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

2/7/25 1:01:51 PM ET

$JKHY

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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 periods presented.

NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS

For cash equivalents, certificates of deposit, amounts receivable or payable, and short-term borrowings, fair values approximate carrying value, based on the short-term nature of the assets and liabilities.

The Company's estimates of the fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets, and requires that observable inputs be used in the valuations when available. The three levels of the hierarchy are as follows:

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Level 1: inputs to the valuation are quoted prices in an active market for identical assets

Level 2: inputs to the valuation include quoted prices for similar assets in active markets that are observable either directly or indirectly

Level 3: valuation is based on significant inputs that are unobservable in the market and the Company's own estimates of assumptions that we believe market participants would use in pricing the asset

Fair value of financial assets included in current assets is as follows:


	Estimated Fair Value Measurements						Total Fair
	Level 1		Level 2		Level 3		Value
December 31, 2024
Financial Assets:

Certificates of Deposit	$	—	$	4,521	$	—	$	4,521
Financial Liabilities:
Credit facilities	$	—	$	150,000	$	—	$	150,000
June 30, 2024
Financial Assets:
Certificates of Deposit	$	—	$	3,505	$	—	$	3,505

Financial Liabilities:
Credit facilities	$	—	$	150,000	$	—	$	150,000

NOTE 5. LEASES

The Company determines if an arrangement is a lease, or contains a lease, at inception. The lease term begins on the commencement date, which is the date the Company takes possession of the property and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease agreements with lease and non-lease components are accounted for as a single lease component for all asset classes, which are comprised of real estate leases and equipment leases. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the Company’s leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based upon the information available at commencement date. The determination of the incremental borrowing rate requires judgment and is determined by using the Company’s current unsecured borrowing rate, adjusted for various factors such as collateralization and term to align with the terms of the lease.

The Company leases certain office space, data centers, and equipment with remaining terms of 1 month to 9 years. Certain leases contain renewal options for varying periods, which are at the Company’s sole discretion. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in the determination of the Company’s ROU assets and lease liabilities. Certain leases require the Company to pay taxes, insurance, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the lease liability to the extent they are variable in nature. Variable lease costs are recognized as a variable lease expense when incurred.

At December 31, 2024, and June 30, 2024, the Company had operating lease assets of $49,476 and $53,981, respectively. At December 31, 2024, total operating lease liabilities of $55,692 were comprised of current operating lease liabilities of $9,199 and noncurrent operating lease liabilities of $46,493. At June 30, 2024, total operating lease liabilities of $59,604 were comprised of current operating lease liabilities of $8,454 and noncurrent operating lease liabilities of $51,150.

Operating lease assets are included within other non-current assets, and operating lease liabilities are included within accrued expenses (current portion) and other long-term liabilities (noncurrent portion) in the Company’s condensed consolidated balance sheets. Operating lease assets were recorded net of accumulated amortization of $39,136 and $34,306 as of December 31, 2024, and June 30, 2024, respectively.

Operating lease costs for the three months ended December 31, 2024, and 2023, were $2,900 and $2,229, respectively. Total operating lease costs for the respective quarters included variable lease costs of $930 and $1,709, respectively. Operating lease costs for the six months ended December 31, 2024, and 2023, were $5,792 and $4,698, respectively. Total operating lease costs for the respective fiscal year-to-date periods included variable

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lease costs of $1,483 and $2,253, respectively. Operating lease expense is included within cost of services, research and development, and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, in the Company’s condensed consolidated statements of income.

For the six months ended December 31, 2024, and 2023, the Company had operating cash flows for payments on operating leases of $5,197 and $4,422, and ROU assets obtained in exchange for operating lease liabilities of $7 and $18,935, respectively.

As of December 31, 2024, and June 30, 2024, the weighted-average remaining lease term for the Company's operating leases was 72 months and 78 months, and the weighted-average discount rate was 2.71% and 2.70%, respectively.

Maturity of Lease Liabilities under ASC 842

Future minimum rental payments on operating leases with initial non-cancellable lease terms in excess of one year were due as follows at December 31, 2024:


Due Dates (fiscal year)	Future Minimum Rental Payments

2025 (remaining period)	$	5,416
2026	11,048
2027	10,455
2028	10,106
2029	7,548
Thereafter	17,667
Total lease payments	$	62,240
Less: interest	(6,548)
Present value of lease liabilities	$	55,692

Future lease payments include $5,464 related to options to extend lease terms that are reasonably certain of being exercised. At December 31, 2024, there were no material legally binding lease payments for leases signed but not yet commenced.

The Company may sublease its facilities from time to time to third parties. Sublease income is recognized on a straight-line basis over the lease term, and is included within revenue on the Company's condensed consolidated statements of income.

On September 30, 2023, the Company entered into an agreement with a third party to sublease a portion of its Elizabethtown, Kentucky facility. The commencement date of the sublease was October 1, 2023, and it had an initial term of 57 months. Sublease income for the three months ended December 31, 2024, and 2023, was $205 and $132, respectively. Sublease income for the six months ended December 31, 2024, and 2023, was $477 and $132, respectively. There have been no indications of impairment related to the underlying right-of-use asset.

Minimum Sublease Payments

At December 31, 2024, the future total minimum sublease payments to be received were as follows:


Due Dates (fiscal year)	Future Minimum Sublease Receipts

2025 (remaining period)	$	406
2026	831
2027	856
2028	882

Total sublease receipts	$	2,975

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NOTE 6. DEBT

Credit facilities

On August 31, 2022, the Company entered into a five-year senior, unsecured amended and restated credit agreement that replaced a prior credit facility that was entered into on February 10, 2020. The credit agreement allows for borrowings of up to $600,000, which may be increased to $1,000,000 by the Company at any time until maturity. The credit agreement bears interest at a variable rate equal to (a) a rate based on an adjusted Secured Overnight Financing Rate (“SOFR”) term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit agreement. As of December 31, 2024, the Company was in compliance with all such covenants. The amended and restated credit facility terminates August 31, 2027. There was $60,000 outstanding under the amended and restated credit facility at December 31, 2024 and June 30, 2024.

