Jack Henry & Associates, Inc. (JKHY) - 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026 (Fiscal Q3 2026) and the nine months ended March 31, 2026. Jack Henry & Associates, Inc. is a financial technology company providing core information processing, payment processing, and complementary software solutions to approximately 7,400 banks, credit unions, and corporate entities. The company operates through four segments: Core, Payments, Complementary, and Corporate Services.
Key Financial Metrics
| Metric | Q3 2026 (3 Months) | Q3 2025 (3 Months) | YTD 2026 (9 Months) | YTD 2025 (9 Months) |
|---|---|---|---|---|
| Revenue | $636.2 million | $585.1 million | $1,900.3 million | $1,759.9 million |
| Operating Income | $155.0 million | $138.7 million | $498.3 million | $413.0 million |
| Net Income | $122.9 million | $111.1 million | $391.5 million | $328.1 million |
| Diluted EPS | $1.71 | $1.52 | $5.41 | $4.49 |
| Operating Margin | 24.4% | 23.7% | 26.2% | 23.5% |
| Cash from Operations (YTD) | $459.3 million (vs. $314.4 million YTD 2025) | |||
| Cash & Equivalents (End of Period) | $20.6 million (vs. $102.0 million at June 30, 2025) | |||
| Debt Outstanding | $90.0 million (Revolving Credit Facility) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 8.7% in Q3 and 8.0% YTD compared to the prior year. Organic growth (excluding deconversions and acquisitions) was 7.3% in Q3 and 7.6% YTD.
- Profitability: Operating income grew 11.8% in Q3 and 20.6% YTD. Net income increased 10.6% in Q3 and 19.3% YTD.
- Segment Performance:
- Core: Revenue up 9.2% (Q3) and 5.9% (YTD), driven by cloud migration and processing volume expansion.
- Payments: Revenue up 7.0% (Q3) and 8.0% (YTD), aided by the acquisition of Victor Technologies and growth in card/faster payments.
- Complementary: Revenue up 8.7% (Q3) and 9.5% (YTD), driven by hosting and digital transaction growth.
- Acquisition: On September 30, 2025, the company acquired Victor Technologies, Inc. for $42.4 million to expand Payments-as-a-Service capabilities. This contributed $1.7 million to Q3 revenue and $3.6 million to YTD revenue.
- Capital Allocation: The company repurchased 1.78 million shares for $284.4 million YTD and paid $127.5 million in dividends YTD.
Guidance, Outlook, and Risks
- Outlook: Management expressed confidence in delivering durable growth, citing a healthy sales pipeline and strong demand for technology solutions. The company is entering its 50th year of business.
- Capital Expenditures: Total consolidated capital expenditures for fiscal year 2026 are expected to be between $100 million and $130 million.
- Tax Legislation: The "One Big Beautiful Bill Act" (OBBBA) enacted in July 2025 restored immediate expensing for R&D and 100% bonus depreciation. While not materially impacting the current effective tax rate, it is expected to reduce cash tax payments and deferred tax assets in the current fiscal year.
- Debt Facility: On March 25, 2026, the company entered a new five-year revolving credit agreement with a capacity of $1.0 billion, replacing the prior facility. $90 million was outstanding as of March 31, 2026.
- Risks: Standard risks include credit risk on client receivables, interest rate risk on variable debt, and the impact of forward-looking statements which are subject to uncertainties.
Investor Verification Checklist
- Cash Position: Verify the significant decrease in cash and cash equivalents from $102.0 million to $20.6 million, driven by share repurchases, dividends, and investing activities.
- Deconversion Impact: Assess the sustainability of revenue growth by reviewing the "organic" growth rates (7.3% Q3, 7.6% YTD) which exclude one-time deconversion revenues ($18.7M in Q3, $33.5M YTD).
- Acquisition Integration: Monitor the integration and performance contribution of Victor Technologies, Inc., particularly in the Payments segment.
- Tax Rate Volatility: Review the impact of the OBBBA tax law changes on future effective tax rates and deferred tax asset valuations.
- Share Repurchase Authority: Note that the company has approximately 1.63 million shares remaining under its current repurchase authorization as of March 31, 2026.