[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q%20Cover%20Page) This section identifies the document as a Quarterly Report on Form 10-Q for Jack Henry & Associates, Inc., including key stock information - The document is a Quarterly Report on Form 10-Q for Jack Henry & Associates, Inc. for the quarterly period ended December 31, 2021[1](index=1&type=chunk)[2](index=2&type=chunk) - The registrant's common stock (**JKHY**) is registered on the Nasdaq Global Select Market[3](index=3&type=chunk) - As of January 28, 2022, the Registrant had **72,825,033 shares of Common Stock outstanding**[4](index=4&type=chunk) [FORWARD LOOKING STATEMENTS](index=2&type=section&id=FORWARD%20LOOKING%20STATEMENTS) This section outlines the nature of forward-looking statements within the report, emphasizing inherent risks and the company's disclaimer regarding updates - The report contains forward-looking statements based on management's current beliefs and assumptions, subject to inherent risks and uncertainties that could cause actual results to differ materially[7](index=7&type=chunk) - The Company expressly disclaims any obligation to publicly update or revise any forward-looking statement[7](index=7&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for Jack Henry & Associates, Inc., including the balance sheets, statements of income, statements of changes in stockholders' equity, and statements of cash flows, along with comprehensive notes detailing accounting policies and specific financial items [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Summarizes the company's financial position, including assets, liabilities, and equity, at specific reporting dates Condensed Consolidated Balance Sheets Summary (in Thousands) | Metric | Dec 31, 2021 | Jun 30, 2021 | YoY Change (%) | | :-------------------------- | :----------- | :----------- | :------------- | | Total Assets | $2,280,802 | $2,336,156 | -2.37% | | Total Liabilities | $1,008,806 | $1,016,864 | -0.79% | | Total Stockholders' Equity | $1,271,996 | $1,319,292 | -3.59% | | Cash and cash equivalents | $29,120 | $50,992 | -42.90% | | Receivables, net | $236,096 | $306,564 | -22.99% | | Deferred revenues (current) | $208,733 | $319,748 | -34.72% | | Debt, net of current maturities | $240,026 | $100,083 | 139.84% | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details the company's revenues, expenses, operating income, and net income for the reported periods Three Months Ended December 31 (in Thousands, Except Per Share Data) | Metric | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Revenue | $493,896 | $422,361 | 17.00% | | Total Expenses | $368,234 | $328,729 | 11.90% | | Operating Income | $125,662 | $93,632 | 34.22% | | Net Income | $95,670 | $71,982 | 32.91% | | Basic earnings per share | $1.30 | $0.94 | 38.30% | | Diluted earnings per share | $1.30 | $0.94 | 38.30% | Six Months Ended December 31 (in Thousands, Except Per Share Data) | Metric | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Revenue | $981,952 | $874,161 | 12.38% | | Total Expenses | $722,695 | $662,941 | 9.01% | | Operating Income | $259,257 | $211,220 | 22.74% | | Net Income | $197,783 | $163,198 | 21.19% | | Basic earnings per share | $2.68 | $2.14 | 25.23% | | Diluted earnings per share | $2.68 | $2.13 | 25.82% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Outlines the changes in the company's equity, including net income, dividends, and share repurchases Key Changes in Stockholders' Equity (Six Months Ended December 31, in Thousands) | Metric | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Net income | $197,783 | $163,198 | 21.19% | | Dividends | $(67,696) | $(65,516) | -3.32% | | Purchase of treasury shares | $(193,917) | $(109,899) | -76.45% | | Total Stockholders' Equity (End of Period) | $1,271,996 | $1,545,179 | -17.68% | - Dividends declared per share increased to **$0.92** for the six months ended December 31, 2021, from $0.86 in the prior year[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Presents the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Summary (Six Months Ended December 31, in Thousands) | Metric | 2021 | 2020 | YoY Change (%) | | :-------------------------------- | :--- | :--- | :------------- | | Net Cash from Operating Activities | $197,351 | $193,984 | 1.74% | | Net Cash from Investing Activities | $(101,052) | $(82,544) | -22.42% | | Net Cash from Financing Activities | $(118,171) | $(177,023) | 33.25% | | Net Change in Cash and Cash Equivalents | $(21,872) | $(65,583) | 66.65% | | Cash and Cash Equivalents, End of Period | $29,120 | $147,762 | -80.29% | - Investing activities included **$71,353 thousand for computer software developed** and **$22,373 thousand for capital expenditures** in 2021[17](index=17&type=chunk) - Financing activities included **$220,000 thousand in borrowings on credit facilities**, offset by **$193,917 thousand for treasury stock purchases** and **$67,696 thousand for dividends paid** in 2021[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures regarding the company's accounting policies, significant estimates, and specific financial statement line items, offering crucial context for the reported financial position and performance [NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%201.