Jack Henry & Associates, Inc. Q4 FY2025 earnings call

1. Financial performance: Q4 non-GAAP revenue up 7.5%, non-GAAP operating margin 23.2% (146 basis points expansion); fiscal year non-GAAP revenue $2.3B, non-GAAP operating income $541.1M. 2. Sales momentum: Q4 had 23 core wins, full year 51 new core deals; 37 contracts to move existing in-house core clients to private cloud, 77% now in private cloud. 3. Larger core deals: Over 3 years, total assets of new core clients won nearly tripled; 51 core wins in fiscal '25 totaling $53B in assets. 4. Accolades: Recognized in U.S. News, Time, Newsweek. 5. Product updates: Banno platform growth, Tap2Local and Jack Henry Rapid Transfers launched. 6. Technology modernization: 20 components of new cloud-native platform live. 7. Stablecoin strategy: Strategic phased approach, working on enabling stablecoins via JHA PayCenter.

Core segment: Q4 non-GAAP revenue increased 7%, operating margin up 274 basis points; full year non-GAAP revenue growth 6%, margin up 113 basis points. Payments segment: Q4 non-GAAP revenue up 6%, operating margin up 99 basis points; full year non-GAAP revenue growth 6%, margin up 109 basis points. Complementary segment: Q4 non-GAAP revenue up 11%, operating margin up 155 basis points; full year non-GAAP revenue growth 9%, margin up 117 basis points.

Fiscal 2026 GAAP revenue growth guidance 4.2%-5.4%, non-GAAP 5.8%-7%; annual non-GAAP margin expansion 20-40 basis points; GAAP EPS $6.32-$6.44; free cash flow conversion 85%-100%; Q1 non-GAAP revenue growth ~7%-7.5%.

Headwinds from industry consolidation, renewal pricing pressure, macroeconomic uncertainty; impact of bank M&A on revenue.

Q: Dan Perlin asked about reconciling aggregate demand and implementation cycles.

A: Greg Adelson said some consulting and implementation delays improved but some still present, with consulting engagements like Financial Crimes Defender catching up.

Q: Nik Cremo asked about fiscal 2026 revenue growth between segments.

A: Mimi Carsley said core to remain solid, payments slightly below/near bottom end of range, complementary expected solid growth near higher end.

Q: Vasu Govil asked about bank M&A impact.

A: Greg Adelson said no indication Jack Henry will lose opportunities, M&A impact on revenue varies by term; Mimi Carsley said no structural change in long-term opportunities.

Q: Kartik Mehta asked about pricing pressure and partnership with Moov.

A: Greg Adelson said pricing pressure always exists, partnership with Moov exceeded expectations, certified in 10 months vs expected 18-24 months.

Q: James Faucette asked about Banno and margin expansion.

A: Mimi Carsley and Greg Adelson discussed process improvement, AI, and tech modernization as drivers of margin expansion; Banno Business winning awards and progressing in feature parity.

Q: Will Nance asked about free cash flow and capital allocation.

A: Mimi Carsley said 0 debt allows flexibility to increase share repurchases, possibly up to $100M; Greg Adelson discussed asset sales and efficiency initiatives.