JACK HENRY & ASSOCIATES INC

Previous wording

For the second quarter of fiscal 2024, total revenue increased 8.0%, or $40,387, compared to the same quarter in fiscal 2023. Total revenue less deconversion revenue of $4,882 for the current fiscal quarter and less deconversion revenues of $6,380 for the prior fiscal year second quarter results in an increase of 8.4%, quarter over quarter. This increase was primarily driven by growth in data processing and hosting, Jack Henry digital, including Banno, card, and remote capture and ACH revenues.

Current wording

For the third quarter of fiscal 2024, total revenue increased 5.9%, or $30,010, compared to the same quarter in fiscal 2023. Total revenue less deconversion revenue of $843 for the current fiscal quarter and less deconversion revenues of $6,143 for the prior fiscal year third quarter results in an increase of 7.0%, quarter over quarter. This increase was primarily driven by growth in data processing and hosting, Jack Henry digital, including Banno, card, and payment processing revenues.

Previous wording

Operating income increased 10.8%, or $11,591, for the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023. Total operating income less deconversion operating income of $3,803 in the current quarter and $5,463 for the prior fiscal year second quarter, and removing the effects of the gain on sale of assets, net, of $1,207 in the prior fiscal year second quarter, results in an increase of 14.4%, quarter over quarter. This increase was primarily driven by revenue growth partially offset by increased operating expenses detailed above.

Current wording

Operating income increased 3.4%, or $3,709, for the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023. Removing from total operating income the effects of deconversion operating loss of $6 for the current fiscal quarter* and deconversion operating income of $5,130 for the prior fiscal year third quarter results in an increase of 8.6%, quarter over quarter. This increase was primarily driven by revenue growth partially offset by increased operating expenses detailed above.

Previous wording

The provision for income taxes increased 15.6%, or $3,823, for the second quarter of fiscal 2024, compared to the second quarter of fiscal 2023. The effective tax rate for the current fiscal second quarter, was 23.5% compared to 23.2% for the same quarter a year ago. The increase in the effective tax rate was primarily due to the difference in impact of share-based compensation that vested during each of the comparative quarters.

Current wording

The provision for income taxes increased 10.2%, or $2,500, for the third quarter of fiscal 2024, compared to the third quarter of fiscal 2023, primarily driven by the increase in income before income taxes. The effective tax rate for the current fiscal third quarter was 23.7% compared to 23.2% for the same quarter a year ago. The increase in the effective tax rate was primarily due to certain discrete period benefits recognized during the prior fiscal quarter.

Previous wording

For the six months ended December 31, 2023, total revenue increased 8.0%, or $82,553, compared to the same period in fiscal year 2023. Total revenue less deconversion and acquisition revenues of $9,018 and $1,945, respectively, for the current fiscal period and less deconversion revenues of $10,899 for the prior fiscal period, results in an increase of 8.1%, period over period. This increase was primarily driven by growth in data processing and hosting, card, Jack Henry digital, other processing and payment processing revenues.

Current wording

For the nine months ended March 31, 2024, total revenue increased 7.3%, or $112,562, compared to the same period in fiscal year 2023. Total revenue less deconversion and acquisition revenues of $9,861 and $1,945, respectively, for the current fiscal period and less deconversion revenues of $17,042 for the prior fiscal period, results in an increase of 7.7%, period over period. This increase was primarily driven by growth in data processing and hosting, card, Jack Henry digital, payment processing and other processing revenues.

Previous wording

Operating expenses increased 10.0%, or $78,986, for the six months ended December 31, 2023, compared to the same period in fiscal year 2023. Total operating expenses less deconversion expenses of $1,460, acquisition-related expenses of $4,182, and voluntary employee departure incentive payment ("VEDIP") program expenses of $16,443 for the current fiscal period, and less deconversion expenses of $1,570 and removing the effects of the gain on sale of assets, net, of $7,384 for the prior fiscal year period, results in an increase of 6.4%, period over period. This increase was primarily driven by higher personnel costs, including commissions, increased direct costs related to growth in revenue, higher internal licenses and fees, and a decrease in the gain on sale of assets, net, compared to the prior fiscal year period.

