jkhy-20241231

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 December 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 January 24, 2025, the Registrant had 72,897,671 shares of Common Stock outstanding ($0.01 par value).

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		Page Reference

PART I	FINANCIAL INFORMATION

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

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

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

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 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	19

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	28

ITEM 4.	Controls and Procedures	28

PART II	OTHER INFORMATION	29

ITEM 1.	Legal Proceedings	29



ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

ITEM 5.	Other Information	29

ITEM 6.	Exhibits	30

	Signatures	31

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, 2024, 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

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

	December 31, 2024		June 30, 2024

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	25,653	$	38,284
Receivables, net	283,223		333,033
Income tax receivable	—		6,149
Prepaid expenses and other	189,826		168,768
Deferred costs	81,099		85,784

Total current assets	579,801		632,018
PROPERTY AND EQUIPMENT, net	226,981		215,069
OTHER ASSETS:
Non-current deferred costs	194,946		183,307
Computer software, net of amortization	606,621		592,761
Other non-current assets	424,994		417,621
Customer relationships, net of amortization	52,598		56,757
Other intangible assets, net of amortization	21,032		22,151
Goodwill	804,797		804,797
Total other assets	2,104,988		2,077,394
Total assets	$	2,911,770	$	2,924,481
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	23,552	$	25,314
Accrued expenses	186,096		200,770

Accrued income taxes	278		—
Current maturities of long-term debt	90,000		90,000
Deferred revenues	197,447		317,730
Total current liabilities	497,373		633,814
LONG-TERM LIABILITIES:
Non-current deferred revenues	72,022		71,202
Deferred income tax liability	234,777		243,522
Debt, net of current maturities	60,000		60,000
Other long-term liabilities	72,033		73,579
Total long-term liabilities	438,832		448,303
Total liabilities	936,205		1,082,117
STOCKHOLDERS' EQUITY
Preferred stock - $1 par value; 500,000 shares authorized, none issued	—		—
Common stock - $0.01 par value; 250,000,000 shares authorized; 104,370,424 shares issued at December 31, 2024; 104,245,089 shares issued at June 30, 2024	1,044		1,042
Additional paid-in capital	633,211		619,805
Retained earnings	3,218,533		3,081,690
Less treasury stock at cost 31,472,352 shares at December 31, 2024; 31,372,959 shares at June 30, 2024	(1,877,223)		(1,860,173)
Total stockholders' equity	1,975,565		1,842,364
Total liabilities and equity	$	2,911,770	$	2,924,481

See notes to condensed consolidated financial statements.

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

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023

REVENUE	$	573,848	$	545,701	$	1,174,829	$	1,117,069

EXPENSES
Cost of Revenue	332,850		320,979		676,282		643,981
Research and Development	41,095		35,478		80,780		72,370
Selling, General, and Administrative	76,901		70,277		143,489		149,051

Total Expenses	450,846		426,734		900,551		865,402

OPERATING INCOME	123,002		118,967		274,278		251,667

INTEREST INCOME (EXPENSE)
Interest Income	7,159		5,121		15,506		9,866
Interest Expense	(2,780)		(3,865)		(5,605)		(8,062)
Total Interest Income (Expense)	4,379		1,256		9,901		1,804

INCOME BEFORE INCOME TAXES	127,381		120,223		284,179		253,471

PROVISION FOR INCOME TAXES	29,536		28,258		67,143		59,827

NET INCOME	$	97,845	$	91,965	$	217,036	$	193,644

Basic earnings per share	$	1.34	$	1.26	$	2.98	$	2.66
Basic weighted average shares outstanding	72,924		72,838		72,914		72,854

Diluted earnings per share	$	1.34	$	1.26	$	2.97	$	2.65
Diluted weighted average shares outstanding	73,082		72,984		73,080		72,999

See notes to condensed consolidated financial statements.

