Fiscal year-to-date summary:
- GAAP revenue increased 6% and GAAP operating income decreased
4% for the nine months ended March 31,
2023, compared to the prior-year period.
- Non-GAAP adjusted revenue increased 8% and non-GAAP adjusted
operating income increased 5% for the nine months ended
March 31, 2023, compared to the
prior-year period.1
- GAAP EPS was $3.68 per diluted
share for the nine months ended March 31,
2023, compared to $3.84 in the
prior-year period.
- Cash, was $27 million at
March 31, 2023, and $40 million at March 31,
2022.
- Debt related to the revolving credit line was $375 million at March 31,
2023, and $225 million at
March 31, 2022.
Third quarter summary:
- GAAP revenue increased 6% and GAAP operating income decreased
3% for the three months ended March 31,
2023, compared to the prior-year period.
- Non-GAAP adjusted revenue increased 8% and non-GAAP adjusted
operating income increased 11% for the three months ended
March 31, 2023, compared to the
prior-year period.1
- GAAP EPS was $1.12 per diluted
share for the three months ended March 31,
2023, compared to $1.16 for
the prior-year period.
Full-year fiscal 2023 guidance:2
GAAP (compared to second quarter
guidance)
- Revenue increases to $2,050
million to $2,057
million.
- Operating margin increases to 22.9% to 23.1%.
- EPS increases to $4.85 to
$4.87.
Non-GAAP3
- Adjusted revenue $2,021 million
to $2,028 million.3
- Adjusted operating margin 22.8% to 22.9%.3
MONETT,
Mo., May 2, 2023 /PRNewswire/ -- Jack Henry & Associates, Inc. (Nasdaq:
JKHY), a leading financial technology provider, today announced
results for the fiscal third quarter ended March 31, 2023.
According to David
Foss, Board Chair and CEO, "We are very pleased to report another
quarter of revenue growth and an overall strong financial
performance. Despite the disruptions in the banking industry, we
continue to experience great demand for Jack Henry financial
technology solutions. Our sales teams produced an all-time record
Q3 bookings quarter, and our sales pipeline is now larger than at
any time in the history of our company. Most of the banks and
credit unions that support Main Street America are Jack Henry
clients. They are essential to the economic success of local
communities, and we continue to focus on our stated mission to help
strengthening connections between community and regional financial
institutions and the people and businesses they serve."
|
1 See tables below reconciling non-GAAP financial
measures to GAAP.
2 The guidance assumes no additional acquisitions are
made during the year.
3 See tables below reconciling fiscal year 2023
GAAP to non-GAAP guidance.
4 See tables below on page 12 reconciling Net Income to
non-GAAP EBITDA.
Operating Results
Revenue, operating expenses, operating income, and net income
for the three and nine months ended March
31, 2023, compared to the three and nine months ended
March 31, 2022, were as follows (all
dollar amounts in this section are in thousands, except for per
share amounts):
Revenue
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
(In
Thousands)
|
Three Months
Ended
March
31,
|
|
%
Change
|
|
Nine Months
Ended
March
31,
|
|
%
Change
|
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Services and
Support
|
$
291,922
|
|
$
282,921
|
|
3 %
|
|
$
902,771
|
|
$
876,625
|
|
3 %
|
Percentage of Total
Revenue
|
57 %
|
|
59 %
|
|
|
|
59 %
|
|
60 %
|
|
|
Processing
|
216,630
|
|
195,339
|
|
11 %
|
|
640,298
|
|
583,587
|
|
10 %
|
Percentage of Total
Revenue
|
43 %
|
|
41 %
|
|
|
|
41 %
|
|
40 %
|
|
|
REVENUE
|
$
508,552
|
|
$
478,260
|
|
6 %
|
|
$
1,543,069
|
|
$
1,460,212
|
|
6 %
|
- Services and support revenue increased for the three months
ended March 31, 2023, primarily
driven by growth in data processing and hosting fees of 12%
partially offset by a decrease of 65% in deconversion fees. Another
driver was an increase in hardware revenue. Processing revenue
increased for the three months ended March
31, 2023, primarily driven by growth in card processing
revenue of 9%. Other drivers were increases in payment processing,
Jack Henry digital, and other
processing fee revenues.
- Services and support revenue increased for the nine months
ended March 31, 2023, primarily
driven by growth in data processing and hosting fees of 12%
partially offset by a 65% decrease in deconversion fees. Other
drivers were increases in software usage and subscription fees and
hardware revenue. Processing revenue increased for the nine months
ended March 31, 2023, primarily
driven by growth in card processing revenue of 8%. Other drivers
were increases in payment processing, Jack
Henry digital, and other processing fee revenues.