Current wording

Operating expenses increased 8.9%, or $105,287, for the nine months ended March 31, 2024, compared to the same period in fiscal year 2023. Total operating expenses less deconversion expenses of $2,309, acquisition-related expenses of $4,182, and voluntary employee departure incentive payment ("VEDIP") program expenses of $16,443 for the current fiscal period, and less deconversion expenses of $2,583 and removing the effects of the gain on sale of assets, net, of $7,384 for the prior fiscal year period, results in an increase of 6.5%, period over period. This increase was primarily driven by higher personnel costs, increased direct costs, and higher internal licenses and fees compared to the prior fiscal year period.

Previous wording

Operating income increased 1.4%, or $3,567, for the six months ended December 31, 2023, compared to the same period in fiscal year 2023. Total operating income less deconversion operating income of $7,558, removing the effects of the VEDIP program of $16,443 and an acquisition operating loss of $2,237 for the current fiscal year period, less deconversion operating income of $9,330 and removing the effects of the gain on sale of assets, net, of $7,383 for the prior fiscal year period, results in a 13.6% increase period over period. This increase was primarily driven by revenue growth partially offset by increased operating expenses detailed above.

Current wording

Operating income increased 2.0%, or $7,275, for the nine months ended March 31, 2024, compared to the same period in fiscal year 2023. Total operating income less deconversion operating income of $7,552, removing the effects of the VEDIP program of $16,443 and an acquisition operating loss of $2,237 for the current fiscal year period, less deconversion operating income of $14,459 and removing the effects of the gain on sale of assets, net, of $7,384 for the prior fiscal year period, results in a 12.0% increase period over period. This increase was primarily driven by revenue growth partially offset by increased operating expenses detailed above.

Previous wording

The provision for income taxes increased 4.6%, or $2,641, for the six months ended December 31, 2023, compared to the same period in fiscal year 2023. The effective tax rate for the six months ended December 31, 2023, was 23.6% compared to 23.4% for the same period a year ago. The increase in the effective tax rate was primarily due to the difference in impact of share-based compensation that vested during the comparative periods.

Current wording

The provision for income taxes increased 6.3%, or $5,141, for the nine months ended March 31, 2024, compared to the same period in fiscal year 2023, primarily driven by the increase in income before income taxes. The effective tax rate for the nine months ended March 31, 2024, was 23.6% compared to 23.3% for the same period a year ago. The increase in the effective tax rate was primarily due to the difference in impact of share-based compensation that vested during the comparative periods.

Previous wording

Net income increased 3.4%, or $6,320, for the six months ended December 31, 2023, compared to the same period a year ago. Total net income less deconversion net income of $5,744, plus net loss for the acquisition and the VEDIP program of $3,539 and $12,497, respectively, for the current fiscal year period, and less net income for deconversions and the gain on sale of assets, net, of $7,090 and $5,612, respectively, for the prior fiscal year period, results in a 16.8% increase period over period. This increase was primarily due to net organic growth in our lines of revenue partially offset by higher operating expenses and increased provision for income taxes in the six months ended December 31, 2023 compared to the same period last fiscal year.

Current wording

Net income increased 4.4%, or $11,870, for the nine months ended March 31, 2024, compared to the same period a year ago. Total net income less deconversion net income of $5,739, plus net loss for the acquisition and the VEDIP program of $3,539 and $12,497, respectively, for the current fiscal year period, and less net income for deconversions and the gain on sale of assets, net, of $10,989 and $5,612, respectively, for the prior fiscal year period, results in a 15.4% increase period over period. This increase was primarily due to net organic growth in our lines of revenue for the nine months ended March 31, 2024, compared to the same period last fiscal year.

Previous wording

We move into the third quarter of fiscal 2024 with significant portions of our business continuing to come from recurring revenues and our sales pipeline remaining encouraging. Our customers continue to face regulatory and operational challenges which our products and services address, and we believe they have a great need for our solutions that directly address institutional profitability, efficiency, and security. Our strong balance sheet, access to extensive lines of credit, the continued strength of our existing lines of revenue, and an unwavering commitment to superior customer service should position us well to address current and future opportunities.

Current wording

We move into the fourth quarter of fiscal 2024 with significant portions of our business continuing to come from recurring revenues and our sales pipeline remaining encouraging. Our customers continue to face regulatory and operational challenges which our products and services address, and we believe they have a great need for our solutions that directly address institutional profitability, efficiency, and security. Our strong balance sheet, access to extensive lines of credit, the continued strength of our existing lines of revenue, and an unwavering commitment to superior customer service should position us well to address current and future opportunities.

