process.

David Togut -- Evercore ISI -- Analyst

Got it. Thanks. And then just walking through some of the revenue growth trends in the three reporting segments. Very nice acceleration in payments revenue growth to 13% from 10%. But we saw some deceleration, both in the core and the complimentary revenue. Any call outs, a, behind the acceleration in payments and sustainability and then some of the de-sell in the other two segments?

Kevin D. Williams -- Chief Financial Officer and Treasurer

Well, so, on the core side, Dave, and I mentioned, I'm opening comments, the headwinds are primarily from our implementation revenues, because you also save a 100% of our new banking core customers are going outsourcing and probably close to 80% of our new credit union customers are going outsourcing, and that implementation revenue has to be spread over the life of the contract, where an in-house customer, you're actually working on that implementation revenue upfront when you actually deliver the software. So that's the biggest headwind we're seeing on the core side.

Complementary is somewhat the same. There is also some implementation challenges there, because, again as we're installing, these complementary products in an outsourcing solution, we have to spread that revenue. So, that's really the only headwinds we are seeing. I mean, we've -- as Dave mentioned, we continue to see very strong sales and very strong deliveries and products across both banking and credit unions and core and complementary. Obviously payments had some increase from some of the acquisitions. So I don't know that that growth is totally sustainable. But, I think we'll continue to see very nice growth, as we continue to add new customers in just about every bucket of our payments which is obviously as we talked before, there's three different buckets in our payments, offerings and all three of those are showing nice growth.

David Togut -- Evercore ISI -- Analyst

Understood. Then just a quick final question from me. Dave, you called out a $35 billion asset bank that you signed on for the new Banno Digital Suite. Can you talk about the drivers of that when -- that's certainly a very large win in terms of asset size. And then do you expect that to lay the groundwork if you will, for more banks in that size range?

David B. Foss -- President and Chief Executive Officer

So, first off, we won that contract, many months ago. My point was that they went live in this quarter. So, we signed that deal, many months ago and are we targeting $35 billion bank with the Banno solution, we are not. We're targeting banks and credit unions running the spectrum.

My key point there is that it is a solution that is working very well. I mean they're very happy. I just recently talked to their CEO, about the rollout and they're very happy with the rollout, very happy with the solution. And I think the significant thing about that solution is regardless of the size of the institution, it positions our customer to compete heads up against primarily the two that lot of people call out everyday BoA and JP Morgan Chase as they're investing billions in their technology to serve their consumers through the digital channel. And this solution, our Banno solution positions our customers very well to compete in that environment.

The key thing and I stressed that in my opening comments, now I'll just say it here too. Three different modules in Banno. So Banno online is what we used to think as of online banking, Banno mobile, of course, mobile banking, and then there's Banno conversations and that's been the real differentiator for this large institution and several of other customers and that they can communicate with their consumer in the channel, in the banking channel, they can do chat essentially with their consumer through their help desk and that's the differentiator for our solution and it's definitely a differentiator for these customers. And it's one of the things that really attracted this particular customer to that solution.

So we expect, certainly large banks and credit unions to adopt this, but we also expect a lot of institutions that are smaller than that, because it takes strategic solution for them to compete with the Tier 1 banks in the United States.

Hey, Dave one more comment too, I highlighted implementation revenue being down, but that also goes hand-in-hand with our license revenue because as more and more of our new core customers go outsourced, obviously we're not selling licensing revenue, and in this quarter a year ago, we had a very large winner merger, that drove quite a bit of license and implementation revenue in the quarter, which made sort of a test comp for both core and complementary compared to a year ago.

David Togut -- Evercore ISI -- Analyst

Understood. Thank you very much. I appreciate it.

David B. Foss -- President and Chief Executive Officer

You bet. Thanks David.

Kevin D. Williams -- Chief Financial Officer and Treasurer

Thanks David.

Operator

Thank you. And our next question comes from Kartik Mehta with Northcoast Research. Your line is now open.

Kartik Mehta -- Northcoast Research -- Analyst

Hey, good morning, Dave and Kevin.

David B. Foss -- President and Chief Executive Officer

Good morning.

Kartik Mehta -- Northcoast Research -- Analyst

Dave, just give your perspective on how your customers are feeling, and if you look at kind of spending as we look at 2019 kind of compare to 2018, how you think that will trend for the banks and credit unions?

David B. Foss -- President and Chief Executive Officer

Sure. So, I mentioned earlier that the sales pipeline is up 26% over where we ended in June. The reason I mentioned that was because in June I talked about -- at the end of the June quarter I talked about how significant the pipeline was going into the new fiscal year. Frankly, I'm shocked that the pipeline is up so significantly over where we were in last June. So the interest in Jack Henry solutions, the spending environment today is definitely very strong.

