Second quarter summary:
- GAAP revenue increased 5.2% and GAAP operating income increased
3.4% for the fiscal three months ended December 31, 2024, compared to the prior fiscal
year quarter.
- Non-GAAP adjusted revenue increased 6.1% and non-GAAP adjusted
operating income increased 7.3% for the fiscal three months ended
December 31, 2024, compared to the
prior fiscal year quarter.1
- GAAP EPS was $1.34 per diluted
share for the fiscal three months ended December 31, 2024, compared to $1.26 per diluted share in the prior fiscal year
quarter.
Fiscal year-to-date summary:
- GAAP revenue increased 5.2% and GAAP operating income increased
9.0% for the fiscal year-to-date period ended December 31, 2024, compared to the prior fiscal
year-to-date period.
- Non-GAAP adjusted revenue increased 5.7% and non-GAAP adjusted
operating income increased 4.2% for the fiscal year-to-date period
ended December 31, 2024, compared to
the prior fiscal year-to-date period.1
- GAAP EPS was $2.97 per diluted
share for the fiscal year-to-date period ended December 31, 2024, compared to $2.65 per diluted share in the prior fiscal
year-to-date period.
- Cash and cash equivalents were $26
million at December 31, 2024,
and $27 million at December 31, 2023.
- Debt outstanding related to credit facilities was $150 million at December
31, 2024, and $255 million at
December 31, 2023.
Full year fiscal 2025 guidance (In
millions):2
|
Current
|
|
GAAP
|
Low
|
High
|
|
Revenue
|
$2,369
|
$2,391
|
|
Operating
margin3
|
23.0 %
|
23.2 %
|
|
EPS
|
$5.78
|
$5.87
|
|
|
|
|
Non-GAAP4
|
|
|
|
Adjusted
revenue
|
$2,353
|
$2,375
|
|
Adjusted operating
margin
|
22.7 %
|
22.8 %
|
MONETT,
Mo., Feb. 4, 2025 /PRNewswire/ -- Jack Henry & Associates, Inc. (Nasdaq:
JKHY), a leading financial technology provider, today announced
results for fiscal second quarter ended December 31, 2024.
|
1 See tables
below on page 4 reconciling non-GAAP financial measures to
GAAP.
|
|
2 The full
fiscal year guidance assumes no acquisitions or dispositions are
made during fiscal year 2025.
|
|
3 Operating
margin is calculated by dividing operating income by
revenue.
|
|
4 See tables
below on page 9 reconciling fiscal year 2025 GAAP to non-GAAP
guidance.
|
|
5 See table
below on page 14 reconciling net income to non-GAAP
EBITDA.
|
|
According to Greg
Adelson, President and CEO, "We are pleased to report solid
performance in the second quarter of our fiscal year. We
continued our positive sales momentum with record sales attainment
in Q2 for the second consecutive year while maintaining a robust
sales pipeline for future opportunities. We are seeing strong
demand for our products from both new and existing clients and are
making substantial progress with our technology modernization
strategy. Our focus on a people-first culture, service excellence,
technology innovation, and a well-executed strategy continues to
differentiate us in the market."
|
Operating Results
Revenue, operating expenses, operating income, and net income
for the three and six months ended December 31, 2024, compared
to the three and six months ended December 31, 2023, were as
follows:
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, in
thousands)
|
Three Months
Ended
December
31,
|
|
%
Change
|
|
Six Months
Ended
December
31,
|
|
%
Change
|
|
2024
|
|
2023
|
|
|
|
2024
|
|
2023
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Services and
Support
|
$
323,027
|
|
$
311,992
|
|
3.5 %
|
|
$
679,706
|
|
$
654,197
|
|
3.9 %
|
|
Percentage of
Total Revenue
|
56.3 %
|
|
57.2 %
|
|
|
|
57.9 %
|
|
58.6 %
|
|
|
|
Processing
|
250,821
|
|
233,709
|
|
7.3 %
|
|
495,123
|
|
462,872
|
|
7.0 %
|
|
Percentage of
Total Revenue
|
43.7 %
|
|
42.8 %
|
|
|
|
42.1 %
|
|
41.4 %
|
|
|
|
REVENUE
|
$ 573,848
|
|
$
545,701
|
|
5.2 %
|
|
$
1,174,829
|
|
$
1,117,069
|
|
5.2 %
|
- Services and support revenue increased for the three months
ended December 31, 2024, primarily
driven by growth in data processing and hosting revenue of 11.8%,
partially offset by a decrease in deconversion revenue of
$4,813. Processing revenue increased
for the three months ended December 31,
2024, primarily driven by growth in card revenue of 6.5%,
transaction and digital revenue of 10.0%, and payment processing
revenue of 10.1%.
- Services and support revenue increased for the six months ended
December 31, 2024, primarily driven
by growth in data processing and hosting revenue of 12.2%,
partially offset by a decrease in hardware and deconversion
revenues of 31.1% and 58.2%, respectively. Processing revenue
increased for the six months ended December
31, 2024, primarily driven by growth in card revenue of 5.8%
and transaction and digital revenue of 10.4%. Another driver was an
increase in payment processing revenues.