%20NATURE%20OF%20OPERATIONS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Describes the company's business and outlines its key accounting principles and policies - Jack Henry & Associates, Inc. is a leading provider of technology solutions and payment processing services primarily for the financial services industry[18](index=18&type=chunk) - The Company adopted FASB ASC Topic 326, Financial Instruments - Credit Losses (CECL), on July 1, 2020, resulting in an **immaterial cumulative effect adjustment to retained earnings**[21](index=21&type=chunk) Allowance for Credit Losses Activity (Six Months Ended December 31, in Thousands) | Metric | 2021 | 2020 | | :------------------------------------------ | :--- | :--- | | Allowance for credit losses - beginning balance | $7,267 | $6,719 | | Current provision for expected credit losses | $840 | $910 | | Write-offs charged against allowance | $(373) | $(1,286) | | Allowance for credit losses - ending balance | $7,733 | $6,830 | - Accumulated depreciation for property and equipment totaled **$453,439 thousand** at December 31, 2021, and accumulated amortization of intangible assets totaled **$983,626 thousand**[23](index=23&type=chunk)[24](index=24&type=chunk) - The Company had **31,043 thousand shares in treasury stock** at December 31, 2021, with remaining authority to repurchase up to **3,948 thousand additional shares**[26](index=26&type=chunk) - The COVID-19 pandemic's financial and operational impact on the business has been limited to date, with no material impact on condensed consolidated financial statements as of December 31, 2021, though future impacts remain uncertain[34](index=34&type=chunk) [NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS](index=11&type=section&id=NOTE%202.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) Discusses the adoption and potential impact of new accounting standards on the company's financial statements - The Company adopted ASU No. 2019-12 (Income Taxes) effective July 1, 2021, with **no material impact** on its financial statements[35](index=35&type=chunk) - ASU No. 2021-08 (Business Combinations) will be adopted for fiscal years beginning after December 15, 2022, and could affect future business combinations[36](index=36&type=chunk) [NOTE 3. REVENUE AND DEFERRED COSTS](index=11&type=section&id=NOTE%203.%20REVENUE%20AND%20DEFERRED%20COSTS) Details the company's revenue recognition policies, disaggregated revenue streams, and deferred revenue balances - Revenue is generated from data processing, transaction processing, software licensing and related services, professional services, and hardware sales[37](index=37&type=chunk) Disaggregated Revenue (Three Months Ended December 31, in Thousands) | Revenue Type | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Private and Public Cloud | $138,340 | $124,498 | 11.12% | | Product Delivery and Services | $79,499 | $48,414 | 64.21% | | On-Premise Support | $78,372 | $77,961 | 0.53% | | Processing | $197,685 | $171,488 | 15.28% | | Total Revenue | $493,896 | $422,361 | 17.00% | Disaggregated Revenue (Six Months Ended December 31, in Thousands) | Revenue Type | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Private and Public Cloud | $273,982 | $245,456 | 11.62% | | Product Delivery and Services | $131,014 | $105,312 | 24.41% | | On-Premise Support | $188,708 | $181,102 | 4.20% | | Processing | $388,248 | $342,291 | 13.42% | | Total Revenue | $981,952 | $874,161 | 12.38% | - Current deferred revenues decreased from **$319,748 thousand** at June 30, 2021, to **$208,733 thousand** at December 31, 2021[42](index=42&type=chunk) - Estimated future revenue from remaining performance obligations totaled **$5,154,912 thousand** as of December 31, 2021, with approximately **26% expected to be recognized over the next 12 months**[46](index=46&type=chunk) - Capitalized contract costs totaled **$347,867 thousand** at December 31, 2021, an increase from $314,807 thousand at June 30, 2021[48](index=48&type=chunk) [NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS](index=13&type=section&id=NOTE%204.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) Explains the company's methodology for fair value measurements and lists financial assets and liabilities by fair value level - The Company uses a three-level hierarchy for fair value measurements, prioritizing quoted prices in active markets (Level 1) and observable inputs (Level 2)[50](index=50&type=chunk) Fair Value of Financial Assets and Liabilities (December 31, 2021, in Thousands) | Item | Fair Value | Level | | :------------------------ | :--------- | :---- | | Certificates of Deposit | $1,209 | Level 2 | | Revolving credit facility | $240,000 | Level 2 | [NOTE 5. LEASES](index=13&type=section&id=NOTE%205.%20LEASES) Provides information on the company's operating lease assets, liabilities, costs, and future maturity schedules - Operating lease assets were **$51,888 thousand** and operating lease liabilities were **$56,653 thousand** at December 31, 2021[54](index=54&type=chunk) - Operating lease costs for the three months ended December 31, 2021, were **$3,327 thousand**, a decrease from $3,766 thousand in the prior year[56](index=56&type=chunk) - The weighted average remaining lease term for operating leases was **77 months**, and the weighted average discount rate was **2.62%** as of December 31, 2021[58](index=58&type=chunk) Maturity of Operating Lease Liabilities (December 31, 2021, in Thousands) | Due Dates (fiscal year) | Future Minimum Rental Payments | | :---------------------- | :----------------------------- | | 2022 (remaining period) | $6,617 | | 2023 | $12,089 | | 2024 | $10,029 | | 2025 | $7,266 | | 2026 | $6,342 | | Thereafter | $19,388 | | Total lease payments | $61,731 | | Less: interest | $(5,078) | | Present value of lease liabilities | $56,653 | [NOTE 6. DEBT](index=15&type=section&id=NOTE%206.