- For the three months ended March 31,
2023, core segment revenue increased 4%, payments segment
revenue increased 6%, complementary segment revenue increased 6%,
and corporate and other segment revenue increased 35%. Non-GAAP
adjusted core segment revenue increased 8%, non-GAAP adjusted
payments segment revenue increased 7%, non-GAAP adjusted
complementary segment revenue increased 8%, and non-GAAP adjusted
corporate and other segment revenue increased 35% (see revenue
lines of segment break-out tables on page 5 below).
- For the nine months ended March 31,
2023, core segment revenue increased 3%, payments segment
revenue increased 6%, complementary segment revenue increased 6%,
and corporate and other segment revenue increased 25%. Non-GAAP
adjusted core segment revenue increased 7%, non-GAAP adjusted
payments segment revenue increased 6%, non-GAAP adjusted
complementary segment revenue increased 8%, and non-GAAP adjusted
corporate and other segment revenue increased 25% (see revenue
lines of segment break-out tables on page 6 below).
Operating Expenses and Operating Income
(Unaudited, In
Thousands)
|
Three Months
Ended
March
31,
|
|
%
Change
|
|
Nine Months
Ended
March
31,
|
|
%
Change
|
|
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
|
|
Cost of
Revenue
|
$
307,345
|
|
$
282,339
|
|
9 %
|
|
$
910,195
|
|
$
841,799
|
|
8 %
|
|
Percentage of Total
Revenue5
|
60 %
|
|
59 %
|
|
|
|
59 %
|
|
58 %
|
|
|
|
Research and
Development
|
34,625
|
|
30,725
|
|
13 %
|
|
104,179
|
|
87,394
|
|
19 %
|
|
Percentage of Total
Revenue5
|
7 %
|
|
6 %
|
|
|
|
7 %
|
|
6 %
|
|
|
|
Selling, General, and
Administrative
|
58,192
|
|
53,607
|
|
9 %
|
|
172,205
|
|
160,172
|
|
8 %
|
|
Percentage of Total
Revenue5
|
11 %
|
|
11 %
|
|
|
|
11 %
|
|
11 %
|
|
|
|
OPERATING
EXPENSES
|
400,162
|
|
366,671
|
|
9 %
|
|
1,186,579
|
|
1,089,365
|
|
9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
$
108,390
|
|
$
111,589
|
|
(3) %
|
|
$
356,490
|
|
$
370,847
|
|
(4 %)
|
|
Operating
Margin5
|
21 %
|
|
23 %
|
|
|
|
23 %
|
|
25 %
|
|
|
|
- Cost of revenue increased for the three months ended
March 31, 2023, primarily due to
higher direct costs in line with related increases in revenue,
higher personnel costs, increased amortization of intangible
assets, and increased cost of hardware. Cost of revenue increased
for the nine months ended March 31,
2023, primarily due to higher direct costs in line with
related increases in revenue, higher personnel costs, increased
amortization of intangible assets, and increased internal licenses
and fees.
- Research and development expense increased for the three months
ended March 31, 2023, primarily due
to higher personnel costs (net of capitalized personnel costs) and
higher third-party development costs. Research and development
expense increased for the nine months ended March 31, 2023, primarily due to higher personnel
costs (net of capitalized personnel costs), higher third-party
development costs, and increased internal licenses and fees.
- Selling, general, and administrative expense increased for the
three months ended March 31, 2023,
primarily due to higher personnel costs, including increased
commissions expense. Selling, general, and administrative expense
increased for the nine months ended March
31, 2023, primarily due to higher personnel costs, including
increased commissions expense, increased travel-related expenses,
and higher consulting and other professional service fees,
partially offset by the increase in gain on sale of assets.
Net Income
(Unaudited, In
Thousands,
Except Per Share
Data)
|
Three Months
Ended
March
31,
|
|
%
Change
|
|
Nine Months
Ended
March
31,
|
|
%
Change
|
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
|
Income Before Income
Taxes
|
$ 106,115
|
|
$ 110,901
|
|
(4) %
|
|
$
350,624
|
|
$
369,476
|
|
(5) %
|
Provision for Income
Taxes
|
24,566
|
|
26,194
|
|
(6) %
|
|
81,751
|
|
86,986
|
|
(6) %
|
NET
INCOME
|
$ 81,549
|
|
$ 84,707
|
|
(4) %
|
|
$
268,873
|
|
$
282,490
|
|
(5 %)
|
Diluted earnings per
share
|
$
1.12
|
|
$
1.16
|
|
(4) %
|
|
$
3.68
|
|
$ 3.84
|
|
(4 %)
|
- Effective tax rates for the three months ended March 31, 2023, and 2022 were 23.2% and 23.6%,
respectively. Effective tax rates for the nine months ended
March 31, 2023, and 2022 were 23.3%
and 23.5%, respectively.