- For the three months ended December 31,
2024, core segment revenue increased 4.6%, payments segment
revenue increased 5.4%, complementary segment revenue increased
5.6%, and corporate and other segment revenue increased 4.7%. For
the three months ended December 31,
2024, core segment non-GAAP adjusted revenue increased 5.8%,
payments segment non-GAAP adjusted revenue increased 6.2%,
complementary segment non-GAAP adjusted revenue increased 6.5%, and
corporate and other non-GAAP adjusted segment revenue increased
4.9% (see revenue lines of segment break-out tables on pages 5 and
6 below for a reconciliation of segment non-GAAP adjusted revenue
to GAAP segment revenue).
- For the six months ended December 31,
2024, core segment revenue increased 4.8%, payments segment
revenue increased 5.8%, complementary segment revenue increased
6.0%, and corporate and other segment revenue decreased 2.8%. For
the six months ended December 31,
2024, core segment non-GAAP adjusted revenue increased 5.5%,
payments segment non-GAAP adjusted revenue increased 6.0%,
complementary segment non-GAAP adjusted revenue increased 6.8%, and
corporate and other non-GAAP adjusted segment revenue decreased
2.8% (see revenue lines of segment break-out tables on pages 7 and
8 below for a reconciliation of segment non-GAAP adjusted revenue
to GAAP segment revenue).
|
Operating Expenses
and Operating Income
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, in
thousands)
|
Three Months
Ended
December
31,
|
|
%
Change
|
|
Six Months
Ended
December
31,
|
|
%
Change
|
|
|
2024
|
|
2023
|
|
|
|
2024
|
|
2023
|
|
|
|
|
Cost of
Revenue
|
$ 332,850
|
|
$
320,979
|
|
3.7 %
|
|
$
676,282
|
|
$
643,981
|
|
5.0 %
|
|
|
Percentage of Total
Revenue6
|
58.0 %
|
|
58.8 %
|
|
|
|
57.6 %
|
|
57.6 %
|
|
|
|
|
Research and
Development
|
41,095
|
|
35,478
|
|
15.8 %
|
|
80,780
|
|
72,370
|
|
11.6 %
|
|
|
Percentage of Total
Revenue6
|
7.2 %
|
|
6.5 %
|
|
|
|
6.9 %
|
|
6.5 %
|
|
|
|
|
Selling, General, and
Administrative
|
76,901
|
|
70,277
|
|
9.4 %
|
|
143,489
|
|
149,051
|
|
(3.7) %
|
|
|
Percentage of Total
Revenue6
|
13.4 %
|
|
12.9 %
|
|
|
|
12.2 %
|
|
13.3 %
|
|
|
|
|
OPERATING
EXPENSES
|
450,846
|
|
426,734
|
|
5.7 %
|
|
900,551
|
|
865,402
|
|
4.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
$
123,002
|
|
$
118,967
|
|
3.4 %
|
|
$
274,278
|
|
$
251,667
|
|
9.0 %
|
|
|
Operating
Margin6
|
21.4 %
|
|
21.8 %
|
|
|
|
23.3 %
|
|
22.5 %
|
|
|
|
- Cost of revenue increased for the three months ended
December 31, 2024, primarily due to
higher direct costs generally consistent with increases in the
related lines of revenue and higher personnel costs including
benefits expenses from an increase in employee headcount in the
trailing twelve months. Cost of revenue increased for the six
months ended December 31, 2024,
primarily due to higher direct costs generally consistent with
increases in the related lines of revenue, higher personnel costs
including benefits expenses from an increase in employee headcount
in the trailing twelve months, higher internal licenses and fees
from increased deployments and prices, and a rise in amortization
from capital development projects placed into service in the
trailing twelve months.
- Research and development expense increased for the three and
six months ended December 31, 2024,
primarily due to higher personnel costs (net of capitalization)
including benefits expenses from an increase in employee headcount
in the trailing twelve months.
- Selling, general, and administrative expense increased for the
three months ended December 31, 2024,
primarily due to higher personnel costs including benefits expenses
from an increase in employee headcount in the trailing twelve
months. Selling, general, and administrative expense decreased for
the six months ended December 31,
2024, primarily due to the decrease in non-recurring
personnel costs when compared to the prior fiscal year period.
