Hey, good morning. If everybody can grab a seat, we'll go ahead and get things started. Welcome to Jack Henry. Great to see everybody here this morning. We'll get this meeting started with our call to order. So good morning, stockholders, employees, and friends. I am Jack Prim, Chairman of the Board of Jack Henry & Associates, and it's my pleasure to welcome all of you. In accordance with the notice of the meeting, I call to order the 42nd Annual Meeting of Stockholders of Jack Henry & Associates, Inc. In the materials given to you as you entered the meeting, you will find a copy of the agenda by which we will conduct this meeting. In the official part, we need to elect all nine of our directors to serve for the next year, and there are two other items of official business.
Then we'll have our annual presentations and a time at the end for questions and answers. Before proceeding to the business meeting, I'd like to make certain introductions. Our present board of directors who are candidates for reelection are Matthew C. Flanagan, Thomas H. Wilson, Thomas A. Wimsett, Jacque R. Fiegel, Laura G. Kelly, Shruti S. Miyashiro, Wesley A. Brown, David B. Foss, and myself, John F. Jack Prim. I'd also like to introduce some of our officers and other key personnel.
We should meet David Foss, our President and CEO; Kevin Williams, our Chief Financial Officer and Treasurer; Mark Forbis, our Executive Vice President and Chief Technology Officer; Renee Swearingen, Controller and Assistant Treasurer; Craig Morgan, General Counsel and Secretary; Stacy Zengel, Vice President and President of Jack Henry Banking; Ron Moses, Vice President and General Manager of Consumer and Commercial Solutions; Russ Bernthal, Vice President and President of ProfitStars; Greg Adelson, Vice President and General Manager of JHA Payment Solutions; Ted Bilke, Vice President and President of Symitar; and Steve Thompson, Vice President of Sales and Marketing. Also present today are representatives of our independent registered accounting firm, PricewaterhouseCoopers LLP, Dan Zorn, lead partner; Stephen Maggio, partner; and Jonathan Caleff, senior manager. They will be available to answer any proper questions you may have.
Thomas Cooper, representative of Computershare, our transfer agent, is present to assist in tabulation of proxies and ballots and will act as inspector of elections. I might also add the minutes of last year's annual meeting are available, and any stockholder wishing to inspect the minutes should contact our Assistant Corporate Secretary, Mary Stluka. Thomas Cooper, inspector of elections, will now report on the mailing of the notice for this meeting and the presence of a quorum.
This meeting is held pursuant to printed notice mailed with a proxy statement on or about October 4, 2019, to each stockholder of record at the close of business on September 20, 2019, who is entitled to vote. A list of stockholders entitled to vote at this meeting has been available at the company headquarters for the past 10 days and is available here today. All documents concerning the call and notice of the meeting will be filed with the records of the meeting. The count of the shares present immediately prior to the commencement of the meeting indicated that a quorum with respect to each voting issue is present in person or by proxy.
Thank you, Thomas. I hereby declare a quorum present at the meeting. On behalf of the board of directors, I would like to express my appreciation to all stockholders who returned their proxies. The formal business of the meeting will now proceed. Those stockholders who have returned their proxy and do not wish to change their vote need not vote as your proxy has been counted. Stockholders who did not return a proxy or who wish to change your vote, please go to the registration desk now and mark your ballots as we will declare the polls to be closed and voting will conclude upon completion of the following review of items to be voted upon. First item of business is the election of nine directors to serve until the 2020 annual meeting of stockholders or until their successors are duly elected and qualified.
As indicated in the company's proxy statement and notice of this meeting, the board of directors has nominated the following nine persons, and I ask those present to stand as I read their names: Matthew C. Flanagan, Thomas H. Wilson, Thomas A. Wimsett, Jacque R. Fiegel, Laura G. Kelly, Shruti S. Miyashiro, Wesley A. Brown, David B. Foss, and myself, John F. Jack Prim. Mr. Morgan, were there any other stockholder nominations or proposals for other business for this meeting timely filed with the secretary prior to this meeting?
No, Mr. Chairman.
Thank you. The next item of business will be to approve on an advisory basis the compensation of our named executive officers. This vote is commonly referred to as the say-on-pay vote. Specifically, the board of directors has recommended that you vote on an advisory basis to approve the following resolution: resolved that the compensation paid to the named executives as disclosed in the company's proxy statement for the 2019 annual meeting of stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables, and related narrative disclosure is hereby approved.
For your information, the named executive officers for fiscal year 2019 were David Foss, President and Chief Executive Officer, Kevin Williams, Chief Financial Officer and Treasurer, Mark Forbis, Executive Vice President and Chief Technology Officer, Greg Adelson, Vice President and General Manager of JHA Payment Solutions, and Ted Bilke, Vice President and President of Symitar. The next item of business will be to vote on ratification of the selection of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year beginning June 30, 2020. Stockholders voting in person, please mark your ballots and take them to the registration desk now. I recognize Mark Forbis.
Mr. Chairman, I move for election of the nine nominated directors and approval of the resolution you just presented for the non-binding advisory vote on the compensation of our named executive officers and to ratify the selection of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending June 30, 2020.
You have heard the motion. Is there a second?