According to Mimi
Carsley, CFO and Treasurer, "For the third quarter of the fiscal
year, private and public cloud, card processing, transaction and
digital and remittance all contributed to strong revenue growth. As
expected, based on the continued low level of consolidation among
financial institutions, deconversion revenues were down $11M in the
third fiscal quarter and are expected remain low compared to the
prior full fiscal year. Despite this, our GAAP revenue increased 6%
and was up solidly at 8% for the quarter on a non-GAAP basis. The
decrease in deconversion revenues put downward pressure on GAAP
operating income, which decreased 3% for the quarter. Non-GAAP
operating income increased 11% for the quarter thanks to the entire
Jack Henry team's disciplined focus on cost management."
|
5 Operating margin is calculated by dividing
operating income by revenue. Operating margin plus operating
expense components as a percentage of total revenue may not equal
100% due to rounding.
Impact of Non-GAAP Adjustments
The table below shows our revenue and operating income (in
thousands) for the three and nine months ended March 31, 2023,
compared to the three and nine months ended March 31, 2022,
excluding the impacts of deconversion fees, acquisitions, and
gain/loss.
(Unaudited, In
Thousands)
|
Three Months Ended
March
31,
|
|
%
Change
|
|
Nine Months Ended
March
31,
|
|
%
Change
|
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
(GAAP)
|
$
508,552
|
|
$
478,260
|
|
6 %
|
|
$
1,543,069
|
|
$
1,460,212
|
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Deconversion fee
revenue
|
(6,143)
|
|
(17,431)
|
|
|
|
(17,042)
|
|
(48,058)
|
|
|
Revenue from
acquisition
|
(2,658)
|
|
—
|
|
|
|
(5,975)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
REVENUE
|
$ 499,751
|
|
$
460,829
|
|
8 %
|
|
$
1,520,052
|
|
$
1,412,154
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(GAAP)
|
$
108,390
|
|
$ 111,589
|
|
(3) %
|
|
$
356,490
|
|
$
370,847
|
|
(4 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Operating income from
deconversion fees
|
(5,130)
|
|
(15,482)
|
|
|
|
(14,459)
|
|
(43,022)
|
|
|
Operating loss from
acquisition
|
3,508
|
|
—
|
|
|
|
9,634
|
|
—
|
|
|
Gain on disposal of
assets, net
|
—
|
|
—
|
|
|
|
(7,384)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
$ 106,768
|
|
$
96,107
|
|
11 %
|
|
$
344,281
|
|
$
327,825
|
|
5 %
|
The tables below show the segment break-out of revenue and cost
of revenue for each period presented, as adjusted for the items
above, and include a reconciliation to non-GAAP adjusted operating
income presented above.
|
Three Months Ended
March 31, 2023
|
(Unaudited, In
Thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
REVENUE
|
$
156,903
|
|
$
191,840
|
|
$
142,122
|
|
$
17,687
|
|
$
508,552
|
Non-GAAP
adjustments*
|
(2,315)
|
|
(4,301)
|
|
(2,170)
|
|
(15)
|
|
(8,801)
|
NON-GAAP ADJUSTED
REVENUE
|
154,588
|
|
187,539
|
|
139,952
|
|
17,672
|
|
499,751
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUE
|
71,705
|
|
106,878
|
|
61,366
|
|
67,396
|
|
307,345
|
Non-GAAP
adjustments**
|
(239)
|
|
(5,164)
|
|
(165)
|
|
(34)
|
|
(5,602)
|
NON-GAAP ADJUSTED
COST OF REVENUE
|
71,466
|
|
101,714
|
|
61,201
|
|
67,362
|
|
301,743
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
SEGMENT INCOME
|
$
83,122
|
|
$
85,825
|
|
$
78,751
|
|
$
(49,690)
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
34,625
|
Selling, General,
and Administrative
|
|
|
|
|
|
|
|
|
58,192
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
(1,577)
|
NON-GAAP TOTAL
ADJUSTED OPERATING EXPENSES
|
|
|
|
|
|
|
|
392,983
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
|
|
|
|
|
|
$
106,768
|
*Revenue non-GAAP adjustments for the Core, Complementary, and
Corporate and Other segments were deconversion fee revenue. Revenue
non-GAAP adjustments for the Payments segment were deconversion fee
revenue of $1,643 and acquisition
revenue of $2,658.