I did yesterday, for the first time see a survey that some bankers were starting to get a little bit concerned about as they look into calendar 2020 starting to get concerned about the -- where the economy is going and that kind of thing. But the good news for us is that they are focusing a lot of their attention now on preparing for a potential downturn in the economy. So the digital suite for example that I just mentioned when I was talking to Dave, very important to them to position themselves to compete going forward with the digital solution.

Lending is still strong, and so I highlighted that in my comments. Our commercial lending solution is getting great interest. That is helping them position for the future. And then the other topic that's high on their list is efficiency. Their efficiency ratio is a key metric for our customers and that too helps them as they kind of position themselves to make sure that they can weather any economic downturn that might come. So right now spending environment is very strong. I don't see any slowdown as far as what our sales reps are seeing. I'm of course, monitoring things like the report that I just referenced that would indicate that in 2020 maybe there is a little bit of a concern about the economy, but we're not seeing any impacts right now as far as sales are concerned.

Kevin D. Williams -- Chief Financial Officer and Treasurer

Yeah, I'd also add to that Kartik, right now, we continue to see a lot of activity in core valuation, there is an enormous amount of core valuations going on out there. I have a weekly call with our sales team to review some of the activities going on out there, and it's just amazing how strong that continues to be.

Kartik Mehta -- Northcoast Research -- Analyst

And then, Dave, just maybe backdrop, on your comments about 2020, one of the thoughts was as you move to this new credit and debit card portfolio, maybe some of your banks would be interested in issuing their own credit cards as a way to generate more fee income. Have you seen a change in that trend at all? Do you still see interest or with maybe the economy, their concern about the economy is that waiting a little bit?

David B. Foss -- President and Chief Executive Officer

No, I think it's the opposite. I think that the opportunity to issue on the credit card side helps them potentially, if there were to be some kind of the downturn in the economy. So no, absolutely no slowdown as far as interest is concerned. It's -- things are good right now as far as sales are concerned.

Kartik Mehta -- Northcoast Research -- Analyst

And Kevin, just one last question. You talked about the deconversion fees obviously have an impact for you this year. I mean what is the long-term -- I imagine the long-term is a little bit more positive impact, because you're not seeing these customers migrate away or merge away. And is there a way to look at maybe the revenue impact from this as you move to the next year -- next fiscal year?

Kevin D. Williams -- Chief Financial Officer and Treasurer

Well. Like we said the forecast remains -- that's why we're breaking out 7% (ph) because we have no control, we have no visibility. And understand that I mean 90% -- I mean close to 100% of deconversion revenue comes from M&A activity. So it's just when our banks and credit unions get acquired, and they have to pay out these long-term contracts, so we have no control there, we have no visibility to that. So there's really no way I can even predict what's going in into next year.

I mean the only way I know for this quarter and basically the second half is, typically we get notified three to six months before they actually deconvert, when they project they are going to deconvert. But again, under the old revenue recognition rules, we could recognize $0.01 of revenue until they actually deconvert toward the check. Under the new revenue recognition rules, when they gave us notice and signed the papers, we had to start spreading that estimated deconversion fee revenue from that point to the projected deconversion date. If the date shifts then we have to readjust how that gets spread. So I don't have any more visibility into the deconversion fees for 2020, than I did for this year going into 2019.

Kartik Mehta -- Northcoast Research -- Analyst

Yes. Maybe Kevin, my question was more about the fact that you're not going to have the deconversion fees. I guess, the revenue is going to -- you are going to keep the revenue.

Kevin D. Williams -- Chief Financial Officer and Treasurer

Well, then it is good news. I mean we're going to get revenue from these customers. And so, obviously, the headwinds will be less going into next year than they were going into this year.

David B. Foss -- President and Chief Executive Officer

Absolutely, I don't know that's a -- I mean, I've mentioned it in my comments. the good news in all of this is that fewer customers are deconverting. So on the core side we don't typically lose a customer because they choose to go with one of our competitors, but M&A certainly has an impact. But then, we've been pretty open on these calls about the fact that in the payments business we were losing customers. They were leaving Jack Henry and they were paying a deconversion fee sometimes to leave us, because they weren't happy with the platform and of course that has virtually come to a stop now.

So the good news is that revenue stays in-house for Jack Henry, it continues to build both because we're not losing customers through M&A and we're not losing customers on the payment side that in fact leaving us. Quantifying what the impact of that is, as reduced headwind. I don't know that that's -- there is any way to accurately do that, but you can just logically see where that's a positive for us going forward. If you look at -- if you take the long-term view of Jack Henry that's a really good signal for us.

The other thing is to Kevin's comment earlier that almost every core customer we're signing these days on the banking side are going outsourced and much more -- many more of the credit union customers that we signed today are choosing outsourced model, and we're continuing to do these in-to-out migrations. I mentioned in my comments, the number of in-to-outs that we did 17 in-house to outsourcing, all of those set us up with recurring revenues. So if you take the long-term view, those were all good signs for Jack Henry.

