Fourth quarter summary:
GAAP revenue increased 4.7% and GAAP operating income increased 1.2% for the fiscal three months ended June 30, 2024, compared to the prior fiscal year quarter.
Non-GAAP adjusted revenue increased 6.4% and non-GAAP adjusted operating income increased 5.3% for the fiscal three months ended June 30, 2024, compared to the prior fiscal year quarter.1
GAAP EPS was $1.38 per diluted share for the fiscal three months ended June 30, 2024, compared to $1.34 per diluted share in the prior fiscal year quarter.
Fiscal year summary:
GAAP revenue increased 6.6% and GAAP operating income increased 1.8% for the fiscal year ended June 30, 2024, compared to the prior fiscal year.
Non-GAAP adjusted revenue increased 7.4% and non-GAAP adjusted operating income increased 10.3% for the fiscal year ended June 30, 2024, compared to the prior fiscal year.1
GAAP EPS was $5.23 per diluted share for the fiscal year ended June 30, 2024, compared to $5.02 per diluted share in the prior fiscal year.
Cash and cash equivalents were $38 million at June 30, 2024, and $12 million at June 30, 2023.
Debt outstanding related to credit facilities was $150 million at June 30, 2024, and $275 million at June 30, 2023.
Full year fiscal 2025 guidance:2
Current
GAAP
Low
High
Revenue
$2,369
$2,391
Operating margin
23.0 %
23.2 %
EPS
$5.78
$5.87
Non-GAAP3
Adjusted revenue
$2,353
$2,375
Adjusted operating margin
22.7 %
22.8 %
MONETT, Mo., Aug. 20, 2024 /PRNewswire/ -- Jack Henry & Associates, Inc. (NASDAQ:JKHY), a leading financial technology provider, today announced results for the fiscal fourth quarter and full fiscal year ended June 30, 2024.
According to Greg Adelson, President and CEO, "We are very pleased to report overall strong financial performance results for the fourth quarter and full 2024 fiscal year. We produced record revenue and operating income in fiscal year 2024 along with our highest-ever sales bookings in both the fourth quarter and fiscal year. Technology spending remains robust with significant demand for our innovative solutions. Even with record sales bookings, we continued to replenish and keep our sales pipeline near its all-time high. We are well positioned for future growth as we continue to invest in innovation, execute on our strategy, and deliver for our clients and shareholders."
1 See tables below on page 4 reconciling non-GAAP financial measures to GAAP.2 The full fiscal year guidance assumes no acquisitions or dispositions are made during fiscal year 2025.3 See tables below on page 8 reconciling fiscal year 2024 GAAP to non-GAAP guidance.4 See table below on page 14 reconciling net income to non-GAAP EBITDA.
Operating Results
Revenue, operating expenses, operating income, and net income for the three months and fiscal year ended June 30, 2024, compared to the three months and fiscal year ended June 30, 2023, were as follows:
Revenue
(Unaudited, In Thousands)
Three Months Ended
June 30,
%Change
Year Ended
June 30,
%Change
2024
2023
2024
2023
Revenue
Services and Support
$ 316,739
$ 311,931
1.5 %
$ 1,275,954
$ 1,214,701
5.0 %
Percentage of Total Revenue
56.6 %
58.3 %
57.6 %
58.5 %
Processing
243,173
222,703
9.2 %
939,589
863,001
8.9 %
Percentage of Total Revenue
43.4 %
41.7 %
42.4 %
41.5 %
REVENUE
$ 559,912
$ 534,634
4.7 %
$ 2,215,543
$ 2,077,702
6.6 %
Services and support revenue increased for the three months ended June 30, 2024, primarily driven by growth in data processing and hosting revenue of 11.5%. The increase in services and support revenue was partially offset by the decrease in deconversion revenue quarter over quarter. Processing revenue increased for the three months ended June 30, 2024, primarily driven by growth in card revenue of 8.3% and transaction and digital revenue of 14.0%. Other drivers were increases in payment processing and remote capture and ACH revenues.
Services and support revenue increased for the fiscal year ended June 30, 2024, primarily driven by growth in data processing and hosting revenue of 10.9%. Other drivers were increases in software usage, consulting, and hardware revenues. The increase in services and support revenue was partially offset by the decrease in deconversion revenue fiscal year over fiscal year. Processing revenue increased for the fiscal year ended June 30, 2024, primarily driven by growth in card revenue of 6.2% and transaction and digital revenue of 17.7%. Other drivers were increases in payment processing, remote capture and ACH, and other processing revenues.
For the three months ended June 30, 2024, core segment revenue increased 3.0%, payments segment revenue increased 7.7%, complementary segment revenue increased 2.7%, and corporate and other segment revenue increased 5.8%. For the three months ended June 30, 2024, non-GAAP adjusted core segment revenue increased 4.4%, non-GAAP adjusted payments segment revenue increased 8.4%, non-GAAP adjusted complementary segment revenue increased 6.0%, and non-GAAP adjusted corporate and other segment revenue increased 6.3% (see revenue lines of segment break-out tables on pages 5 and 6 below).