**Cost of revenue non-GAAP adjustments for the Core segment were
$239 related to deconversion fees,
for the Payments segment were $5,102
related to the acquisition and $62
related to deconversion fees, for the Complementary segment were
$165 related to deconversion fees,
and for the Corporate and Other
segment were $31 related to the
acquisition and $3 related to
deconversion fees.
***Non-GAAP adjustments unassigned to a segment were $1,034 related to the acquisition and
$543 related to deconversion
fees.
|
Three Months Ended
March 31, 2022
|
(Unaudited, In
Thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
REVENUE
(GAAP)
|
$
150,799
|
|
$
180,518
|
|
$
133,821
|
|
$ 13,122
|
|
$
478,260
|
Non-GAAP
adjustments*
|
(8,154)
|
|
(4,703)
|
|
(4,540)
|
|
(34)
|
|
(17,431)
|
NON-GAAP ADJUSTED
REVENUE
|
142,645
|
|
175,815
|
|
129,281
|
|
13,088
|
|
460,829
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUE
|
66,576
|
|
95,970
|
|
57,740
|
|
62,053
|
|
282,339
|
Non-GAAP
adjustments**
|
(623)
|
|
(28)
|
|
(475)
|
|
(3)
|
|
(1,129)
|
NON-GAAP ADJUSTED
COST OF REVENUE
|
65,953
|
|
95,942
|
|
57,265
|
|
62,050
|
|
281,210
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
SEGMENT INCOME
|
$
76,692
|
|
$
79,873
|
|
$
72,016
|
|
$
(48,962)
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
30,725
|
Selling, General,
and Administrative
|
|
|
|
|
|
|
|
|
53,607
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
(820)
|
NON-GAAP TOTAL
ADJUSTED OPERATING EXPENSES
|
|
|
|
|
|
|
|
364,722
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
|
|
|
|
|
|
$
96,107
|
*Revenue non-GAAP adjustments were all deconversion fee
revenues..
**Cost of revenue non-GAAP adjustments were all related to
deconversion fees.
*** Non-GAAP adjustments unassigned to a segment were all related
to deconversion fees.
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
March 31, 2023
|
(Unaudited, In
Thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
Revenue
|
$
487,417
|
|
$
569,867
|
|
$
432,769
|
|
$
53,016
|
|
$ 1,543,069
|
Non-GAAP
adjustments*
|
(6,248)
|
|
(10,388)
|
|
(6,319)
|
|
(62)
|
|
(23,017)
|
Non-GAAP Adjusted
Revenue
|
481,169
|
|
559,479
|
|
426,450
|
|
52,954
|
|
1,520,052
|
|
|
|
|
|
|
|
|
|
|
Cost of
Revenue
|
212,269
|
|
316,104
|
|
179,074
|
|
202,748
|
|
910,195
|
Non-GAAP
adjustments**
|
(656)
|
|
(12,665)
|
|
(538)
|
|
(109)
|
|
(13,968)
|
Non-GAAP Adjusted
Cost of Revenue
|
211,613
|
|
303,439
|
|
178,536
|
|
202,639
|
|
896,227
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted
Segment Income
|
$
269,556
|
|
$
256,040
|
|
$
247,914
|
|
$
(149,685)
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
104,179
|
Selling, General,
and Administrative
|
|
|
|
|
|
|
|
|
172,205
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
3,160
|
Non-GAAP Total
Adjusted Operating Expenses
|
|
|
|
|
|
|
|
1,175,771
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted
Operating Income
|
|
|
|
|
|
|
|
|
$
344,281
|
*Revenue non-GAAP adjustments for the Core, Complementary, and
Corporate and Other segments were deconversion fee revenue. Revenue
non-GAAP adjustments for the Payments segment were deconversion fee
revenue of $4,413 and acquisition
revenue of $5,975.
**Cost of revenue non-GAAP adjustments for the Core segment were
$656 related to deconversion fees,
for the Payments segment were $12,444
related to the acquisition and $221
related to deconversion fees, for the Complementary segment were
$538 related to deconversion fees,
and for the Corporate and Other segment were $89 related to the acquisition. and $20 related to deconversion fees.
***Non-GAAP adjustments unassigned to a segment were $7,384 related to a gain on sale of assets
partially offset by $3,076 related to
the acquisition and $1,148 related to
deconversion fees.