Previous wording

A detailed discussion of the major components of the results of operations for the three and six months ended December 31, 2023, follows. On August 31, 2022, the Company acquired all of the equity interest in Payrailz, LLC (“Payrailz”). Payrailz (“acquisition”) related revenue and operating expenses mentioned in the six months ended December 31, 2023, discussions below are for the first two months of the period only.

Current wording

A detailed discussion of the major components of the results of operations for the three and nine months ended March 31, 2024, follows. On August 31, 2022, the Company acquired all of the equity interest in Payrailz, LLC (“Payrailz”). Payrailz (“acquisition”) related revenue and operating expenses mentioned in the nine months ended March 31, 2024, discussions below are for the first two months of the period only.

Previous wording

Discussions compare the current fiscal year's three and six months ended December 31, 2023, to the prior fiscal year's three and six months ended December 31, 2022.

Current wording

Discussions compare the current fiscal year's three and nine months ended March 31, 2024, to the prior fiscal year's three and nine months ended March 31, 2023.

Previous wording

Services and support revenue increased 7.3% for the second quarter of fiscal 2024 compared to the same quarter a year ago. Reducing services and support revenue for deconversion revenue from each quarter, which was $4,882 for the current fiscal year quarter and $6,380 for the prior fiscal year quarter results in growth of 8.0% quarter over quarter. This increase was primarily driven by growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand and higher user group revenues from the user group meeting held during the second quarter of fiscal 2024.

Current wording

Services and support revenue increased 4.5% for the third quarter of fiscal 2024 compared to the same quarter a year ago. Reducing services and support revenue for deconversion revenue from each quarter, which was $843 for the current fiscal year quarter and $6,143 for the prior fiscal year quarter, results in growth of 6.4% quarter over quarter. This increase was primarily driven by double-digit growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand.

Previous wording

Services and support revenue increased 7.1% for the six months ended December 31, 2023 compared to the same period a year ago. Reducing services and support revenue for deconversion revenue from each period, which was $9,018 for the current fiscal year period and $10,899 for the prior fiscal year period, and acquisition revenue of $2 for the current fiscal year period, results in growth of 7.5% period over period. This increase was primarily driven by volume growth in data processing and hosting as new and existing customers migrate to our private cloud and processing volumes expand, software usage as customers continue moving to time-based licenses rather than perpetual, and hardware revenues.

Current wording

Services and support revenue increased 6.3% for the nine months ended March 31, 2024 compared to the same period a year ago. Reducing services and support revenue for deconversion revenue from each period, which was $9,861 for the current fiscal year period and $17,042 for the prior fiscal year period, and acquisition revenue of $2 for the current fiscal year period, results in growth of 7.2% period over period. This increase was primarily driven by double-digit growth in data processing and hosting as new and existing customers migrate to our private cloud and processing volumes expand, software usage as customers continue moving to time-based licenses rather than perpetual, hardware, and consulting revenues.

Previous wording

Processing revenue increased 8.9% for the second quarter of fiscal 2024 compared to the same quarter last fiscal year. This increase was primarily driven by growth in Jack Henry digital revenue (including Banno) from higher active users and expanding volumes from existing products and the introduction of new products, growth in card revenue primarily from higher fraud detection and prevention revenues and organic growth from expanding transaction volumes, remote capture and ACH revenue, as well as other processing and payment processing revenues from expanding volumes and new customer revenue.

Current wording

Processing revenue increased 7.8% for the third quarter of fiscal 2024 compared to the same quarter last fiscal year. Deconversion and/or acquisition revenue did not significantly affect processing revenue quarter over quarter. This increase was primarily driven by growth in Jack Henry digital revenue (including Banno) from higher active users and expanding volumes from existing products and the introduction of new products, growth in card revenue primarily from organic growth from expanding volumes, higher payment processing revenues from expanding volumes and new customer revenue, and increased other processing revenues.