%20DEBT) Details the company's outstanding debt, including its revolving credit facility and compliance with financial covenants - The Company had **$240,000 thousand outstanding** under its revolving credit facility at December 31, 2021, an increase from $100,000 thousand at June 30, 2021[61](index=61&type=chunk) - The credit facility allows for borrowings up to **$300,000 thousand**, which may be increased to **$700,000 thousand**, and terminates on February 10, 2025[61](index=61&type=chunk) - Interest paid for the six months ended December 31, 2021, was **$604 thousand**, significantly higher than $105 thousand in the prior year, due to increased borrowings[63](index=63&type=chunk) - The Company was in compliance with all financial covenants of the credit facility as of December 31, 2021[61](index=61&type=chunk) [NOTE 7. INCOME TAXES](index=15&type=section&id=NOTE%207.%20INCOME%20TAXES) Explains the company's effective tax rates, income tax payments, and unrecognized tax benefits - The effective tax rate for the three months ended December 31, 2021, was **23.6%**, up from 23.1% in the prior-year quarter, primarily due to increased operating income[64](index=64&type=chunk) - For the six months ended December 31, 2021, the effective tax rate was **23.5%**, compared to 22.7% in the prior year, also driven by increased operating income and a larger excess tax benefit from share-based compensation in the prior period[65](index=65&type=chunk) - The Company paid income taxes, net of refunds, of **$40,687 thousand** for the six months ended December 31, 2021[66](index=66&type=chunk) - The liability for unrecognized tax benefits could reduce by **$3,500 to $4,500** within twelve months of December 31, 2021, due to lapsing statutes of limitations and examination closures[67](index=67&type=chunk) [NOTE 8. STOCK-BASED COMPENSATION](index=16&type=section&id=NOTE%208.%20STOCK-BASED%20COMPENSATION) Reports the costs associated with stock-based compensation and details outstanding stock options and restricted stock units Stock-Based Compensation Costs (in Thousands) | Period | 2021 | 2020 | | :-------------------------- | :--- | :--- | | Three Months Ended Dec 31 | $6,956 | $5,127 | | Six Months Ended Dec 31 | $13,027 | $9,752 | - As of December 31, 2021, there were **22 thousand stock options outstanding** with a weighted average exercise price of **$87.27**[70](index=70&type=chunk) - There were **343 thousand non-vested performance and restricted stock unit awards outstanding** at December 31, 2021, with **$29,290 thousand of unrecognized compensation expense**[71](index=71&type=chunk)[73](index=73&type=chunk) [NOTE 9. EARNINGS PER SHARE](index=18&type=section&id=NOTE%209.%20EARNINGS%20PER%20SHARE) Presents the basic and diluted earnings per share calculations and their contributing factors Diluted Earnings Per Share | Period | 2021 | 2020 | | :-------------------------- | :--- | :--- | | Three Months Ended Dec 31 | $1.30 | $0.94 | | Six Months Ended Dec 31 | $2.68 | $2.13 | - Common stock repurchases contributed **$0.05 to diluted earnings per share** for the second fiscal quarter and **$0.09 for year-to-date fiscal 2022**[76](index=76&type=chunk) [NOTE 10. REPORTABLE SEGMENT INFORMATION](index=18&type=section&id=NOTE%2010.%20REPORTABLE%20SEGMENT%20INFORMATION) Provides a breakdown of the company's financial performance across its distinct operating segments - The Company operates in four reportable segments: Core, Payments, Complementary, and Corporate and Other[78](index=78&type=chunk) Segment Revenue (Three Months Ended December 31, 2021, in Thousands) | Segment | Total Revenue | | :---------------- | :------------ | | Core | $154,878 | | Payments | $182,528 | | Complementary | $141,724 | | Corporate and Other | $14,766 | Segment Revenue (Six Months Ended December 31, 2021, in Thousands) | Segment | Total Revenue | | :---------------- | :------------ | | Core | $320,163 | | Payments | $352,150 | | Complementary | $283,205 | | Corporate and Other | $26,434 | [NOTE 11. SUBSEQUENT EVENTS](index=21&type=section&id=NOTE%2011.%20SUBSEQUENT%20EVENTS) Discloses any significant events that occurred after the reporting period but before the financial statements were issued - There were no subsequent events requiring disclosure[83](index=83&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=22&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition and results of operations, including an overview of the business, the impact of COVID-19, and detailed analysis of revenue, expenses, and segment performance, along with liquidity and capital resources [Overview](index=22&type=section&id=Overview) Provides a general description of the company's business, its primary services, and main revenue streams - Jack Henry & Associates, Inc. is a leading provider of technology solutions and payment processing services for financial services organizations, marketed through Jack Henry Banking, Symitar, and ProfitStars