jkhy-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ______________ to ________________

Commission file number 0-14112

JACK HENRY & ASSOCIATES, INC.

(Exact name of registrant as specified in its charter)


Delaware						43-1128385
(State or Other Jurisdiction of Incorporation)						(I.R.S. Employer Identification No.)

663 Highway 60, P.O. Box 807, Monett, MO 65708

(Address of Principal Executive Offices)

(Zip Code)

417-235-6652

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock ($0.01 par value)	JKHY	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” ”accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes ☐ No ☒

As of April 26, 2024, the Registrant had 72,900,026 shares of Common Stock outstanding ($0.01 par value).

TABLE OF CONTENTS


		Page Reference

PART I	FINANCIAL INFORMATION

ITEM 1.	Condensed Consolidated Balance Sheets as of March 31, 2024, and June 30, 2023 (Unaudited)	4

	Condensed Consolidated Statements of Income for the Three and Nine Months Ended March 31, 2024 and 2023 (Unaudited)	5

	Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Nine Months Ended March 31, 2024 and 2023 (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2024 and 2023 (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	30

ITEM 4.	Controls and Procedures	30

PART II	OTHER INFORMATION	30

ITEM 1.	Legal Proceedings	30



ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

ITEM 5.	Other Information	31

ITEM 6.	Exhibits	32

	Signatures	33

In this report, all references to “Jack Henry,” the “Company,” “we,” “us,” and “our,” refer to Jack Henry & Associates, Inc., and its wholly owned subsidiaries.

FORWARD LOOKING STATEMENTS

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements may appear throughout this report, including without limitation, in Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “seek,” “anticipate,” “estimate,” “future,” “intend,” “plan,” “strategy,” “predict,” “likely,” “should,” “will,” “would,” “could,” “can,” “may,” and similar expressions. Forward-looking statements are based only on management’s current beliefs, expectations and assumptions regarding the future of the Company, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, those discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, in particular, those included in Item 1A, “Risk Factors” of such report, and those discussed in other documents we file with the Securities and Exchange Commission (“SEC”). Any forward-looking statement made in this report speaks only as of the date of this report, and the Company expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether because of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

Table of Contents


JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In Thousands, Except Share and Per Share Data)

	March 31, 2024		June 30, 2023

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	27,254	$	12,243
Receivables, net	263,416		361,252
Income tax receivable	—		7,523
Prepaid expenses and other	158,725		169,178
Deferred costs	73,167		77,766

Total current assets	522,562		627,962
PROPERTY AND EQUIPMENT, net	215,733		205,664
OTHER ASSETS:
Non-current deferred costs	177,378		161,465
Computer software, net of amortization	588,426		565,714
Other non-current assets	383,504		322,698
Customer relationships, net of amortization	58,949		65,528
Other intangible assets, net of amortization	19,149		19,998
Goodwill	804,797		804,797
Total other assets	2,032,203		1,940,200
Total assets	$	2,770,498	$	2,773,826
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	26,902	$	19,156
Accrued expenses	180,319		172,629

Accrued income taxes	20,494		—

Deferred revenues	147,328		331,974
Total current liabilities	375,043		523,759
LONG-TERM LIABILITIES:
Non-current deferred revenues	66,617		67,755
Deferred income tax liability	229,106		244,431
Debt, net of current maturities	250,000		275,000
Other long-term liabilities	69,801		54,371
Total long-term liabilities	615,524		641,557
Total liabilities	990,567		1,165,316
STOCKHOLDERS' EQUITY
Preferred stock - $1 par value; 500,000 shares authorized, none issued	—		—
Common stock - $0.01 par value; 250,000,000 shares authorized; 104,222,732 shares issued at March 31, 2024; 104,088,784 shares issued at June 30, 2023	1,042		1,041
Additional paid-in capital	610,305		583,836
Retained earnings	3,020,702		2,855,751
Less treasury stock at cost 31,323,119 shares at March 31, 2024; 31,194,351 shares at June 30, 2023	(1,852,118)		(1,832,118)
Total stockholders' equity	1,779,931		1,608,510
Total liabilities and equity	$	2,770,498	$	2,773,826

See notes to condensed consolidated financial statements.

Table of Contents


JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In Thousands, Except Per Share Data)

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023

REVENUE	$	538,562	$	508,552	$	1,655,631	$	1,543,069

EXPENSES
Cost of Revenue	328,224		307,345		972,205		910,195
Research and Development	35,993		34,625		108,363		104,179
Selling, General, and Administrative	62,246		58,192		211,298		172,205

Total Expenses	426,463		400,162		1,291,866		1,186,579

OPERATING INCOME	112,099		108,390		363,765		356,490

INTEREST INCOME (EXPENSE)
Interest Income	6,499		2,391		16,365		3,783
Interest Expense	(4,433)		(4,666)		(12,495)		(9,649)
Total Interest Income (Expense)	2,066		(2,275)		3,870		(5,866)

INCOME BEFORE INCOME TAXES	114,165		106,115		367,635		350,624

PROVISION FOR INCOME TAXES	27,066		24,566		86,892		81,751

NET INCOME	$	87,099	$	81,549	$	280,743	$	268,873

Basic earnings per share	$	1.20	$	1.12	$	3.85	$	3.69
Basic weighted average shares outstanding	72,872		72,935		72,860		72,931

Diluted earnings per share	$	1.19	$	1.12	$	3.85	$	3.68
Diluted weighted average shares outstanding	73,031		73,074		73,010		73,119

See notes to condensed consolidated financial statements.

