Jack Henry & Associates, Inc. Reports Second Quarter Fiscal 2026 Results

Second quarter summary:

•     GAAP revenue increased 7.9% and GAAP operating income increased 29.4% for the fiscal three months ended December 31, 2025, compared to the prior fiscal year quarter.

•     Non-GAAP adjusted revenue increased 6.7% and non-GAAP adjusted operating income increased 24.3% for the fiscal three months ended December 31, 2025, compared to the prior fiscal year quarter.1

•GAAP EPS was $1.72 per diluted share for the fiscal three months ended December 31, 2025, compared to $1.34 per diluted share in the prior fiscal year quarter representing growth of 28.6%.

Fiscal year-to-date summary:

•     GAAP revenue increased 7.6% and GAAP operating income increased 25.1% for the fiscal year-to-date period ended December 31, 2025, compared to the prior fiscal year-to-date period.

•     Non-GAAP adjusted revenue increased 7.7% and non-GAAP adjusted operating income increased 21.2% for the fiscal year-to-date period ended December 31, 2025, compared to the prior fiscal year-to-date period.1

•     GAAP EPS was $3.70 per diluted share for the fiscal year-to-date period ended December 31, 2025, compared to $2.97 per diluted share in the prior fiscal year-to-date period representing growth of 24.5%.

•     Cash and cash equivalents were $28.2 million at December 31, 2025, and $25.7 million at December 31, 2024.

•    Debt outstanding related to credit facilities was $20 million at December 31, 2025, and $150 million at December 31, 2024.

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

Monett, MO, February 3, 2026 - Jack Henry & Associates, Inc. (Nasdaq: JKHY), a leading financial technology provider, today announced results for fiscal second quarter ended December 31, 2025.

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

2See table below on page 14 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 9 reconciling fiscal year 2026 GAAP to non-GAAP guidance.

Revenue, operating expenses, operating income, and net income for the fiscal three and six months ended December 31, 2025, compared to the fiscal three and six months ended December 31, 2024, were as follows:

•Services and support revenue increased for the fiscal three months ended December 31, 2025, primarily driven by growth in data processing and hosting revenue within private and public cloud revenue of 9.2% and higher deconversion revenue by $6,143. Processing revenue increased for the fiscal three months ended December 31, 2025, primarily driven by growth in digital and transaction revenue of 14.8%, card revenue of 6.1%, and faster payments products revenue, of 52.1%.

•Services and support revenue increased for the fiscal six months ended December 31, 2025, primarily driven by growth in data processing and hosting revenue within private and public cloud revenue of 8.6% and higher deconversion revenue by $11,072. Processing revenue increased for the fiscal six months ended December 31, 2025, primarily driven by growth in card revenue of 7.5%, digital and transaction revenue of 14.3%, and faster payments products revenue of 53.9%.

•For the fiscal three months ended December 31, 2025, core segment revenue increased 8.4%, payments segment revenue increased 8.0%, complementary segment revenue increased 9.6%, and corporate and other segment revenue decreased 9.8%. For the fiscal three months ended December 31, 2025, core segment non-GAAP adjusted revenue increased 7.4%, payments segment non-GAAP adjusted revenue increased 6.4%, complementary segment non-GAAP adjusted revenue increased 8.7%, and corporate and other non-GAAP adjusted segment revenue decreased 10.1%. Total non-GAAP adjusted revenue increased 6.7% for the same period (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).

•For the fiscal six months ended December 31, 2025, core segment revenue increased 4.2%, payments segment revenue increased 8.5%, complementary segment revenue increased 9.9%, and corporate and other segment revenue increased 9.3%. For the fiscal six months ended December 31, 2025, core segment non-GAAP adjusted revenue increased 6.8%, payments segment non-GAAP adjusted revenue increased 7.4%, complementary segment non-GAAP adjusted revenue increased 9.0%, and corporate and other non-GAAP adjusted segment revenue increased 9.0%. Total non-GAAP adjusted revenue increased 7.7% for the same period (see revenue lines of segment break-out tables on pages 7 and 8 below for a reconciliation of GAAP segment revenue to non-GAAP adjusted segment revenue).