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
March 31, 2022
|
(Unaudited, In
Thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
Revenue
|
$
470,962
|
|
$
538,615
|
|
$
408,137
|
|
$
42,498
|
|
$
1,460,212
|
Non-GAAP
adjustments*
|
(21,176)
|
|
(13,084)
|
|
(13,554)
|
|
(244)
|
|
(48,058)
|
Non-GAAP Adjusted
Revenue
|
449,786
|
|
525,531
|
|
394,583
|
|
42,254
|
|
1,412,154
|
|
|
|
|
|
|
|
|
|
|
Cost of
Revenue
|
198,032
|
|
287,518
|
|
168,139
|
|
188,110
|
|
841,799
|
Non-GAAP
adjustments**
|
(1,378)
|
|
(317)
|
|
(1,049)
|
|
(324)
|
|
(3,068)
|
Non-GAAP Adjusted
Cost of Revenue
|
196,654
|
|
287,201
|
|
167,090
|
|
187,786
|
|
838,731
|
|
|
|
|
|
|
|
|
|
|
Non- GAAP Adjusted
Segment Income
|
$
253,132
|
|
$
238,330
|
|
$
227,493
|
|
$
(145,532)
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
87,394
|
Selling, General,
and Administrative
|
|
|
|
|
|
|
|
|
160,172
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
(1,968)
|
Non-GAAP Total
Adjusted Operating Expenses
|
|
|
|
|
|
|
|
1,084,329
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted
Operating Income
|
|
|
|
|
|
|
|
|
$
327,825
|
*Revenue non-GAAP adjustments were all deconversion fee
revenues..
**Cost of revenue non-GAAP adjustments were all related to
deconversion fees.
*** Non-GAAP adjustments unassigned to a segment were all related
to deconversion fees.
The table below shows our GAAP to non-GAAP guidance for fiscal
2023. Non-GAAP guidance excludes the impacts of deconversion fee
and acquisition revenue and operating expenses and assumes no
further acquisitions are made during the fiscal year.
|
GAAP to Non-GAAP
GUIDANCE (In Millions, except
per share data)
|
|
Annual
FY23*
|
|
|
|
Low
|
|
High
|
|
REVENUE
(GAAP)
|
|
$
2,050
|
|
$
2,057
|
|
Growth
|
|
5.5 %
|
|
5.9 %
|
|
Deconversion
fees
|
|
$
20
|
|
$
20
|
|
Acquisition
|
|
9
|
|
9
|
|
NON-GAAP ADJUSTED
REVENUE*
|
|
$
2,021
|
|
$
2,028
|
|
Non-GAAP Adjusted
Growth
|
|
7.0 %
|
|
7.3 %
|
|
|
|
|
|
|
|
OPERATING EXPENSES
(GAAP)
|
|
$
1,580
|
|
$
1,583
|
|
Growth
|
|
7.6 %
|
|
7.8 %
|
|
Deconversion
costs
|
|
$
5
|
|
$
5
|
|
Acquisition
costs
|
|
22
|
|
22
|
|
Gain on disposal of
assets, net
|
|
(7)
|
|
(7)
|
|
NON-GAAP ADJUSTED
OPERATING EXPENSES*
|
|
$
1,561
|
|
$
1,564
|
|
Non-GAAP Adjusted
Growth
|
|
6.8 %
|
|
7.0 %
|
|
|
|
|
|
|
|
OPERATING INCOME
(GAAP)
|
|
$
470
|
|
$
474
|
|
Growth
|
|
(0.9) %
|
|
(0.1) %
|
|
|
|
|
|
|
|
OPERATING INCOME
MARGIN (GAAP)
|
|
22.9 %
|
|
23.1 %
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
$
460
|
|
$
464
|
|
Non-GAAP Adjusted
Growth
|
|
7.6 %
|
|
8.6 %
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME MARGIN
|
|
22.8 %
|
|
22.9 %
|
|
|
|
|
|
|
|
EPS
(GAAP)
|
|
$
4.85
|
|
$
4.87
|
|
Growth
|
|
(1.8) %
|
|
(1.4) %
|
*GAAP to Non-GAAP revenue and operating expenses may not foot
due to rounding.
Balance Sheet and Cash Flow Review
- At March 31, 2023, cash and cash
equivalents decreased to $27 million
from $40 million at March 31, 2022.
- Trade receivables totaled $238
million at March 31, 2023,
compared to $223 million at
March 31, 2022.
- The Company had $375 million of
borrowings at March 31, 2023, and
$225 million at March 31, 2022.
- Total deferred revenue increased to $226
million at March 31, 2023,
compared to $218 million a year
ago.
- Stockholders' equity increased to $1,538
million at March 31, 2023,
compared to $1,329 million a year
ago.
*See table below for Net Cash Provided by Operating Activities
and on page 12 for Return on Average Shareholders' Equity. Tables
reconciling the non-GAAP measures Free Cash Flow and return on
invested capital (ROIC) to GAAP measures are also on page 12. See
the Use of Non-GAAP Financial Information section below for the
definitions of Free Cash Flow and ROIC.