Table of Contents


JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
(In Thousands, Except Share and Per Share Data)

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
PREFERRED SHARES:	—		—		—		—

COMMON SHARES:
Shares, beginning of period	104,181,060		104,027,008		104,088,784		103,921,724
Shares issued for equity-based payment arrangements	17,382		9,660		65,042		59,177
Shares issued for Employee Stock Purchase Plan	24,290		23,977		68,906		79,744
Shares, end of period	104,222,732		104,060,645		104,222,732		104,060,645

COMMON STOCK - PAR VALUE $0.01 PER SHARE:
Balance, beginning of period	$	1,042	$	1,040	$	1,041	$	1,039
Shares issued for equity-based payment arrangements	—		—		1		—
Shares issued for Employee Stock Purchase Plan	—		—		—		1
Balance, end of period	$	1,042	$	1,040	$	1,042	$	1,040

ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period	$	601,790	$	564,856	$	583,836	$	551,360

Tax withholding related to share-based compensation	(1,782)		(1,575)		(5,343)		(8,306)
Shares issued for Employee Stock Purchase Plan	3,373		3,322		9,408		9,005
Stock-based compensation expense	6,924		6,915		22,404		21,459
Balance, end of period	$	610,305	$	573,518	$	610,305	$	573,518

RETAINED EARNINGS:
Balance, beginning of period	$	2,973,673	$	2,752,212	$	2,855,751	$	2,636,342

Net income	87,099		81,549		280,743		268,873
Dividends	(40,070)		(37,892)		(115,792)		(109,346)
Balance, end of period	$	3,020,702	$	2,795,869	$	3,020,702	$	2,795,869

TREASURY STOCK:
Balance, beginning of period	$	(1,852,118)	$	(1,807,118)	$	(1,832,118)	$	(1,807,118)
Purchase of treasury shares	—		(25,000)		(20,000)		(25,000)
Balance, end of period	$	(1,852,118)	$	(1,832,118)	$	(1,852,118)	$	(1,832,118)

TOTAL STOCKHOLDERS' EQUITY	$	1,779,931	$	1,538,309	$	1,779,931	$	1,538,309

Dividends declared per share	$	0.55	$	0.52	$	1.59	$	1.50

See notes to condensed consolidated financial statements.

Table of Contents


JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Thousands)

	Nine Months Ended
	March 31,
	2024		2023

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	280,743	$	268,873
Adjustments to reconcile net income from operations to net cash from operating activities:
Depreciation	34,943		36,740
Amortization	114,270		105,609
Change in deferred income taxes	(15,325)		(36,370)
Expense for stock-based compensation	22,404		21,459
(Gain)/loss on disposal of assets	273		(7,234)
Changes in operating assets and liabilities:
Change in receivables	97,835		110,686
Change in prepaid expenses, deferred costs and other	(60,520)		(68,885)
Change in accounts payable	(3,800)		(5,654)
Change in accrued expenses	20,265		(48,319)
Change in income taxes	30,938		14,256
Change in deferred revenues	(185,784)		(184,130)
Net cash from operating activities	336,242		207,031

CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for acquisitions, net of cash acquired	—		(229,628)
Capital expenditures	(34,347)		(27,237)

Proceeds from dispositions	900		27,885

Purchased software	(4,561)		(1,471)
Computer software developed	(125,351)		(124,110)
Purchase of investment	(1,146)		(1,000)
Net cash from investing activities	(164,505)		(355,561)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facilities	335,000		550,000
Repayments on credit facilities and financing leases	(360,000)		(290,059)
Purchase of treasury stock	(20,000)		(25,000)
Dividends paid	(115,792)		(109,346)

Tax withholding payments related to share-based compensation	(5,343)		(8,306)
Proceeds from sale of common stock	9,409		9,006
Net cash from financing activities	(156,726)		126,295
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	15,011	$	(22,235)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	$	12,243	$	48,787
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	27,254	$	26,552

See notes to condensed consolidated financial statements.

Table of Contents

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In Thousands, Except Per Share Amounts)

NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of the Company

Jack Henry & Associates, Inc. and subsidiaries (“Jack Henry,” or the “Company”) is a well-rounded financial technology company. Jack Henry was founded in 1976 as a provider of core information processing solutions for banks. Today, the Company’s extensive array of products and services includes processing transactions, automating business processes, and managing information for approximately 7,500 financial institutions and diverse corporate entities.

Consolidation

The condensed consolidated financial statements include the accounts of Jack Henry and all of its subsidiaries, which are wholly owned, and all intercompany accounts and transactions have been eliminated.

Comprehensive Income

Comprehensive income for the three and nine months ended March 31, 2024 and 2023, equals the Company’s net income.