brands[86](index=86&type=chunk) - Primary revenue streams are 'services and support' (including private and public cloud, product delivery, and on-premise support) and 'processing' (including remittance, card, and transaction/digital)[87](index=87&type=chunk) [COVID-19 Impact and Response](index=22&type=section&id=COVID-19%20Impact%20and%20Response) Discusses the company's operational adjustments and the financial impact of the COVID-19 pandemic - The Company reimplemented a company-wide recommendation for remote work on August 3, 2021, due to new virus variants, with most employees continuing to work remotely or in a hybrid capacity[89](index=89&type=chunk) - Delays in customer system installations due to COVID-19 have been limited, and remote installation processes have been developed[90](index=90&type=chunk) - The overall financial and operational impact of COVID-19 on the business has been limited, with strong liquidity and positive operating cash flows, but future impacts remain uncertain[92](index=92&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) The company reported strong financial performance for the second quarter and six months ended December 31, 2021, with significant increases in total revenue, operating income, and net income, driven by growth in cloud, card, and processing revenues [Revenue](index=24&type=section&id=Revenue) Analyzes the company's revenue growth, identifying key drivers across different service categories - Total revenue increased **17% for Q2 FY22** and **12% for YTD FY22**, primarily driven by growth in public and private cloud revenue, card, transaction and digital, and remittance processing revenues, and increased implementation fee revenue[93](index=93&type=chunk)[98](index=98&type=chunk) Services and Support Revenue (in Thousands) | Period | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Three Months Ended Dec 31 | $296,211 | $250,873 | 18% | | Six Months Ended Dec 31 | $593,704 | $531,870 | 12% | Processing Revenue (in Thousands) | Period | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Three Months Ended Dec 31 | $197,685 | $171,488 | 15% | | Six Months Ended Dec 31 | $388,248 | $342,291 | 13% | [Operating Expenses](index=25&type=section&id=Operating%20Expenses) Details the changes in the company's operating expenses and their primary contributing factors - Operating expenses increased **12% for Q2 FY22** and **9% for YTD FY22**, primarily due to increased direct costs related to the card payment processing platform and Jack Henry digital, higher personnel costs (salary increases), and increased operating licenses and fees[94](index=94&type=chunk)[99](index=99&type=chunk) Cost of Revenue (in Thousands) | Period | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Three Months Ended Dec 31 | $282,825 | $257,782 | 10% | | Six Months Ended Dec 31 | $559,460 | $520,711 | 7% | Research and Development Expense (in Thousands) | Period | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Three Months Ended Dec 31 | $29,916 | $26,780 | 12% | | Six Months Ended Dec 31 | $56,670 | $52,837 | 7% | Selling, General, and Administrative Expense (in Thousands) | Period | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Three Months Ended Dec 31 | $55,493 | $44,167 | 26% | | Six Months Ended Dec 31 | $106,565 | $89,393 | 19% | [Interest Income (Expense)](index=26&type=section&id=Interest%20Income%20(Expense)) Explains the company's interest income and expense, highlighting the impact of debt levels and interest rates Interest Income (Expense) (in Thousands) | Period | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Interest Income (Q2) | $6 | $52 | -88% | | Interest Expense (Q2) | $(447) | $(117) | 282% | | Interest Income (YTD) | $13 | $120 | -89% | | Interest Expense (YTD) | $(696) | $(235) | 196% | - The increase in interest expense was due to interest rate fluctuations, length of borrowing time, and increased amounts borrowed, with a **$240,000 thousand outstanding balance** on the credit facility at December 31, 2021, compared to none in the prior year[118](index=118&type=chunk) [Provision for Income Taxes](index=26&type=section&id=Provision%20for%20Income%20Taxes) Discusses the company's income tax provision and the factors influencing its effective tax rate Provision for Income Taxes (in Thousands) | Period | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Provision (Q2) | $29,551 | $21,585 | 37% | | Effective Rate (Q2) | 23.6% | 23.1% | 0.5 pp | | Provision (YTD) | $60,791 | $47,907 | 27% | | Effective Rate (YTD) | 23.5% | 22.7% | 0.8 pp | - The increase in the effective tax rate was primarily due to the relative impact of increased operating income[119](index=119&type=chunk)[120](index=120&type=chunk) [Net Income](index=26&type=section&id=Net%20Income) Presents the company's net income and diluted earnings per share for the reported periods Net Income and Diluted EPS | Period | 2021 | 2020 | YoY Change (%) | | :-------------------------- | :--- | :--- | :------------- | | Net Income (Q2, in Thousands) | $95,670 | $71,982 | 33% | | Diluted EPS (Q2) | $1.30 | $0.94 | 38% | | Net Income (YTD, in Thousands) | $197,783 | $163,198 | 21% | | Diluted EPS (YTD) | $2.68 | $2.13 | 25% | [Reportable Segment Discussion](index=26&type=section&id=Reportable%20Segment%20Discussion) This section provides a detailed breakdown of revenue and cost of revenue