Mr. Chairman, I'd like to second that motion.
Thank you. I hereby declare the polls to be closed. The inspector of election will now report the tabulation results of all balloting for the election of directors and the other matters presented to the stockholders.
The voting results have been tabulated, and each of the nine nominees for director has been elected by a majority of the votes cast. The compensation of the named executive officers has been approved by a majority of the votes cast, and the ratification of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm has been approved by a majority of the votes cast.
Thank you. This concludes the official business of the meeting. May I hear a motion for adjournment?
Mr. Chairman, I move to adjourn the meeting.
Is there a second?
Mr. Chairman, I second the motion.
Thank you. All in favor say aye.
Aye.
Aye. Upon motion made, seconded, and approved, the formal portion of this 42nd Annual Meeting of Stockholders is adjourned, and now it's time for the informal part of our annual meeting with the presentations by your CEO, Dave, and the CFO, Kevin.
Thank you, Mr. Chairman. Welcome, everybody. I'm glad to have so many of you here with us again this year. I'm Dave Foss, President and CEO at Jack Henry. My mission here this afternoon or this morning will be just to give you a little bit of an overview of what's happening at Jack Henry, update you on some key things that we've been through in the past fiscal year, and of course, the fiscal year ended June 30, so this will be primarily focused on the things that we did during fiscal 2019. To kick us off here, I'll give you a quick reminder of our strategy at Jack Henry. So this strategy has not changed noticeably in quite some time. We continue to be focused on the types of things that we've been focused on in the past.
We are a core system provider to banks and credit unions in the United States. And as a reminder, when we talk about our company as a core system provider, for a bank or credit union, kind of that primary accounting system that processes loans, deposits, and general ledger, that is what we're talking about when we refer to a core system. And that's been true for Jack Henry since the founding of our company. We've been a core processing provider to banks and credit unions. But we do all kinds of other things beyond that system that processes loans, deposits, and general ledger, and that's the second bullet here. So we offer additional technology, essentially any technology you need to run a bank or credit union in the United States, Jack Henry can provide. That's our goal.
So we do mobile banking and online banking and check processing and pretty much anything you need to run a bank or credit union. We focus now today on the digital channels and payments. So emerging in the past few years in the United States, a real focus on mobile banking, right? You want to be able to do any banking that you could do by walking into a branch. Today, people want to be able to do that through their mobile device, a mobile phone or a tablet or whatever. And so that has become kind of a new emphasis for us in the past few years. That's why that third bullet is there. And then, of course, payments. There's lots of changes happening in the world of payments, and so we have an intense focus there as well.
We offer standalone solutions to institutions who don't have a Jack Henry core system, so we have some systems we sell to banks and credit unions that don't use a Jack Henry core. We work with partners, in some cases outside the financial services industry. We emphasize integration and superior customer service, and I'll come to that customer service point in just a minute here because that is probably the thing Jack Henry is known for more than almost anything else in our industry is outstanding customer service. We focus on our people and our culture. I'll share more on that topic in a minute as well, and then we do acquire other companies periodically.
We've done one acquisition already in this fiscal year, and I'll talk about that in just a minute, but they are always focused on our strategy. We don't look for acquisitions that will simply add revenue to the company. We're looking for those acquisitions that fit our strategy and we hope will bring solutions that will be of value to our bank and credit union customers. As far as kind of a high-level overview of the company, we continue to operate with a fortress balance sheet, virtually no debt, net cash positive, strong organic revenue growth. We have historically been the strongest in our space as far as top-line revenue growth.
Profit margins among the highest in the industry, high percentage of recurring revenue. And so when we say that, what that means is the revenue that comes in the door every day, every month, every week, every quarter, but well over 80% now of the revenue that comes in is recurring in nature. We know that it's going to come in the door tomorrow and the next day, so we've built a very strong model at Jack Henry now that's very predictable as far as revenue coming in the door, and then a business profile that's resistant to current and potential economic issues, and of course, we all saw what happened in 2008, 2009.
Jack Henry really weathered that storm well. We hope probably the worst economic disaster that we've seen in this country and that we will see for some time, and Jack Henry made it through that very, very well, and in part is because of the business model that we've built. Looking at FY 2019, just a quick glance at the year, record revenue and earnings in fiscal year 2019. We continued, as I said before, to operate with a fortress balance sheet. We did complete the integration of the Ensenta acquisition. So we acquired this company called Ensenta now about a year and a half ago, or almost coming close to two years, but we integrated that company fully during fiscal 2019.
This company, by the way, is a Silicon Valley, California, technology company that we acquired. So we do have an office now in Silicon Valley as a result of that acquisition. We announced two acquisitions during the fiscal year 2019, one called Bolts, the other called Agiliti, and then we rolled out several strategic new solutions during the year. So our Commercial Lending Center Suite to enable our customers to do online commercial lending, our new card payments platform. We delivered a CISO solution, Current Expected Credit Loss, which is a regulatory change that's impacting virtually every bank and credit union. And then we expanded our call center offerings.