Net Income
|
(Unaudited, in
thousands,
except per share
data)
|
Three Months
Ended
December
31,
|
|
%
Change
|
|
Six Months
Ended
December
31,
|
|
%
Change
|
|
2024
|
|
2023
|
|
|
|
2024
|
|
2023
|
|
|
|
Income Before Income
Taxes
|
$
127,381
|
|
$
120,223
|
|
6.0 %
|
|
$
284,179
|
|
$
253,471
|
|
12.1 %
|
|
Provision for Income
Taxes
|
29,536
|
|
28,258
|
|
4.5 %
|
|
67,143
|
|
59,827
|
|
12.2 %
|
|
NET
INCOME
|
$
97,845
|
|
$
91,965
|
|
6.4 %
|
|
$
217,036
|
|
$
193,644
|
|
12.1 %
|
|
Diluted earnings per
share
|
$
1.34
|
|
$
1.26
|
|
6.2 %
|
|
$
2.97
|
|
$
2.65
|
|
12.0 %
|
- Effective tax rates for the three months ended December 31, 2024, and 2023, were 23.2% and
23.5%, respectively. Effective tax rates for the six months ended
December 31, 2024, and 2023, were
23.6% and 23.6%, respectively.
|
According to Mimi
Carsley, CFO and Treasurer, "Our second quarter results
included non-GAAP revenue growth of over 6%, led by our key revenue
areas of public and private cloud and processing, which combined to
grow by nearly 9%. That strong revenue growth and the
leverage provided by our SaaS business model led to non-GAAP
operating income growth of over 7%."
|
|
6Operating
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 tables below show our revenue, operating income, and net
income for the three and six months ended December 31, 2024,
compared to the three and six months ended December 31, 2023, excluding the impacts of
deconversions and the VEDIP program expense.*
|
(Unaudited, in
thousands)
|
Three Months
Ended
December 31,
|
|
%
Change
|
|
Six Months Ended
December 31,
|
|
%
Change
|
|
2024
|
|
2023
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Revenue**
|
$
573,848
|
|
$
545,701
|
|
5.2 %
|
|
$
1,174,829
|
|
$
1,117,069
|
|
5.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deconversion
revenue
|
(69)
|
|
(4,882)
|
|
|
|
(3,766)
|
|
(9,018)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
REVENUE**
|
$
573,779
|
|
$
540,819
|
|
6.1 %
|
|
$ 1,171,063
|
|
$ 1,108,051
|
|
5.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Income
|
$
123,002
|
|
$
118,967
|
|
3.4 %
|
|
$
274,278
|
|
$
251,667
|
|
9.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (income) loss
from deconversions
|
622
|
|
(3,803)
|
|
|
|
(2,873)
|
|
(7,558)
|
|
|
|
VEDIP program
expense*
|
—
|
|
—
|
|
|
|
—
|
|
16,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
$
123,624
|
|
$
115,164
|
|
7.3 %
|
|
$
271,405
|
|
$
260,552
|
|
4.2 %
|
|
Non-GAAP Adjusted
Operating Margin***
|
21.5 %
|
|
21.3 %
|
|
|
|
23.2 %
|
|
23.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Income
|
$
97,845
|
|
$
91,965
|
|
6.4 %
|
|
$
217,036
|
|
$
193,644
|
|
12.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss from
deconversions
|
622
|
|
(3,803)
|
|
|
|
(2,874)
|
|
(7,558)
|
|
|
|
VEDIP program
expense*
|
—
|
|
—
|
|
|
|
—
|
|
16,443
|
|
|
|
Tax impact of
adjustments****
|
(149)
|
|
913
|
|
|
|
690
|
|
(2,132)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
NET INCOME
|
$
98,318
|
|
$
89,075
|
|
10.4 %
|
|
$
214,852
|
|
$
200,397
|
|
7.2 %
|
|
|
*The VEDIP program
expense for the fiscal six months ended December 31, 2023, was
related to a Company voluntary separation program offered to
certain eligible employees beginning in July 2023.
|
|
**GAAP revenue is
comprised of services and support and processing revenues (see page
2). Reducing services and support revenue by deconversion revenue
for the three months ended December 31, 2024, and 2023 which was
$69 for the current fiscal year quarter and $4,882 for the prior
fiscal year quarter, results in non-GAAP adjusted services and
support revenue growth of 5.2% quarter over quarter. There were no
non-GAAP adjustments to processing revenue for the three months
ended December 31, 2024, or 2023.
|
|
Reducing services and
support revenue by deconversion revenue for the six months ended
December 31, 2024, and 2023, which was $3,766 for the current
fiscal year period and $9,018 for the prior fiscal year period,
results in non-GAAP adjusted services and support revenue growth of
4.8% period over period. There were no non-GAAP adjustments to
processing revenue for the six months ended December 31, 2024,
or 2023.
|
|
***Non-GAAP adjusted
operating margin is calculated by dividing non-GAAP adjusted
operating income by non-GAAP adjusted revenue.
|
|
****The tax impact of
adjustments is calculated using a tax rate of 24% for the three and
six months ended December 31, 2024, and 2023. The tax rate for
non-GAAP adjustment items takes a broad look at our recurring tax
adjustments and applies them to non-GAAP revenue that does not have
its own specific tax impacts.