Term loan facility

On May 16, 2023, the Company entered into a term loan credit agreement with a syndicate of financial institutions, with an original principal balance of $180,000. Borrowings under the term loan facility bear interest at a variable rate equal to (a) a rate based on an adjusted SOFR term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 0.75%), plus an applicable percentage in each case determined by the Company's leverage ratio. The term loan credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the term loan credit agreement. As of December 31, 2024, the Company was in compliance with all such covenants. The term loan credit agreement has a maturity date of May 16, 2025. There was $90,000 outstanding under the term loan at December 31, 2024 and June 30, 2024.

Other lines of credit

The Company has an unsecured bank credit line, which provides for funding of up to $5,000 and bears interest at the prime rate less 1.0%. The credit line expires on April 30, 2025. There was no balance outstanding at December 31, 2024, or June 30, 2024.

On October 31, 2024, the Company entered into a discretionary line of credit demand note, which provides for funding of up to $50,000 and bears interest at the prime rate less 2.0%. The note does not constitute a committed line of credit. The line of credit renews annually. There was no balance outstanding at December 31, 2024.

Interest

The Company paid interest of $4,352 and $6,802 during the six months ended December 31, 2024, and 2023, respectively.

NOTE 7. INCOME TAXES

The effective tax rate decreased for the three months ended December 31, 2024, compared to the three months ended December 31, 2023, with an effective tax rate of 23.2% of income before income taxes, compared to 23.5% in the prior fiscal year quarter.

For the six months ended December 31, 2024, and 2023, the effective tax rate remained consistent, with an effective tax rate of 23.6% of income before income taxes.

The Company paid income taxes, net of refunds, of $65,833 and $52,018 in the six months ended December 31, 2024, and 2023, respectively.

At December 31, 2024, the Company had $21,259 of gross unrecognized tax benefits before interest and penalties, $19,218 of which, if recognized, would affect our effective tax rate. The Company had accrued interest and penalties of $4,281 related to uncertain tax positions at December 31, 2024.

The U.S. federal and state income tax returns for fiscal 2021 and all subsequent years remain subject to examination as of December 31, 2024, under statute of limitations rules. In addition, certain U.S. state income tax returns remain subject to examination as of December 31, 2024, under the statute of limitation rules for fiscal 2016 through 2020. The Company anticipates potential changes due to lapsing of statutes of limitations, and examination

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closures could reduce the unrecognized tax benefits balance by $3,000 to $7,000 within twelve months of December 31, 2024.

NOTE 8. STOCK-BASED COMPENSATION

Our operating income for the three months ended December 31, 2024, and 2023, included $8,834 and $8,333 of stock-based compensation costs, respectively. Our operating income for the six months ended December 31, 2024, and 2023, included $15,539 and $15,480 of stock-based compensation costs, respectively.

On November 10, 2015, the Company adopted the 2015 Equity Incentive Plan (“2015 EIP”) for its associates and non-employee directors. The plan allows for grants of stock options, stock appreciation rights, restricted stock shares or units, and performance shares or units. The maximum number of shares authorized for issuance under the plan is 3,000.

Stock option awards

Under the 2015 EIP, terms and vesting periods of the options are determined by the Compensation Committee of the Board of Directors when granted. The option period must expire not more than ten years from the option grant date. The options granted under this plan are exercisable beginning three years after the grant date at an exercise price equal to 100% of the fair market value of the stock at the grant date. The options terminate upon surrender of the option, ninety days after termination of employment, upon the expiration of one year following notification of a deceased optionee, or ten years after grant.

During the six months ended December 31, 2024, there were no options granted or forfeited, and 12 options were exercised at a weighted average exercise price of $87.27 per share with a total exercise intrinsic value of $991. At December 31, 2024, there was no compensation cost yet to be recognized related to options. There were no options outstanding as of December 31, 2024.

Restricted stock unit and performance unit awards

The Company issues unit awards under the 2015 EIP. Restricted stock unit awards (which are unit awards that have service requirements only and are not tied to performance measures) generally vest over a period of 1 to 3 years. Performance unit awards are awards that have performance measures in addition to service requirements.

The following table summarizes non-vested restricted stock unit awards and performance unit awards as of December 31, 2024:


Unit awards	Units	Weighted Average Grant Date Fair Value Per Unit		Aggregate Intrinsic Value
Outstanding July 1, 2024	325	$	189.68
Granted1	157	172.06
Vested	(115)	186.27
Forfeited2	(12)	179.46
Outstanding December 31, 2024	355	$	183.34	$	62,157

1Granted includes restricted stock unit awards and performance unit awards with market conditions at 100% achievement.

2Forfeited includes restricted stock unit awards and performance unit awards forfeited for service requirements not met and performance unit awards not settled due to underachievement of performance measures.

Of the 157 unit awards granted in fiscal 2025, 113 were restricted stock unit awards and 44 were performance unit awards. The restricted stock unit awards were valued at the weighted average fair value of the non-vested units based on the fair market value of the Company’s equity shares on the grant date, less the present value of expected future dividends to be declared during the vesting period, consistent with the methodology for calculating compensation expense on such awards.

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18 of the performance unit awards granted in fiscal 2025 were valued at grant by estimating 100% payout at release and using the fair market value of the Company equity shares on the grant date, less the present value of expected future dividends to be declared during the vesting period. The payout at release of approximately half of these performance unit awards will be determined based on the Company's compound annual growth rate for revenue (excluding adjustments) for the three-year vesting period compared against goal thresholds as defined in the award agreement. The performance payout at release of the other half of these performance unit awards will be determined based on the expansion of the Company's non-GAAP operating margin over the three-year vesting period compared against goal thresholds as defined in the award agreement. 26 of the performance unit awards have market conditions and were valued at grant using a Monte Carlo pricing model as of the measurement date customized to the specific provisions of the Company’s plan design. Per the Company's award vesting and settlement provisions, the performance unit awards that utilize a Monte Carlo pricing model were valued at grant on the basis of Total Shareholder Return (“TSR”) in comparison to the compensation peer group made up of participants approved by the Human Capital & Compensation Committee of the Company's Board of Directors for fiscal year 2025. The Monte Carlo inputs used in the model to estimate fair value at the measurement date and resulting values for these performance unit awards are as follows:



Monte Carlo award inputs:	Fiscal 2025
Compensation Peer Group:
Volatility	24.5	%
Risk free interest rate	3.72	%
Annual dividend based on most recent quarterly dividend	$2.20
Dividend yield	1.29	%
Beginning average percentile rank for TSR	41.0	%

At December 31, 2024, there was $31,138 of compensation expense that has yet to be recognized related to non-vested restricted stock unit and performance unit awards, which will be recognized over a weighted average period of 1.32 years.