For the fiscal year ended June 30, 2024, core segment revenue increased 6.4%, payments segment revenue increased 6.6%, complementary segment revenue increased 5.9%, and corporate and other segment revenue increased 14.3%. For the fiscal year ended June 30, 2024, non-GAAP adjusted core segment revenue increased 7.1%, non-GAAP adjusted payments segment revenue increased 6.7%, non-GAAP adjusted complementary segment revenue increased 7.7%, and non-GAAP adjusted corporate and other segment revenue increased 14.4% (see revenue lines of segment break-out tables on pages 6 and 7 below).
Operating Expenses and Operating Income
(Unaudited, In Thousands)
Three Months Ended
June 30,
%Change
Year Ended
June 30,
%Change
2024
2023
2024
2023
Cost of Revenue
$ 327,272
$ 308,868
6.0 %
$ 1,299,477
$ 1,219,062
6.6 %
Percentage of Total Revenue5
58.5 %
57.8 %
58.7 %
58.7 %
Research and Development
39,892
38,498
3.6 %
148,256
142,678
3.9 %
Percentage of Total Revenue5
7.1 %
7.2 %
6.7 %
6.9 %
Selling, General, and Administrative
67,122
63,069
6.4 %
278,419
235,274
18.3 %
Percentage of Total Revenue5
12.0 %
11.8 %
12.6 %
11.3 %
OPERATING EXPENSES
434,286
410,435
5.8 %
1,726,152
1,597,014
8.1 %
OPERATING INCOME
$ 125,626
$ 124,199
1.2 %
$ 489,391
$ 480,688
1.8 %
Operating Margin5
22.4 %
23.2 %
22.1 %
23.1 %
Cost of revenue increased for the three months ended June 30, 2024, primarily due to higher direct costs generally consistent with increases in the related revenue, higher personnel costs, and increased internal licenses and fees. Cost of revenue increased for the fiscal year ended June 30, 2024, primarily due to increased personnel costs, higher direct costs generally consistent with increases in the related revenue, and increased internal licenses and fees.
Research and development expense increased for the three months ended June 30, 2024, primarily due to higher consulting and other professional services (net of capitalization) and increased cloud consumption costs (net of capitalization). Research and development expense increased for the fiscal year ended June 30, 2024, primarily due to higher cloud consumption (net of capitalization) and increased personnel costs (net of capitalization) related to the Jack Henry Platform and Payrailz, LLC ("Payrailz").6
Selling, general, and administrative expense increased for the three months ended June 30, 2024, primarily due to higher personnel costs, including increased commissions, payroll taxes, and medical benefits expenses. Selling, general, and administrative expense increased for the fiscal year ended June 30, 2024, primarily due to higher personnel costs, including the voluntary employee departure incentive payment (VEDIP) program7 and commissions expenses.
Net Income
(Unaudited, In Thousands,
Except Per Share Data)
Three Months Ended
June 30,
%Change
Year Ended
June 30,
%Change
2024
2023
2024
2023
Income Before Income Taxes
$ 130,384
$ 123,950
5.2 %
$ 498,019
$ 474,574
4.9 %
Provision for Income Taxes
29,311
26,177
12.0 %
116,203
107,928
7.7 %
NET INCOME
$ 101,073
$ 97,773
3.4 %
$ 381,816
$ 366,646
4.1 %
Diluted earnings per share
$ 1.38
$ 1.34
3.3 %
$ 5.23
$ 5.02
4.2 %
Effective tax rates for the three months ended June 30, 2024, and 2023, were 22.5% and 21.1%, respectively. Effective tax rates for the fiscal year ended June 30, 2024, and 2023, were 23.3% and 22.7%, respectively.
According to Mimi Carsley, CFO and Treasurer, "For both the fourth quarter and the fiscal year, our private cloud and processing services continued to drive robust revenue growth. These key areas of revenue had strong, organic revenue growth of 9%, while overall revenue grew over 7% on a non-GAAP basis and non-GAAP operating income grew over 10%."
5 Operating margin is calculated by dividing operating income by revenue. Operating margin plus operating expense components as a percentage of total revenue may not equal 100% due to rounding.6 On August 31, 2022, the Company acquired all the equity interest in Payrailz.7 The VEDIP program was a Company voluntary separation program offered to certain eligible employees beginning in July 2023.
Impact of Non-GAAP Adjustments
The tables below show our revenue, operating income, and net income for the three months ended June 30, 2024, and fiscal year ended June 30, 2024, compared to the three months ended June 30, 2023, and fiscal year ended June 30, 2023, excluding the impacts of deconversions, the VEDIP program expense,* the (gain)/loss on sale of assets, net, and the acquisition.
