Jack Henry & Associates, Inc. JKHY delivered third-quarter fiscal 2026 earnings of $1.71 per diluted share, which improved 12.5% year over year and beat the Zacks Consensus Estimate by 19.58%.
Revenues rose 8.7% year over year to $636 million, surpassing the consensus mark by 3.4%. After adjusting for deconversion revenues of $18.7 million and revenues from the acquisition of $1.7 million, non-GAAP revenues were $615.9 million, up 7.3% year over year.
JKHY’s third-quarter results reflected continued expansion in cloud-related processing and hosting activity, and management highlighted 15 competitive core wins, its best third quarter for new core wins in seven years.
Jack Henry & Associates surpassed the Zacks Consensus Estimate for earnings in each of the preceding four quarters, the average surprise being 19.96%.
Jack Henry & Associates, Inc. Price, Consensus and EPS Surprise
Jack Henry & Associates, Inc. price-consensus-eps-surprise-chart | Jack Henry & Associates, Inc. Quote
JKHY’s Revenue Gains Are Broad-Based Across Segments
Services and Support revenues increased 10.4% year over year to $365.1 million, boosted by growth in data processing and hosting, including private and public cloud revenue growth. Processing revenues rose 6.6% to $271.1 million, driven by higher digital and transaction revenues, card revenues and faster payments revenues. Services and Support accounted for 57.4% of total revenues, while Processing contributed the remaining 42.6%.
Segment-wise, revenues from the Core segment (30% of total revenues) in the third quarter of fiscal 2026 were $195.4 million, up 9.2% year over year. Revenues from Payments (37.5% of total revenues) were $232.7 million, which rose 7% year over year. Revenues from Complementary (29.3% of total revenues) were $187.5 million, up 8.7% year over year. Revenues from Corporate and Other (3.2% of total revenues) were $20.6 million, up 27.5% year over year.
In the fiscal third quarter, revenue growth was supported by contributions from each of the company’s major operating segments. Core, Payments and Complementary solutions all posted higher revenues compared with the prior-year period, underscoring balanced customer spending across Jack Henry’s product portfolio.
Corporate and Other also contributed to total sales, while the segment mix continued to tilt toward Payments and other transaction-driven offerings. The diversified revenue base helped the company absorb pockets of timing-related variability and still post an above-consensus top line.
Non-GAAP adjusted operating income came in at $141.2 million, up 7.3% from the year-ago period, with the non-GAAP adjusted operating margin at 22.9%.
JKHY’s Strategy Leans on Cloud and Competitive Conversions
Management framed the quarter around demand from banks and credit unions and emphasized disciplined execution across the business. Beyond the 15 competitive core wins, commentary pointed to an expanding sales pipeline supported by increased technology spending and competitive uncertainty among customers.
Operationally, the quarter’s drivers were closely tied to processing growth vectors such as digital and transaction activity, card and faster payments, and services trends in hosting and data processing. These areas are central to Jack Henry’s longer-term strategy as customers modernize core and payments infrastructure.
Jack Henry’s Balance Sheet
As of March 31, 2026, JKHY’s cash and cash equivalents were $21 million compared with $28 million as of Dec. 31, 2025. In the first nine months of fiscal 2026, Jack Henry & Associates generated an operating cash flow of $459 million and free cash flow of $294 million.
JKHY Updates 2026 Guidance
For fiscal 2026, Jack Henry & Associates updated its GAAP revenue guidance to $2.521-$2.533 billion, up from its previously guided range of $2.508-$2.525 billion. Non-GAAP revenues are estimated in the range of $2.479-$2.491 billion, up from the earlier band of $2.474-$2.491 billion. The Zacks Consensus Estimate for revenues is pegged at $2.51 billion, suggesting a year-over-year rise of 5.59%.
The GAAP operating margin is anticipated between 24.7% and 24.9% compared with its previous guidance of 24.3-24.5%. The adjusted operating margin is expected to be between 23.9% and 24.1%, up from the previous guidance of 23.7-23.9%.
Management expects GAAP earnings in the range of $6.78-$6.87 per share, up from its previous guidance range of $6.61-$6.72 for fiscal 2026. The Zacks Consensus Estimate for earnings is pegged at $6.69, indicating a year-over-year increase of 7.2%.
JKHY’s Zacks Rank and Other Stocks to Consider
Currently, Jack Henry carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth considering in the broader Zacks Computer and Technology sector are Micron Technology MU, Broadcom AVGO and NVIDIA NVDA. Micron Technology sports a Zacks Rank #1 (Strong Buy) at present, while Broadcom and NVIDIA each carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has been revised upward by a penny to $58.36 per share in the past 30 days, suggesting an increase of 604% from fiscal 2025’s reported figure. Micron Technology shares have surged 124.3% year to date (YTD).
The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings has moved northward by 9 cents to $11.45 per share over the past 30 days and calls for a year-over-year jump of 67.9%. Broadcom shares have soared 25.8% YTD.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved upward by 4 cents to $8.07 per share in the past 30 days, implying a year-over-year improvement of approximately 69.2%. NVIDIA shares have risen 5.3% YTD.
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This article originally published on Zacks Investment Research (zacks.com).