Jack Henry & Associates, Inc. Reports First Quarter 2026 Results

First quarter summary:

•     GAAP revenue increased 7.3% and GAAP operating income increased 21.7% for the fiscal three months ended September 30, 2025, compared to the prior fiscal year quarter.

•     Non-GAAP adjusted revenue increased 8.7% and non-GAAP adjusted operating income increased 18.6% for the fiscal three months ended September 30, 2025, compared to the prior fiscal year quarter.1

▪     GAAP EPS was $1.97 per diluted share for the fiscal three months ended September 30, 2025, compared to $1.63 per diluted share in the prior fiscal year quarter.

▪     Cash and cash equivalents were $36.2 million at September 30, 2025, and $43.2 million at September 30, 2024.

▪     Debt outstanding related to credit facilities was $20 million at September 30, 2025, and $140 million at September 30, 2024.

Full year fiscal 2026 guidance (Dollars in millions):3

Monett, MO, November 4, 2025 - Jack Henry & Associates, Inc. (Nasdaq: JKHY), a leading financial technology provider, today announced results for fiscal first quarter ended September 30, 2025.

1 See tables below on page 4 reconciling non-GAAP financial measures to GAAP.

2See table below on page 12 reconciling net income to non-GAAP EBITDA.

3 The full fiscal year guidance assumes no additional acquisitions or dispositions will be made during fiscal year 2026.

4Operating margin is calculated by dividing operating income by revenue.

5 See tables below on page 7 reconciling fiscal year 2026 GAAP to non-GAAP guidance.

Revenue, operating expenses, operating income, and net income for the fiscal three months ended September 30, 2025, compared to the fiscal three months ended September 30, 2024, were as follows:

•Services and support revenue increased for the fiscal three months ended September 30, 2025, primarily driven by growth in data processing and hosting revenue within cloud of 8.0%, higher user group revenue by $5,481 due to the timing of our Connect conference, and higher deconversion revenue by $4,929. Processing revenue increased for the fiscal three months ended September 30, 2025, primarily driven by growth in card revenue of 9.0%, higher transaction and digital revenue of 13.9%, and an increase in payment processing revenues primarily related to PayCenter of 12.1%.

•For the fiscal three months ended September 30, 2025, core segment revenue increased 0.5%, payments segment revenue increased 9.0%, complementary segment revenue increased 10.2%, and corporate and other segment revenue increased 31.6%. For the fiscal three months ended September 30, 2025, core segment non-GAAP adjusted revenue increased 6.3%, payments segment non-GAAP adjusted revenue increased 8.3%, complementary segment non-GAAP adjusted revenue increased 9.4%, and corporate and other non-GAAP adjusted segment revenue increased 31.5%. Total non-GAAP adjusted revenue increased 8.7%. Excluding the impact of the user group revenues related to the timing of our Connect conference, non-GAAP adjusted revenue growth was 7.8% (see revenue lines of segment break-out tables on pages 5 and 6 below for a reconciliation of GAAP segment revenue to non-GAAP adjusted segment revenue).

•Cost of revenue increased for the fiscal three months ended September 30, 2025, primarily due to higher direct costs generally consistent with increases in related lines of revenue, excluding cost of customer maintenance, slightly higher personnel costs, and increased amortization of intangible assets, partially offset by the decrease in cost of customer maintenance due to a contractual change (see FAQ for Analysts/Investors section on page 13), quarter over quarter.

•Research and development expense slightly decreased for the fiscal three months ended September 30, 2025, compared to the fiscal three months ended September 30, 2024.

•Selling, general, and administrative expense increased for the fiscal three months ended September 30, 2025, primarily due to higher expenses related to the timing of our Connect conference and increased professional services, partially offset by the higher gain on sale of assets in the current fiscal year quarter.

•Effective tax rates for the fiscal three months ended September 30, 2025, and 2024, were 24.3% and 24.0%, respectively.

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.

The tables below show our revenue, operating income, and net income for the fiscal three months ended September 30, 2025, compared to the fiscal three months ended September 30, 2024, excluding the impacts of deconversions and the gain on sale of asset for the current fiscal year quarter, and excluding the impact of a contract change on first quarter fiscal 2025

*GAAP revenue is comprised of services and support and processing revenues (see page 2). Services and support revenue less deconversion revenue for the three months ended September 30, 2025, and 2024 which was $8,626 for the current fiscal year quarter and $3,697 for the prior fiscal year quarter, and reducing the three months ended September 30, 2024, for revenue related to a contract change of $12,248, results in non-GAAP adjusted services and support revenue growth of 8.1% quarter over quarter. There were no non-GAAP adjustments to processing revenue for the fiscal three months ended September 30, 2025, or 2024.

**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 fiscal three months ended September 30, 2025, and 2024. The tax rate for non-GAAP adjustment items takes a broad look at the Company's 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.

*Revenue non-GAAP adjustments for all segments were deconversion revenue. Cost of revenue non-GAAP adjustments for all segments were deconversion costs.

***Non-GAAP adjustments unassigned to a segment were a selling, general, and administrative gain on sale of assets of $3,796 less deconversion costs of $621.