Allowance for Credit Losses

The Company monitors trade and other receivable balances and contract assets and estimates the allowance for lifetime expected credit losses. Estimates of expected credit losses are based on historical collection experience and other factors, including those related to current market conditions and events.

The following table summarizes allowance for credit losses activity for the three and nine months ended March 31, 2024 and 2023:


	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023
Allowance for credit losses - beginning balance	$	8,132	$	8,184	$	7,955	$	7,616

Current provision for expected credit losses	480		420		1,440		1,380
Write-offs charged against allowance	(642)		(444)		(1,425)		(834)
Recoveries of amounts previously written off	—		—		—		(2)
Other	(280)		—		(280)		—
Allowance for credit losses - ending balance	$	7,690	$	8,160	$	7,690	$	8,160

Property and Equipment

Property and equipment is recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Accumulated depreciation at March 31, 2024, totaled $475,245 and at June 30, 2023, totaled $466,711.

Intangible Assets

Intangible assets consist of goodwill, customer relationships, computer software, and trade names acquired in business acquisitions in addition to internally developed computer software. The amounts are amortized, with the exception of those intangible assets with an indefinite life (such as goodwill), over an estimated economic benefit period, generally 3 to 20 years. Accumulated amortization of intangible assets totaled $1,240,498 and $1,149,913 at March 31, 2024, and June 30, 2023, respectively.

Purchase of Investment

At March 31, 2024, and June 30, 2023, the Company had an investment in the preferred stock of Autobooks, Inc. (“Autobooks”) of $18,250, which represented a non-controlling share of the voting equity as of that date. The total investment was recorded at cost and is included within other non-current assets on the Company's balance sheet. There have been no events or changes in circumstances that would indicate an impairment and no price changes resulting from observing a similar or identical investment. An impairment and/or an observable price change would be an adjustment to recorded cost. Fair value will not be estimated unless there are identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment.

Table of Contents

Common Stock

The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or borrowings on its existing line of credit. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At March 31, 2024, there were 31,323 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,667 additional shares. The total cost of treasury shares at March 31, 2024, was $1,852,118. During the first nine months of fiscal 2024, the Company repurchased 129 shares. At June 30, 2023, there were 31,194 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,796 additional shares. The total cost of treasury shares at June 30, 2023, was $1,832,118 and the Company repurchased 151 shares during the first nine months of fiscal 2023.

Income Taxes

Deferred tax liabilities and assets are recognized for the tax effects of differences between the financial statement and tax basis of assets and liabilities. A valuation allowance would be established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based upon the technical merits of the position. The tax benefit recognized in the financial statements from such a position is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Also, interest and penalties expenses are recognized on the full amount of unrecognized benefits for uncertain tax positions. The Company's policy is to include interest and penalties related to unrecognized tax benefits in income tax expense.

Interim Financial Statements

The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim condensed consolidated financial statements, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes, which are included in its Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended June 30, 2023.

In the opinion of the management of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly in all material respects the financial position of the Company as of March 31, 2024, the results of its operations for the three and nine months ended March 31, 2024 and 2023, changes in stockholders' equity for the three and nine months ended March 31, 2024 and 2023, and its cash flows for the nine months ended March 31, 2024 and 2023. The condensed consolidated balance sheet at June 30, 2023, was derived from audited annual financial statements, but does not contain all of the footnote disclosures from the annual financial statements.

The results of operations for the three and nine months ended March 31, 2024, are not necessarily indicative of the results to be expected for the entire fiscal year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant Accounting Policies

The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its Form 10-K for the fiscal year ended June 30, 2023. For the three and nine months ended March 31, 2024, there have been no new or material changes to the significant accounting policies discussed in the Company’s Form 10-K for the fiscal year ended June 30, 2023, that are of significance, or potential significance, to the Company.

Table of Contents

NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Guidance

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company adopted the ASU effective July 1, 2023, and will apply it prospectively to business combinations occurring after that date.

Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves the disclosures about a public entity's reportable segments through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The ASU requires additional disclosure related to rate reconciliation, income taxes paid, and other disclosures to improve the effectiveness of income tax disclosures. The ASU is effective for annual periods beginning after December 15, 2024, and applied on a prospective basis. Early adoption and retrospective application is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

NOTE 3. REVENUE AND DEFERRED COSTS

Revenue Recognition

The Company generates revenue from data processing and hosting, transaction processing, software licensing and related services, professional services, and hardware sales.

Disaggregation of Revenue

The tables below present the Company's revenue disaggregated by type of revenue. Refer to Note 11, Reportable Segment Information, for disaggregated revenue by type and reportable segment. The majority of the Company’s revenue is earned domestically, with revenue from customers outside the United States comprising less than 1% of total revenue.


	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023
Private and Public Cloud	$	174,122	$	158,228	$	506,344	$	460,357
Product Delivery and Services	51,638		56,372		175,490		172,489
On-Premise Support	79,257		77,322		277,380		269,925
Services and Support	305,017		291,922		959,214		902,771

Processing	233,545		216,630		696,417		640,298

Total Revenue	$	538,562

SEC Form 10-Q filed by Jack Henry & Associates Inc.