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1. Company Snapshot

1.a. Company Description

Jack Henry & Associates, Inc.provides technology solutions and payment processing services primarily for financial services organizations in the United States.It operates through four segments: Core, Payments, Complementary, and Corporate and Other.


The company offers information and transaction processing solutions for banks ranging from community to multi-billion-dollar asset institutions under the Jack Henry Banking brand; core data processing solutions for various credit unions under the Symitar brand; and specialized financial performance, imaging and payments processing, information security and risk management, retail delivery, and online and mobile solutions to financial institutions and corporate entities under the ProfitStars brand.It also provides a suite of integrated applications required to process deposit, loan, and general ledger transactions, as well as to maintain centralized customer/member information; and complementary products and services that enable core bank and credit union clients to respond to evolving customer/member demands.The company's Jack Henry Banking business brand offers SilverLake, a robust primarily designed for commercial-focused banks; CIF 20/20, a parameter-driven, easy-to-use system for banks; and Core Director, a cost-efficient system with point-and-click operation.


Its Symitar business brand provides Episys, a robust designed for credit unions.In addition, the company offers digital products and services and electronic payment solutions; purchases and resells hardware systems, including servers, workstations, scanners, and other devices; and provides implementation, training, and support services.Jack Henry & Associates, Inc.


was founded in 1976 and is headquartered in Monett, Missouri.

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1.b. Last Insights on JKHY

Jack Henry & Associates' recent performance was driven by strong Q1 FY2026 earnings, with EPS of $1.97 beating estimates and revenue reaching $644.7 million, a 7.3% year-over-year increase. The company's 21% profit growth and lifted 2026 outlook also contributed to positive momentum. Additionally, a recent upgrade to a Zacks Rank #2 (Buy) reflects growing optimism about the company's earnings prospects. Institutional investors, such as DekaBank Deutsche Girozentrale, have also shown confidence in the company by increasing their holdings.

1.c. Company Highlights

2. Jack Henry's Q1 Fiscal 2026 Earnings: A Strong Start to the Year

Jack Henry's first-quarter fiscal 2026 earnings report was impressive, with record non-GAAP revenue of $636 million, up 8.7% year-over-year, exceeding the anticipated 7-7.5% growth. The non-GAAP operating margin expanded by 227 basis points to 27.2%, driven by inherent leverage, strategic cost management, and AI utilization. Fully diluted GAAP earnings per share was $1.97, up 21%, significantly beating estimates of $1.64.

Publication Date: Nov -16

📋 Highlights
  • Record Non-GAAP Revenue:: $636 million, up 8.7% YoY, surpassing 7-7.5% growth guidance.
  • Margin Expansion:: Non-GAAP operating margin rose 227 bps to 27.2%, driven by cost management and AI utilization.
  • Cloud Migration Progress:: 77% of core clients now on private cloud, with 7 new contracts including a $11B asset credit union.
  • Deconversion Revenue Guidance:: Raised to $20 million, supporting 4.9-5.9% revenue growth in fiscal 2026.
  • GAAP EPS Growth:: $1.97 per share, +21% YoY, with full-year guidance of $6.38–$6.49 (2–4% growth).

Business Momentum

The company signed 7 contracts to migrate clients to its private cloud, including a $11 billion asset credit union and an $8 billion asset bank, with 77% of its core clients now operating in the Jack Henry private cloud. New core sales saw 4 competitive wins, including 1 financial institution with over $1 billion in assets. The annual client conference, Jack Henry Connect, drew a record 2,651 attendees and 91 prospects, indicating strong business momentum.

Strategic Acquisitions and Innovations

The acquisition of Victor Technologies closed on September 30, and the company is excited about the technology's potential to create new opportunities. Jack Henry also completed a proof of concept for stablecoin, allowing financial institutions to send and receive USDC, showcasing its commitment to innovation.

Guidance and Outlook

The company updated its fiscal 2026 guidance, including increased deconversion revenue guidance to $20 million. The company increased its revenue growth guidance to 4.9% to 5.9%, driven by deconversion revenue and the Victor acquisition. Non-GAAP revenue annual growth rate guidance is now 6% to 7%.

Valuation and Growth Prospects

With a P/E Ratio of 24.89 and an ROE of 23.11%, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 5.9%, indicating a stable outlook. The company's strong margins, driven by its compounding business nature, and its focus on innovation and strategic acquisitions, position it well for future growth.

