In This Article:
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Non-GAAP Revenue Growth: Increased by 7% in Q3 fiscal year 2025.
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Non-GAAP Operating Margin: Expanded to 23%, a 207 basis points increase over last year.
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GAAP Revenue Growth: Increased by 9% in Q3 fiscal year 2025.
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Deconversion Revenue: $9.6 million in Q3, with full-year guidance of $22 million to $28 million.
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Processing and Cloud Revenue: 76% of total revenue for the quarter, grew at 9.8%.
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Recurring Revenue: 92% of total revenue, excluding deconversion revenue.
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Core Segment Revenue Growth: Increased by 6% on a non-GAAP basis in Q3.
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Payments Segment Revenue Growth: Increased by 7% on a non-GAAP basis in Q3.
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Complementary Segment Revenue Growth: Increased by 10% on a non-GAAP basis in Q3.
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Operating Cash Flow: $108 million in Q3, a $10 million increase over the prior year's period.
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Free Cash Flow: Trailing 12-month free cash flow of $303 million, with a 71% conversion rate.
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GAAP EPS: $1.52, up 28% in Q3.
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Full Year GAAP EPS Guidance: $6 to $6.09, representing annual growth of 15% to 17%.
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Return on Invested Capital: 20% trailing 12-month return.
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Jack Henry & Associates Inc (NASDAQ:JKHY) reported a 7% increase in non-GAAP revenue and a 23% non-GAAP operating margin, reflecting a 207 basis points expansion over the previous year.
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The company secured 28 new core wins in the fiscal year, including 11 in Q3, with financial institutions totaling $30 billion in assets.
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Jack Henry & Associates Inc (NASDAQ:JKHY) continues to see strong growth in its Payments segment, with significant increases in clients using Zelle, RTP, and FedNow.
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The Banno Digital Platform experienced healthy growth, with a 18% increase in registered users over the past 12 months.
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The company is ahead of schedule on its technology modernization efforts, with plans to deliver a public cloud-native consumer and commercial deposit-only core in the first half of 2026.
Negative Points
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Jack Henry & Associates Inc (NASDAQ:JKHY) lowered its full-year revenue guidance due to macroeconomic concerns and a softening in nonstrategic revenue such as hardware purchases and consulting engagements.
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There is a noted slowdown in hardware sales and non-recurring revenue from customer projects, impacting overall non-GAAP revenue growth.
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The company is experiencing some delays in the implementation of post-core conversion products in its Complementary and Payment segments.
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There is a softening in debit card transactions, similar to trends seen by card associations in the US debit businesses.
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Despite strong performance in key areas, non-key revenue contracted by 2%, creating a headwind to total growth.