Previous wording

Processing revenue increased 9.3% for the six months ended December 31, 2023, compared to the same period last fiscal year. Reducing processing revenue for acquisition revenue of $1,943 for the current fiscal year period, results in growth of 8.8% period over period. This increase was primarily driven by growth in card revenue primarily from higher fraud detection and prevention revenues and organic growth from expanding transaction volumes, growth in Jack Henry digital revenue (including Banno) from higher active users and expanding volumes from existing products and the introduction of new products, other processing and payment processing revenues from expanding volumes and new customer revenue, and remote capture and ACH revenues.

Current wording

Processing revenue increased 8.8% for the nine months ended March 31, 2024, compared to the same period last fiscal year. Reducing processing revenue for acquisition revenue of $1,943 for the current fiscal year period, results in growth of 8.5% period over period. This increase was primarily driven by growth in card revenue primarily from organic growth from expanding volumes, growth in Jack Henry digital revenue (including Banno) from higher active users and expanding volumes from existing products and the introduction of new products, increased payment processing revenues from expanding volumes and new customer revenue, and higher other processing revenues.

Previous wording

Cost of revenue for the second quarter of fiscal 2024 increased 5.4% over the prior fiscal year second quarter. This increase was primarily due to higher direct costs, consistent with increases in the related revenue, increased internal licenses and fees, and higher personnel costs due to an increase in employee headcount in the trailing twelve months. Cost of revenue increased 1% compared to the prior fiscal year quarter as a percentage of total revenue.

Current wording

Cost of revenue for the third quarter of fiscal 2024 increased 6.8% over the prior fiscal year third quarter. Reducing cost of revenue for deconversion costs from each quarter, which were $671 for the current fiscal year quarter and $470 for the prior fiscal year quarter, results in a 6.7% increase quarter over quarter. This increase was primarily due to higher direct costs, generally consistent with increases in the related revenue, higher personnel costs due to an increase in employee headcount in the trailing twelve months and increased bonus attainment quarter over quarter, and increased internal licenses and fees from increased pricing and deployment. Cost of revenue increased 1% compared to the prior fiscal year quarter as a percentage of total revenue.

Previous wording

Cost of revenue increased 6.8% for the six months ended December 31, 2023, compared to the same period last fiscal year. Reducing cost of revenue for deconversion costs from each period, which were $891 for the current fiscal period and $965 for the prior fiscal period, and for acquisition costs of $3,334 from the current fiscal period, results in a 6.3% increase period over period. This increase was primarily due to higher direct costs in line with related increases in revenue, higher personnel costs due to an increase in employee headcount in the trailing twelve months, and increased internal licenses and fees. Cost of revenue remained consistent compared to the prior fiscal year period as a percentage of total revenue.

Current wording

Cost of revenue increased 6.8% for the nine months ended March 31, 2024, compared to the same period last fiscal year. Reducing cost of revenue for deconversion costs from each period, which were $1,562 for the current fiscal period and $1,435 for the prior fiscal period, and for acquisition costs of $3,334 from the current fiscal period, results in a 6.4% increase period over period. This increase was primarily due to higher direct costs generally consistent with related increases in revenue, higher personnel costs due to an increase in employee headcount in the trailing twelve months and increased bonus attainment period over period, and increased internal licenses and fees from increased pricing and deployment. Cost of revenue remained consistent compared to the prior fiscal year period as a percentage of total revenue.

Previous wording

Research and development expense decreased 3.0% for the second quarter of fiscal 2024 compared to the prior fiscal year second quarter. This decrease was primarily due to lower personnel costs, net of capitalization, from a decrease in employee headcount in the trailing twelve months. Research and development expense for the quarter remained consistent compared to the prior fiscal year quarter as a percentage of total revenue.

Current wording

Research and development expense increased 4.0% for the third quarter of fiscal 2024 compared to the prior fiscal year third quarter. Deconversion and/or acquisition costs did not significantly affect research and development expenses quarter over quarter. This increase was primarily due to higher cloud consumption costs, net of capitalization. Research and development expense for the quarter remained consistent compared to the prior fiscal year quarter as a percentage of total revenue.

Previous wording

Research and development expense increased 4.0% for the six months ended December 31, 2023, compared to the same period last fiscal year. Reducing research and development expense for the effects of acquisitions of $656 for the current fiscal year period results in a 3.1% increase period over period. This increase was primarily due to an increase in personnel costs, net of capitalization, related to the Payrailz acquisition and Jack Henry Platform. Research and development expense for the current fiscal year period decreased 1% compared to the prior fiscal year period as a percentage of total revenue.