You may or may not know, we have a call center in Springfield and here in Monett where we will take calls for our customers, bank and credit union customers, as though we work in the bank or credit union. Their consumers are calling into their bank or credit union with a question about something. The call is actually answered here, and we answer as though we work for the credit union or the bank, and we help those consumers with whatever question they have for their bank or credit union. We're continuing to grow that business as well. Additionally, we recorded record attendance at our client conferences. We host two major client conferences each year in the fall, one for our credit union customers, one for our banking customers.
Both had record attendance in the fall, very high customer satisfaction ratings that I'll show you a little more detail in a minute. We introduced some new HR programs this past year, so funded partially or mostly by the Tax Cuts and Jobs Act that was enacted at the end of calendar 2017. That helps us fund a new total rewards program for our employees. So we enhanced our bonus plan. So now virtually every employee at Jack Henry has an opportunity to earn a bonus. We've never had that before at Jack Henry, and today almost every employee has the opportunity to earn a bonus if the company performs well. And then we enhanced our 401(k) program as well. We also launched a formal diversity and inclusion initiative at Jack Henry.
So you may have heard that as a movement around the United States. A lot of companies focused on diversity and inclusion, making sure that you're involving people from all kinds of backgrounds, all kinds of cultures, because that makes the company better, we think, and we think it brings new ideas, new initiatives to the company. And so we launched that last year. We were named again to the Forbes Best Employer list, so this is three years in a row that Forbes has recognized Jack Henry as a best large employer in the country.
And then we were named to the S&P 500. So those of you who were here last year may recall that we had just been named to the S&P about a week before this meeting last year, but it was actually in fiscal 2019, which is why it's on this list, but it happened right before we walked in the door here last year. So we've been on the S&P now for about a year as a named company. There are some challenges, so it's not all good news for Jack Henry. Cost of security, compliance, governance is going up. So you think about all the things you hear in the news about hackers and bad guys trying to do bad things with financial institutions.
Well, we're right there in the thick of it, making sure that we can protect our customers and our company, for that matter, but protect our customers against those bad guys. So that certainly is something that we spend a lot of money on. And then governance and compliance. The regulatory environment for financial institutions is heavy, and we support our customers in many ways in that respect. So we spend a lot in those areas. Ongoing capital investment for R&D and for our infrastructures. So the facility you're sitting in right here, for example, you probably have noticed it has been remodeled here in the past year.
So upkeep of facilities that we have all over the United States and investment in data centers that we own, continuing to invest. We want to make sure that our employees enjoy a nice work environment, and so that takes ongoing maintenance. Continued pace of mergers and acquisitions. So a lot of our customers end up being acquired by other banks or credit unions, and a lot of our banks and credit unions are acquiring other banks and credit unions. So there's consolidation happening in our market, and so that creates challenges for us. It also creates opportunities oftentimes, but it does create challenges. Retaining talent and finding new talent. So we're essentially in a full employment environment in the United States today, right?
Employment is hovering a little below 3.7%. And I saw a chart recently, by the way, that compared the number of people looking for a job to the number of jobs that were open in the United States. The number of jobs that are open is greater by a large margin than the number of people looking for a job. So think about that for a second. If you could line everybody up who's looking for a job, and if they had the right talents, there would be more jobs available than there are people looking for a job today in the United States.
So as an employer, a large employer with people scattered all over the country, that's a challenge for us, making sure that we can attract and retain the best talent, the talent that we need to be successful going forward. And all that recognition we get about being a best place to work definitely helps us in that regard. And then we are in an intense competitive environment. We have some large mergers that have happened in our space, other companies like Jack Henry that have acquired each other and have become much larger organizations. And so that can create challenges for us to make sure that we can remain independent and make sure we can compete against those companies. There we go. We have done one acquisition here since we started the new fiscal year.
So we're currently in fiscal 2020, but we did do one acquisition. We closed July 1, so I thought it was appropriate to mention that here. This is a company called Geezeo, or they were called Geezeo. Now they're called Jack Henry & Associates, but they were called Geezeo, based in Boston. They provide personal financial management and analytics technology. So what does that mean? It means if you're using your phone to do banking with your bank and you want to do budgeting through that mobile application, you want to learn more about where you're spending money and how you're spending money, this technology enables you to do that through your phone directly with your bank, analyzing your transactional activity. So really robust technology.
The company has been around for a while, founded in 2006. About 500 financial institutions today use the technology, but of course, we're integrating that into our digital suite at Jack Henry, so you'll see that number continue to grow. And this is increasingly becoming a key function for banks and credit unions in their digital offering as they work with their consumers. So we thought it was an important acquisition for us.
So one thing I've talked about many times in the past is as we run the company, and this has been true since Jack and Jerry were here running the company, we try to operate with these three key pillars in mind. So first, our employees. We try to put our employees first, create an outstanding work environment for our employees. The idea is if our employees are happy, they're going to deliver great technology and great service to our customers. So our customers are the second pillar. If our customers are happy, they're going to buy more stuff from us, and they're going to remain our customers, and that'll take care of the shareholders. So, hate to break it to you all, but you're third on the list of three. But we really do try to put employees first.
So let me touch on each of these just a little bit with a little bit of detail. So first off, one of the ways that we track how we're doing with our employees to make sure that we really are creating a best place to work is through our employee engagement surveys. And so we ask a series of questions every year of our employees about how do you feel about working at Jack Henry. And in one of the surveys that we do, we get a good benchmark, which is a comparison to how other employees feel about whatever company they work for. We can compare our results to those results to see are we doing better than these other employers out there in the opinion of their employees.