Kevin D. Williams -- Chief Financial Officer and Treasurer

And Kartik one more comment. I mean, I didn't talk about this before. There is no way to project what future revenue there is tied to a deconversion fee, because it could be a bank or credit union that has six months left on the contract that has a plethora of our products. They're going to pay as they usually converge fee to be a small bank that has four years left that only has a couple of products that they're going pay a much smaller fee. So you really can't tie the deconversion fees to forwarding going revenue.

Kartik Mehta -- Northcoast Research -- Analyst

Okay. Got it. Thank you very much.

David B. Foss -- President and Chief Executive Officer

Thank you very much I really appreciate it.

Operator

Thank you. And our next question comes from Peter Heckmann with Davidson. Your line is now open.

Peter Heckmann -- D.A. Davidson & Company -- Analyst

Good morning, gentlemen. Just wanted to follow-up, make sure we're following the number. Can you -- Kevin, just for reference, give us that guidance again in terms of looking at adjusted, I think you said adjusted revenue, which would exclude term fees should still for the year be up about 7%.

Kevin D. Williams -- Chief Financial Officer and Treasurer

Yes.

Peter Heckmann -- D.A. Davidson & Company -- Analyst

Okay. You gave your commentary as regards the impact for the -- with big drop in high-margin deconversion fees in the third quarter, but for the year it still sounded as if we're looking at that kind of high single-digits to maybe potentially 10% EPS growth for the year. Is that the right way to interpret it?

Kevin D. Williams -- Chief Financial Officer and Treasurer

On a GAAP -- well on a non-GAAP basis, the ESP (ph), I mean, once you back deconversion fees out, I mean, revenue growth should still be roughly 7% for the year, operating margins will get some leverage from that. And then obviously a little more leverage to EPS from that, from the lower tax rate. So, obviously EPS on an adjusted basis, if you back out the TCJA again, we get some crazy numbers compared to last year because of the impact of TCJA on our deferred taxes. Last year which was well over $1 of EPS. So you have to back that out to really get an apples-to-apples comparison. Yes, so we'll still have a nice EPS growth, if you adjust all that out.

Peter Heckmann -- D.A. Davidson & Company -- Analyst

Okay. Okay. And they -- and kind of a good, just get for reference purposes were good, full year adjusted fiscal 2018 EPS figure, is that around $3.30?

Kevin D. Williams -- Chief Financial Officer and Treasurer

I'm sorry, say again Pete.

Peter Heckmann -- D.A. Davidson & Company -- Analyst

Just, so if we're looking at kind of non-GAAP EPS figure for fiscal year '18, would you put that figure around $3.30?

Kevin D. Williams -- Chief Financial Officer and Treasurer

I think it's about $3.29 Pete.

Peter Heckmann -- D.A. Davidson & Company -- Analyst

$3.29. Great. Great. Okay and then just fundamentally, I did want to follow up on Zelle, you talked about some of the pilots that were occurring late last summer and through the fall. I wanted to see what type of uptake you're seeing there if any in volumes and nice relative appetite to adopt or incorporate that service?

David B. Foss -- President and Chief Executive Officer

Well, so, we have talked about with the Zelle, is the fact that they've had so much trouble bringing the processors live. So they, today, Zelle has 60 institutions live on their platform. 15 of those are one holding company. Eight or whatever it is were the original founding banks and then the other 12, that were part of the original clear exchange program. So, 35, 40 whatever that adds up to of them were part of the original plan. And then there's another 20 or so that they brought live all of them have been point-to-point connections where they've developed their own interface from the bank into the Zelle platform. None of the processors are live as processors.

So -- but we have sold 15 so far. We have customers that are in testing, and so there's a lot of interest. But, as far as live volume going through us as a processor, meaning we're aggregating transaction for a bunch of banks, and processing them live, we don't have any of those live today nor do any of the other processors have them live today.

Peter Heckmann -- D.A. Davidson & Company -- Analyst

Got it, got it. Thanks for the update.

David B. Foss -- President and Chief Executive Officer

You bet.

Operator

Thank you. And our next question comes from Glenn Greene with Oppenheimer. Your line is now open.

Glenn Greene -- Oppenheimer -- Analyst

Thanks. Good morning, Kevin and David. And David, thanks for the clarification on the First Data situation. We've been getting a lot of questions on that. I guess the first -- the first question is could you guys sort of talk a little bit about the drivers of the payments strength that 13% in the quarter, maybe if you could parse it across the key product areas that drove that?

David B. Foss -- President and Chief Executive Officer

Sure. So, the three primary product areas, so first off, we have, what we call the EPS, Enterprise Payment Solutions. EPS is our traditional notepad capture and ACH processing platforms. So, EPS was up approximately 6% I guess as far as the revenue is concerned for the quarter, but that's a business that it's an ACH based business, but continues to grow nicely, not only through our banking customers but through partnerships that we through EPS and we've talked about some of those in the past.