|
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
December 31, 2024
|
|
(Unaudited, in
thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
|
GAAP
REVENUE
|
$
173,173
|
|
$
214,836
|
|
$
160,937
|
|
$ 24,902
|
|
$
573,848
|
|
Non-GAAP
adjustments*
|
20
|
|
(34)
|
|
(60)
|
|
5
|
|
(69)
|
|
NON-GAAP ADJUSTED
REVENUE
|
173,193
|
|
214,802
|
|
160,877
|
|
24,907
|
|
573,779
|
|
|
|
|
|
|
|
|
|
|
|
GAAP COST OF
REVENUE
|
70,739
|
|
114,738
|
|
63,384
|
|
83,989
|
|
332,850
|
|
Non-GAAP
adjustments*
|
(88)
|
|
(53)
|
|
(99)
|
|
—
|
|
(240)
|
|
NON-GAAP ADJUSTED
COST OF REVENUE
|
70,651
|
|
114,685
|
|
63,285
|
|
83,989
|
|
332,610
|
|
|
|
|
|
|
|
|
|
|
|
GAAP SEGMENT
INCOME
|
$
102,434
|
|
$
100,098
|
|
$
97,553
|
|
$
(59,087)
|
|
|
|
Segment Income
Margin**
|
59.2 %
|
|
46.6 %
|
|
60.6 %
|
|
(237.3) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
SEGMENT INCOME
|
$
102,542
|
|
$
100,117
|
|
$
97,592
|
|
$
(59,082)
|
|
|
|
Non-GAAP Adjusted
Segment Income Margin**
|
59.2 %
|
|
46.6 %
|
|
60.7 %
|
|
(237.2) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
41,095
|
|
Selling, General, and
Administrative
|
|
|
|
|
|
|
|
|
76,901
|
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
(451)
|
|
NON-GAAP TOTAL
ADJUSTED OPERATING EXPENSES
|
|
|
|
|
|
|
|
450,155
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
|
|
|
|
|
|
$
123,624
|
|
|
*Revenue non-GAAP
adjustments for all segments were deconversion revenue. Cost of
revenue non-GAAP adjustments for all segments were deconversion
costs.
|
|
**Segment income margin
is calculated by dividing segment income by revenue for each
segment. Non-GAAP adjusted segment income margin is calculated by
dividing non-GAAP adjusted segment income by non-GAAP adjusted
revenue for each segment.
|
|
***Non-GAAP adjustments
unassigned to a segment were selling, general, and administrative
deconversion costs.
|
|
Three Months Ended
December 31, 2023
|
|
(Unaudited, in
thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
|
GAAP
REVENUE
|
$
165,601
|
|
$
203,839
|
|
$
152,466
|
|
$ 23,795
|
|
$
545,701
|
|
Non-GAAP
adjustments*
|
(1,929)
|
|
(1,555)
|
|
(1,355)
|
|
(43)
|
|
(4,882)
|
|
NON-GAAP ADJUSTED
REVENUE
|
163,672
|
|
202,284
|
|
151,111
|
|
23,752
|
|
540,819
|
|
|
|
|
|
|
|
|
|
|
|
GAAP COST OF
REVENUE
|
69,370
|
|
111,623
|
|
62,825
|
|
77,161
|
|
320,979
|
|
Non-GAAP
adjustments*
|
(321)
|
|
(51)
|
|
(249)
|
|
—
|
|
(621)
|
|
NON-GAAP ADJUSTED
COST OF REVENUE
|
69,049
|
|
111,572
|
|
62,576
|
|
77,161
|
|
320,358
|
|
|
|
|
|
|
|
|
|
|
|
GAAP SEGMENT
INCOME
|
$ 96,231
|
|
$ 92,216
|
|
$
89,641
|
|
$
(53,366)
|
|
|
|
Segment Income
Margin**
|
58.1 %
|
|
45.2 %
|
|
58.8 %
|
|
(224.3) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
SEGMENT INCOME
|
$
94,623
|
|
$ 90,712
|
|
$
88,535
|
|
$
(53,409)
|
|
|
|
Non-GAAP Adjusted
Segment Income Margin
|
57.8 %
|
|
44.8 %
|
|
58.6 %
|
|
(224.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
35,478
|
|
Selling, General, and
Administrative
|
|
|
|
|
|
|
|
|
70,277
|
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
(458)
|
|
NON-GAAP TOTAL
ADJUSTED OPERATING EXPENSES
|
|
|
|
|
|
|
|
425,655
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
|
|
|
|
|
|
$ 115,164
|
|
|
*Revenue non-GAAP
adjustments for all segments were deconversion revenues. Cost of
revenue non-GAAP adjustments for the Core, Payments, and
Complementary segments were deconversion costs.
|
|
**Segment income margin
is calculated by dividing segment income by revenue for each
segment. Non-GAAP adjusted segment income margin is calculated by
dividing non-GAAP adjusted segment income by non-GAAP adjusted
revenue for each segment.
|
|
***Non-GAAP adjustments
unassigned to a segment were selling, general, and administrative
deconversion costs.
