Jack Henry & Associates

Financial Performance

5Y price score: (16)

10Y return: 95.6%

DATE RANGE:

US$ Per
Share

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121.0

52-week range

193.3

155.86

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Required return / cost of capital

FCFF terminal growth rate

Your fair value & Margin of safety

To calculate fair value based on cost of capital and terminal growth assumptions above, please select free cash flow forecast.

Forecast:

Valuation

Free Cash Flow Yield

6.4 %

Dividend Yield TTM

1.5 %

Market cap $

$ 11,074

Price / Earnings TTM

21.8

Price / Book TTM

5.3

PEG TTM

1.1

Earnings growth and return

LTM

5YR

10YR

Total return (price & dividends)

(3.2) %

(6.3) %

95.6 %

Free cash flow per share growth

15.3 %

86 %

105.7 %

Earnings per share growth

19.3 %

61.7 %

140.9 %

Founded: 1,976

Employees: 7,170

Business Summary:Jack Henry & Associates, Inc. (JHA) is a prominent provider of technology and payment processing solutions, primarily catering to financial institutions throughout the United States. The company's operations are segmented into four key areas: Core, Payments, Complementary, and Corporate & Other. Under its Jack Henry Banking brand, JHA offers comprehensive information and transaction processing systems designed for a diverse range of banks, from community-focused establishments to large institutions with multi-billion-dollar assets. Notable products within this brand include SilverLake, a robust platform particularly well-suited for commercially-oriented banks; CIF 20/20, an intuitive system driven by customizable parameters; and Core Director, an economical solution known for its user-friendly point-and-click interface. For credit unions, the Symitar brand delivers essential core data processing capabilities, prominently featuring its powerful Episys platform. The ProfitStars brand extends JHA's specialized offerings to both financial institutions and corporate clients. These solutions encompass tools for enhancing financial performance, streamlining imaging and payments processes, strengthening information security and risk management, optimizing retail delivery channels, and providing modern online and mobile functionalities. Beyond these specific brands, Jack Henry furnishes an integrated suite of applications crucial for managing fundamental banking operations such such as deposit, loan, and general ledger transactions, as well as maintaining a centralized repository of customer and member information. Furthermore, its complementary products and services empower core banking and credit union clients to effectively adapt to the evolving demands and expectations of their customers and members. The company's service portfolio also includes various digital products and services, advanced electronic payment solutions, the resale of hardware systems (such as servers, workstations, and scanners), and critical implementation, training, and ongoing support services. Established in 1976, Jack Henry & Associates, Inc. is headquartered in Monett, Missouri.

Fair Value Reference Estimate

Latest Earnings Call Takeaways

2026 Q3 (May 6, 2026)

1) Financial Performance Highlights
- Record Q3 results with non-GAAP revenue of $616 million, up 7.3% YoY.
- Non-GAAP operating margin remained strong at 22.9%, consistent with last year's Q3.
- GAAP revenue increased by 9%, with deconversion revenue at approximately $19 million, reflecting ongoing M&A activity among financial institutions.
- Operating cash flow was $186 million, a 72% increase YoY, and free cash flow reached $122 million, up 137% YoY.

2) Sales and Market Dynamics
- Achieved 17 competitive core wins, the best third quarter in 7 years, including 5 institutions with over $1 billion in assets.
- Year-to-date, 43 core deals won, up from 28 last year, with confidence to exceed last year's total of 51 core wins.
- 58% of core wins included trifecta solutions (digital banking and card solutions), up from 29% last year, indicating stronger client relationships.

3) Strategic Initiatives and Product Development
- Continued investment in AI, with nearly 100 approved tools enhancing productivity across various departments.
- Progress on stablecoin strategy with successful beta testing for USDC transactions, awaiting regulatory guidance.
- Significant traction with Tap2Local, now live with over 700 banks, and Rapid Transfers with 110 banks onboarded, indicating strong early momentum.
- Development of a cloud-native deposit-only core is ahead of schedule, with client testing underway.

4) Guidance and Outlook
- Increased fiscal 2026 full-year GAAP revenue growth guidance to 6.1% to 6.6% and non-GAAP revenue growth guidance to 6.6% to 7.1%.
- Anticipated lower revenue growth in Q4 due to slowing digital revenue and increased expenses from medical costs and cloud migration.
- Projected non-GAAP margin expansion for the full year increased to 75 to 95 basis points from the previous 20 to 40 basis points.
- Full-year GAAP EPS guidance raised to $6.78 to $6.87, reflecting a 9% to 10% growth.

5) Challenges and Competitive Landscape
- Potential headwinds include normalization of medical expenses and lower network incentive revenue impacting margins in Q4.
- The competitive landscape remains dynamic, with ongoing consolidation among providers, which may impact RFP activity.
- The company is confident in its ability to navigate these challenges, supported by a strong pipeline and robust client demand for technology investments.

Bottom line: Jack Henry's strong Q3 performance, driven by record core wins and strategic investments in AI and innovative solutions, positions the company well for continued growth. Despite anticipated challenges in Q4, the overall outlook for fiscal 2026 remains positive, with increased guidance reflecting confidence in sustained demand and margin expansion.

Annual report links (10K)

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