The second is our bill-pay business iPay, which traditional aggregator business. Transaction counts there were up almost 4% for the quarter. So, that business continues to grow nicely. And then the third, is the card processing business. So it's the transactions that we're processing through the First Data platform, but also the legacy platforms that we are hosting today. Transaction counts are up nicely there. They were up almost 9% for the quarter.

So it's kind of across the board. The thing to kind of zero in on is the point that I made earlier about the number of customers that we now have live on the new platform. I mentioned that 19 customers signed with us today that were never on the old platform. So, it's not that we will be migration -- migrating them. It's that we'll -- is that they are brand new customers to Jack Henry. I also mentioned that out of the customers we do have live processing today. 21 of them were never on the old platform. So there is new revenue that's coming in, in addition to migrating customers over and seeing growth out of those customers, because they have more functionality on the new platform.

We're adding new customers through the -- through signing customers because they like the functionality that we have, particularly with the PSCU, technology laying over the top. So it's kind of -- all three areas are growing well, but certainly we're seeing nice growth in CPS because of all those customers that we're adding net new to Jack Henry.

Kevin D. Williams -- Chief Financial Officer and Treasurer

And one other thing Glenn, so probably what you're going to ask next is margins. So, as we add these new customers, obviously that helps to offset some of the headwinds on margins of the customers who are migrating over which makes it even more of a challenge and difficult to quantify what the true margin impact is going to be in 2020 when we can take all these costs out, because the more new customers we're adding, they help to offset those margin headwind. So just true to the thought.

Glenn Greene -- Oppenheimer -- Analyst

Yes. I'll follow-up on the payments front. I'm still struggling on to see how you get the 30%. But I'll -- I'll take that offline. I wanted to follow up on Pete Heckmann's question because, I heard a couple of things on the margin expectations. Kevin, you said in prepared -- your prepared comments, somewhat flattish and then to Pete's question, you suggested some margin leverage, and I thought, I also heard you say flat -- flattish EBIT, overall implying sort of a 23% tax rate, buyback of the envelope math got me $3.55, $3.60-ish EPS. I just wanted to know if that's sort of sanity checks with how you're thinking about it. It's a little bit different than your answer to what -- to Pete?

Kevin D. Williams -- Chief Financial Officer and Treasurer

So, Glenn, the operating income for Q3 is going to be basically flat on a GAAP basis. On a non-GAAP basis when you back out the deconversion fees and other non-GAAP adjustments, you're going to have some decent leverage to the operating margin line. So, your EPS for the adjustment is pretty much in line in that $3.55 to $3.60, somewhere in there for the year. After we adjust out, so I hope that answers your question. But you might -- in my opening comments, revenue growth even is going to be in the 5.5% to 6% on a GAAP basis, on a non-GAAP basis it is still be is roughly 7% based on what we're looking at now by big -- backing up deconversion fees, with very little leverage to the operating income line on a GAAP basis, with some decent leverage on a non-GAAP basis. Obviously, when you have a $20 million headwind from deconversion fees for the year, that's going to have some impact on your margin, from a GAAP reported basis.

Glenn Greene -- Oppenheimer -- Analyst

Understood. Appreciate that. One more question. Any more current thinking on where your margins trend once you get past the debit conversion?

David B. Foss -- President and Chief Executive Officer

Well. Again, like I just said Glenn that the challenge there is, as we add new customers, which we've already added several, that's new revenue and new margins, which is actually at a higher margin than our old customers are that we're deconverting off. So we continue to increase cost, but we also have an offset of new revenue and new margins, which is kind of reduce the headwind. So, at this time, it's still kind of a challenge, and I think I've been pretty consistent that by the end of this fiscal year, I hopefully would be able to give you much clearer guidance on what that impact is going to be in the second half of 2020.

Glenn Greene -- Oppenheimer -- Analyst

All right, great. Thanks a lot. I appreciate it.

David B. Foss -- President and Chief Executive Officer

Thanks, Glenn.

Operator

Thank you. And our next question comes from Tim Willi with Wells Fargo. Your line is now open.

Timothy Willi -- Wells Fargo -- Analyst

Thanks, good morning. Couple of questions. One, I was curious if you could just talk about the pricing environment. I'm curious about some of the faster growing areas like mobile. Is there just any sort of call outs around some of your -- I guess major revenue drivers, where you feel like the pricing environment just maybe favorable versus under any kind of traditional or extraordinary pressure? Just sort of try to get a gauge on that, and I had a couple of follow ups?

David B. Foss -- President and Chief Executive Officer

Sure. So, in the mobile area, definitely a differentiated solution with our Banno solution, because we have a single platform that's doing what we traditionally called online banking what we traditionally call mobile banking. We have an advertising platform through it. We have the conversations component that I just talked about earlier. And we can host the financial institution website all on the same digital channel. It is definitely a differentiated solutions. So when you think about price, it's not like we're trying to line up our pricing in a per widget with somebody else because it's a totally differentiated solution.

