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Jack Henry (JKHY) Q1 Earnings Top Estimates, Revenues Rise Y/Y

Jack Henry & Associates, Inc. JKHY reported first-quarter fiscal 2023 earnings of $1.46 per share, which surpassed the Zacks Consensus Estimate by 5.8%. Further, the bottom line increased 5.8% from the year-ago fiscal quarter’s reported figure.

Revenues improved 8% from the year-ago fiscal quarter’s reading to $529.2 million, which came ahead of the Zacks Consensus Estimate of $529.04 million.

JKHY’s non-GAAP revenues were $523.9 million, up 8% from the year-ago fiscal quarter’s level.

Top-line growth was driven by increased processing, and services and support revenues. Additionally, strength across the Core, Payments, Complementary and Corporate segments drove the results.

Jack Henry & Associates, Inc. Price, Consensus and EPS Surprise

Jack Henry & Associates, Inc. Price, Consensus and EPS Surprise
Jack Henry & Associates, Inc. Price, Consensus and EPS Surprise

Jack Henry & Associates, Inc. price-consensus-eps-surprise-chart | Jack Henry & Associates, Inc. Quote

Top Line in Detail

Services & Support: Jack Henry generated revenues of $320.15 million from the category (60% of revenues). The figure rose 8% from the year-ago fiscal quarter’s level owing to growth in cloud processing revenues. Also, improving user group revenues, rising implementation fee and increasing software usage contributed well.

Processing: The category yielded $209.1 million (40% of revenues) in the reported quarter, up 10% from the year-ago fiscal quarter’s actuals. This can be attributed to 8% growth in Jack Henry's digital revenues and the growing card-processing fee revenues.

Segments in Detail

Core: Revenues totaled $175.1 million. (33% of the top line), up 6% from the year-ago fiscal quarter’s tally.

Payments: Revenues summed $186.5 million (35% of the total revenues), increasing 8% from the year-ago fiscal quarter’s level.

Complementary: Revenues came in at $148.3 million (28% of the total revenues), rising 8% from the year-earlier fiscal quarter’s number.

Corporate & Other: Revenues grossed $19.2 million (3% of the total revenues), up 55% from the prior-year fiscal quarter’s level.

Operating Details

In first-quarter fiscal 2023, total operating expenses were $388.5 million, reflecting a 10% increase from the prior-year fiscal quarter’s finals. This can primarily be attributed to higher personnel and travel costs, and rising expenses related to JKHY’s card-processing platform.

As a percentage of revenues, the figure expanded 80 basis points (bps) from the year-earlier fiscal quarter’s number to 73.4%.

The operating margin was 27% in the reported quarter, flat with the year-earlier fiscal quarter’s number.

Balance Sheet

As of Sep 30, 2022, cash and cash equivalents totaled $32 million, which decreased from $48.8 million as of Jun 30, 2022.

Trade receivables were $247.5 million in the reported quarter, down from $348.1 million in the previous fiscal quarter.

The current and the long-term debt stood at $245.04 million at the end of the first-quarter fiscal 2023 compared with $115.1 million at the end of the fourth-quarter fiscal 2022.

Guidance

For fiscal 2023, Jack Henry raised its guidance for GAAP revenues from $2.080-$2.087 billion to $2.092-$2.099 billion. The Zacks Consensus Estimate for revenues is pegged at $2.08 billion.

JKHY anticipates non-GAAP revenues of $2.045-$2.052 billion.

Management lowered the guidance for earnings from $5.05-$5.09 per share to $4.90-$4.94. The Zacks Consensus Estimate for the same is pegged at $4.99 per share.

Zacks Rank & Stocks to Consider

Jack Henry currently carries a Zacks Rank #3 (Hold).

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Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Arista Networks ANET, Agilent Technologies A and Asure Software ASUR. While Arista Networks sports a Zacks Rank #1 (Strong Buy), Agilent Technologies and Asure Software carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agilent Technologies has lost 13.6% in the year-to-date period. A’s long-term earnings growth rate is currently projected at 10%.

Arista Networks has lost 9.2% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 15.7%.

Asure Software has lost 14.9% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 14%.


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