And so what I have on the screen with you here is just a couple of the questions from the survey. The top one is, "I'm confident about the future performance of my organization. Do you believe the company's on the right track? We're doing the right things for you as an employee of Jack Henry to be successful?" And you can see that 75% of our employees strongly agreed with that statement. And the benchmark there, which is all these other people who work at other companies, they were 56% strongly agreed with whatever company they work for. And on the second question there, "I believe in my organization's values," 86% of our associates strongly agreed with that statement. And you can see the benchmark is 70%. So we scored really well.
I could list any of the questions up here, and you'd see that type of comparison where we tend to score really high compared to other companies out there and how their employees feel about whatever those companies are doing. It's a good gauge for us to track how are we doing with our employees. We do regularly win Best Place to Work awards, so hopefully you've seen these pop up periodically. Many of these are geographic in nature, so it's the San Diego office or the Dallas office or the Nashville office where they're surveying in those communities. There are a couple here that are pretty interesting, I think. One is the one down in the bottom right-hand side, there: Computer World. Computer World isn't focused on what do you do or where do you live.
It's focused on what do you do. It's a Best Place to Work in technology. It's not even financial technology, just technology. Jack Henry regularly places on the Computer World Best Place to Work list. Then up in the top left-hand corner, you'll see American Banker. For the first time, we placed in American Banker in 2019 as a best Fintech. That's an important word. When people use the word Fintech, financial technology, it's a combination of financial technology to Fintech. Usually what they're talking about is these upstart companies, usually Silicon Valley, small companies. Those are the ones that are usually called Fintechs, and they're very innovative, very creative, very forward-thinking companies are normally branded as Fintechs. American Banker listed the top 50 Fintechs to work for in the U.S. Top 50 Fintechs.
47 of those top 50 Fintechs generate less than $500 million in revenue or less than $50 million in revenue. 47 of them, less than $50 million in revenue. There was one company larger than Jack Henry. It's called Ally Financial. They're kind of a bank, kind of a technology company. They're a hybrid, and then there's Jack Henry in there, 42-year-old technology company with 6,600 employees almost and $1.5 billion in revenue, and there we are on the cool kids list.
How did that happen? It's because we've been rolling out all this really innovative technology lately, and American Banker and their customers have really taken notice that Jack Henry is doing a lot of innovative things when it comes to technology, and so we ended up on the Fintech Best Place to Work list, so we're very proud of that recognition this year.
But the one that gets lots of attention is Forbes. So this is the Forbes magazine that you all have seen before. So this is our third year in a row that we've been recognized by Forbes as a Best Large Employer in the United States. And of course, that is invaluable when it comes to recruiting people to come to work for you when you can say, "Hey, look at all these Best Place to Work awards that we've got, and Forbes has listed us three years in a row." That really helps get people's attention when we're trying to attract top talent to come to work for our company. So that was a little bit about our associates. The second pillar was our customers. We survey our customers to see how we're doing with them.
This is a 90-day rolling average score that you see in the bubble here, 4.71. That's as of September 30th. That's a real number as of September 30th. On a five-point scale, and the scale is listed down here on the right-hand side, we average company-wide a 4.71. So think about that for a minute. If you're going to average a 4.71, what that means is almost every survey we're getting back, we're rated a 5, which has far exceeded the customer's expectations. It's rare for our teams to get rated a three, as low as a three. And yet if you look at that, the three says you met the customer's expectations. You did a good job if you get a , and yet we rarely get rated that low at Jack Henry.
And that's why we often say this is probably the thing Jack Henry is known for more than almost anything else, is that level of customer service. Customers love working with our teams at Jack Henry. And so we talked about our employees. We talked about our customers, a little bit about our shareholders, about you. So hopefully you all know these numbers and have seen these numbers before. But here's revenue on the left-hand side, earnings per share on the right-hand side. The anomaly there in the middle is the result of Tax Cuts and Jobs Act. So we did get a great big tax savings. It showed up in the 2018 numbers here.
But if you take out the impact of the tax savings, then you see the TCJA adjusted number, $3.29. That's just giving kind of a normalized progression without that anomaly of the tax savings. So, nice consistent growth for you as a shareholder at Jack Henry. One thing we do emphasize a lot, and our customers really, really like this slide right here. We put a lot of the money that we make at Jack Henry back into R&D, back into technology development, investing in new solutions for our customers. And so when I mentioned earlier we made the cool kids list because of all the technology things we've been rolling out lately, that is reflected in these numbers here.
We believe we're investing about twice as much as our major competitors, putting back into new product development, making sure that we're cutting edge, making sure that we're remaining relevant to our customers. So that's an important slide for us and for our customers. Few key initiatives that we've been working on lately. Digital. So I mentioned that earlier. Banks and credit unions today, they are all focused on going digital, making sure you can do everything through your phone or through your tablet that you can do if you walk into a branch.