performance across the Core, Payments, Complementary, and Corporate and Other segments, demonstrating growth across all segments for both the quarter and year-to-date periods [Core](index=27&type=section&id=Core) Analyzes the revenue and cost of revenue performance for the Core segment, driven by data processing and hosting fees Core Segment Performance (in Thousands) | Metric | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | | :---------------- | :------ | :------ | :------- | :------- | | Revenue | $154,878 | $134,948 | $320,163 | $288,103 | | YoY Change (%) | 15% | - | 11% | - | | Cost of Revenue | $64,554 | $58,485 | $131,456 | $122,347 | | YoY Change (%) | 10% | - | 7% | - | - Revenue growth in the Core segment was primarily driven by data processing and hosting fee revenue[125](index=125&type=chunk)[126](index=126&type=chunk) [Payments](index=27&type=section&id=Payments) Examines the revenue and cost of revenue performance for the Payments segment, driven by card and remittance fees Payments Segment Performance (in Thousands) | Metric | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | | :---------------- | :------ | :------ | :------- | :------- | | Revenue | $182,528 | $155,182 | $352,150 | $311,915 | | YoY Change (%) | 18% | - | 13% | - | | Cost of Revenue | $95,570 | $86,455 | $188,795 | $172,783 | | YoY Change (%) | 11% | - | 9% | - | - Revenue growth in the Payments segment was primarily due to increased card and remittance fee revenue within processing[127](index=127&type=chunk)[128](index=128&type=chunk) [Complementary](index=27&type=section&id=Complementary) Reviews the revenue and cost of revenue performance for the Complementary segment, driven by digital and hosting fee revenues Complementary Segment Performance (in Thousands) | Metric | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | | :---------------- | :------ | :------ | :------- | :------- | | Revenue | $141,724 | $121,408 | $283,205 | $251,762 | | YoY Change (%) | 17% | - | 12% | - | | Cost of Revenue | $58,151 | $52,407 | $113,635 | $104,431 | | YoY Change (%) | 11% | - | 9% | - | - Revenue growth in the Complementary segment was primarily driven by growth in Jack Henry digital and hosting fee revenues[129](index=129&type=chunk)[131](index=131&type=chunk) [Corporate and Other](index=28&type=section&id=Corporate%20and%20Other) Discusses the revenue and cost of revenue performance for the Corporate and Other segment, including hardware revenue Corporate and Other Segment Performance (in Thousands) | Metric | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | | :---------------- | :------ | :------ | :------- | :------- | | Revenue | $14,766 | $10,823 | $26,434 | $22,381 | | YoY Change (%) | 36% | - | 18% | - | | Cost of Revenue | $64,550 | $60,435 | $125,574 | $121,150 | | YoY Change (%) | 7% | - | 4% | - | - Revenue increase was primarily due to higher services and support revenue, including an increase in hardware revenue[132](index=132&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, sources and uses of cash, and capital management strategies, including share repurchases and debt facilities, highlighting positive operating cash flows despite increased cash usage in investing and financing activities [Capital Requirements and Resources](index=29&type=section&id=Capital%20Requirements%20and%20Resources) Outlines the company's capital needs, funding sources, and share repurchase authorization - The Company primarily uses existing resources and funds generated from operations to meet its capital requirements[138](index=138&type=chunk) - Total consolidated capital expenditures on facilities and equipment for fiscal year 2022 are not expected to exceed **$52,000 thousand**[138](index=138&type=chunk) - At December 31, 2021, the Company had remaining authority to repurchase up to **3,948 thousand additional shares of common stock**[139](index=139&type=chunk) [Revolving Credit Facility](index=29&type=section&id=Revolving%20Credit%20Facility) Details the company's primary credit facility, outstanding balance, and compliance with covenants - The Company's five-year senior, unsecured revolving credit facility allows for borrowings of up to **$300,000 thousand**, which may be increased to **$700,000 thousand**, and terminates on February 10, 2025[140](index=140&type=chunk) - There was a **$240,000 thousand outstanding balance** under the credit facility at December 31, 2021, an increase from $100,000 thousand at June 30, 2021, primarily due to increased common stock repurchases[140](index=140&type=chunk) - The Company was in compliance with all financial covenants as of December 31, 2021[140](index=140&type=chunk) [Other Lines of Credit](index=29&type=section&id=Other%20Lines%20of%20Credit) Describes additional unsecured bank credit lines available to the company - The Company has an unsecured bank credit line providing up to **$5,000 thousand**, with no outstanding balance at December 31, 2021, and expiring on April 30, 2023[141](index=141&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=30&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section outlines the company's exposure to market risks, specifically credit risk on customer credit and interest rate risk on outstanding debt, and confirms that no derivative financial instruments are currently used - The Company is exposed to credit risk on credit