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
December 31, 2024
|
|
(Unaudited, in
thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
|
GAAP
REVENUE
|
$
368,797
|
|
$
426,758
|
|
$
332,639
|
|
$ 46,635
|
|
$
1,174,829
|
|
Non-GAAP
adjustments*
|
(1,267)
|
|
(1,948)
|
|
(533)
|
|
(18)
|
|
(3,766)
|
|
NON-GAAP ADJUSTED
REVENUE
|
367,530
|
|
424,810
|
|
332,106
|
|
46,617
|
|
1,171,063
|
|
|
|
|
|
|
|
|
|
|
|
GAAP COST OF
REVENUE
|
152,159
|
|
227,757
|
|
129,352
|
|
167,014
|
|
676,282
|
|
Non-GAAP
adjustments*
|
(125)
|
|
(71)
|
|
(159)
|
|
—
|
|
(355)
|
|
NON-GAAP ADJUSTED
COST OF REVENUE
|
152,034
|
|
227,686
|
|
129,193
|
|
167,014
|
|
675,927
|
|
|
|
|
|
|
|
|
|
|
|
GAAP SEGMENT
INCOME
|
$
216,638
|
|
$
199,001
|
|
$
203,287
|
|
$
(120,379)
|
|
|
|
Segment Income
Margin**
|
58.7 %
|
|
46.6 %
|
|
61.1 %
|
|
(258.1) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
SEGMENT INCOME
|
$
215,496
|
|
$
197,124
|
|
$
202,913
|
|
$
(120,397)
|
|
|
|
Non-GAAP Adjusted
Segment Income Margin
|
58.6 %
|
|
46.4 %
|
|
61.1 %
|
|
(258.3) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
80,780
|
|
Selling, General, and
Administrative
|
|
|
|
|
|
|
|
|
143,489
|
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
(538)
|
|
NON-GAAP TOTAL
ADJUSTED OPERATING EXPENSES
|
|
|
|
|
|
|
|
899,658
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
|
|
|
|
|
|
$
271,405
|
|
|
*Revenue non-GAAP
adjustments for all segments were deconversion revenue. Cost of
revenue non-GAAP adjustments for the Core, Payments, and
Complementary segments were deconversion costs.
|
|
**Segment income margin
is calculated by dividing segment income by revenue for each
segment. Non-GAAP adjusted segment income margin is calculated by
dividing non-GAAP adjusted segment income by non-GAAP adjusted
revenue for each segment.
|
|
***Non-GAAP adjustments
unassigned to a segment were selling, general, and administrative
deconversion costs.
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
December 31, 2023
|
|
(Unaudited, in
thousands)
|
Core
|
|
Payments
|
|
Complementary
|
|
Corporate
and Other
|
|
Total
|
|
GAAP
REVENUE
|
$
352,041
|
|
$
403,195
|
|
$
313,833
|
|
$
48,000
|
|
$
1,117,069
|
|
Non-GAAP
adjustments*
|
(3,595)
|
|
(2,560)
|
|
(2,806)
|
|
(57)
|
|
(9,018)
|
|
NON-GAAP ADJUSTED
REVENUE
|
348,446
|
|
400,635
|
|
311,027
|
|
47,943
|
|
1,108,051
|
|
|
|
|
|
|
|
|
|
|
|
GAAP COST OF
REVENUE
|
145,296
|
|
220,449
|
|
123,783
|
|
154,453
|
|
643,981
|
|
Non-GAAP
adjustments*
|
(425)
|
|
(98)
|
|
(367)
|
|
(1)
|
|
(891)
|
|
NON-GAAP ADJUSTED
COST OF REVENUE
|
144,871
|
|
220,351
|
|
123,416
|
|
154,452
|
|
643,090
|
|
|
|
|
|
|
|
|
|
|
|
GAAP SEGMENT
INCOME
|
$
206,745
|
|
$
182,746
|
|
$
190,050
|
|
$
(106,453)
|
|
|
|
Segment Income
Margin**
|
58.7 %
|
|
45.3 %
|
|
60.6 %
|
|
(221.8) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
SEGMENT INCOME
|
$
203,575
|
|
$
180,284
|
|
$
187,611
|
|
$
(106,509)
|
|
|
|
Non-GAAP Adjusted
Segment Income Margin
|
58.4 %
|
|
45.0 %
|
|
60.3 %
|
|
(222.2) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
|
|
|
|
|
72,370
|
|
Selling, General, and
Administrative
|
|
|
|
|
|
|
|
|
149,051
|
|
Non-GAAP adjustments
unassigned to a segment***
|
|
|
|
|
|
|
|
(17,012)
|
|
NON-GAAP TOTAL
ADJUSTED OPERATING EXPENSES
|
|
|
|
|
|
|
|
847,499
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME
|
|
|
|
|
|
|
|
$
260,552
|
|
|
*Revenue non-GAAP
adjustments for all segments were deconversion revenues. Cost of
revenue non-GAAP adjustments for all segments were deconversion
costs.
|
|
**Segment income margin
is calculated by dividing segment income by revenue for each
segment. Non-GAAP adjusted segment income margin is calculated by
dividing non-GAAP adjusted segment income by non-GAAP adjusted
revenue for each segment.
|
|
***Non-GAAP adjustments
unassigned to a segment were VEDIP expenses of $16,443 and selling,
general, and administrative deconversion costs of $569. The VEDIP
program expense for the fiscal six months ended December 31, 2023,
was related to a Company voluntary separation program offered to
certain eligible employees beginning in July 2023.
|
The table below shows our GAAP to non-GAAP guidance for the
fiscal year ending June 30, 2025.