Now we're in a competitive environment, and we have to deal with all the standard competition stuff. But it's a good place for us to be as far as having a differentiated solution and being able to sell value as opposed to just trying to compete per widget with somebody who is out there with exactly the same thing.

If you look across the broader products suite, as I said earlier, the spending environment is strong today, and we are not seeing the intense pressure as far as price compression. There are certain pockets here and there, but it's not like it was say, three, four years ago, where there was a real intense price compression going on in several areas of the business. Today that's just not the case. I think part of it is because several of our technology solutions really are differentiated. We talked about treasury management for example. It is a unique new solution. We bought mobile on the mobile component live this past quarter. I didn't even highlight that earlier, but to have a treasury management solution with a complete set of mobile functionality is a real differentiator. So it's -- there is pressure. We are in a competitive environment. We always deal with that. But I think several of our technology solutions now are highly differentiated from our competition. And so, that always helps when you're talking price.

Timothy Willi -- Wells Fargo -- Analyst

Great. And then just the two follow-ups, I guess they are somewhat related, but just curious about anything on the M&A environment that's changed since the last couple of calls where I think the answers been things are really expensive, but there's no shortage of stuff being presented to you. Maybe you could address that directly and I just had a follow-up that sort of ties into that as well.

David B. Foss -- President and Chief Executive Officer

Things are really expensive and there is no shortage of stuff being presented to us. I mean, it really is. It's the same environment that we've been in for quite some time. I got an updated number just the other day, there is still $1.5 trillion of PE money sitting on the sidelines waiting to be invested. We certainly see that when we're in competitive deals. The private equity, they're looking for places to put their money and so they're pretty ready to outbid on deal. So it's definitely very competitive.

But you saw us do the two little deals in October, the Agiletics deal and the BOLTS deal. And then in Ensenta, a year ago now, all of those deals were competitive, but Jack Henry oftentimes has an edge because of reputation and culture, and you oftentimes don't think of culture as winning the day when it comes to a competitive bid acquisition, but it really does help in those situations and so we continue to ensure that that message is out there. And when we do an acquisition we will take care of the employees and the customers and certainly the seller, but we're very focused on making sure that the employees and the customers land in an environment that's going to help them be successful long-term.

Timothy Willi -- Wells Fargo -- Analyst

Great. And then so my follow-up on that was, this has come up periodically. Obviously Jack Henry is hyper-focused on customer experience, retention culture. We're in a very dynamic tech environments, open banking, open computing type environment. Do you have any different stance around internal development versus partnerships in lieu of finding attractive M&A opportunities? Is that anything at all, where there's a till one way versus the other about maybe looking at partnerships and building that ecosystem not more so then you would have thought a year ago or 18 months ago? Or do you feel like anything your customers are looking for? If you can't find a way to acquire it, you got the bandwidth and the resources to develop it internally.

David B. Foss -- President and Chief Executive Officer

So, it's a good question. We've talked quite a bit in the past couple of years about the whole build by partner methodology that we go through. Whenever we have a need for a solution that our customers are looking for and we go through this build by partner analysis, trying to find what is the best approach for us. So you've seen us build term solutions like treasury management, you've seen us partner like First Data deal and then the acquisitions that we just talked about. So we've done a lot of that. All three of those in the last year or two and certainly Jack Henry has a history in all those areas.

So with the points that you mentioned, I don't know that there is any need for us to change the way we do that and you kind of have to define the word partner in the question that you asked. So partner usually implies that where there's a revenue share and all that kind of stuff. Keep in mind jack Henry forever has been -- had a very open approach to working with third-party vendors, and we don't require Rev Share. We've opened up our host systems for years to make it easy for the third party to integrate into our core to enable our customer to get whatever it is that they're looking for.

And that philosophy and strategy hasn't changed. And frankly, it feeds perfectly into the open banking accounts that you're talking about. However, our competitors have not had that approach. We've been open for years and have provided the tools for years to help enable third party products with Jack Henry core. Now, we need to expand on that and we are close to rolling out the complete set of open APIs that kind of extends that functionality, but we are well positioned to address the open banking concept as it's being defined today.

Kevin D. Williams -- Chief Financial Officer and Treasurer

And Tim, it really depends on the situation, because obviously -- back to you, I think your second question, we're obviously always getting hit with opportunities to buy companies and if they fit and it makes sense then yeah, we'll try to buy them. But on the other hand when customers come to us like today's example of treasury management, you look out there, did we have the cash to -- did we have the cash to build it. No. But we found the right manager to hire and build a team and build the solution because it made more sense because there were really not out there to buy, but when you look at like Ensenta, we didn't have -- we couldn't build replicate that, so it made more sense to just buy it and the same way that we see it made more sense to partner, because there was -- we couldn't build it and there was nothing out there for us to buy. So it really depends on situation which direction we're going to ultimately end up going.