The following table summarizes net cash from operating
activities:
(Unaudited, In
Thousands)
|
Nine Months Ended
March 31,
|
|
2023
|
|
2022
|
Net income
|
$
268,873
|
|
$
282,490
|
Depreciation
|
36,740
|
|
38,339
|
Amortization
|
105,609
|
|
94,563
|
Change in deferred
income taxes
|
(36,370)
|
|
15,681
|
Other non-cash
expenses
|
14,225
|
|
19,604
|
Change in
receivables
|
110,686
|
|
83,868
|
Change in deferred
revenue
|
(184,130)
|
|
(177,987)
|
Change in other assets
and liabilities
|
(108,602)
|
|
(55,161)
|
NET CASH FROM
OPERATING ACTIVITIES
|
$
207,031
|
|
$
301,397
|
The following table summarizes net cash from investing
activities:
(Unaudited, In
Thousands)
|
Nine Months Ended
March 31,
|
|
2023
|
|
2022
|
Payment for
acquisitions, net of cash acquired*
|
$
(229,628)
|
|
$
—
|
Capital
expenditures
|
(27,237)
|
|
(28,386)
|
Proceeds from
dispositions
|
27,885
|
|
38
|
Purchased
software
|
(1,471)
|
|
(7,726)
|
Computer software
developed
|
(124,110)
|
|
(108,950)
|
Purchase of
investments
|
(1,000)
|
|
—
|
NET CASH FROM
INVESTING ACTIVITIES
|
$
(355,561)
|
|
$
(145,024)
|
*During first quarter fiscal 2023, the Company completed its
previously announced acquisition of Payrailz.
The following table summarizes net cash from financing
activities:
(Unaudited, In
Thousands)
|
Nine Months Ended
March 31,
|
|
2023
|
|
2022
|
Borrowings on credit
facilities*
|
$
550,000
|
|
$
292,000
|
Repayments on credit
facilities and financing leases
|
(290,059)
|
|
(167,091)
|
Purchase of treasury
stock
|
(25,000)
|
|
(193,916)
|
Dividends
paid
|
(109,346)
|
|
(103,376)
|
Net cash from issuance
of stock and tax related to stock-based compensation
|
700
|
|
4,815
|
NET CASH FROM
FINANCING ACTIVITIES
|
$
126,295
|
|
$
(167,568)
|
*The Company's acquisition of Payrailz during first
quarter fiscal 2023 was primarily funded by new borrowings under
the Company's revolving credit facility.
Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used
to refer to the standard framework of guidelines for financial
accounting in the United States.
GAAP include the standards, conventions, and rules accountants
follow in recording and summarizing transactions in the preparation
of financial statements. In addition to reporting financial
results in accordance with GAAP, we have provided certain non-GAAP
financial measures, including adjusted revenue, adjusted operating
income, adjusted segment income, adjusted cost of revenue, adjusted
operating expenses, non-GAAP earnings before interest, taxes,
depreciation, and amortization (non-GAAP EBITDA), free cash flow,
and return on invested capital (ROIC).
We believe non-GAAP financial measures help investors better
understand the underlying fundamentals and true operations of our
business. Adjusted revenue, adjusted operating income, adjusted
operating income margin, adjusted segment income, adjusted cost of
revenue, and adjusted operating expenses, eliminate one-time
deconversion fees and associated costs, the effects of acquisitions
and divestitures, and gain/loss on the disposal of assets, all of
which management believes are not indicative of the Company's
operating performance. Such adjustments give investors further
insight into our performance. Non-GAAP EBITDA is defined as net
income attributable to the Company before the effect of interest
expense, taxes, depreciation, and amortization, adjusted for net
income before the effect of interest expense, taxes, depreciation,
and amortization attributable to eliminated one-time deconversion
fees, acquisitions and divestitures, and gain/loss on the disposal
of assets. Free cash flow is defined as net cash from operating
activities, less capitalized expenditures, internal use software,
and capitalized software, plus proceeds from the sale of assets.
ROIC is defined as net income divided by average invested capital,
which is the average of beginning and ending long-term debt and
stockholders' equity for a given period. Management believes that
non-GAAP EBITDA is an important measure of the Company's overall
operating performance and excludes certain costs and other
transactions that management deems one time or non-operational in
nature; free cash flow is useful to measure the funds generated in
a given period that are available for debt service requirements and
strategic capital decisions; and ROIC is a measure of the Company's
allocation efficiency and effectiveness of its invested capital.