NOTE 9. EARNINGS PER SHARE

The following table reflects the reconciliation between basic and diluted earnings per share.


	Three Months Ended December 31,				Six Months Ended December 31,
	2024		2023		2024		2023
Net Income	$	97,845	$	91,965	$	217,036	$	193,644
Common share information:
Weighted average shares outstanding for basic earnings per share	72,924		72,838		72,914		72,854
Dilutive effect of stock options, restricted stock units, and performance units	158		146		166		145
Weighted average shares outstanding for diluted earnings per share	73,082		72,984		73,080		72,999
Basic earnings per share	$	1.34	$	1.26	$	2.98	$	2.66
Diluted earnings per share	$	1.34	$	1.26	$	2.97	$	2.65

Per share information is based on the weighted average number of common shares outstanding for the three and six months ended December 31, 2024, and 2023. Stock options, restricted stock units, and performance units have been included in the calculation of diluted earnings per share to the extent they are dilutive. There were nominal anti-dilutive stock options, restricted stock units, or performance units excluded for the three and six months ended December 31, 2024, and 24 and 22 were excluded for the three and six months ended December 31, 2023, respectively.

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NOTE 10. REPORTABLE SEGMENT INFORMATION

The Company is a well-rounded financial technology company and is a leading provider of technology solutions and payment processing services primarily to community and regional financial institutions.

The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing services, online and mobile bill pay solutions, Automated Clearing House (“ACH”) origination and remote deposit capture processing, and risk management products and services. The Complementary segment provides additional software, hosted processing platforms, and services, including digital/mobile banking, treasury services, online account opening, fraud/anti-money laundering ("AML") and lending/deposit solutions that can be integrated with the Company's Core solutions, and many can be used independently. The Corporate and Other segment includes revenue and costs from hardware and other products not attributed to any of the other three segments, as well as operating expenses not directly attributable to the other three segments.

The Company evaluates the performance of its segments and allocates resources to them based on various factors, including performance against trend, budget, and forecast. Only revenue and costs of revenue are considered in the evaluation for each segment.

Immaterial adjustments have been made between segments to reclassify cost of revenue that was recognized for the three and six months ended December 31, 2023. These reclasses were made to be consistent with the current allocation of cost of revenue by segment. Cost of revenue reclassed for the three and six months ended December 31, 2023, from Complementary to Corporate and Other, was $1,198 and $2,515, respectively.


	Three Months Ended
	December 31, 2024
	Core		Payments		Complementary		Corporate and Other		Total
REVENUE
Services and Support	$	163,119	$	20,094	$	117,574	$	22,240	$	323,027
Processing	10,054		194,742		43,363		2,662		250,821
Total Revenue	173,173		214,836		160,937		24,902		573,848

Cost of Revenue	70,739		114,738		63,384		83,989		332,850
Research and Development									41,095
Selling, General, and Administrative									76,901


Total Expenses									450,846

SEGMENT INCOME	$	102,434	$	100,098	$	97,553	$	(59,087)

OPERATING INCOME									123,002

INTEREST INCOME (EXPENSE)									4,379

INCOME BEFORE INCOME TAXES									$	127,381

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	Three Months Ended
	December 31, 2023
	Core		Payments		Complementary		Corporate and Other		Total
REVENUE
Services and Support	$	155,429	$	21,060	$	113,779	$	21,724	$	311,992
Processing	10,172		182,779		38,687		2,071		233,709
Total Revenue	165,601		203,839		152,466		23,795		545,701

Cost of Revenue	69,370		111,623		62,825		77,161		320,979
Research and Development									35,478
Selling, General, and Administrative									70,277


Total Expenses									426,734

SEGMENT INCOME	$	96,231	$	92,216	$	89,641	$	(53,366)

OPERATING INCOME									118,967

INTEREST INCOME (EXPENSE)									1,256

INCOME BEFORE INCOME TAXES									$	120,223



	Six Months Ended
	December 31, 2024
	Core		Payments		Complementary		Corporate & Other		Total
REVENUE
Services and Support	$	347,985	$	42,837	$	247,567	$	41,317	$	679,706
Processing	20,812		383,921		85,072		5,318		495,123
Total Revenue	368,797		426,758		332,639		46,635		1,174,829

Cost of Revenue	152,159		227,757		129,352		167,014		676,282
Research and Development									80,780
Selling, General, and Administrative									143,489


Total Expenses									900,551

SEGMENT INCOME	$	216,638	$	199,001	$	203,287	$	(120,379)

OPERATING INCOME									274,278

INTEREST INCOME (EXPENSE)									9,901

INCOME BEFORE INCOME TAXES									$	284,179

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	Six Months Ended
	December 31, 2023
	Core		Payments		Complementary		Corporate & Other		Total
REVENUE
Services and Support	$	331,173	$	40,962	$	238,050	$	44,012	$	654,197
Processing	20,868		362,233		75,783		3,988		462,872
Total Revenue	352,041		403,195		313,833		48,000		1,117,069

Cost of Revenue	145,296		220,449		123,783		154,453		643,981
Research and Development									72,370
Selling, General, and Administrative									149,051


Total Expenses									865,402

SEGMENT INCOME	$	206,745	$	182,746	$	190,050	$	(106,453)

OPERATING INCOME									251,667

INTEREST INCOME (EXPENSE)									1,804

INCOME BEFORE INCOME TAXES									$	253,471

The Company has not disclosed any additional asset information by segment, as the information is not generated for internal management reporting to the Chief Executive Officer, who is also the Chief Operating Decision Maker.

NOTE 11. SUBSEQUENT EVENTS

None.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statements included in this Form 10-Q for the fiscal quarter ended December 31, 2024.