Card Processing and Lending Activity

The company's first-quarter card processing revenue grew 2%, outpacing industry trends, driven by a healthy pace of US consumer spending and the stabilization of the EPS business. The company is also seeing a small uptick in lending activity, with deposit growth remaining a top priority for its customers.

3. NewsRoom

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CFG Bank Turns to Jack Henry to Modernize Technology and Scale Niche Services

Dec -04

Source: prnewswire.com

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Jack Henry & Associates, Inc. (JKHY) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -04

Source: seekingalpha.com

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Jack Henry Named One of America's Best Companies in Forbes Ranking

Dec -02

Source: prnewswire.com

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Jack Henry Study Uncovers Gaps in Consumer Financial Confidence and Digital Experience

Dec -01

Source: prnewswire.com

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Bell Asset Management Ltd Increases Stock Position in Jack Henry & Associates, Inc. $JKHY

Nov -27

Source: defenseworld.net

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Financial Contrast: Jack Henry & Associates (NASDAQ:JKHY) & Accenture (NYSE:ACN)

Nov -27

Source: defenseworld.net

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Jack Henry Leaders to Present at Upcoming Conferences for UBS, Nasdaq

Nov -25

Source: prnewswire.com

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Here Are Thursday's Top Wall Street Analyst Research Calls: AON, Apollo Global Managment, Bullish, Jack Henry, Marsh & McClennan, Nasdaq, NVIDIA,

Nov -20

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.39%)

6. Segments

Payments

Expected Growth: 8%

The 8% growth in payments from Jack Henry & Associates, Inc. is driven by increasing adoption of digital banking solutions, rising demand for payment processing services, and strategic partnerships with financial institutions. Additionally, the company's investments in cloud-based infrastructure and innovative payment technologies have enhanced its scalability and competitiveness, contributing to the growth.

Core

Expected Growth: 6%

Core segment growth of 6% at Jack Henry & Associates, Inc. is driven by increasing demand for digital banking and payment solutions, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on innovation, customer relationships, and operational efficiency also contribute to its growth.

Complementary

Expected Growth: 5%

Complementary growth driven by increasing demand for digital banking and payment solutions, expansion into new markets, strategic partnerships, and innovative product offerings. Additionally, the company's focus on cloud-based services, cybersecurity, and data analytics has contributed to its growth.

Corporate and Other Segment

Expected Growth: 4%

The 4% growth in Corporate and Other Segment of Jack Henry & Associates, Inc. is driven by increasing demand for digital banking and payment solutions, strategic acquisitions, and expansion of existing customer relationships. Additionally, the company's investments in innovation and technology, such as cloud-based services and data analytics, are contributing to revenue growth.

7. Detailed Products

Core Director

A core banking system that provides a comprehensive platform for managing customer accounts, transactions, and banking operations.

Symitar Episys

A core processing system designed for credit unions, offering a range of features for managing member accounts, transactions, and operations.

Silverlake System

A core banking system that provides a comprehensive platform for managing customer accounts, transactions, and banking operations.

JHA Payment Processing

A payment processing solution that enables financial institutions to process transactions, manage payment networks, and provide card services.

JHA Card Processing

A card processing solution that enables financial institutions to issue and manage debit and credit cards, as well as provide cardholder services.

JHA Online Banking

An online banking platform that enables financial institutions to provide online banking services to customers.

JHA Mobile Banking

A mobile banking platform that enables financial institutions to provide mobile banking services to customers.

8. Jack Henry & Associates, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Jack Henry & Associates, Inc. is low due to the company's strong brand recognition and customer loyalty in the financial technology industry.

Bargaining Power Of Customers

The bargaining power of customers for Jack Henry & Associates, Inc. is medium due to the presence of some large financial institutions that can negotiate prices, but the company's diversified customer base mitigates this risk.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Jack Henry & Associates, Inc. is low due to the company's ability to negotiate prices with its suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for Jack Henry & Associates, Inc. is medium due to the presence of some barriers to entry, such as high capital requirements and regulatory hurdles, but the company still needs to innovate to stay ahead of potential new competitors.

Intensity Of Rivalry

The intensity of rivalry for Jack Henry & Associates, Inc. is high due to the presence of several established competitors in the financial technology industry, leading to a competitive pricing environment and a need for the company to differentiate itself.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.96%
Debt Cost 7.09%
Equity Weight 71.04%
Equity Cost 7.26%
WACC 7.21%
Leverage 40.76%

11. Quality Control: Jack Henry & Associates, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

180.34$

Current Price

180.34$

Potential

-0.00%

Expected Cash-Flows