extended to customers and interest rate risk on outstanding debt[144](index=144&type=chunk) - A **1% increase in the borrowing rate** would increase annual interest expense by **$2,400 thousand**, based on $240,000 thousand of outstanding variable-rate debt at December 31, 2021[145](index=145&type=chunk) - The Company does not currently use any derivative financial instruments[144](index=144&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=30&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2021, providing reasonable assurance for timely and accurate reporting [Changes in Internal Control over Financial Reporting](index=30&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Confirms that no material changes in internal control over financial reporting occurred during the quarter - No changes in internal control over financial reporting were identified during the fiscal quarter ended December 31, 2021, that materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting[147](index=147&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) Presents additional information not covered in the financial statements, including legal proceedings, equity sales, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=29&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in various routine legal proceedings and claims arising in the ordinary course of business, but management does not expect any resulting liabilities to have a material adverse effect on its consolidated financial statements - The Company is subject to various routine legal proceedings and claims in the ordinary course of business[148](index=148&type=chunk) - Management believes any liabilities from current lawsuits are not expected to have a **material adverse effect** on the consolidated financial statements[148](index=148&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=30&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the company's share repurchase activities during the fiscal quarter ended December 31, 2021, including the number of shares bought back and the remaining authorization [Issuer Purchases of Equity Securities](index=31&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) Provides a table detailing the company's common stock repurchases during the quarter and remaining authorization Issuer Purchases of Equity Securities (Fiscal Quarter Ended December 31, 2021) | Period | Total Number of Shares Purchased | Average Price of Share | | :-------------------------- | :------------------------------- | :--------------------- | | October 1 - October 31, 2021 | — | $— | | November 1 - November 30, 2021 | 800,000 | $154.44 | | December 1 - December 31, 2021 | 450,000 | $156.37 | | Total | 1,250,000 | $155.13 | - As of December 31, 2021, the Company had remaining authority to repurchase **3,947,713 additional shares** under its Board-approved stock repurchase authorizations[150](index=150&type=chunk) [ITEM 6. EXHIBITS](index=32&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the quarterly report, including XBRL formatted financial statements and various certifications from the Chief Executive Officer and Chief Financial Officer - The report includes XBRL formatted Condensed Consolidated Balance Sheets, Statements of Income, Statements of Changes in Shareholders' Equity, Statements of Cash Flows, and Notes to Condensed Consolidated Financial Statements[153](index=153&type=chunk) - Certifications of the Chief Executive Officer and Chief Financial Officer are furnished as Exhibits 31.1, 31.2, 32.1, and 32.2[154](index=154&type=chunk) [Signatures](index=33&type=section&id=Signatures) The quarterly report is officially signed by David B. Foss, Board Chair and Chief Executive Officer, and Kevin D. Williams, Chief Financial Officer and Treasurer, on behalf of Jack Henry & Associates, Inc. on February 9, 2022 - The report was signed by David B. Foss, Board Chair and Chief Executive Officer, and Kevin D. Williams, Chief Financial Officer and Treasurer[157](index=157&type=chunk) - The signing date for the report was February 9, 2022[157](index=157&type=chunk)

Jack Henry & Associates, Inc. (NASDAQ:JKHY) Q2 2022 Earnings Conference Call February 9, 2022 8:45 AM ET Company Participants David B. Foss – Board Chair and CEO Kevin D. Williams – CFO and Treasurer Conference Call Participants Rayna Kumar - UBS Vasu Govil – KBW Kartik Mehta – Northcoast Research Dominick Gabriele – Oppenheimer Kenneth Suchoski – Autonomous Research Operator Good morning ladies and gentlemen, thank you for standing by and welcome to Jack Henry and Associates Second Quarter Fiscal Year 2022 ...

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 September 30, 2021 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 43-11 ...

Jack Henry & Associates, Inc. (NASDAQ:JKHY) Q1 2022 Earnings Conference Call November 9, 2021 8:45 AM ET Company Participants David Foss – Board Chair, President & Chief Executive Officer Kevin Williams – Chief Financial Officer & Treasurer Conference Call Participants Vasu Govil – KBW Kartik Mehta – Northcoast Peter Heckman – DA and Davidson David Koning – Baird Ken Suchoski – Autonomous Research Dominic Gabriel – Oppenheimer Operator Ladies and gentlemen, thank you for standing by. Welcome to the Jack Hen ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2021 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 & ASS ...