OVERVIEW

Jack Henry & Associates, Inc. is a well-rounded financial technology company headquartered in Monett, Missouri, that employs approximately 7,200 full-time and part-time associates nationwide, and is a leading provider of technology solutions and payment processing services primarily to community and regional financial institutions. Our solutions serve approximately 7,500 clients and consist of integrated data processing systems solutions to U.S. banks ranging from de novo to multi-billion-dollar institutions with assets up to $50 billion, core data processing solutions for credit unions of all sizes, and non-core highly specialized core-agnostic products and services that enable financial institutions of every asset size and charter, and diverse corporate entities outside the financial services industry, to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. Our integrated solutions are available for on-premise installation and delivery in our private and public cloud.

Each of our solutions shares the fundamental commitment to provide high-quality business systems, service levels that consistently exceed client expectations, and integration of solutions and practical new technologies. The quality of our solutions, our high service standards, and the fundamental way we do business typically foster long-term client relationships, attract prospective clients, and have enabled us to capture substantial market share.

Through internal product development, disciplined acquisitions, and alliances with companies offering niche solutions that complement our proprietary solutions, we regularly introduce new products and services and generate new cross-sales opportunities. We provide compatible computer hardware for our on-premise installations and secure processing environments for our outsourced solutions in our private and public cloud. We perform data conversions, software implementations, initial and ongoing client training, and ongoing client support services.

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We believe our primary competitive advantage is client service. Our support infrastructure and strict standards provide service levels that generate high levels of client satisfaction and retention. We consistently measure client satisfaction using a variety of surveys, such as an annual survey on the client's anniversary date and randomly-generated surveys initiated each day by routine support requests. Dedicated surveys are also used to grade specific aspects of our client experience, including product implementation, education, and consulting services.

Our two primary revenue streams are “services and support” and “processing.” Services and support includes: “private and public cloud” revenues that predominantly have contract terms of six years at inception; “product delivery and services” revenues, which include revenues from the sales of licenses, implementation services, deconversions, consulting, and hardware; and “on-premise support” revenues, composed of maintenance fees that primarily contain annual contract terms. Processing includes: "remittance” revenues from payment processing, remote capture, and ACH transactions; “card” revenues, including card transaction processing and monthly fees; and “transaction and digital” revenues, which include transaction and mobile processing revenues. We continually seek opportunities to increase revenue while at the same time containing costs to expand margins.

We have four reportable segments: Core, Payments, Complementary, and Corporate and Other. The respective segments include all related revenues along with the related cost of revenue.

A detailed discussion of the major components of the results of operations follows. All amounts in the following discussion are in thousands, except per share amounts.

RESULTS OF OPERATIONS

For the second quarter of fiscal 2025, total revenue increased 5.2%, or $28,147, compared to the same quarter in fiscal 2024. Total revenue less deconversion revenue of $69 for the current fiscal quarter and $4,882 for the prior fiscal year second quarter results in an increase of 6.1%, quarter over quarter. This increase was primarily driven by organic growth in our revenue lines including data processing and hosting, card, payment processing, which is inclusive of PayCenter, and Jack Henry digital, which is inclusive of Banno.

Operating expenses increased 5.7%, or $24,112, for the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. Total operating expenses less deconversion operating expenses of $690 for the current fiscal quarter and $1,079 for the prior fiscal year second quarter results in an increase of 5.8%. This increase was primarily driven by higher personnel costs and direct costs.

Operating income increased 3.4%, or $4,035, for the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. Removing from total operating income the effects of deconversion operating loss of $622 for the current fiscal quarter and deconversion operating income of $3,803 for the prior fiscal year second quarter results in an increase of 7.3%, quarter over quarter. This increase was primarily driven by organic revenue growth partially offset by increased operating expenses detailed above.

The provision for income taxes increased 4.5%, or $1,278, for the second quarter of fiscal 2025, compared to the second quarter of fiscal 2024, primarily driven by the increase in income before income taxes. The effective tax rate for the current fiscal second quarter was 23.2% compared to 23.5% for the same quarter a year ago.

Net income increased 6.4%, or $5,880, for the second quarter of fiscal 2025, compared to the second quarter of fiscal 2024. Removing from total net income the effects of deconversion net loss of $472 for the current fiscal quarter and deconversion net income of $2,890 for the prior fiscal year second quarter, results in a 10.4% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue for the second quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same quarter last fiscal year.

For the six months ended December 31, 2024, total revenue increased 5.2%, or $57,760, compared to the same period in fiscal 2024. Total revenue less deconversion revenue of $3,766 for the current fiscal year period and $9,018 for the prior fiscal year period results in an increase of 5.7%, period over period. This increase was primarily driven by organic growth in our revenue lines including data processing and hosting, card, Jack Henry digital, which is inclusive of Banno, and payment processing, which is inclusive of PayCenter.

Operating expenses increased 4.1%, or $35,149, for the six months ended December 31, 2024 compared to the same period in fiscal 2024. Total operating expenses less deconversion operating expenses of $892 for the current fiscal year period and $1,460 for the prior fiscal year period and less Voluntary Employee Departure Incentive Payment ("VEDIP") program expense of $16,443 for the prior fiscal year period results in an increase of 6.2%. This increase was primarily driven by higher direct costs, personnel costs, internal licenses and fees, and amortization. The VEDIP program, was a voluntary separation program for certain eligible employees conducted during July 2023 that included a VEDIP payment for the eligible employees who chose to participate in the program.

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Operating income increased 9.0%, or $22,611, for the six months ended December 31, 2024 compared to the same period in fiscal 2024. Removing from total operating income the effects of deconversion operating income of $2,873 for the current fiscal year period and $7,558 for the prior fiscal year period and VEDIP program operating loss of $16,443 from the prior fiscal year period results in an increase of 4.2%, period over period. This increase was primarily driven by organic revenue growth partially offset by increased operating expenses detailed above.

The provision for income taxes increased 12.2%, or $7,316, for the six months ended December 31, 2024, compared to the same period in fiscal 2024, primarily driven by the increase in income before income taxes. The effective tax rate for the current and prior fiscal year periods remained consistent and was 23.6% for both periods.

Net income increased 12.1%, or $23,392, for the six months ended December 31, 2024, compared to the same period in fiscal 2024. Removing from total net income the effects of deconversion net income of $2,184 for the current fiscal year period and $5,744 for the prior fiscal year period and VEDIP program net loss of $12,497 for the prior fiscal year period results in a 7.2% increase period over period. This increase was primarily due to net organic growth in our lines of revenue for the six months ended December 31, 2024, partially offset by higher operating expenses and the increased provision for income taxes compared to the same period last fiscal year.