Fiscal year 2025 non-GAAP guidance excludes the impacts of
deconversion revenue and related operating expenses and assumes no
acquisitions or dispositions are made during the fiscal year.
|
GAAP to Non-GAAP
GUIDANCE (In millions, except per share data)
|
|
Annual
FY25
|
|
|
Low
|
|
High
|
|
GAAP
REVENUE
|
|
$
2,369
|
|
$
2,391
|
|
Growth
|
|
6.9 %
|
|
7.9 %
|
|
Deconversions*
|
|
$
16
|
|
$
16
|
|
NON-GAAP ADJUSTED
REVENUE**
|
|
$
2,353
|
|
$
2,375
|
|
Non-GAAP Adjusted
Growth
|
|
7.0 %
|
|
8.0 %
|
|
|
|
|
|
|
GAAP OPERATING
EXPENSES
|
|
$
1,823
|
|
$
1,836
|
|
Growth
|
|
5.6 %
|
|
6.4 %
|
|
Deconversion
costs*
|
|
$
3
|
|
$
3
|
|
NON-GAAP ADJUSTED
OPERATING EXPENSES**
|
|
$
1,820
|
|
$
1,833
|
|
Non-GAAP Adjusted
Growth
|
|
6.7 %
|
|
7.4 %
|
|
|
|
|
|
|
GAAP OPERATING
INCOME
|
|
$
546
|
|
$
555
|
|
Growth
|
|
11.6 %
|
|
13.3 %
|
|
|
|
|
|
|
GAAP OPERATING
MARGIN
|
|
23.0 %
|
|
23.2 %
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING INCOME**
|
|
$
533
|
|
$
542
|
|
Non-GAAP Adjusted
Growth
|
|
8.2 %
|
|
9.9 %
|
|
|
|
|
|
|
NON-GAAP ADJUSTED
OPERATING MARGIN
|
|
22.7 %
|
|
22.8 %
|
|
|
|
|
|
|
GAAP
EPS***
|
|
$ 5.78
|
|
$ 5.87
|
|
Growth
|
|
10.6 %
|
|
12.3 %
|
|
|
|
|
|
|
Non-GAAP
EPS***
|
|
$
5.65
|
|
$
5.74
|
|
Growth
|
|
7.3 %
|
|
9.0 %
|
|
|
*Deconversion revenue
and related operating expenses are based on actual results for the
six months ended December 31, 2024, and estimates for the remainder
of fiscal year 2025, based on the lowest actual recent historical
results. See the Company's Form 8-K filed with the Securities and
Exchange Commission on January 27, 2025.
|
|
**GAAP to Non-GAAP
revenue, operating expenses, and operating income may not foot due
to rounding.
|
|
***The GAAP to Non-GAAP
EPS reconciliation table is below on page 15.
|
Balance Sheet and Cash Flow Review (In
millions)
- Cash and cash equivalents were $26
million at December 31, 2024,
and $27 million at December 31, 2023.
- Trade receivables were $283
million at December 31, 2024,
compared to $271 million at
December 31, 2023.
- The Company had $150 million of
borrowings at December 31, 2024
compared to $255 million of
borrowings at December 31, 2023.
- Deferred revenue remained consistent at $269 million at December
31, 2024, and 2023.
- Stockholders' equity increased to $1,976
million at December 31, 2024,
compared to $1,724 million at
December 31, 2023.
|
*See table below for
Net Cash Provided by Operating Activities and on page 14 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 14. 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)
|
Six Months Ended
December 31,
|
|
2024
|
|
2023
|
|
Net income
|
$
217,036
|
|
$
193,644
|
|
Depreciation
|
22,731
|
|
23,765
|
|
Amortization
|
79,517
|
|
75,366
|
|
Change in deferred
income taxes
|
(8,745)
|
|
(16,532)
|
|
Other non-cash
expenses
|
15,535
|
|
15,693
|
|
Change in
receivables
|
49,811
|
|
90,702
|
|
Change in deferred
revenue
|
(119,463)
|
|
(130,529)
|
|
Change in other assets
and liabilities*
|
(49,879)
|
|
(13,437)
|
|
NET CASH FROM
OPERATING ACTIVITIES
|
$
206,543
|
|
$
238,672
|
|
|
*For the six months
ended December 31, 2024, includes the change in prepaid cost of
product and other of $(34,384), accrued expenses of $(19,450), and
income taxes of $9,538. For the six months ended December 31, 2023,
includes the change in prepaid cost of product and other of
$(52,969), income taxes of $23,792, and the change in accrued
expenses of $15,463.