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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				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023
PREFERRED SHARES:	—		—		—		—

COMMON SHARES:
Shares, beginning of period	104,332,023		104,144,549		104,245,089		104,088,784
Shares issued for equity-based payment arrangements	23,828		16,603		89,215		47,660
Shares issued for Employee Stock Purchase Plan	14,573		19,908		36,120		44,616
Shares, end of period	104,370,424		104,181,060		104,370,424		104,181,060

COMMON STOCK - PAR VALUE $0.01 PER SHARE:
Balance, beginning of period	$	1,043	$	1,041	$	1,042	$	1,041
Shares issued for equity-based payment arrangements	1		1		1		1
Shares issued for Employee Stock Purchase Plan	—		—		1		—
Balance, end of period	$	1,044	$	1,042	$	1,044	$	1,042

ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period	$	623,381	$	591,458	$	619,805	$	583,836
Shares issued for equity-based payment arrangements	—		—		(1)		—
Tax withholding related to share-based compensation	(1,173)		(617)		(7,342)		(3,561)
Shares issued for Employee Stock Purchase Plan	2,169		2,616		5,210		6,035
Stock-based compensation expense	8,834		8,333		15,539		15,480
Balance, end of period	$	633,211	$	601,790	$	633,211	$	601,790

RETAINED EARNINGS:
Balance, beginning of period	$	3,160,777	$	2,919,567	$	3,081,690	$	2,855,751

Net income	97,845		91,965		217,036		193,644
Dividends	(40,089)		(37,859)		(80,193)		(75,722)
Balance, end of period	$	3,218,533	$	2,973,673	$	3,218,533	$	2,973,673

TREASURY STOCK:
Balance, beginning of period	$	(1,860,173)	$	(1,852,118)	$	(1,860,173)	$	(1,832,118)
Purchase of treasury shares	(17,050)		—		(17,050)		(20,000)
Balance, end of period	$	(1,877,223)	$	(1,852,118)	$	(1,877,223)	$	(1,852,118)

TOTAL STOCKHOLDERS' EQUITY	$	1,975,565	$	1,724,387	$	1,975,565	$	1,724,387

Dividends declared per share	$	0.55	$	0.52	$	1.10	$	1.04

See notes to condensed consolidated financial statements.

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

	Six Months Ended
	December 31,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	217,036	$	193,644
Adjustments to reconcile net income from operations to net cash from operating activities:
Depreciation	22,731		23,765
Amortization	79,517		75,366
Change in deferred income taxes	(8,745)		(16,532)
Expense for stock-based compensation	15,539		15,480
(Gain)/loss on disposal of assets	(4)		213
Changes in operating assets and liabilities:
Change in receivables	49,811		90,702
Change in prepaid expenses, deferred costs and other	(34,384)		(52,969)
Change in accounts payable	(5,583)		277
Change in accrued expenses	(19,450)		15,463
Change in income taxes	9,538		23,792
Change in deferred revenues	(119,463)		(130,529)
Net cash from operating activities	206,543		238,672

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures	(29,469)		(24,458)

Proceeds from dispositions	—		878

Purchased software	(3,528)		(2,971)
Computer software developed	(85,803)		(83,408)
Proceeds from investments	1,000		—
Purchase of investments	(2,000)		(1,000)
Net cash from investing activities	(119,800)		(110,959)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facilities	165,000		220,000
Repayments on credit facilities	(165,000)		(240,000)
Purchase of treasury stock	(17,050)		(20,000)
Dividends paid	(80,193)		(75,722)
Proceeds from issuance of common stock upon exercise of stock options	2		—
Tax withholding payments related to share-based compensation	(7,342)		(3,561)
Proceeds from sale of common stock	5,209		6,036
Net cash from financing activities	(99,374)		(113,247)
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	(12,631)	$	14,466
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	$	38,284	$	12,243
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	25,653	$	26,709

See notes to condensed consolidated financial statements.

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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 six months ended December 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 six months ended December 31, 2024 and 2023:


	Three Months Ended December 31,				Six Months Ended December 31,
	2024		2023		2024		2023
Allowance for credit losses - beginning balance	$	7,257	$	8,204	$	7,477	$	7,955

Current provision for expected credit losses	480		480		960		960
Write-offs charged against allowance	(865)		(552)		(1,494)		(783)

Other	—		—		(71)		—
Allowance for credit losses - ending balance	$	6,872	$	8,132	$	6,872	$	8,132

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 December 31, 2024, totaled $495,768 and at June 30, 2024, totaled $486,168.

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 $1,353,054 and $1,279,499 at December 31, 2024, and June 30, 2024, respectively.

Purchase of Investment

At December 31, 2024, and June 30, 2024, the Company had $25,750 in non-current investments. These investments were recorded at cost and are included within other non-current assets on the Company's balance sheets. 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.