As we move into the third quarter of fiscal 2025, significant portions of our business continue to provide recurring revenue and our sales pipeline is also encouraging. Our clients continue to face regulatory and operational challenges which our products and services address, and in these times they have an even greater need for our solutions that directly address institutional profitability, efficiency, and security. We believe our strong balance sheet, access to extensive lines of credit, the strength of our existing product line, and an unwavering commitment to superior client service position us well to address current and future opportunities.

A detailed discussion of the major components of the results of operations for the three and six months ended December 31, 2024, follows.

Discussions compare the current fiscal year's three and six months ended December 31, 2024, to the prior fiscal year's three and six months ended December 31, 2023.

REVENUE


Services and Support	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2024			2023					2024			2023
Services and Support	$	323,027		$	311,992		3.5	%	$	679,706		$	654,197		3.9	%
Percentage of total revenue	56		%	57		%			58		%	59		%

Services and support revenue increased 3.5% for the second quarter of fiscal 2025 compared to the same quarter a year ago. Reducing services and support revenue for deconversion revenue from each quarter, which was $69 for the current fiscal year quarter and $4,882 for the prior fiscal year quarter, results in growth of 5.2% quarter over quarter. This increase was primarily driven by double-digit growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand.

Services and support revenue increased 3.9% for the six months ended December 31, 2024, compared to the same period in fiscal 2024. Reducing services and support revenue for deconversion revenue from each period, which was $3,766 for the current fiscal year period and $9,018 for the prior fiscal year period, results in growth of 4.8% period over period. This increase was primarily driven by double-digit growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand, partially offset by the decrease in license and hardware revenues, period over period.


Processing	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2024			2023					2024			2023
Processing	$	250,821		$	233,709		7.3	%	$	495,123		$	462,872		7.0	%
Percentage of total revenue	44		%	43		%			42		%	41		%

Processing revenue increased 7.3% for the second quarter of fiscal 2025 compared to the same quarter last fiscal year. This increase was primarily driven by growth in card revenue primarily from monthly service and risk management fees, higher payment processing revenues, including PayCenter products — Zelle, RTP (Real Time Payments), and FedNow — from expanding volumes and new client revenue, and improvement in Jack Henry digital revenue (including Banno) from a higher number of active users and expanding volumes and from the

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ramping up of add-on products. Deconversion revenue did not significantly affect processing revenue quarter over quarter.

Processing revenue increased 7.0% for the six months ended December 31, 2024 compared to the same period in fiscal 2024. This increase was primarily driven by growth in card revenue primarily from monthly service and risk management fees, improvement in Jack Henry digital revenue (including Banno) from a higher number of active users and expanding volumes and from the ramping up of add-on products, and higher payment processing revenues, including PayCenter products — Zelle, RTP, and FedNow — from expanding volumes and new client revenue. Deconversion revenue did not significantly affect processing revenue period over period.

OPERATING EXPENSES


Cost of Revenue	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2024			2023					2024			2023
Cost of Revenue	$	332,850		$	320,979		3.7	%	$	676,282		$	643,981		5.0	%
Percentage of total revenue	58		%	59		%			58		%	58		%

Cost of revenue for the second quarter of fiscal 2025 increased 3.7% over the prior fiscal year second quarter. Reducing cost of revenue for deconversion costs from each quarter, which were $240 for the current fiscal year quarter and $621 for the prior fiscal year quarter, results in a 3.8% increase quarter over quarter. This increase was primarily due to higher direct costs generally consistent with increases in the related lines of revenue and higher personnel costs, including an increase in employee headcount in the trailing twelve months. Cost of revenue decreased 1% as a percentage of total revenue compared to the prior fiscal year quarter.

Cost of revenue for the six months ended December 31, 2024, increased 5.0% compared to the same period in fiscal 2024. Reducing cost of revenue for deconversion costs from each period, which were $355 for the current fiscal year period and $891 for the prior fiscal year period, results in a 5.1% increase period over period. This increase was primarily due to higher direct costs generally consistent with increases in the related lines of revenue, higher personnel costs, including an increase in employee headcount in the trailing twelve months, and increased internal licenses and fees from increased deployments and pricing. Cost of revenue remained consistent as a percentage of total revenue compared to the prior fiscal year period.


Research and Development	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2024			2023					2024			2023
Research and Development	$	41,095		$	35,478		15.8	%	$	80,780		$	72,370		11.6	%
Percentage of total revenue	7		%	7		%			7		%	6		%

Research and development expense increased 15.8% for the second quarter of fiscal 2025 compared to the prior fiscal year second quarter. This increase was primarily due to higher personnel costs net of capitalization including an increase in employee headcount in the trailing twelve months. Deconversion and non-recurring costs did not significantly affect research and development expenses quarter over quarter. Research and development expense for the quarter increased remained consistent as a percentage of total revenue compared to the prior fiscal year quarter.

Research and development expense increased 11.6% for the six months ended December 31, 2024, compared to the same period in fiscal 2024. This increase was primarily due to higher personnel costs net of capitalization including an increase in employee headcount in the trailing twelve months. Deconversion costs did not significantly affect research and development expenses period over period. Research and development expense increased 1.0% as a percentage of total revenue compared to the prior fiscal year period.


Selling, General, and Administrative	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2024			2023					2024			2023
Selling, General, and Administrative	$	76,901		$	70,277		9.4	%	$	143,489		$	149,051		(3.7)	%

Percentage of total revenue	13		%	13		%			12		%	13		%

Selling, general, and administrative expense increased 9.4% in the second quarter of fiscal 2025 compared to the same quarter in the prior fiscal year. Reducing selling, general, and administrative expense for deconversion costs

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from each quarter, which were $451 for the current fiscal year quarter and $458 for the prior fiscal year quarter results in a 9.5% increase quarter over quarter. This increase was primarily due to higher personnel costs, including benefits expenses from an increase in employee headcount in the trailing twelve months. Selling, general, and administrative expense remained consistent as a percentage of total revenue this fiscal quarter versus the prior fiscal year quarter.