Timothy Willi -- Wells Fargo -- Analyst

Great. That's all I had. Thanks very much.

David B. Foss -- President and Chief Executive Officer

Thanks, Jim.

Operator

Thank you. And our next question comes from Joseph Foresi with Cantor Fitzgerald. Your line is now open.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Hi, good morning. My first question, I want to go back to the FIS, Fiserv, FTC deal. I guess two questions there. One, do you believe that by making that acquisition it strengthened Fiserv's position in the market, particularly around core processing. In other words, do they now become a little bit more attractive because they have sort of the front end and the back end. And then my second question is, does it really make sense to continue with the FTC processing aspect of your partnership, or would it make more sense to be with the different merchant, because couldn't Fiserv go to clients and theoretically say well, we've got the processing. We've got the back end, we are not putting them in a better competitive position.

David B. Foss -- President and Chief Executive Officer

Well, I don't believe, first off, that it strengthens them at all on the core side because this acquisition has nothing to do with their core. As far as the payments equation, we believe that the platform that we have with First Data is a terrific solution for Jack Henry and what Fiserv does as far as the sales strategy as I mentioned earlier, we will be a very large customer for them. And so, now you have to have to keep that in mind as they go forward and develop their sales strategy. So I don't think that would be a prudent move for them to try to do something like what you're suggesting. But you'll have to have Fiserv what their strategy is. I'm not sure.

Kevin D. Williams -- Chief Financial Officer and Treasurer

And the other thing Joe, remember our agreement is really with PSCU. And PSCU has the agreement with FTC, which they've had a working relationship with First Data for 30 years. So that relationship is been place forever and our agreement was with PSCU to process our transactions through PSCU to FDC, and FDC is just basically processing the transactions.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Got it. Okay. And then just on the competitive environment. We've seen some press releases around Infosys helping some banks maybe move some of the work to the cloud. And then of course, I think we've heard some rumblings about Temenos in the Midwest in a bank there. I was just wondering what your thoughts were about the move to the cloud and Temenos and sort of the structure of the industry at this point. If you're seeing any changes on the competitive landscape?

David B. Foss -- President and Chief Executive Officer

No major changes on the competitive landscape in Temenos and Infosys for that matter have been working to establish a foothold in the US for many years. So there's nothing particularly new there. They're working on implementing deposits for a single bank in the Midwest. But getting deposits, loans, general ledger everything rolled out is a tall order. So, but again, they've been both of them have been working in the US, trying to establish a foothold in the US for a long time. So I don't see any significant change there. As far as moving to the cloud we have the same type of projects going on at Jack Henry. Some products are already public cloud residents and others were in the process of moving things there as they make sense. So, I think we're positioned well to be competitive with either of those players if they get a stronger presence in the US.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Got it. And then the last question from me. Our channel checks seem to imply that banks spending at least on IT continues to be good heading into next year or this year at this point. Can you just give us your thoughts on spending patterns this year versus last year, and maybe call out where you see some of the major areas and how you're positioned in them? Thanks.

David B. Foss -- President and Chief Executive Officer

Yes. So as I mentioned earlier that our pipeline is up 26% over where it was at the end of June and you may or may not recall but, I highlighted at the end of June last year because it was up so significantly and I was frankly kind of shocked with how large the pipeline was getting. And, so here the sales team now, after receiving a quarter increase there is already at 109% year-to-date and the pipeline is up 26%. So, the interest in Jack Henry solutions in the overall spending environment is very strong right now.

Keep in mind, almost everything that we are selling today and I won't say -- I won't say everything. I'll say almost everything that we sell today is the recurring revenue type of agreements. So you don't see a revenue pop in the quarter. You see that come over time and that's -- the good news is customers are signing long-term contracts for almost anything that they're buying from Jack Henry today. So, spending environment is strong, where we see particular interest, I highlighted a couple of these already, the digital channel, a lot of activity there.

Kevin mentioned there is so much activity going on in the core space right now, which normally you don't see big blips when it comes to the core business. It's usually pretty steady, both on the banking in the credit union side. We tend to win a very large portion of those deals that go up for decision. But right now, there is just a lot of -- lot of deals in play and so that's interesting, it's good. De novo activity is up. So there have been 24 new banks chartered in the past 12 months. We've won 13 of those and more than half. The other less than half have gone to a variety of other different vendors, but Jack Henry is one more than half. That's good for Jack Henry because they tend to grow quickly and that produces revenue. So spending environment is strong. The overall environment is good, and again I think the technology solutions that we're offering today, really positioned our Company well to be competitive.

Kevin D. Williams -- Chief Financial Officer and Treasurer

And Joe, I would tell you that Dave and I have both churn (ph) our sales organization to make sure and scrub those the sales pipeline and I can assure you that the numbers, that Dave is quoting are all very much sales opportunities.

David B. Foss -- President and Chief Executive Officer

They are legitimate.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Got it. Thank you.