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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 December 31, 2024, there were 31,472 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,518 additional shares. The total cost of treasury shares at December 31, 2024, was $1,877,223. During the first six months of fiscal 2025, the Company repurchased over 99 shares. At June 30, 2024, there were 31,373 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,618 additional shares. The total cost of treasury shares at June 30, 2024, was $1,860,173 and the Company repurchased 129 shares during the first six months of fiscal 2024.

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, 2024.

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 December 31, 2024, the results of its operations for the three and six months ended December 31, 2024 and 2023, changes in stockholders' equity for the three and six months ended December 31, 2024 and 2023, and its cash flows for the six months ended December 31, 2024 and 2023. The condensed consolidated balance sheet at June 30, 2024, 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 six months ended December 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, 2024. For the three and six months ended December 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, 2024, that are of significance, or potential significance, to the Company.

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NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS

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.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires more detailed disclosures of certain categories of expenses such as employee compensation, depreciation, and intangible asset amortization that are components of existing expense captions presented on the face of the consolidated statements of income. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption 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 10, Reportable Segment Information, for disaggregated revenue by type and reportable segment. The majority of the Company’s revenue is earned domestically, with revenue from clients outside the United States comprising less than 1% of total revenue.


	Three Months Ended December 31,				Six Months Ended December 31,
	2024		2023		2024		2023
Private and Public Cloud	$	187,139	$	168,733	$	369,398	$	332,222
Product Delivery and Services	56,278		63,013		113,942		123,852
On-Premise Support	79,610		80,246		196,366		198,123
Services and Support	323,027		311,992		679,706		654,197

Processing	250,821		233,709		495,123		462,872

Total Revenue	$	573,848	$	545,701	$	1,174,829	$	1,117,069

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Contract Balances

The following table provides information about contract assets and contract liabilities from contracts with clients.


	December 31, 2024		June 30, 2024
Receivables, net	$	283,223	$	333,033
Contract Assets - Current	34,958		33,610
Contract Assets - Non-current	111,064		103,295
Contract Liabilities (Deferred Revenue) - Current	197,447		317,730
Contract Liabilities (Deferred Revenue) - Non-current	72,022		71,202

Contract assets primarily result from revenue being recognized when or as control of a solution or service is transferred to the client, except where invoicing is contingent upon the completion of other performance obligations or payment terms differ from the provisioning of services. The current portion of contract assets is reported within prepaid expenses and other in the condensed consolidated balance sheets, and the non-current portion is included in other non-current assets. Contract liabilities (deferred revenue) primarily relate to consideration received from clients in advance of delivery of the related goods and services to the client. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.

The Company analyzes contract language to identify if a significant financing component does exist and would adjust the transaction price for any material effects of the time value of money if the timing of payments provides either party to the contract with a significant benefit of financing the transaction.

For the three months ended December 31, 2024, and 2023, the Company recognized revenue of $76,528 and $85,458, respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods. For the six months ended December 31, 2024, and 2023, the Company recognized revenue of $152,657 and $167,671, respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods.

Amounts recognized that relate to performance obligations satisfied (or partially satisfied) in prior periods were immaterial for each period presented. These adjustments are primarily the result of transaction price re-allocations due to changes in estimates of variable consideration.

Transaction Price Allocated to Remaining Performance Obligations

As of December 31, 2024, estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period totaled $7,202,267. The Company expects to recognize approximately 21% over the next 12 months, 19% in 13-24 months, and the balance thereafter.

Contract Costs

The Company incurs incremental costs to obtain a contract as well as costs to fulfill contracts with clients that are expected to be recovered. These costs consist primarily of sales commissions, which are incurred only if a contract is obtained, and client conversion or implementation-related costs. Capitalized costs are amortized based on the transfer of goods or services to which the asset relates, in line with the percentage of revenue recognized for each performance obligation to which the costs are allocated.

Capitalized costs totaled $516,505 and $503,152, at December 31, 2024, and June 30, 2024, respectively.

For the three months ended December 31, 2024, and 2023, amortization of deferred contract costs totaled $43,640 and $41,552, respectively. For the six months ended December 31, 2024, and 2023, amortization of deferred contract costs totaled $98,547 and $92,088, respectively. There were no impairment losses in relation to capitalized costs for the

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