For these reasons, management also uses these non-GAAP financial
measures in its assessment and management of the Company's
performance.
Non-GAAP financial measures used by the Company may not be
comparable to similarly titled non-GAAP measures used by other
companies. Non-GAAP financial measures have no standardized meaning
prescribed by GAAP and therefore, are unlikely to be comparable
with calculations of similar measures for other companies.
Any non-GAAP financial measures should be considered in context
with the GAAP financial presentation and should not be considered
in isolation or as a substitute for GAAP measures. Reconciliations
of the non-GAAP financial measures to related GAAP measures are
included.
Quarterly Conference Call
The Company will hold a conference call on May 3, 2023; at 7:45 a.m.
Central Time and investors are invited to listen at
www.jackhenry.com. A webcast replay will be available approximately
one hour after the event at
ir.jackhenry.com/corporate-events-and-presentations and will remain
available for one year.
About Jack Henry &
Associates, Inc.®
Jack Henry™ (Nasdaq: JKHY) is a well-rounded financial
technology company that strengthens connections between financial
institutions and the people and businesses they serve. We are an
S&P 500 company that prioritizes openness, collaboration, and
user centricity — offering banks and credit unions a vibrant
ecosystem of internally developed modern capabilities as well as
the ability to integrate with leading fintechs. For more than 46
years, Jack Henry has provided
technology solutions to enable clients to innovate faster,
strategically differentiate, and successfully compete while serving
the evolving needs of their accountholders. We empower
approximately 7,700 clients with people-inspired innovation,
personal service, and insight-driven solutions that help reduce the
barriers to financial health. Additional information is available
at www.jackhenry.com.
Statements made in this news release that are not historical
facts are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Because forward-looking statements
relate to the future, they are subject to inherent risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements. Such risks and
uncertainties include, but are not limited to, those discussed in
the Company's Securities and Exchange Commission filings, including
the Company's most recent reports on Form 10-K and Form 10-Q,
particularly under the heading Risk Factors. Any forward-looking
statement made in this news release speaks only as of the date of
the news release, and the Company expressly disclaims any
obligation to publicly update or revise any forward-looking
statement, whether because of new information, future events or
otherwise.
Condensed
Consolidated Statements of Income (Unaudited)
|
(In Thousands, except
per
share data)
|
Three Months Ended
March 31,
|
|
% Change
|
|
Nine Months Ended
March 31,
|
|
% Change
|
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
$
508,552
|
|
$ 478,260
|
|
6 %
|
|
$
1,543,069
|
|
$
1,460,212
|
|
6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Revenue
|
307,345
|
|
282,339
|
|
9 %
|
|
910,195
|
|
841,799
|
|
8 %
|
Research and
Development
|
34,625
|
|
30,725
|
|
13 %
|
|
104,179
|
|
87,394
|
|
19 %
|
Selling, General,
and
Administrative
|
58,192
|
|
53,607
|
|
9 %
|
|
172,205
|
|
160,172
|
|
8 %
|
EXPENSES
|
400,162
|
|
366,671
|
|
9 %
|
|
1,186,579
|
|
1,089,365
|
|
9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
108,390
|
|
111,589
|
|
(3) %
|
|
356,490
|
|
370,847
|
|
(4) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
2,391
|
|
3
|
|
79,600 %
|
|
3,783
|
|
16
|
|
23,544 %
|
Interest
expense
|
(4,666)
|
|
(691)
|
|
575 %
|
|
(9,649)
|
|
(1,387)
|
|
596 %
|
Interest Income
(Expense),
net
|
(2,275)
|
|
(688)
|
|
231 %
|
|
(5,866)
|
|
(1,371)
|
|
328 %
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
INCOME
TAXES
|
106,115
|
|
110,901
|
|
(4) %
|
|
350,624
|
|
369,476
|
|
(5) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes
|
24,566
|
|
26,194
|
|
(6) %
|
|
81,751
|
|
86,986
|
|
(6) %
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
$
81,549
|
|
$ 84,707
|
|
(4) %
|
|
$
268,873
|
|
$
282,490
|
|