Selling, general, and administrative expense decreased 3.7% in the six months ended December 31, 2024, compared to the same quarter in 2024. Reducing selling, general, and administrative expense for deconversion costs from each period, which were $538 for the current fiscal year period and $569 for the prior fiscal year period and for VEDIP program expense of $16,443 in the prior fiscal year period, results in an 8.3% increase period over period. This increase was primarily due to higher personnel costs, including benefits expenses from an increase in employee headcount in the trailing twelve months. Selling, general, and administrative expense decreased 1.0% as a percentage of total revenue this fiscal year period versus the prior fiscal year period.


INTEREST INCOME (EXPENSE)	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2024		2023				2024		2023
Interest Income	$	7,159	$	5,121	39.8	%	$	15,506	$	9,866	57.2	%
Interest Expense	$	(2,780)	$	(3,865)	(28.1)	%	$	(5,605)	$	(8,062)	(30.5)	%

Interest income increased due to higher interest-earning balances for the three and six months ended December 31, 2024, compared to the three and six months ended December 31, 2023. Interest expense decreased when compared to the prior fiscal year quarter primarily due to a decrease in average outstanding debt period over period. There was a $150,000 outstanding balance under the revolving credit and term loan facilities at December 31, 2024, and $255,000 outstanding balance under the revolving credit and term loan facilities at December 31, 2023.


PROVISION FOR INCOME TAXES	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2024			2023					2024			2023
Provision for Income Taxes	$	29,536		$	28,258		4.5	%	$	67,143		$	59,827		12.2	%
Effective Rate	23.2		%	23.5		%			23.6		%	23.6		%

The effective tax rates for the three months ended December 31, 2024, compared to the three months ended December 31, 2023, remained generally consistent with an effective tax rate of 23.2% of income before taxes for the current fiscal quarter and 23.5% of income before taxes for the prior year fiscal quarter. The effective tax rates for the six months ended December 31, 2024, compared to the six months ended December 31, 2023, remained consistent with effective tax rates of 23.6% of income before taxes for both periods.


NET INCOME	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2024		2023				2024		2023
Net income	$	97,845	$	91,965	6.4	%	$	217,036	$	193,644	12.1	%
Diluted earnings per share	$	1.34	$	1.26	6.2	%	$	2.97	$	2.65	12.0	%

Net income increased 6.4% to $97,845, or $1.34 per diluted share, for the second quarter of fiscal 2025 compared to $91,965, or $1.26 per diluted share, in the same quarter of fiscal 2024. Removing from total net income the effects of deconversion net loss of $472 for the current fiscal quarter and net income of $2,890 for the prior fiscal year quarter, results in a 10.4% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue for the second quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same quarter last fiscal year.

Net income increased 12.1% to $217,036, or $2.97 per diluted share, for the six months ended December 31, 2024 compared to $193,644, or $2.65 per diluted share, in the same quarter of fiscal 2024. Removing from total net income the effects of deconversion net income of $2,184 for the current fiscal year period and $5,744 for the prior fiscal year period, and the VEDIP program net loss of $12,497 for the prior fiscal year period, results in a 7.2% increase period over period. This increase was primarily due to net organic growth in our lines of revenue for the

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second quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same period last fiscal year.

REPORTABLE SEGMENT DISCUSSION

The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment provides additional software, hosted processing platforms, and services, including digital/mobile banking, treasury services, online account opening, fraud/anti-money laundering ("AML") and lending/deposit solutions that can be integrated with the Company's Core solutions, and many can be used independently. The Corporate and Other segment includes revenue and costs from hardware and other products not attributed to any of the other three segments, as well as operating expenses not directly attributable to the other three segments.



Core	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2024		2023				2024		2023
Revenue	$	173,173	$	165,601	4.6	%	$	368,797	$	352,041	4.8	%
Cost of Revenue	$	70,739	$	69,370	2.0	%	$	152,159	$	145,296	4.7	%

Revenue in the Core segment increased 4.6% and cost of revenue increased 2.0% for the three months ended December 31, 2024, compared to the three months ended December 31, 2023. Reducing Core revenue for deconversion revenue in both quarters, which totaled $(20) for the three months ended December 31, 2024, and $1,929 for the three months ended December 31, 2023, results in a 5.8% increase quarter over quarter. This increase was primarily driven by organic growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand, partially offset by a decrease in maintenance fees and software usage revenues. Reducing Core cost of revenue for deconversion costs in both quarters, which totaled $88 for the three months ended December 31, 2024 and $321 for the three months ended December 31, 2023, results in a 2.3% increase quarter over quarter. The Core cost of revenue increase was primarily due to higher direct costs generally consistent with increases in related lines of revenue. Core cost of revenue decreased 1% as a percentage of Core revenue for the second quarter of fiscal 2025 compared to the same quarter in fiscal 2024.

Revenue in the Core segment increased 4.8% and cost of revenue increased 4.7% for the six months ended December 31, 2024, compared to the six months ended December 31, 2023. Reducing Core revenue for deconversion revenue in both periods, which totaled $1,267 for the six months ended December 31, 2024, and $3,595 for the six months ended December 31, 2023, results in a 5.5% increase period over period. This increase was primarily driven by organic growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand, partially offset by a decrease in maintenance fees and software usage revenues. Reducing Core cost of revenue for deconversion costs in both periods, which totaled $125 for the six months ended December 31, 2024 and $425 for the six months ended December 31, 2023, results in a 4.9% increase period over period. The Core cost of revenue increase was primarily due to higher direct costs generally consistent with increases in related lines of revenue. Core cost of revenue remained consistent as a percentage of Core revenue for the six months ended December 31, 2024 compared to the same period in fiscal 2024.

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Payments	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2024		2023				2024		2023
Revenue	$	214,836	$	203,839	5.4	%	$	426,758	$	403,195	5.8	%
Cost of Revenue	$	114,738	$	111,623	2.8	%	$	227,757	$	220,449	3.3	%

Revenue in the Payments segment increased 5.4% and cost of revenue increased 2.8% for the second quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both quarters, which totaled $34 for the second quarter of fiscal 2025 and $1,555 for the second quarter of fiscal 2024, results in a 6.2% increase quarter over quarter. This increase was primarily due to higher card revenue from an increase in volumes, higher payment processing revenues, including PayCenter products — Zelle, RTP, and FedNow — from an increase in volumes and new client revenue, and increased remote capture and ACH revenue. The Payments cost of revenue increase was primarily due to higher direct costs generally consistent with increases in lines of revenue. Deconversion costs did not significantly affect Payments cost of revenue quarter over quarter. Payments cost of revenue as a percentage of Payments revenue decreased 2% for the second quarter of fiscal 2025 compared to the same quarter in fiscal 2024.