On August 31, 2022, the Company acquired all the equity interest in Payrailz (the "acquisition"). Payrailz related revenue, operating expenses, operating income, and net income excluded in the tables below in the column for the year ended June 30, 2024, include Payrailz activity for the first two months of the fiscal year only.
(Unaudited, In Thousands)
Three Months Ended June 30,
%Change
Year Ended June 30,
%Change
2024
2023
2024
2023
GAAP Revenue**
$ 559,912
$ 534,634
4.7 %
$ 2,215,543
$ 2,077,702
6.6 %
Adjustments:
Deconversion revenue
(6,693)
(14,733)
(16,554)
(31,775)
Revenue from acquisition
—
—
(1,945)
—
NON-GAAP ADJUSTED REVENUE**
$ 553,219
$ 519,901
6.4 %
$ 2,197,044
$ 2,045,927
7.4 %
GAAP Operating Income
$ 125,626
$ 124,199
1.2 %
$ 489,391
$ 480,688
1.8 %
Adjustments:
Operating income from deconversions
(5,594)
(13,054)
(13,146)
(27,513)
VEDIP program expense*
—
—
16,443
—
Operating loss from acquisition
—
—
2,237
—
(Gain)/loss on sale of assets, net
—
2,816
—
(4,567)
NON-GAAP ADJUSTED OPERATING INCOME
$ 120,032
$ 113,961
5.3 %
$ 494,925
$ 448,608
10.3 %
Non-GAAP Adjusted Operating Margin***
21.7 %
21.9 %
22.5 %
21.9 %
GAAP Net Income
$ 101,073
$ 97,773
3.4 %
$ 381,816
$ 366,646
4.1 %
*The VEDIP program expense for the fiscal year ended June 30, 2024, was related to a Company voluntary separation program offered to certain eligible employees beginning in July 2023.
**GAAP revenue is comprised of services and support and processing revenues (see page 2). Reducing services and support revenue by deconversion revenue for the three months ended June 30, 2024, and 2023 which was $6,693 for the current fiscal year quarter and $14,733 for the prior fiscal year quarter, results in non-GAAP adjusted services and support revenue growth of 4.3% quarter over quarter. There were no non-GAAP adjustments to processing revenue for the three months ended June 30, 2024, or 2023 .
Reducing services and support revenue by deconversion revenue for the year ended June 30, 2024, and 2023, which was $16,554 for the current fiscal year and $31,775 for the prior fiscal year, and by $2 of revenue from the acquisition in the current fiscal year, results in non-GAAP adjusted services and support revenue growth of 6.5% year over year. Reducing processing revenue by revenue from the acquisition for the year ended June 30, 2024, which was $1,943, results in non-GAAP adjusted processing revenue growth of 8.6% year over year.
***Non-GAAP adjusted operating margin is calculated by dividing non-GAAP adjusted operating income by non-GAAP adjusted revenue.
(Unaudited, In Thousands)
Three Months Ended June 30,
%Change
Year Ended June 30,
%Change
2024
2023
2024
2023
GAAP Net Income
$ 101,073
$ 97,773
3.4 %
$ 381,816
$ 366,646
4.1 %
Adjustments:
Net income from deconversions
(5,594)
(13,054)
(13,146)
(27,513)
VEDIP program expense*
—
—
16,443
—
Net loss from acquisition
—
—
4,656
—
(Gain)/loss on sale of assets, net
—
2,816
—
(4,567)
Tax impact of adjustments**
1,343
2,456
(1,909)
7,699
NON-GAAP ADJUSTED NET INCOME
$ 96,822
$ 89,991
7.6 %
$ 387,860
$ 342,265
13.3 %
*The VEDIP program expense for the fiscal year ended June 30, 2024, was related to a Company voluntary separation program offered to certain eligible employees beginning in July 2023.
**The tax impact of adjustments is calculated using a tax rate of 24% for the three months ended June 30, 2024, and 2023, and for the fiscal year ended June 30, 2024, and 2023. The tax rate for non-GAAP adjustment items takes a broad look at our recurring tax adjustments and applies them to non-GAAP revenue that does not have its own specific tax impacts.
The tables below show the segment break-out of revenue and cost of revenue for each period presented, as adjusted for the items above, and include a reconciliation to non-GAAP adjusted operating income presented above.
Three Months Ended June 30, 2024
(Unaudited, In Thousands)
Core
Payments
Complementary
Corporateand Other
Total
GAAP REVENUE
$ 172,040
$ 212,593
$ 155,149
$ 20,130
$ 559,912
Non-GAAP adjustments*
(2,407)
(2,367)
(1,777)
(142)
(6,693)
NON-GAAP ADJUSTED REVENUE
169,633
210,226
153,372
19,988
553,219
GAAP COST OF ...