|
The following table summarizes net cash from investing
activities:
|
(Unaudited, in
thousands)
|
Six Months Ended
December 31,
|
|
2024
|
|
2023
|
|
Capital
expenditures
|
(29,469)
|
|
(24,458)
|
|
Proceeds from
dispositions
|
—
|
|
878
|
|
Purchased
software
|
(3,528)
|
|
(2,971)
|
|
Computer software
developed
|
(85,803)
|
|
(83,408)
|
|
Purchase of
investments
|
(2,000)
|
|
(1,000)
|
|
Proceeds from
investments
|
1,000
|
|
—
|
|
NET CASH FROM
INVESTING ACTIVITIES
|
$
(119,800)
|
|
$
(110,959)
|
The following table summarizes net cash from financing
activities:
|
(Unaudited, in
thousands)
|
Six Months Ended
December 31,
|
|
2024
|
|
2023
|
|
Borrowings on credit
facilities
|
$
165,000
|
|
$
220,000
|
|
Repayments on credit
facilities and financing leases
|
(165,000)
|
|
(240,000)
|
|
Purchase of treasury
stock
|
(17,050)
|
|
(20,000)
|
|
Dividends
paid
|
(80,193)
|
|
(75,722)
|
|
Net cash from issuance
of stock and tax related to stock-based compensation
|
(2,131)
|
|
2,475
|
|
NET CASH FROM
FINANCING ACTIVITIES
|
$
(99,374)
|
|
$
(113,247)
|
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 includes 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, adjusted operating margin, adjusted segment
income margin, non-GAAP earnings before interest, taxes,
depreciation, and amortization (non-GAAP EBITDA), free cash flow,
return on invested capital (ROIC), non-GAAP adjusted net income,
and non-GAAP earnings per share (EPS).
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 margin, adjusted segment income, adjusted segment
income margin, adjusted cost of revenue, adjusted operating
expenses, adjusted net income, and non-GAAP EPS eliminate one-time
deconversion revenue and associated costs and the effects of the
VEDIP program expense related to a Company voluntary separation
program offered to certain eligible employees beginning in
July 2023, 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 deconversions and the VEDIP
program expense. 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 February 5, 2025, 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 48
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 7,500 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
December 31,
|
|
%
Change
|
|
Six Months Ended
December 31,
|
|
%
Change
|
|
2024
|
|
2023
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
$
573,848
|
|
$
545,701
|
|
5.2 %
|
|
$
1,174,829
|
|
$
1,117,069
|
|
5.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Revenue
|
332,850
|
|
320,979
|
|
3.7 %
|
|
676,282
|
|
643,981
|
|
5.0 %
|
|
Research and
Development
|
41,095
|
|
35,478
|
|
15.8 %
|
|
80,780
|
|
72,370
|
|
11.6 %
|
|
Selling, General, and
Administrative
|
76,901
|
|
70,277
|
|
9.4 %
|
|
143,489
|
|
149,051
|
|
(3.7) %
|
|
EXPENSES
|
450,846
|
|
426,734
|
|
5.7 %
|
|
900,551
|
|
865,402
|
|
4.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
123,002
|
|
118,967
|
|
3.4 %
|
|
274,278
|
|
251,667
|
|
9.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
7,159
|
|
5,121
|
|
39.8 %
|
|
15,506
|
|
9,866
|
|
57.2 %
|
|
Interest
expense
|
(2,780)
|
|
(3,865)
|
|
(28.1) %
|
|
(5,605)
|
|
(8,062)
|
|
(30.5) %
|
|
Interest Income
(Expense), net
|
4,379
|
|
1,256
|
|
248.6 %
|
|
9,901
|
|
1,804
|
|
448.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
127,381
|
|
120,223
|
|
6.0 %
|
|
284,179
|
|
253,471
|
|
12.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes
|
29,536
|
|
28,258
|
|
4.5 %
|
|
67,143
|
|
59,827
|
|
12.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
$
97,845
|
|
$
91,965
|
|
6.4 %
|
|
$
217,036
|
|
$
193,644
|
|
12.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share
|
$
1.34
|
|
$
1.26
|
|
|
|
$
2.97
|
|
$
2.65
|
|
|
|
Diluted weighted
average shares outstanding
|
73,082
|
|
72,984
|
|
|
|
73,080
|
|
72,999
|
|
|
|
Consolidated Balance
Sheet Highlights (Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
December
31,
|
|
%
Change
|
|
|
|
|
|
|
|
2024
|
|
2023
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
$
25,653
|
|
$
26,709
|
|
(4.0) %
|
|
Receivables
|
|
|
|
|
|
|
283,223
|
|