David B. Foss -- President and Chief Executive Officer

Thanks, Joe.

Operator

Thank you. And our next question comes from Dave Koning with Baird. Your line is now open.

David Koning -- Baird -- Analyst

Yes. Hi, thanks guys. So, just a couple of quick ones on guidance. I think you said Q3, we should take -- I think consensus was $0.90, we should take that down by $0.13 to $0.77, is it roughly what you're saying on that, right?

Kevin D. Williams -- Chief Financial Officer and Treasurer

Yes.

David Koning -- Baird -- Analyst

And did you say, EBIT. Go ahead, sorry.

Kevin D. Williams -- Chief Financial Officer and Treasurer

Yes. But, I mean, so Dave, obviously deconversion fees were down $6 million roughly in the first half of the year. We were able to basically over rule that with some of the pull forward of the software subscriptions, different things, so it didn't have much of an impact as of 606. Because of the 606 and, but when you have a $13 million headwind in this quarter and probably another $1 million decrease in deconversion fees in Q4, I don't see any alternative, other than to take guidance down.

David Koning -- Baird -- Analyst

Yes. That doesn't makes sense. And did you say, EBIT for the year, I think the base of last year's $3.57-ish, did you say that would be about flat in '19, so it be another something right around that same number?

Kevin D. Williams -- Chief Financial Officer and Treasurer

For GAAP, yes.

David Koning -- Baird -- Analyst

Yes. Okay. Okay and then one thing that was really encouraging some margins in the first half, if you strip out term fees, I guess, your non-GAAP margins were actually up year-over-year, despite all the implementation fees, despite the severance payments and all that stuff. So have some of those investments just been a little slower to start or is it just the core margins are -- have been just so good?

Kevin D. Williams -- Chief Financial Officer and Treasurer

Well, I mean, we actually had a decent first half and in some areas like license fees and software subscriptions were up nicely, which obviously that's very nice margins. Payments business was up nicely in the first half. But again, we continue to add additional cost. We continue to add double the fees for the payments platform migration. So we're going to see increased margin headwinds in the second half above what we saw in the first half, but yes, I mean our associates and our managers have done an extremely good job in the first half to overcome and offset some of the increased costs we had in this half (ph), including depreciation amortization from some of the new products and facilities upgrades that we did in the first half of the year.

David Koning -- Baird -- Analyst

Okay, good. Yes and I guess lastly and then maybe a little corollary to this, your revenue growth organic ex-term fees and everything was about 8% the first half. It's one of the strongest periods in the last five years or so? Is that -- I mean, you mentioned some of the drivers. But I mean, is a lot of this just the pipeline, the work is good, the new products are good, and I mean, do you think we're just in a period that might be a little better than normal over the next couple of years?

David B. Foss -- President and Chief Executive Officer

Well, as a combination of all that, Dave, but then also remember 606 hold some revenue forward in the first half, which again is causing some headwinds in second half. So revenue growth is not going to be 8% in the second half of the year. I mean, obviously revenue growth is going to be down especially on a GAAP basis in the next two quarters to get us down to where, I said that 5.5% to 6% growth. So obviously you can tell the Q3 and Q4 is going to be down slightly because we pull that back.

But again as I said on last quarter, it's going to take us a year to get through this, all the bumps and hurdles of 606 and trying to get into a normalized pattern. So I think what you're seeing Dave is, we're probably getting more into a normalized pattern where we're going to have a little more revenue growth in the first half. It's going to be a little more headwinds in the second half. I think we're going to see that again next year and then the following year is kind of unknown because that's when we finish the migration of the payments platforms. We're going to be taking a lot of cost out. We'll will have anniversaried, the new pay for performance bonus. So there's going to be a lot of changes, even in FY '20, but even more than that and FY '21.

David Koning -- Baird -- Analyst

Got you. Okay, that's helpful. I really appreciate it.

David B. Foss -- President and Chief Executive Officer

You bet. Thanks, Dave.

Operator

Thank you. And our last question comes from Brett Huff with Stephens Incorporated. Your line is now open.

Brett Huff -- Stephens Inc -- Analyst

Good morning guys. How are you?

David B. Foss -- President and Chief Executive Officer

Hi Brett.

Brett Huff -- Stephens Inc -- Analyst

One specific question, then a couple other product updates. When we did the math on incremental margins for the payments segment this quarter -- this past quarter, it was above 60%. I think it was maybe 30% or 35% in 1Q. And Kevin, I think you called out there were some M&A that helped but Dave, then you said -- mentioned that the transaction counts were pretty good. Is there something about the new M&A that made that margin go up or is it maybe some 606 stuff or is that anomalous or something we should think about?