•Cost of revenue increased for the fiscal three months ended December 31, 2025, compared to the fiscal three months ended December 31, 2024, primarily due to higher direct costs generally consistent with increases in related lines of revenue and higher personnel costs tempered by lower than normal medical claims, quarter-over-quarter.

•Cost of revenue increased for the fiscal six months ended December 31, 2025, compared to the fiscal six months ended December 31, 2024, primarily due to higher direct costs generally consistent with increases in related lines of revenue, higher personnel costs tempered by lower than normal medical claims, and increased amortization of intangible assets, period over period.

•Research and development expense increased for the fiscal three and six months ended December 31, 2025, compared to the fiscal three and six months ended December 31, 2024.

•Selling, general, and administrative expense decreased for the fiscal three months ended December 31, 2025, compared to the fiscal three months ended December 31, 2024, primarily due to the decrease in travel and entertainment and meeting expenses related to the timing of our Connect conference and the higher gain on sale of assets, net, in the current fiscal year quarter of $3,032 compared to the prior fiscal year quarter.

•Selling, general, and administrative expense decreased for the fiscal six months ended December 31, 2025, compared to the fiscal six months ended December 31, 2024, primarily due to higher personnel costs partially related to a limited increase in employee headcount in the trailing twelve months and higher professional service costs that were more than offset by lower than normal medical claims and the higher gain on sale of assets, net, in the current fiscal year period of $6,829 compared to the prior fiscal year period.

•Effective tax rates for the fiscal three and six months ended December 31, 2025, and 2024, were 24.1% and 24.2% and 23.2% and 23.6%, 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 and six months ended December 31, 2025, compared to the fiscal three and six months ended December 31, 2024, excluding the impacts of deconversions in the fiscal quarters and fiscal year-to-date periods ended December 31, 2025, and December 31, 2024, the gain on sale of assets, net, in the current fiscal quarter and fiscal year-to-date period, the impact of a contract change in the prior fiscal quarter and fiscal year-to-date period, and the acquisition in the current fiscal quarter and fiscal year-to-date period.

*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 December 31, 2025, and 2024 which was $6,212 for the current fiscal year quarter and $69 for the prior fiscal year quarter, and reducing the three months ended December 31, 2024, amount also for revenue related to a contractual change of $1,223, results in non-GAAP adjusted services and support revenue growth of 5.6% quarter over quarter. Processing revenue less revenue from the acquisition for the three months ended December 31, 2025, of $1,945, results in non-GAAP adjusted processing revenue growth of 8.3% quarter over quarter.

Services and support revenue less deconversion revenue for the six months ended December 31, 2025, and 2024 which was $14,838 for the current fiscal year period and $3,766 for the prior fiscal year period, and reducing the six months ended December 31, 2024, amount also for revenue related to a contractual change of $13,471, results in non-GAAP adjusted services and support revenue growth of 6.8% period over period. Processing revenue less revenue from the acquisition for the three months ended December 31, 2025, of $1,945, results in non-GAAP adjusted processing revenue growth of 9.0% period over period.

**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 and six months ended December 31, 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 the Payments segment were ($1,945) of acquisition revenue and ($1,397) of deconversion revenue. Revenue non-GAAP adjustments for the remainder of the segments were deconversion revenue. Cost of revenue non-GAAP adjustments for the Payments segment were ($2,409) of acquisition costs and ($138) of deconversion costs. Cost of revenue non-GAAP adjustment for the Corporate and Other segment was acquisition costs. Cost of revenue non-GAAP adjustments for the remainder of the segments were deconversion costs.

***Non-GAAP adjustments unassigned to a segment were a gain on sale of assets of $3,032 less deconversion costs of $1,484, research and development costs related to the acquisition of $371, and selling, general, and administrative costs related to the acquisition of $54.