Our card processing platform, we have a major initiative that we've been working on to roll out a new debit card processing platform and new credit card offering for our banks and credit unions. Our payments hub, which is a real-time payments initiative that's going on in the U.S. today. Up on the top right-hand side, open banking strategy, facilitating our customers' desire to be able to connect to other technologies. Treasury management has been a big initiative for a lot of our customers to service larger commercial customers. And then the last item there is Commercial Lending Center Suite. So that's an online commercial lending offering.
So if you're running a small business, for example, and you want to apply for a commercial loan, rather than going to the branch and filling out a bunch of paperwork, you just go online through your PC, fill everything out online, submit scanned documents online. There's a quick decision process that can say, "Hey, you're approved for a loan." You don't even have to go into the branch. So really nice innovative technology. So as you look at our company today, we have more than 6,500 associates at Jack Henry, more than 9,000 clients, 42 offices now around the country. We continue to offer five core processing systems.
And if you look at the number right below that, we're now 58% of our customers using our outsourced delivery model in the Jack Henry private cloud. We do a lot of acquisitions. We have more than 300 products and services. Our payments business down in the bottom left-hand corner there continues to grow. We're now processing about 710 million transactions per month for our clients. We ended the year at $1.55 billion in revenue. And if you look way down in the bottom right-hand corner, you see we're now over $11 billion market cap for Jack Henry & Associates. So we continue to grow from a market cap point of view as well. Continue to go to market with three successful brands. So Jack Henry Banking, Symitar, and ProfitStars.
This hasn't changed at all since the last time we were together. Jack Henry Banking focused on selling core systems to banks. Symitar focused on selling core systems to credit unions. And then the ProfitStars brand we use for selling to non-Jack Henry core customers and sometimes to outside the financial services industry altogether.
We do. I emphasized this last year. We do a lot to give back to the communities that we're in, not just in raising money for the communities, but also in time that we give back to different entities. So this past year, we raised well over $180,000. This is our employees doing community service projects. We raised well over $180,000 to give back to charities. This isn't just Jack Henry writing a check. This is our employees being engaged and helping to raise money for different charities that we support. And then we give lots, thousands and thousands of hours of employee time back to all kinds of different organizations in the financial services area. So for example, we have employees who speak at conferences. We have employees who are volunteers on different boards within our industry.
This isn't being on the YMCA board, for example, although we have a lot of employees who do that kind of stuff. This is groups that support the industry. So you'll see a few of them up here. The Association for Financial Technology, for example, that is focused on our industry. And we have employees who volunteer by speaking, but also volunteer in serving in board capacity. So thousands of hours that our employees give back to that community every year to support the industry.
If you look at our company tomorrow and beyond, we will continue to focus on the financial services area, maintain our high levels of customer service and satisfaction, deliver highly integrated business solutions to our customers, leverage advancing technologies like I emphasized earlier, and then pursue disciplined acquisition. And that word disciplined is key to us. Jack Henry does not, and we will not go do crazy acquisitions that put your money at risk. Our goal is to do disciplined acquisitions. We will do disciplined acquisitions. We do take risks, but we're not into the business of doing crazy things, right? We like to do acquisitions that we think you will look at and say, "Well, that makes sense. That's a good thing for Jack Henry to have done."
So you'll continue to see us act in that manner as we look at potential acquisitions going forward, and then we always try to run the company following this philosophy, and I imagine you all, many of you have come to these meetings for many years. You've heard this since Jack and Jerry were doing these presentations. We try to do the right thing, do whatever it takes, and have fun at this company. Those really are the guiding principles for Jack Henry. Every day, these are the kind of the key things that we try to keep in mind as we take care of our customers, as we make decisions to take care of our employees.
As long as you're trying to do the right thing and doing whatever it takes, then you're doing the right things as far as I'm concerned. Before I close, I do want to make one mention. So when Jack introduced the officers, he introduced Mark Forbis as our Chief Technology Officer and Executive Vice President. You probably have seen the press release that Mark, for some unknown reason, has decided to retire. So this is Mark's last meeting. Tomorrow is actually his retirement date, but Mark is with us today. So I do want to thank Mark. 31 years at Jack Henry.
Mark Forbis has been with us, a key member of our leadership team, so thank you to Mark and congratulations, and then we announced two promotions recently, so Ted Bilke is going to become, he's going to fill Mark's shoes. Ted Bilke is going to become our Chief Technology Officer, so he will not be the president of Symitar going forward. Ted's going to go back to his technical roots and become the Chief Technology Officer. Shannon McLaughlin, who is not here with us today, but Shannon will become the new president of Symitar, Shannon's been with Jack Henry for many years now, so congratulations to Ted, and then our new Chief Operating Officer is Greg Adelson, so Greg has been running our payments business.
Greg becomes Chief Operating Officer, so what that means is he will take the operations of the company, will report to him. Symitar, Jack Henry Banking, our payments business, consumer and commercial solutions, ProfitStars, and then our CIO, Rob Zelenka, will all report to Greg. So essentially, he took all the really hard stuff off my shoulders. And so congratulations to Greg Adelson. As he moves into the COO role, all of these changes are effective tomorrow, November 15th, and we'll be transitioning here in the near future. So congratulations and thank you to all of you. So in closing, I do want to thank you all for being here. I want to thank you for your confidence that you've placed in us, your investment in Jack Henry.