Jack Henry & Associates, Inc. (NASDAQ:JKHY) Q4 2021 Results Conference Call August 18, 2021 8:45 AM ET Company Participants David Foss – President & Chief Executive Officer Kevin Williams – Chief Financial Officer & Treasurer Conference Call Participants Vasu Govil – KBW Peter Heckmann – D.A. Davidson Dave Koning – Baird Kartik Mehta – Northcoast Research John Davis – Raymond James Dominick Gabriele – Oppenheimer Ken Suchoski – Autonomous Research Dan Perlin – RBC Capital Markets Operator Good day and thank ...

☐ 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 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 March 31, 2021 O ...

Jack Henry & Associates, Inc. (NASDAQ:JKHY) Q3 2021 Earnings Conference Call May 4, 2021 8:45 AM ET Company Participants Kevin Williams - Chief Financial Officer & Treasurer David Foss - President & Chief Executive Officer Conference Call Participants Peter Heckmann - D.A. Davidson Kartik Mehta - Northcoast Research David Togut - Evercore. ISI Steve Comery - G Research John Davis - Raymond James Ken Suchoski - Autonomous Research Dominick Gabriele - Oppenheimer Vasu Govil - KBW Operator Ladies and gentlemen ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial information for the reporting period [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents unaudited condensed consolidated financial statements and detailed notes on accounting policies [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity **Condensed Consolidated Balance Sheet Highlights (In Thousands):** | Item | December 31, 2020 | June 30, 2020 | | :-------------------------- | :------------------ | :-------------- | | Total Assets | $2,286,709 | $2,428,474 | | Total Liabilities | $741,530 | $878,786 | | Total Stockholders' Equity | $1,545,179 | $1,549,688 | | Cash and cash equivalents | $147,762 | $213,345 | | Receivables, net | $212,934 | $300,945 | | Deferred revenues (current) | $193,409 | $318,161 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This section presents the company's financial performance, detailing revenues, expenses, and net income **Condensed Consolidated Statements of Income Highlights (In Thousands, Except Per Share Data):** | Item | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Revenue | $422,361 | $419,119 | $874,161 | $857,124 | | Operating Income | $93,632 | $93,704 | $211,220 | $211,892 | | Net Income | $71,982 | $72,098 | $163,198 | $161,468 | | Basic earnings per share | $0.94 | $0.94 | $2.14 | $2.10 | | Diluted earnings per share | $0.94 | $0.94 | $2.13 | $2.10 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details changes in equity, including net income, dividends, and share repurchases **Changes in Stockholders' Equity Highlights (In Thousands):** | Item | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | | :-------------------------------- | :---------------------------- | :---------------------------- | | Net income | $163,198 | $161,468 | | Dividends | $(65,516) | $(61,502) | | Purchase of treasury shares | $(109,899) | $(51,210) | | Total Stockholders' Equity (End of Period) | $1,545,179 | $1,486,746 | | Dividends declared per share | $0.86 | $0.80 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines cash inflows and outflows from operating, investing, and financing activities **Condensed Consolidated Statements of Cash Flows Highlights (In Thousands):** | Cash Flow Activity | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | | :-------------------------------- | :---------------------------- | :---------------------------- | | Net cash from operating activities | $193,984 | $215,013 | | Net cash from investing activities | $(82,544) | $(125,395) | | Net cash from financing activities | $(177,023) | $(110,733) | | Net change in cash and cash equivalents | $(65,583) | $(21,115) | | Cash and cash equivalents, end of period | $147,762 | $72,513 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the condensed consolidated financial statements [NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%201.%20NATURE%20OF%20OPERATIONS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes the company's business and outlines its significant accounting policies - Jack Henry & Associates, Inc. provides integrated computer systems and services, including software, hardware, conversion, implementation, and support, primarily to financial institutions[18](index=18&type=chunk) - The Company adopted FASB ASC Topic 326 (CECL) on July 1, 2020, for allowance for credit losses, resulting in an immaterial cumulative effect adjustment to retained earnings[21](index=21&type=chunk)[35](index=35&type=chunk) **Allowance for Credit Losses Activity (In Thousands):** | Item | Three Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2020 | | :-------------------------------- | :------------------------------ | :---------------------------- | | Allowance for credit losses - beginning balance | $6,731 | $6,719 | | Current provision for expected credit losses | $370 | $910 | | Allowance for credit losses - ending balance | $6,830 | $6,830 | - The COVID-19 pandemic did not result in a significant increase in the Company's expected credit loss allowance as of December 31, 2020, but future developments could have a material impact on management's estimates[22](index=22&type=chunk)[32](index=32&type=chunk) [NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS](index=10&type=section&id=NOTE%202.