270,551
|
|
4.7 %
|
|
Total assets
|
|
|
|
|
|
|
2,911,770
|
|
2,753,976
|
|
5.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
$
209,926
|
|
$
207,230
|
|
1.3 %
|
|
Current and long-term
debt
|
|
|
|
|
|
|
150,000
|
|
255,000
|
|
(41.2) %
|
|
Deferred
revenue
|
|
|
|
|
|
|
269,469
|
|
269,200
|
|
0.1 %
|
|
Stockholders'
equity
|
|
|
|
|
|
|
1,975,565
|
|
1,724,387
|
|
14.6 %
|
|
Calculation of
Non-GAAP Earnings Before Income Taxes, Depreciation and
Amortization (Non-GAAP EBITDA)
|
|
Three Months
Ended
December 31,
|
|
%
Change
|
|
Six Months Ended
December 31,
|
|
%
Change
|
|
(In
thousands)
|
2024
|
|
2023
|
|
|
|
2024
|
|
2023
|
|
|
|
Net income
|
$
97,845
|
|
$
91,965
|
|
|
|
$
217,036
|
|
$
193,644
|
|
|
|
Net interest
|
(4,379)
|
|
(1,256)
|
|
|
|
(9,901)
|
|
(1,804)
|
|
|
|
Taxes
|
29,536
|
|
28,258
|
|
|
|
67,143
|
|
59,827
|
|
|
|
Depreciation and
amortization
|
51,754
|
|
49,896
|
|
|
|
102,248
|
|
99,131
|
|
|
|
Less: Net income before
interest expense, taxes, depreciation and amortization attributable
to eliminated one-time adjustments*
|
622
|
|
(3,802)
|
|
|
|
(2,873)
|
|
8,886
|
|
|
|
NON-GAAP
EBITDA
|
$
175,378
|
|
$
165,061
|
|
6.3 %
|
|
$
373,653
|
|
$
359,684
|
|
3.9 %
|
|
|
*The fiscal second
quarter 2025 and 2024 adjustments for net income before interest
expense, taxes, depreciation and amortization were for
deconversions. The fiscal year-to-date 2025 and 2024 adjustments
were for deconversions in 2025 and deconversions and the VEDIP
program expense in 2024 and were $(7,557) and $16,443,
respectively. The VEDIP program expense for the fiscal six
months ended December 31, 2023, was related to a Company voluntary
separation program offered to certain eligible employees beginning
in July 2023.
|
|
Calculation of Free
Cash Flow (Non-GAAP)
|
|
|
|
|
|
Six Months Ended
December 31,
|
|
(In
thousands)
|
|
|
|
|
|
|
2024
|
|
2023
|
|
Net cash from operating
activities
|
|
|
|
|
|
$
206,543
|
|
$
238,672
|
|
Capitalized
expenditures
|
|
|
|
|
|
|
(29,469)
|
|
(24,458)
|
|
Internal use
software
|
|
|
|
|
|
|
(3,528)
|
|
(2,971)
|
|
Proceeds from sale of
assets
|
|
|
|
|
|
|
—
|
|
878
|
|
Capitalized
software
|
|
|
|
|
|
|
(85,803)
|
|
(83,408)
|
|
FREE CASH
FLOW
|
|
|
|
|
|
|
$
87,743
|
|
$
128,713
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of the
Return on Average Shareholders' Equity
|
|
|
|
December
31,
|
|
(In
thousands)
|
|
|
|
|
|
|
2024
|
|
2023
|
|
Net income (trailing
four quarters)
|
|
|
|
|
|
$
405,208
|
|
$
372,966
|
|
Average stockholder's
equity (period beginning and ending balances)
|
|
|
|
1,849,976
|
|
1,617,689
|
|
RETURN ON AVERAGE
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
21.9 %
|
|
23.1 %
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Return on Invested Capital (ROIC) (Non-GAAP)
|
|
|
December
31,
|
|
(In
thousands)
|
|
|
|
|
|
|
2024
|
|
2023
|
|
Net income (trailing
four quarters)
|
|
|
|
|
|
$
405,208
|
|
$
372,966
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholder's
equity (period beginning and ending balances)
|
|
|
|
1,849,976
|
|
1,617,689
|
|
Average current
maturities of long-term debt and financing leases (period beginning
and ending balances)
|
|
45,000
|
|
11
|
|
Average long-term debt
(period beginning and ending balances)
|
|
157,500
|
|
265,000
|
|
Average invested
capital
|
|
|
|
|
|
|
$ 2,052,476
|
|
$
1,882,700
|
|
|
|
|
|
|
|
|
|
|
|
ROIC
|
|
|
|
|
|
|
19.7 %
|
|
19.8 %
|
|
GAAP to Non-GAAP EPS
Reconciliation Table
|
|
|
|
FY25
Guidance
|
|
|
|
GAAP
EPS
|
$5.78-$5.87
|
|
|
|
Excluded Activity,
net of Tax:
|
|
Deconversion*
|
$0.13
|
|
|
|
Non-GAAP
EPS
|
$5.65-$5.74
|
|
|
*We are not aware of
any other discreet adjustments at this time. Deconversion revenue
and related operating expenses are based on actual results for
fiscal second quarter 2025 and estimates for the remainder of
fiscal year 2025, based on the lowest actual recent historical
results. See the Company's Form 8-K filed with the Securities and
Exchange Commission on January 27, 2025.
|
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SOURCE Jack Henry &
Associates, Inc.
