Management highlights that revenue growth is primarily driven by data processing and hosting revenues as new and existing customers migrate to their private cloud, and processing volumes expand. Jack Henry digital revenue is also a key growth driver.

The Payments segment saw revenue increase 6.5% YoY for the quarter and 6.7% YoY for the six months, with the Payrailz acquisition contributing to this growth. The acquisition is expected to provide growth potential, synergies, and economies of scale.

The company spent $35.5 million on research and development for the quarter and $72.4 million for the six months. These expenses are related to the Payrailz acquisition and Jack Henry Platform.

Management states that customers continue to face regulatory and operational challenges, and they believe the company's products and services address these needs. They emphasize a commitment to superior customer service.

The Company conducted a voluntary separation program for certain eligible employees that includes a voluntary employee departure incentive payment (VEDIP) for the eligible employees who chose to participate in the program. The Company made payments associated with the VEDIP program in the approximate amount of $16,443 from July 2023 through December 2023

The effective tax rate increased for the three and six months ended December 31, 2023, compared to the three and six months ended December 31, 2022 with an effective tax rate of 23.5% and 23.6%, respectively, of income before taxes, compared to 23.2% and 23.4%, respectively, of income before taxes for the same periods last fiscal year. The increases in the effective tax rates were primarily due to the differences in impacts of share-based compensation that vested during each of the comparative periods.

The company actively monitors credit risks through controlled procedures involving senior management. They believe the credit risk associated with the extension of credit to our customers will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

The company had $255,000 outstanding debt with variable interest rates as of December 31, 2023, and a 1% increase in our borrowing rate would increase our annual interest expense by $2,550.

Core segment revenue increased 7.9% and cost of revenue increased 4.1% for the three months ended December 31, 2023, compared to the three months ended December 31, 2022. This increase was primarily driven by growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand.

At December 31, 2023, there were 31,323 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,667 additional shares. The total cost of treasury shares at December 31, 2023, was $1,852,118, and the Company repurchased 129 shares during the first six months of fiscal 2024.

Cash used in investing activities for the first six months of fiscal 2024 totaled $110,959 and included: $83,408 for the ongoing enhancement and development of existing and new product and service offerings; capital expenditures on facilities and equipment of $24,458.