(5) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share
|
$
1.12
|
|
$
1.16
|
|
|
|
$
3.68
|
|
$ 3.84
|
|
|
Diluted weighted
average
shares outstanding
|
73,074
|
|
73,019
|
|
|
|
73,119
|
|
73,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance
Sheet Highlights (Unaudited)
|
(In
Thousands)
|
|
|
|
|
|
|
March
31,
|
|
% Change
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
$ 26,552
|
|
$ 39,797
|
|
(33) %
|
Receivables
|
|
|
|
|
|
|
238,364
|
|
222,696
|
|
7 %
|
Total assets
|
|
|
|
|
|
|
2,607,597
|
|
2,272,103
|
|
15 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
$ 163,794
|
|
$ 169,891
|
|
(4) %
|
Current and long-term
debt
|
|
|
|
|
|
|
375,001
|
|
225,103
|
|
67 %
|
Deferred
revenue
|
|
|
|
|
|
|
226,146
|
|
217,613
|
|
4 %
|
Stockholders'
equity
|
|
|
|
|
|
|
1,538,309
|
|
1,328,608
|
|
16 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Non-GAAP Earnings Before Income Taxes, Depreciation and
Amortization (Non-GAAP EBITDA)
|
|
Three Months Ended
March 31,
|
|
%
Change
|
|
Nine Months Ended
March 31,
|
|
%
Change
|
(in
thousands)
|
2023
|
|
2022
|
|
|
|
2023
|
|
2022
|
|
|
Net income
|
$
81,549
|
|
$ 84,707
|
|
|
|
$
268,873
|
|
$ 282,491
|
|
|
Interest,
net
|
2,275
|
|
688
|
|
|
|
5,865
|
|
1,370
|
|
|
Taxes
|
24,566
|
|
26,194
|
|
|
|
81,751
|
|
86,985
|
|
|
Depreciation and
amortization
|
48,637
|
|
44,449
|
|
|
|
142,349
|
|
132,902
|
|
|
Less: Net income
before
interest expense, taxes,
depreciation and
amortization attributable to
eliminated one-time
deconversions, acquisitions,
and gain on disposal of
assets, net.*
|
(4,654)
|
|
(15,482)
|
|
|
|
(19,184)
|
|
(43,022)
|
|
|
NON-GAAP
EBITDA
|
$ 152,373
|
|
$ 140,556
|
|
8 %
|
|
$
479,654
|
|
$
460,726
|
|
4 %
|
*The fiscal third
quarter adjustments for net income before interest expense, taxes,
depreciation and amortization were for
deconversions and acquisitions and were $5,130 and $(476),
respectively, and the prior fiscal year third quarter adjustment
was for
deconversions only. The fiscal year-to-date adjustments for
net income before interest expense, taxes, depreciation and
amortization
were for deconversions, acquisitions, and gain on disposal of
assets, net, and were $14,459, $(2,659), and $7,384, respectively,
and the
prior fiscal year-to-date adjustment was for deconversions
only.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Free
Cash Flow (Non-GAAP)
|
|
|
|
|
|
Nine Months Ended
March 31,
|
|
|
(in
thousands)
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
Net cash from operating
activities
|
|
|
|
|
|
$ 207,031
|
|
$ 301,397
|
|
|
Capitalized
expenditures
|
|
|
|
|
|
|
(27,237)
|
|
(28,386)
|
|
|
Internal use
software
|
|
|
|
|
|
|
(1,471)
|
|
(7,726)
|
|
|
Proceeds from sale of
assets
|
|
|
|
|
|
|
27,885
|
|
38
|
|
|
Capitalized
software
|
|
|
|
|
|
|
(124,110)
|
|
(108,950)
|
|
|
FREE CASH
FLOW
|
|
|
|
|
|
|
$ 82,098
|
|
$ 156,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of the
Return on Average Shareholders' Equity
|
|
|
|
March
31,
|
|
|
(in
thousands)
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
Net income (trailing
four quarters)
|
|
|
|
|
|
$
349,299
|
|
$
359,353
|
|
|
Average stockholder's
equity (period beginning and ending
|balances)
|
|
|
|
1,433,459
|
|
1,322,026
|
|
|
RETURN ON AVERAGE
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
24.4 %
|
|
27.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Return on Invested Capital (ROIC) (Non-GAAP)
|
|
|
March
31,
|
|
|
(in
thousands)
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
Net income (trailing
four quarters)
|
|
|
|
|
|
$
349,299
|
|
$
359,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholder's
equity (period beginning and ending
balances)
|
|
|
|
1,433,459
|
|
1,322,026
|
|
|
Average current
maturities of long-term debt (period beginning and
ending balances)
|
|
51
|
|
109
|
|
|
Average long-term debt
(period beginning and ending balances)
|
|
300,001
|
|
212,561
|
|
|
Average invested
capital
|
|
|
|
|
|
|
$
1,733,511
|
|
$
1,534,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROIC
|
|
|
|
|
|
|
20.1 %
|
|
23.4 %
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/jack-henry--associates-inc-reports-third-quarter-fiscal-2023-results-301813815.html
SOURCE Jack Henry &
Associates, Inc.