We feel strongly that this company is performing well. We're on the right track. We're very optimistic about the future. And again, thank you all for being here. So now I'm going to turn it over to the tallest CFO in the industry, our longtime CFO, Kevin Williams.
Thanks, Dave. So I'm going to kind of flip through the numbers a little bit, kind of give you an update on the financials for last year and actually first quarter that we just announced a couple of weeks ago. Obviously, forward-looking statement, I may make some of those, and if I do, shame on me. But it's good information that we try to share at these meetings. Dave had a similar slide to this up there. And I just want to point out that these are not the numbers that you saw last year. We had this thing called ASC 606, which is a change in revenue recognition.
So 2017 and 2018 numbers have been restated to reflect that. So if you pull out last year's 10-K and this year's 10-K, the prior year numbers are a little bit different because of that. So it did change our revenue and EPS. It did not have any impact on our cash flows. So our cash flows stayed the same, which cash flows is really what most of our institutional investors really look at. And as of yesterday, institutional shareholders own just under 95% of our stock, which is a big change from where we were 20 years ago. And our top 25 shareholders own about 65% of our stock. So we try to keep in good touch with those people.
In fact, I'm headed up to Chicago next week to visit with a few of those. And Dave and I are going over to Europe here in a couple of weeks to visit with. We've actually got quite a few international shareholders now. About 14% of our stock is now held internationally.
So if you look at our P&L and our 10-K, these are the two lines of revenue that we have in our statement of income. Service and support, which is primarily delivery of products and all of our core solutions. Deconversion fees are in there, which is early-term fees if one of our customers gets acquired. Dave mentioned all the consolidation that goes on, and then processing is primarily all of our payments and just transaction processing. And both those are growing nicely. Support and service grew 4% this year. Processing grew 8%, which that's where, again, a lot of the transaction processing going.
And a six% growth overall for the year, which is not at the seven or eight% that we normally like to, but our deconversion fees, which again are those early termination fees when one of our customers gets acquired, they have to buy out of the contract. They were down significantly this last year, which for the financial perspective is a bad thing, but for Jack Henry for the long term is a good thing because it means we kept those customers and we're going to keep that revenue going forward, which I'd much rather have that than a one-time check from them because they got acquired by somebody.
And then if you break that down into our three segments, these are our three reporting segments, which according to the Securities and Exchange Commission, we have to report different segments to kind of break it down so you, our investors, can actually tell a little more about what's driving the business. Core is primarily Jack Henry Banking and Symitar. So that's all the core products that we have out there and the core customers, both in-house and in our private cloud. Payments is actually three different payments buckets. We have our card processing business, which is the biggest part of it. But then we also have online bill pay, which is the next largest piece. And then EPS, which is basically check conversions and converting checks into electronic payments. So those three things make up payments.
And then complementary is all the other things we have, like treasury management and all those things and all the ProfitStars solutions that we sell to non-core customers is what makes up that segment of our reporting. And then corporate is kind of a catch-all. That's where everything that doesn't fit in those and basically very little revenue generation is in that. So that's where all of our travel and a lot of our overhead is in that segment. Operating cash flow, I mentioned that. It's very important. That's one of the key things that our institutional investors look at is they want to see what our cash flow is. We had a little dip there a couple of years ago. And again, these numbers didn't get restated because the change in revenue recognition does not impact cash flow.
But we had a nice growth this last year. I think we're going to continue to see that as we've made the transition. Again, there was a headwind because of a couple of things. One, decreased deconversion fees, which is a good thing. But then also we've seen the transition almost totally now from in-house licensing, which is where a customer actually takes on-prem license, which they write as a big check upfront for license, to where now almost 100% of our new core customers are going outsourcing. So there are no license fees. It's just a monthly generative revenue that we get typically over a seven-year contract life, which again, that's better news for Jack Henry.
Out of the operating cash flow, we do two things with that. One is CapEx, which capital expenditure was up a little bit this year. That is because we did some data center expansion last year that we actually paid for in 2019, but we actually did it at the beginning of the year, and that was partly because of the Tax Cuts and Jobs Act. We went ahead and put a lot of new equipment into production because it gave us a really nice tax benefit in 2018. The other thing we do with it is CapEx software. So Dave mentioned about all these projects we're going on with Banno and digital and the payments and all these faster payments and all this. That's what that is.
That's capitalized software, which according to the FASB rules, you actually capitalize this until you actually get into beta. And then you actually start amortizing that. And typically our software gets amortized over a five-year life. So the three components that make up that operating cash flow are CapEx, cap software, and then what's called free cash flow. So if you think about free cash flow, it's kind of like your take-home money that after you've paid your mortgage and car payments, that's what you got left over that you can spend. And so what this is another analysis that Wall Street really looks at is that free cash flow, how do we convert net income into free cash flow. And as you can see, back in 2015, free cash flow was actually well above 100% of net income.
That's what Wall Street likes to see. But over the last few years, because we have spent so much on development of new software and that cap software has gone up, we've not been able to convert 100%. We got real close again this year. In 2020, we should be back up above 100% conversion, which again, is something that our institutional shareholders really like to see. We continue to pay dividends. We started paying dividends in 1991. We've increased dividends every fiscal year since then. So a nice return. I'm sure you all like to see that quarterly dividend check come in. I do. And then we also continue to buy back a few shares. We bought back, we started this back basically during the financial crisis back in 2008. We bought back about 26.5 million shares.