			Three Months Ended December 31, 2024
(Unaudited, dollars in thousands)			Core						Payments						Complementary						Corporate and Other						Total
GAAP REVENUE			$	171,607					$	214,836					$	165,732					$	21,673					$	573,848
Non-GAAP adjustments*			(1,203)						(34)						(60)						5						(1,292)
NON-GAAP ADJUSTED REVENUE			170,404						214,802						165,672						21,678						572,556
GAAP COST OF REVENUE			70,324						114,738						64,542						83,246						332,850
Non-GAAP adjustments*			(1,147)						(53)						(99)						—						(1,299)
NON-GAAP ADJUSTED COST OF REVENUE			69,177						114,685						64,443						83,246						331,551
GAAP SEGMENT INCOME			$	101,283					$	100,098					$	101,190					$	(61,573)
Segment Income Margin**			59.0		%				46.6		%				61.1		%				(284.1)		%
NON-GAAP ADJUSTED SEGMENT INCOME			$	101,227					$	100,117					$	101,229					$	(61,568)
Non-GAAP Adjusted Segment Income Margin			59.4		%				46.6		%				61.1		%				(284.0)		%
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																											449,096
NON-GAAP ADJUSTED OPERATING INCOME																											$	123,460

*Revenue non-GAAP adjustments for the Core segment were ($1,223) of revenue related to the contractual change and $20 of deconversion revenue. Revenue non-GAAP adjustments for the remainder of the segments were deconversion revenue. Cost of revenue non-GAAP adjustments for the Core segment were cost of revenue related to a contractual change of ($1,059) and ($88) of deconversion costs. Cost of revenue non-GAAP adjustments for the remainder of the segments were deconversion costs.

*Revenue non-GAAP adjustments for the Payments segment were ($1,945) of acquisition revenue and ($4,880) of deconversion revenue. Revenue non-GAAP adjustments for the remainder of the segments were deconversion revenue. Cost of revenue non-GAAP adjustments for the Payments segment were ($2,409) of acquisition costs and ($289) of deconversion costs. Cost of revenue non-GAAP adjustments for the Corporate and Other segment were ($94) of acquisition costs and ($1) of deconversion costs. Cost of revenue non-GAAP adjustments for the remainder of the segments were deconversion costs.

***Non-GAAP adjustments unassigned to a segment were a gain on sale of assets of $6,829 less deconversion costs of $2,106, research and development costs related to the acquisition of $371, and selling, general, and administrative costs related to the acquisition of $54.

*Revenue non-GAAP adjustments for the Core segment were ($13,471) of revenue related to the contractual change and ($1,267) of deconversion revenue. Revenue non-GAAP adjustments for the remainder of the segments were deconversion revenue. Cost of revenue non-GAAP adjustments for the Core segment were cost of revenue related to a contractual change of ($11,501) and ($125) of deconversion costs. Cost of revenue non-GAAP adjustments for the remainder of the segments were 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 six months ended December 31, 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 January 27, 2026.

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

            

•Cash and cash equivalents were $28 million at December 31, 2025, compared to $26 million at December 31, 2024.

•Trade receivables were $298 million at December 31, 2025, compared to $283 million at December 31, 2024.

•The Company had $20 million of borrowings at December 31, 2025, compared to $150 million of borrowings at December 31, 2024.

•Deferred revenue was $271 million at December 31, 2025, compared to $269 million at December 31, 2024.

•Stockholders' equity increased to $2,203 million at December 31, 2025, compared to $1,976 million at December 31, 2024.

*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 Net Operating Profit After Tax Return on Invested Capital (NOPAT ROIC) to GAAP measures are on pages 14 and 15. 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 six months ended December 31, 2025, the change in other assets and liabilities includes the change in prepaid expenses, deferred costs and other of $(56,056), accrued expenses of $(34,863), income taxes of $(9,345), and the change in accounts payable of $(8,339). For the fiscal six months ended December 31, 2024, the change in other assets and liabilities includes the change in prepaid expenses, deferred costs and other of $(34,384), the change in accrued expenses of $(19,450), the change in accounts payable of $(5,583) partially offset by the change in income taxes of $9,538.

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, the gain on sale of assets, net, an acquisition, 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, an acquisition, 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 9).

2.) What are some key elements of the outlook for the second half of fiscal 2026?

•We expect the year-over-year revenue growth rates to slow slightly as we face overall tougher prior year comparables from the second half of fiscal 2025.

•We expect some contraction in margins in the second half of fiscal 2026 compared to the first half where we experienced lower than normal expense for medical claims under our self-insured employee healthcare plan.