Kevin D. Williams -- Chief Financial Officer and Treasurer

It's not really M&A related that would cause margins to go up, and really not 606 Brett, because actually 606 goes the other way. 606 actually takes revenue out and carves it back into license and implementation. So it's -- I mean. it was just a really good quarter. It was a nice mix of the three buckets of revenues as Dave pointed out. So I mean I don't know that it's actually sustainable. But it was just a really good quarter within the base and the mix of payment sales that we had in the quarter.

Brett Huff -- Stephens Inc -- Analyst

Okay. That's helpful. And then two product questions. We've talked a little bit about treasury management and commercial cash management. I know you guys have been selling those for a while. It sounds like they're selling well and that it's helping retain some of those larger customers that were looking around. Can you tell us about the competitive environment there? I know it's a very fragmented market. There's some legacy players and there is a couple of new players. And I think we're taking share? Are you all focused on your base first or is this something that ProfitStars can go out and sell or give us an update on the competitive environment there?

David B. Foss -- President and Chief Executive Officer

Yes, it's a good question. So we are -- and you're reading that environment very well. We booked 10 new treasury management deals in the quarter. And you're absolutely right, it's larger customers who are looking for a solution to serve their commercial customers better. There's a lot of interest in that area, I highlighted commercial interest of our clients to serve their commercial base earlier when I was talking about lending, but it's certainly true on the treasury side as well.

The environment out there as far as company's offering a full treasury solution is fragmented, as far as I know. And I'm not an absolute expert in treasury, but I'm pretty involved as far as I know and nobody has the breadth of functionality that we have with this new solution, including the fully enabled mobile platform that we have with the mobile functionality that we have with the treasury solution, that's getting a lot of attention, because it's a very robust platform to begin with, but then it has all the functionality on the mobile side. So, there are players out there. I don't know that I can highlight anybody that has a solution that's as modern as the platform that we have and that has the breadth of functionality when you add in the mobile piece. So, I think that's helping us win new customers.

To your question about the strategy as far as the base that we're approaching, that's exactly the way we defined that originally we wanted to go after the Jack Henry base first. Make sure that we had some success within our core base, but eventually this will be a ProfitStars solution that will sell outside the Jack Henry core base just like many of the other solutions that we offer.

Brett Huff -- Stephens Inc -- Analyst

And then, of those 10 are those competitive takeaways are those banks that are looking to grow and want to establish a commercial banking practice. And then I've a -- the last question is want an update on the fraud system. It seems like that's kind of a sweeper and an important one, but I'll stop there. Thank you.

David B. Foss -- President and Chief Executive Officer

Yes. That's, I can't quote for you accurately how many of those were competitive takeaways and how many never had a treasury solution. I would be hesitant to guess, but most of them had something. They probably had a cash management solution, which is a more rudimentary version of full treasury management. But there are probably a few that didn't have anything significant before, but most of them are either converting off of somebody else's treasury solution or they're probably upgrading from a cash management solution to full on treasury management.

And as far as the fraud solution the partnership with SaaS that has been a a sleeper as you said. We have a lot of interest from our customers. But as we had disclosed last year when we first started talking about it, there were several modules for us to book rollout. There was kind of a nine phase rollout of that product that continues on. We don't have a whole lot of customers live with that yet because there's still a lot of development work going on in the partnership. But a year from now, my expectation is, we'll have a lot more talk about the best solution.

Brett Huff -- Stephens Inc -- Analyst

Great. Thank you.

David B. Foss -- President and Chief Executive Officer

You bet.

Operator

Thank you. And that does conclude today's question-and-answer session. I would now like to turn the call back to Kevin Williams for any further remarks.

Kevin D. Williams -- Chief Financial Officer and Treasurer

Thank you. Again, I would like to repeat, we are pleased with the results from our ongoing operations and the efforts of all of our associates to take care of our customers. Our executives, managers and all of our associates continue to focus on what is best for our customers and our shareholders.

With that I want to thank you for joining us. And, Chris, would you please now provide the replay number for the listeners.

Operator

Ladies and gentlemen this conference will be available for replay after 1:45 PM Eastern Standard Time today through February 13, 11:59 PM Eastern Standard Time. You may access the remote replay system at anytime by dialing 800-585-8367 and entering the access code 2945179. International participants dial 404-537-3406. Those numbers again are 800-585-8367 and 404-537-3406. Again, the access code is 2945179. That does conclude our conference for today. Thank you for participating in today's conference. You may all disconnect. Everyone, have a great day.

Duration: 63 minutes

Call participants:

Kevin D. Williams -- Chief Financial Officer and Treasurer

David B. Foss -- President and Chief Executive Officer

David Togut -- Evercore ISI -- Analyst

Kartik Mehta -- Northcoast Research -- Analyst

Peter Heckmann -- D.A. Davidson & Company -- Analyst

Glenn Greene -- Oppenheimer -- Analyst

Timothy Willi -- Wells Fargo -- Analyst

Joseph Foresi -- Cantor Fitzgerald -- Analyst

David Koning -- Baird -- Analyst

Brett Huff -- Stephens Inc -- Analyst

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