We've spent about a little over $1 billion to buy back those shares, which again helps to drive EPS up, which is another measurement, obviously, that you all look at and our institutional investors look at. Statement of income, again, I said revenue was up 6%, but our operating income was actually down. And that's because of that big decrease in deconversion fees, which were down about $18 million this year from last year, which $18 million is kind of hard to overcome. But again, it's a good thing long-term for Jack Henry because we keep that revenue. Net income was down primarily because of the Tax Cuts and Jobs Act that impacted the previous year that we didn't have that same impact this year. The effective tax rate was quite a bit higher this year than it was last year.
And then obviously the impact on EPS. Balance sheet, we continue to have a very strong and clean balance sheet. We have $96 million in cash. Receivables are very clean. Our past due 90-day accounts receivable continues to be a very controllable number. Our deferred revenue is up a little bit, which that's revenue that we've cashed that we've already collected from the customers, and now we have to deliver the services, so that deferred revenue gets recognized over time, so that's FY19. We just announced Q1 of FY20. We are now well into our fiscal year 2020. Revenue is up 12% for the quarter. Very strong quarter. Again, the revenue recognition rules that went into place last year kind of impact this because under the old rules, a thing called software subscription got spread.
That revenue got spread evenly over the fiscal year. Now, if we delivered it last year and they signed up for another year, we take 100% of that revenue in Q1, so it accelerates a little bit of the revenue, kind of changes things around a little bit, but again, a very strong quarter. Operating income up 14%.
Net income was only up 7% because taxes. I'm going to say I'm one of the bigger percentages this year than we had to pay them last year. So there's still a 7% increase in net income and then a 7% increase in EPS. And the balance sheet continues to be clean. We continue to have no debt and continue to be in a very strong cash position. And with that, I would like to thank you for believing and investing in Jack Henry and thank you for being here today. With that, I would open the floor up for questions for Dave or I. And if you would, you wait for a microphone if you've got a question to ask.
Kevin, why is the effective tax rate higher this year than it was last year?
So last year you had the impacts of the Tax Cuts and Jobs Act, which basically we almost paid no taxes last year because of the Tax Cuts and Jobs Act. So it's back this year up to more of a normal effective tax rate of 23%-24%. So when the Tax Cuts and Jobs Act kicked in, the biggest impact for us was we had to adjust our deferred taxes on the balance sheet. And they were at an effective rate of about 35%. We had to take those down to 23%. So you had about $100 million of non-cash tax impact that impacted the P&L, but no impact on cash.
So the rate hasn't gone up?
No. Well, the rate's actually gone down from where we were in 2017. We're actually down from 35 down to about 23. So that last year was just an anomaly because of all the noise of having to adjust the balance sheet and flush it through the P&L.
Kevin.
You're good.
I believe you already answered my question, but it went by a little too fast. What is deconversion?
So if you're one of our core customers and you're in one of our private clouds, so we do all the back-end processing for you, and you're on a seven-year contract, if you're three years into that contract, or it can even be a payments contract. It can be any long-term contract we have with you. So if you're a bank and you're three years into this contract and another bank comes and buys you, you have to deconvert off our software systems onto whatever the acquiring bank is doing, which is what typically happens. When that happens, when you deconvert, you have to pay us a deconversion early termination penalty to get out of our contract.
So you're converting off of our system or deconverting off our system onto another system. Now, what we really like to do is win a merger. So, we really would rather, if a bank comes and buys you as a bank, we would rather that bank switch to our system. Think of it as you're leasing a car and you decide you want to get out of the car lease early, you have to pay off some portion of the remainder of the lease. Same idea here.
You answered there again. I had a note here, deconversion fees, and I think you clarified that. Thank you.
Okay. Good. You betcha. Any other questions? Way in the back. Oh, yep.
If I heard you correctly, you're going to have a meeting with some international stockholders, investors. Is this a precursor to international banking?
No, it is not. No. So we've been, as Kevin emphasized, we have about 14% international ownership right now. And the reason I think for that is there's investors in Europe who really like the Jack Henry model. And so that's been slowly growing over time. But that's totally separate from us deciding that we're going to stake out some ground internationally and start to work with the banks internationally. We may do that at some day. But today, there's no need for us to do that and introduce these complexities into our model that we don't need to deal with. So that is not the plan right now. Yeah. And I will tell you that the international investors are a lot different than investors in New York City. I mean, they don't even talk to us about numbers.
What they want to hear about is our culture, how we take care of our employees and associates, and how we take care of our shareholders. We like that we're a very stable business, that I call us boring with growth, which is a good thing. So we're a pretty boring story that we continue to generate nice free cash flow that I showed. We continue to increase our dividends, all those things, and a good clean solid balance sheet. All those are things that the international investors like, which is why four years ago, less than 1% of our stock was held internationally. And today, it's about 14%. Back here.
That tax cut you talked about, does it have a sunset?