Revenue in the Payments segment increased 5.8% and cost of revenue increased 3.3% for the six months ended December 31, 2024, compared to the equivalent period of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both periods, which totaled $1,948 for the six months ended December 31, 2024 and $2,560 for the six months ended December 31, 2023, results in a 6.0% increase period over period. This increase was primarily due to higher card revenue from an increase in volumes, higher payment processing revenues, including PayCenter products — Zelle, RTP, and FedNow — from an increase in volumes and new client revenue, and increased remote capture and ACH revenue. The Payments cost of revenue increase was primarily due to higher direct costs generally consistent with increases in lines of revenue. Deconversion costs did not significantly affect Payments cost of revenue period over period. Payments cost of revenue as a percentage of Payments revenue decreased 1% for the six months ended December 31, 2024 compared to the same period in fiscal 2024.



Complementary	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2024		2023				2024		2023
Revenue	$	160,937	$	152,466	5.6	%	$	332,639	$	313,833	6.0	%
Cost of Revenue	$	63,384	$	62,825	0.9	%	$	129,352	$	123,783	4.5	%

Revenue in the Complementary segment increased 5.6% and cost of revenue increased 0.9% for the second quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Complementary revenue for deconversion revenue in both quarters, which totaled $60 for the second quarter of fiscal 2025 and $1,355 for the second quarter of fiscal 2024, results in a 6.5% increase quarter over quarter. This increase was primarily driven by organic growth in hosting revenues as new and existing clients continued to migrate to our private cloud and processing volumes expanded and increased Jack Henry digital revenue (including Banno) as the number of active users increased and volumes expanded and from the ramping up of add-on products. Reducing Complementary cost of revenue for deconversion costs in both quarters, which totaled $99 for the second quarter of fiscal 2025 and $249 for the second quarter of fiscal 2024, results in a 1.1% increase quarter over quarter. Complementary cost of revenue as a percentage of Complementary revenue decreased 2% for the second quarter of fiscal 2025 compared to the same quarter in fiscal 2024.

Revenue in the Complementary segment increased 6.0% and cost of revenue increased 4.5% for the six months ended December 31, 2024 compared to the equivalent period of the prior fiscal year. Reducing Complementary revenue for deconversion revenue in both periods, which totaled $533 for the six months ended December 31, 2024 and $2,806 for the six months ended December 31, 2023, results in a 6.8% increase period over period. This increase was primarily driven by organic growth in hosting revenues as new and existing clients continued to migrate to our private cloud and processing volumes expanded and increased Jack Henry digital revenue (including Banno) as the number of active users increased and volumes expanded and from the ramping up of add-on products. Reducing Complementary cost of revenue for deconversion costs in both quarters, which totaled $159 for the six months ended December 31, 2024 and $367 for the six months ended December 31, 2023, results in a 4.7% increase period over period. This increase was primarily due to higher amortization of capitalized software from capital software development projects and increased personnel costs, including benefits, from an increase in employee headcount in the trailing twelve months. Complementary cost of revenue as a percentage of Complementary revenue remained consistent for the six months ended December 31, 2024, compared to the same period in fiscal 2024.

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Corporate and Other	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2024		2023				2024		2023
Revenue	$	24,902	$	23,795	4.7	%	$	46,635	$	48,000	(2.8)	%
Cost of Revenue	$	83,989	$	77,161	8.8	%	$	167,014	$	154,453	8.1	%

Revenue classified in the Corporate and Other segment includes revenues from other products and services and hardware not specifically attributed to the other three segments. Revenue in the Corporate and Other segment increased 4.7% for the second quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Corporate and Other revenue for deconversion revenue in both quarters, which totaled $(5) for the second quarter of fiscal 2025 and $43 for the second quarter of fiscal 2024, results in a 4.9% increase quarter over quarter. The Corporate and Other revenue increase was primarily due to higher processing and subscription revenues quarter over quarter.

Cost of revenue for the Corporate and Other segment includes operating expenses not directly attributable to the other three segments. The cost of revenue in the second quarter of fiscal 2025 increased 8.8% when compared to the prior fiscal year quarter. This increase was primarily due to increased direct costs, higher personnel costs, including an increase in headcount in the trailing twelve months, and increased cloud consumption costs, quarter over quarter. Deconversion costs did not significantly affect Corporate and Other cost of revenue quarter over quarter.

Revenue in the Corporate and Other segment decreased 2.8% for the six months ended December 31, 2024, compared to the equivalent period of the prior fiscal year. The Corporate and Other revenue decrease was primarily due to lower hardware revenue partially offset by higher software usage and subscription revenue and increased processing fee revenue. Deconversion revenue did not significantly affect Corporate and Other revenue period over period.

The cost of revenue in the six months ended December 31, 2024, increased 8.1% when compared to the prior fiscal year period. This increase was primarily due to increased direct costs higher personnel costs, including an increase in headcount in the trailing twelve months, and increased cloud consumption costs, period over period. Deconversion costs did not significantly affect Corporate and Other cost of revenue period over period.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash and cash equivalents decreased to $25,653 at December 31, 2024, from $38,284 at June 30, 2024.

The following table summarizes net cash from operating activities in the statement of cash flows:


	Six Months Ended
	December 31,
	2024		2023
Net income	$	217,036	$	193,644
Non-cash expenses	109,038		98,292
Change in receivables	49,811		90,702
Change in deferred revenue	(119,463)		(130,529)
Change in other assets and liabilities	(49,879)		(13,437)
Net cash provided by operating activities	$	206,543	$	238,672

Cash provided by operating activities for the first six months of fiscal 2025 decreased 13% compared to the same period last year primarily due to the decrease in the change in receivables period over period. We collected significantly more annual maintenance dollars in the fourth quarter of fiscal 2024 than we have historically collected in the fourth quarter, leaving less to be collected in the current fiscal period. Cash from operations is primarily used to repay debt, pay dividends, repurchase stock, for capital expenditures, and acquisitions.

