Jack Henry(JKHY) - 2023 Q3 - Quarterly Report

Financial Performance - Revenue for the three months ended March 31, 2023, was $508,552,000, an increase of 6.9% compared to $478,260,000 for the same period in 2022[12] - Net income for the three months ended March 31, 2023, was $81,549,000, a decrease of 3.6% from $84,707,000 in the same period last year[12] - Operating income for the nine months ended March 31, 2023, was $356,490,000, down from $370,847,000 for the same period in 2022, representing a decline of 3.9%[12] - Basic earnings per share for the three months ended March 31, 2023, were $1.12, compared to $1.16 for the same period in 2022, indicating a decrease of 3.4%[12] - For the three months ended March 31, 2023, the Company recognized revenue of $83,179, a decrease of 9.5% from $92,147 in the same period of 2022[41] - For the nine months ended March 31, 2023, the Company recognized revenue of $215,263, down 4.5% from $225,424 in the prior year[41] - Total revenue for the nine months ended March 31, 2023, reached $1,543,069, representing an increase of 5.7% compared to $1,460,212 in the prior year[37] Assets and Liabilities - Total assets increased to $2,607,597,000 as of March 31, 2023, compared to $2,455,564,000 as of June 30, 2022, reflecting a growth of 6.2%[10] - Total liabilities decreased slightly to $1,069,288,000 as of March 31, 2023, from $1,073,941,000 as of June 30, 2022[10] - Cash and cash equivalents decreased to $26,552,000 as of March 31, 2023, from $48,787,000 as of June 30, 2022, a decline of 45.4%[10] - Goodwill increased to $804,797,000 as of March 31, 2023, from $687,458,000 as of June 30, 2022, reflecting a growth of 17.1%[10] - Contract liabilities (deferred revenue) - current decreased to $156,761 as of March 31, 2023, from $330,687 as of June 30, 2022[39] Expenses - Research and development expenses for the three months ended March 31, 2023, were $34,625,000, up 12.3% from $30,725,000 in the same period last year[12] - Total expenses for the three months ended March 31, 2023, were $400,162,000, up from $366,671,000 in Q1 2022, indicating an increase of about 9.1%[94] - Stock-based compensation costs for the three months ended March 31, 2023, were $6,915, up from $6,276 in 2022, representing an increase of 10%[70] Cash Flow - Cash flows from operating activities for the nine months ended March 31, 2023, were $207,031, down 31.2% from $301,397 in the same period of 2022[17] - The company reported a net cash outflow from investing activities of $355,561 for the nine months ended March 31, 2023, compared to an outflow of $145,024 in the previous year[17] - The company’s cash and cash equivalents at the end of the period were $26,552, down from $39,797 at the end of the previous year[17] Debt and Financing - Borrowings on credit facilities increased to $550,000 in the nine months ended March 31, 2023, up from $292,000 in the same period of 2022[17] - The Company entered into a five-year senior, unsecured amended credit agreement allowing for borrowings of up to $600,000, with $375,000 outstanding as of March 31, 2023[61] - The company reported $375,000,000 in outstanding debt with variable interest rates as of March 31, 2023, with a potential increase in annual interest expense of $3,750,000 if borrowing rates rise by 1%[161] Taxation - The effective tax rate for the three months ended March 31, 2023, was 23.2%, a decrease from 23.6% in the same period of 2022[65] - The Company paid income taxes of $103,251 for the nine months ended March 31, 2023, compared to $44,245 in the same period of 2022[67] - The Company had $10,905 of gross unrecognized tax benefits as of March 31, 2023, with $9,702 potentially affecting the effective tax rate if recognized[68] Acquisitions - The company acquired Payrailz for a total purchase price of $230,205, aimed at expanding its digital financial management solutions[79][80] - Payrailz contributed revenue of $2,658 and a net loss of $4,938 for the three months ended March 31, 2023[86] - The acquisition of Payrailz resulted in identifiable intangible assets of $119,868, with goodwill recognized at $117,339[81][82] Future Expectations - As of March 31, 2023, estimated revenue expected to be recognized in the future related to unsatisfied performance obligations totaled $5,884,965, with approximately 25% expected to be recognized over the next 12 months[43] - The company expects to recognize $26,880 of compensation expense related to non-vested restricted stock unit awards over a weighted average period of 1.24 years[75] Segment Information - The company’s reportable segments include Core, Payments, Complementary, and Corporate & Other, with performance evaluated based on revenue and costs of revenue[91][92] - Segment income for Core Payments was $85,198,000 for Q1 2023, compared to $84,223,000 in Q1 2022, reflecting a slight increase of 1.2%[94] Market Risks - The company actively monitors market risks, including credit risk and interest rate risk, through controlled procedures involving senior management[161] Subsequent Events - There were no subsequent events disclosed that would impact the financial position or results of operations[97]