			Three Months Ended September 30, 2024
(Unaudited, dollars in thousands)			Core						Payments						Complementary						Corporate and Other						Total
GAAP REVENUE			$	194,287					$	211,923					$	176,281					$	18,491					$	600,982
Non-GAAP adjustments*			(13,535)						(1,914)						(473)						(23)						(15,945)
NON-GAAP ADJUSTED REVENUE			180,752						210,009						175,808						18,468						585,037
GAAP COST OF REVENUE			80,947						113,020						67,144						82,321						343,432
Non-GAAP adjustments*			(10,480)						(18)						(60)						—						(10,558)
NON-GAAP ADJUSTED COST OF REVENUE			70,467						113,002						67,084						82,321						332,874
GAAP SEGMENT INCOME			$	113,340					$	98,903					$	109,137					$	(63,830)
Segment Income Margin**			58.3		%				46.7		%				61.9		%				(345.2)		%
NON-GAAP ADJUSTED SEGMENT INCOME			$	110,285					$	97,007					$	108,724					$	(63,853)
Non-GAAP Adjusted Segment Income Margin			61.0		%				46.2		%				61.8		%				(345.7)		%
Research and Development																											39,686
Selling, General, and Administrative																											66,588
Non-GAAP adjustments unassigned to a segment***																											(87)
NON-GAAP TOTAL ADJUSTED OPERATING EXPENSES																											439,061
NON-GAAP ADJUSTED OPERATING INCOME																											$	145,976

*Revenue non-GAAP adjustments for the payments, complementary, and corporate and other segments were deconversion revenue. Revenue non-GAAP adjustments for the core segment were deconversion revenue of $1,287 and revenue related to a contract change of $12,248. Cost of revenue non-GAAP adjustments for the payments, complementary, and corporate and other segments were deconversion costs. Cost of revenue non-GAAP adjustments for the core segment were deconversion costs of $37 and costs related to a contract change of $10,443.

***Non-GAAP adjustments unassigned to a segment were selling, general, and administrative deconversion costs.

The table below shows our GAAP to non-GAAP guidance for the fiscal year ending June 30, 2026. Fiscal year 2026 non-GAAP guidance excludes the impacts of deconversion revenue and related operating expenses, acquisition revenues and related operating expenses, the revenues and operating expenses related to a contractual change, and the gain on sale of assets, and assumes no additional acquisitions or dispositions will be made during the fiscal year.

*Deconversion revenue and related operating expenses are based on actual results for fiscal three months ended September 30, 2025, and estimates for the remainder of the fiscal year 2026. See the Company’s Form 8-K filed with the Securities and Exchange Commission on October 28, 2025.

**GAAP to Non-GAAP revenue, operating expenses, and operating income may not foot due to rounding.

            

•Cash and cash equivalents were $36 million at September 30, 2025, compared to $43 million at September 30, 2024.

•Trade receivables were $308 million at September 30, 2025, compared to $307 million at September 30, 2024.

•The Company had $20 million of borrowings at September 30, 2025, compared to $140 million of borrowings at September 30, 2024.

•Deferred revenue was $321 million at September 30, 2025, compared to $320 million at September 30, 2024.

•Stockholders' equity increased to $2,173 million at September 30, 2025, compared to $1,925 million at September 30, 2024.

*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 Net Operating Profit After Tax Return on Invested Capital (NOPAT ROIC) to GAAP measures are on pages 12 and 13. See the Use of Non-GAAP Financial Information section below for the definitions of Free Cash Flow and NOPAT ROIC.

The following table summarizes net cash from operating activities:

*For the fiscal three months ended September 30, 2025, the change in other assets and liabilities includes accrued expenses of $(36,567), the change in prepaid expenses, deferred costs and other of $(34,336), and income taxes of $(9,150). For the fiscal three months ended September 30, 2024, the change in other assets and liabilities includes the change in accrued expenses of $(23,067), the change in prepaid expenses, deferred costs and other of $(18,788), partially offset by the change in income taxes of $38,576.

The following table summarizes net cash from investing activities:

The following table summarizes net cash from financing activities:

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 segment revenue, adjusted operating income, adjusted segment income, adjusted cost of revenue, adjusted segment 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, net operating profit after tax return on invested capital (NOPAT ROIC), and non-GAAP adjusted net income.

We believe non-GAAP financial measures help investors better understand the underlying fundamentals and true operations of our business. Adjusted revenue, adjusted segment revenue, adjusted operating income, adjusted operating margin, adjusted segment income, adjusted segment income margin, adjusted cost of revenue, adjusted segment cost of revenue, adjusted operating expenses, and adjusted net income eliminate one-time deconversion revenue and associated costs and the gain on sale of assets, net, and a contractual change, 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, the gain on sale of assets, net, and a contractual change. 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. NOPAT ROIC is defined as operating income for the trailing four quarters multiplied by one minus the average effective tax rate (ETR) for the trailing four quarters, with the result divided by average invested capital (average of the beginning and ending period balances). 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 NOPAT 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.

*NOPAT operating income is calculated by multiplying the trailing four quarters operating income by one minus the average ETR. NOPAT ROIC is calculated by dividing NOPAT operating income by average invested capital (period beginning and ending balances).

1.)Why does fiscal 2025 non-GAAP revenue used for growth calculation not match reported fiscal 2025 non-GAAP revenue?

•The restructuring of a third-party agreement has resulted in a $16 million fiscal year-over-year revenue headwind, with $12 million of that coming in the first quarter.

•The remaining $4 million will impact the rest of the fiscal year.

•This restructuring has also resulted in a decrease in the related costs and the impact on margins is expected to be minimal.

•This has been adjusted for a consistent fiscal year-over-year comparison and is included in our fiscal year 2026 guidance (see page 7).

2.) What is the impact of recent federal tax legislation on free cash flow?

•Full expensing of research and development costs (IRC 174) and 100% "bonus" tax depreciation will have a meaningful favorable impact on free cash flow.

•We plan to elect to deduct the remaining unamortized IRC 174 capitalized costs in fiscal year 2026 generating a significant non-recurring cash tax benefit in the current fiscal year.

•Overall, we anticipate this legislation will allow Jack Henry to produce free cash flow conversion consistent with historical levels of approximately 85% to 100% in future years.