Good question. You tell us. Nothing's permanent until it's permanent. I don't think it'll change under the current administration. But if there's a change in administration, could it change and go back up? Absolutely. Which is why when that came into place, and I did a lot of strategizing with the board, is that, okay, so we're going to do a nice increase in dividends when that happen. And then we also use that to fund the bonus program. But we only use about 30% or so of the tax savings just in case it does go back up. We're still in great shape to handle that.
Yeah. We had our eyes wide open in that. We used some of the savings to fund these things, as Kevin emphasized. But we had our eyes wide open knowing this isn't permanent. This could all go back again.
So we got to be prepared for that. Any other questions up in front here?
I'm going to take a second.
Yeah. He's getting the microphone over here. He's running.
The statement, or in the annual report, the statement is brought up that the Federal Reserve could be a player in real-time payments?
Real-time payments. Yep.
I've been trying to formulate an intelligent question. I guess the only thing I could come up with is in what way?
Yeah. So essentially they create a solution. So if I need to send you money, or let's do it, you're going to send me money. Let's do it this way. If you want to send me money, you can go through the real-time payment system. And the moment you on your phone, let's say, you're going to send me money. The moment you send it to me, it shows up in my account and I can see it in my account. And so they're creating a solution. There's already one out there that we're working with. But the Federal Reserve announced recently that they were going to get into this same game where they would create the technology to do that. So you on your phone can say, "I want to send money to Dave Foss. Here's how much." Boom.
And it's in my account, essentially immediately. I mean, it's not truly immediately, but it's near real-time that I would be able to see that and I would be able to use that money out of my account. And that's the important thing, that I can not only get it in my account, but I could turn around and send it to Kevin immediately if I wanted to. That's the concept of real-time payments. Honest. You're looking at me like you think I'm making it up. I mean, it's kind of like an ACH or other payments today, but it's definitely a new set of rails that they're going to run these payments down. So they're actually creating a new mechanism to actually be able to send this money.
The key difference, so you think about an ACH transaction, the money, you would send the money now, the money actually shows up in your account two days later probably with an ACH transaction. With real-time payments, you're going to be able to see it immediately.
Thank you for just confusing me a little bit.
But when they bring it up and live, I'll let you know. And then you can send me some money just to test it out.
My concern is that, okay, for all the reasons that you've already given, Jack Henry is just an excellent vendor, company, good investment.
Yeah. All of those.
The whole bang, but I've always on the commercial side, okay. I look at the Federal Reserve Bank as on the other side of a division, like the federal government, and I just can't.
So it's.
I'm afraid they're going to cross over.
No, they're providing services to banks and credit unions today. That's their role is to provide services to banks and credit unions today. So this is another service that they would be creating. Bank or credit union would say, "Hey, we're going to sign up and use the Fed's real-time payment system." Jack Henry enables that. So it's very consistent. It's the same as anything else we do today where we're helping banks move money or credit unions move money back and forth between their institution and other institutions. The Fed is oftentimes involved in that. It's just kind of the new step, the next thing for the Fed to be involved in, and we just go right along with that and help facilitate that.
So it's another way for a customer of one of our banks to move money from my account to Dave's account instead of writing a check.
Yeah. Let's talk more about that. When you were sending to me just a minute ago, remember he was sending to you and you to me.
But I mean, it's basically the same as writing a check, only it's all electronic and it's real-time. So if you want to move money to somebody, you can do it that quick. And then they have the money in their account, they can actually use it that quick.
Very good.
We're good? Yeah.
Yeah. But what does that have to do with the Federal Reserve Bank?
But they're creating the technology. So the Federal Reserve creates that technology and we're going to tie into it. So the Federal Reserve's like the check. They're actually going to take the money from our customer and take it to you or whoever the customer is electronically. So they're in the middle just moving the money.
Would they be utilizing the same partners, Zelle?
Zelle. Yeah. So Zelle essentially competes with Zelle. So Zelle is.
Compete with.
The Federal Reserve would essentially be competing with Zelle. Same idea though. If you know Zelle, it's the same concept.
Okay. I think that's what I was trying to get.
Yep. And we will help the bank or credit union with whichever they choose. Whatever flavor they want, we're there to help them.
That will be an interesting development, but I have confidence. I think many of us have confidence that JHA will take advantage of it.
Take advantage. We're here for you. We are there to support our customers.
Thank you.
You bet. Anybody else? Back here.
Basically, like the old days when I was in college and first married, and you send in the check to the electric company, but you don't sign it, so you can get yourself another week. It's going to be over.
Yeah. Float. The whole idea of float is gone. That's exactly right. Yep.
And the federal government will be able to get your taxes that you owe a whole lot quicker that way.
If you choose to send it to them through that rail, you could still write an old-fashioned check and say, "Here you go." But yeah, if you.
For the time being.
The important thing about real-time payments, so I've been doing this for a little while with my kids. My kids are getting grown now, but I still have one in college, and when they need money, sending them money on their phone where they can get it immediately, I mean, really, really helpful to them. Not so much to me, but certainly helpful to them, and we do that. We facilitate that.
For bail, right?
For bail? Yeah.
Yeah.
Okay. Okay. I got to talk to you. Anybody else? No? Okay. Thank you, everybody. Thank you for the questions. I'll turn it back.