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This note details the adoption and impact of recent accounting standards on financial statements - The Company adopted ASU No. 2017-04 (Goodwill Impairment) on July 1, 2020, with no material impact on its financial statements[33](index=33&type=chunk) - ASU No. 2016-13 (CECL) was adopted effective July 1, 2020, resulting in a cumulative-effect decrease to beginning retained earnings of **$493K**[34](index=34&type=chunk)[35](index=35&type=chunk) - ASU No. 2019-12 (Income Taxes) will be effective for the Company on July 1, 2021, and is not expected to have a material impact[36](index=36&type=chunk) [NOTE 3. REVENUE AND DEFERRED COSTS](index=10&type=section&id=NOTE%203.%20REVENUE%20AND%20DEFERRED%20COSTS) This note provides a breakdown of revenue by type and details deferred revenue and related costs - The Company generates revenue from data processing, transaction processing, software licensing and related services, professional services, and hardware sales[37](index=37&type=chunk) **Revenue Disaggregated by Type (In Thousands):** | Revenue Type | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | Six Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2019 | | :---------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Outsourcing & Cloud | $124,498 | $115,897 | $245,456 | $224,480 | | Product Delivery & Services | $48,414 | $61,709 | $105,312 | $133,070 | | In-House Support | $77,961 | $77,598 | $181,102 | $176,462 | | Services & Support | $250,873 | $255,204 | $531,870 | $534,012 | | Processing | $171,488 | $163,915 | $342,291 | $323,112 | | Total Revenue | $422,361 | $419,119 | $874,161 | $857,124 | - As of December 31, 2020, estimated revenue expected to be recognized in the future related to unsatisfied performance obligations totaled **$4,139,497K**, with approximately **27% expected over the next 12 months**[45](index=45&type=chunk) [NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS](index=12&type=section&id=NOTE%204.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note describes fair value measurements of financial instruments - For cash equivalents, certificates of deposit, amounts receivable or payable, and short-term borrowings, fair values approximate carrying value due to their short-term nature[48](index=48&type=chunk) **Fair Value of Financial Assets (In Thousands):** | Item | December 31, 2020 (Level 2) | June 30, 2020 (Level 2) |

Financial Data and Key Metrics Changes - For Q2 of fiscal 2021, total revenue increased by 1% year-over-year and by 2% on a non-GAAP basis [10][28] - Net income was $72 million for the second quarter, compared to $72.1 million last year, with earnings per share of $0.94 in both quarters [32] - The effective tax rate for the quarter was essentially flat at 23.1% compared to 23.2% last year [32] Business Line Data and Key Metrics Changes - Core segment revenue increased by 1% for the quarter and by 4% on a non-GAAP basis [11] - Payments segment revenue posted a 2% increase this quarter and a 3% increase on a non-GAAP basis [11] - Complementary solutions business saw a 3% increase in revenue this quarter and a 4% increase on a non-GAAP basis [11] Market Data and Key Metrics Changes - 73% of banks in the target market expect to increase their technology spending in 2021, with 22% indicating an increase of greater than 10% year-over-year [22] - The sales pipeline is robust, with the company experiencing the fifth largest sales quarter in its history [12][23] Company Strategy and Development Direction - The company is focusing on digital banking solutions, with over 4 million users on the Banno Digital platform [15] - The company is actively participating in the FedNow pilot program to enhance its payments solutions [17] - The company aims to improve margins and return to historical levels by migrating customers to its private cloud and enhancing its card processing platform [90][92] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of technology solutions and the spending environment as the economy recovers [23] - The company anticipates a significant decrease in deconversion revenue in Q3, impacting revenue growth in the short term but is viewed positively in the long term [37] - Management noted that the sales pipeline is back to pre-pandemic levels, indicating potential for increased core wins in the future [82] Other Important Information - The company released its first corporate sustainability report, highlighting commitments to stakeholders and corporate responsibility [20][21] - The company plans to hold a virtual Analyst Day on May 11 [95] Q&A Session Summary Question: Could you walk through the revenue guidance part again? - The GAAP guidance provided is $1.760 million to $1.770 million, with a $30 million decrease in deconversion fees impacting the non-GAAP revenue guidance [45][46] Question: What is the demand for credit card business? - There is ongoing demand, with five new credit card customers signed this year, but the company is cautious about overextending during the debit conversion [47][48] Question: How are customers responding to fintech competition? - Customers are exploring digital-only banks and partnerships with fintechs to enhance their offerings [50][51] Question: What is the expected impact of the legacy debit processing platform shutdown? - The company expects to recognize around 15% to 20% of the annualized direct cost reduction in fiscal '21 [54] Question: What is driving the difference in core and complementary demand? - Core replacements are challenging during the pandemic, while demand for complementary solutions has increased due to the need for digital services [58][59] Question: Will new core wins return to pre-COVID levels? - The pipeline is back to pre-pandemic levels, and management expects new core wins to increase later this year [82][84] Question: How will sales trend as the economy reopens? - The company expects to see more core signings while maintaining strong complementary bookings [86][87]