Jack Henry & Associates — Q1 FY27 Earnings Summary

Financial Performance:

• GAAP revenue increased 8.8% year-over-year to $701.5 million for the fiscal three months ended September 30, 2026.
• Non-GAAP adjusted revenue increased 7.2% year-over-year to $682.2 million.
• GAAP operating income increased 12.5% year-over-year to $207.1 million; GAAP operating margin was 29.5%.
• Non-GAAP adjusted operating income increased 11.2% year-over-year to $192.6 million; Non-GAAP adjusted operating margin was 28.2%.
• GAAP net income increased 11.4% year-over-year to $160.4 million.
• Non-GAAP adjusted net income increased 10.1% year-over-year to $149.4 million.
• Diluted GAAP EPS was $2.28, representing a 15.6% increase from $1.97 in the prior year quarter.
• Net cash from operating activities was $161.3 million, compared to $120.6 million in the prior year quarter.
• Free cash flow was $82.9 million, compared to $69.5 million in the prior year quarter.
• Non-GAAP EBITDA was $248.0 million, an increase of 10.2% from $225.1 million in the prior year quarter.
• NOPAT ROIC was 23.2%, up from 21.9% in the prior year quarter.
• Return on average stockholders' equity was 24.3%, up from 23.5% in the prior year quarter.
• Effective tax rate was 23.8% for the quarter, compared to 24.3% in the prior year quarter.

Guidance and Future Outlook:

• Full-year fiscal 2027 GAAP revenue guidance is set at $2,698 million to $2,718 million.
• Full-year fiscal 2027 Non-GAAP adjusted revenue guidance is set at $2,667 million to $2,687 million.
• Full-year fiscal 2027 GAAP operating margin guidance is 24.7% to 24.9%.
• Full-year fiscal 2027 Non-GAAP adjusted operating margin guidance is 24.1% to 24.3%.
• Full-year fiscal 2027 GAAP EPS guidance is $7.47 to $7.51.
• Guidance assumes no acquisitions or dispositions during fiscal 2027.

Business Segments and Product Lines:

• Core segment revenue increased 7.1% year-over-year; Non-GAAP adjusted core revenue increased 4.9%.
• Payments segment revenue increased 9.2% year-over-year; Non-GAAP adjusted payments revenue increased 8.3%.
• Complementary segment revenue increased 10.4% year-over-year; Non-GAAP adjusted complementary revenue increased 8.4%.
• Corporate services segment revenue increased 6.2% year-over-year; Non-GAAP adjusted corporate services revenue increased 5.2%.
• Services and support revenue increased 7.5% to $405.0 million, driven by an 11.7% increase in hosting revenue and a 9.9% increase in software usage revenue.
• Processing revenue increased 10.7% to $296.6 million, driven by a 9.4% increase in card revenue and a 13.3% increase in digital and transaction revenue.
• Faster payments revenue increased 43.8% year-over-year.
• Deconversion revenue was $17.9 million for the current quarter compared to $8.6 million in the prior year quarter.

Market and Competitive Landscape:

• Management described the demand environment as "very strong" with outstanding sales performance and a robust pipeline.
• The company serves approximately 7,200 clients, including banks and credit unions.
• Cloud migration continues to drive growth, with new and existing clients moving to the private cloud.

Risks and Challenges:

• Cost of revenue increased 7.9% due to higher personnel costs, cloud consumption costs (including AI and security), and amortization of intangibles.
• Research and development expenses increased 16.6% due to higher personnel costs.
• Stockholders' equity decreased 3.4% to $2.1 billion, primarily driven by stock repurchases.
• Cash and cash equivalents decreased 30.0% to $25.4 million.
• Debt outstanding increased to $85 million from $20 million in the prior year quarter.

Management Commentary and Tone:

• Greg Adelson, President and CEO, stated the company delivered "record financial results that exceeded the outlook we provided in August" and exceeded consensus expectations.
• Mimi Carsley, CFO and Treasurer, highlighted "solid 7.2% non-GAAP revenue growth" aided by Cloud, Card, and Digital, noting continued Faster Payments momentum.
• Management expressed confidence in delivering consistent, long-term results through commitment to culture, service, innovation, strategy, and execution.

Other Key Points:

• Stock repurchases totaled $71 million at an average price of $153.47 per share for the quarter.
• The company acquired Victor Technologies in the prior fiscal year, with related revenue and costs adjusted in Non-GAAP measures.
• A gain on assets, net, of $3.8 million was recorded in the prior year quarter, which was excluded from Non-GAAP measures.
• Deferred revenue increased 3.6% to $333 million.
• Trade receivables increased 12.4% to $346 million.
• The company will hold a conference call on November 4, 2026, at 7:45 a.m. Central Time.