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JKHY Nasdaq· Jack Henry & Associates Inc.
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JKHY Nasdaq· Jack Henry & Associates Inc.
Earnings report Q4 2023

Jack Henry & Associates Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

In the latest quarter, Jack Henry & Associates (JKHY) reported a total revenue of $23.8 million in the Corporate and Other segment, representing a significant increase of 30.9% compared to the same quarter in the prior fiscal year. This growth was primarily driven by higher user group revenues related to the user group meeting held during the current quarter. Additionally, revenue in the Complementary segment increased by 8.0%, primarily due to higher Jack Henry digital revenue as active users increased and volumes expanded.

Strengths

Jack Henry & Associates demonstrated strong revenue growth in the latest quarter. The increase in revenue was primarily driven by growth in data processing and hosting, Jack Henry digital (including Banno), card, and remote capture and ACH revenues. The company's products and services continue to address the regulatory and operational challenges faced by its customers, positioning it well to meet their needs. Jack Henry & Associates also highlighted its strong balance sheet, access to extensive lines of credit, and commitment to superior customer service as factors that should support its future opportunities.

Challenges

While Jack Henry & Associates reported strong revenue growth, it also experienced an increase in operating expenses. Operating expenses increased by 7.2% compared to the same quarter in the prior fiscal year, primarily driven by higher direct costs as revenues increased, higher personnel costs (including medical insurance and commissions), increased travel and entertainment expenses related to the user group meeting, and increased internal licenses and fees. Managing these expenses effectively will be crucial for the company's profitability.

Noteworthy

It is worth noting that Jack Henry & Associates reported a quarter-over-quarter increase of 8.4% in revenue, indicating a positive growth trend. The company also mentioned that significant portions of its business come from recurring revenues, and its sales pipeline remains encouraging. This suggests a stable revenue stream and potential future growth opportunities.

Summary

Jack Henry & Associates delivered a strong performance in the latest quarter, with significant revenue growth in both the Corporate and Other segment and the Complementary segment. The company's focus on addressing customer challenges and providing solutions for institutional profitability, efficiency, and security has contributed to its success. However, the increase in operating expenses poses a challenge that needs to be managed effectively. Overall, Jack Henry & Associates' strong revenue growth and commitment to customer service position it well for future opportunities.

Source documents

Form 10-Q  filed on Feb 08, 2024
126 pages scanned

Reference data

Company financials Q4 revenue 546M
Analyst estimates Q4 EPS missed by -8.36%
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