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Cash used in investing activities for the first six months of fiscal 2025 totaled $119,800 and included: $85,803 for the ongoing enhancement and development of existing and new product and service offerings; capital expenditures on facilities and equipment of $29,469; $3,528 for the purchase and development of internal use software; and the purchase of investment of $2,000. Cash uses were partially offset by proceeds from investments of $1,000. Cash used in investing activities for the first six months of fiscal 2024 totaled $110,959 and included: $83,408 for the development of software; $24,458 for capital expenditures; $2,971 for the purchase and development of internal use software; and $1,000 for the purchase of investment. Cash uses were partially offset by proceeds from dispositions of $878.

Financing activities used cash of $99,374 for the first six months of fiscal 2025 and included: payments on credit facilities of $165,000; dividends paid to stockholders of $80,193; the purchase of treasury stock of $17,050; and a net cash outflow from the issuance of stock and tax withholding related to stock-based compensation of $2,131. Cash uses were partially offset by borrowings on credit facilities of $165,000. Financing activities used cash of $113,247 in the first six months of fiscal 2024 and included: repayments on credit facilities of $240,000; $75,722 for the payment of dividends; and the purchase of treasury stock of $20,000. Cash uses were partially offset by borrowings on credit facilities of $220,000 and $2,475 net cash inflow from the issuance of stock and tax withholding related to stock-based compensation.

Capital Requirements and Resources

The Company generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling $29,469 and $24,458 for the six months ended December 31, 2024, and December 31, 2023, respectively, were made primarily for additional equipment and the improvement of existing facilities. These additions were funded from cash generated by operations. Total consolidated capital expenditures on facilities and equipment for the Company for fiscal year 2025 are expected to be approximately $68,000 and have been or will be funded from our credit facilities and cash generated by operations.

Contractual obligations are discussed in our Annual Report on Form 10-K for the year ended June 30, 2024. There have been no material contractual obligations added for the six months ended December 31, 2024.

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, and the Company repurchased over 99 shares during the first six months of fiscal 2025. 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.

Credit facilities

Term loan facility

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Period on such day for Dollars plus 0.75%), plus an applicable percentage in each case determined by the Company's leverage ratio. The term loan credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the term loan credit agreement. As of December 31, 2024, the Company was in compliance with all such covenants. The term loan credit agreement has a maturity date of May 16, 2025. There was $90,000 outstanding under the term loan at December 31, 2024 and June 30, 2024.

Other lines of credit

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Dollar amounts in this item are in thousands.

Market risk refers to the risk that a change in the level of one or more market prices, interest rates, indices, volatilities, correlations or other market factors such as liquidity, will result in losses for a certain financial instrument or group of financial instruments. We are currently exposed to credit risk on credit extended to clients and interest risk on outstanding debt. We do not currently use any derivative financial instruments. We actively monitor these risks through a variety of controlled procedures involving senior management.

Based on the controls in place and the credit worthiness of the client base, we believe the credit risk associated with the extension of credit to our clients will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

We had $150,000 outstanding debt with variable interest rates as of December 31, 2024, and a 1% increase in our borrowing rate would increase our annual interest expense by $1,500.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of our management, including the Company's Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon that evaluation (required in Exchange Act Rules 13a-15(b) and 15d-15(b)), the CEO and CFO concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. For this purpose, disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to the Company's management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended December 31, 2024, there were no changes in the Company's internal control over financial reporting which were identified in connection with management’s evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to various routine legal proceedings and claims arising in the ordinary course of our business. In the opinion of management, any liabilities resulting from current lawsuits are not expected, either individually or in the aggregate, to have a material adverse effect on our consolidated financial statements. In accordance with U.S. GAAP, we record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These liabilities are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case or proceeding.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following shares of the Company were repurchased during the quarter ended December 31, 2024:


	Total Number of Shares Purchased	Average Price of Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under the Plans (1)
October 1 — October 31, 2024	—	$	—	—	3,617,657
November 1 — November 30, 2024	99,393	171.33		99,393	3,518,264
December 1 — December 31, 2024	—	—		—	3,518,264
Total	99,393	$	171.33	99,393	3,518,264

(1) Total stock repurchase authorizations approved by the Company's Board of Directors as of May 14, 2021, were for 35,000,000 shares. Under these authorizations, the Company has repurchased and not re-issued 31,472,352 shares and has repurchased and re-issued 9,384 shares. These authorizations have no specific dollar or share price targets and no expiration dates.

ITEM 5. OTHER INFORMATION

Rule 10b-5(1) Trading Plans

During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS

3.1.9 Restated Certificate of Incorporation of Jack Henry & Associates, Inc.

10.80 Jack Henry & Associates, Inc. 2006 Employee Stock Purchase Plan, as amended and restated on November 13, 2024.

31.1 Certification of the Chief Executive Officer.

31.2 Certification of the Chief Financial Officer.

32.1 Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.

32.2 Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

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101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Furnished with this quarterly report on Form 10-Q are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at December 31, 2024, and June 30, 2024, (ii) the Condensed Consolidated Statements of Income for the three and six months ended December 31, 2024, and 2023, (iii) the Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended December 31, 2024, and 2023, (iv) the Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2024, and 2023, and (v) Notes to Condensed Consolidated Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.


		JACK HENRY & ASSOCIATES, INC.

Date:	February 7, 2025	/s/ Gregory R. Adelson
		Gregory R. Adelson
		Chief Executive Officer and President

Date:	February 7, 2025	/s/ Mimi L. Carsley
		Mimi L. Carsley
		Chief Financial Officer and Treasurer

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Date	Price Target	Rating	Analyst
4/2/2025	$183.00	Sell → Neutral	Goldman
3/10/2025		Buy → Neutral	Northcoast
1/14/2025	$155.00	Underweight	Wells Fargo
10/1/2024	$181.00 → $206.00	Outperform	Oppenheimer
9/4/2024	$186.00	Neutral	Compass Point
3/7/2024		Peer Perform	Wolfe Research
1/18/2024	$177.00	Neutral	Citigroup
12/6/2023	$167.00 → $186.00	Neutral → Buy	BofA Securities

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

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SEC Filings

Jack Henry & Associates Inc. filed SEC Form 8-K: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year, Financial Statements and Exhibits