Current wording

Research and development expense increased 4.0% for the nine months ended March 31, 2024, compared to the same period last fiscal year. Reducing research and development expense for the effects of acquisitions of $656 for the current fiscal year period results in a 3.4% increase period over period. This increase was primarily due to an increase in personnel costs, net of capitalization, including increased bonus attainment period over period. Research and development expense for the current fiscal year period remained consistent compared to the prior fiscal year period as a percentage of total revenue.

Previous wording

Selling, general, and administrative expense increased 23.8% in the second quarter of fiscal 2024 over the same quarter in the prior fiscal year. Reducing selling, general, and administrative expense for deconversion costs from each quarter, which were $458 for the current fiscal year quarter and $362 for the prior fiscal year quarter, and removing the effect of the gain on disposal of assets, net, of $1,207 in the prior fiscal year quarter, results in a 21.1% increase quarter over quarter. This increase was primarily due to higher personnel costs from medical insurance and commissions expenses, and an increase in travel and entertainment and meeting expenses from the user group meeting held during the current quarter. Selling, general, and administrative expense increased 2% as a percentage of total revenue this fiscal quarter versus the prior fiscal year quarter.

Current wording

Selling, general, and administrative expense increased 7.0% in the third quarter of fiscal 2024 over the same quarter in the prior fiscal year. Reducing selling, general, and administrative expense for deconversion costs from each quarter, which were $178 for the current fiscal year quarter and $543 for the prior fiscal year quarter, results in a 7.7% increase quarter over quarter. This increase was primarily due to higher personnel costs from commissions and medical benefits expenses. Selling, general, and administrative expense increased 1% as a percentage of total revenue this fiscal quarter versus the prior fiscal year quarter.

Previous wording

Selling, general, and administrative expense increased 30.7% in the six months ended December 31, 2023, compared to the same period last fiscal year. Reducing selling, general, and administrative expense for the effects of deconversions from each period, which were $570 for the current fiscal year period and $604 for the prior fiscal year period, for VEDIP program expenses of $16,443 and the effect of the acquisition of $192 in the current fiscal year period and removing the effect of the gain on sale of assets, net, of $7,383 in the prior fiscal year period, results in a 9.2% increase period over period. This increase was primarily due to higher personnel costs from commissions expenses, and a decrease in the gain on sale of assets, net, period over period. Selling, general, and administrative expense increased 2% as a percentage of total revenue this fiscal year period versus the prior fiscal year period.

Current wording

Selling, general, and administrative expense increased 22.7% in the nine months ended March 31, 2024, compared to the same period last fiscal year. Reducing selling, general, and administrative expense for the effects of deconversions from each period, which were $747 for the current fiscal year period and $1,148 for the prior fiscal year period, for VEDIP program expenses of $16,443 and the effect of the acquisition of $192 in the current fiscal year period and removing the effect of the gain on sale of assets, net, of $7,384 in the prior fiscal year period, results in an 8.7% increase period over period. This increase was primarily due to higher personnel costs, including commissions and medical benefits expenses, and a decrease in the gain on sale of assets, net, period over period. Selling, general, and administrative expense increased 2% as a percentage of total revenue this fiscal year period versus the prior fiscal year period.

Previous wording

Interest income fluctuated due to changes in interest earned on balances during the three and six months ended December 31, 2023 compared to the three and six months ended December 31, 2022. Interest expense increased when compared to the prior fiscal year quarter and year-to-date period due to increases in prevailing interest rates and amounts borrowed. There was a $255,000 outstanding balance under the credit and term loan facilities at December 31, 2023, and $275,000 outstanding balance under the credit facility at December 31, 2022.

Current wording

Interest income fluctuated due to changes in interest earned on balances during the three and nine months ended March 31, 2024, compared to the three and nine months ended March 31, 2023. Interest expense decreased when compared to the prior fiscal year quarter due to a decrease in the amount borrowed partially offset by increases in prevailing interest rates. Interest expense increased when compared to the prior year-to-date period due to increases in prevailing interest rates partially offset by a decrease in the amount borrowed. There was a $250,000 outstanding balance under the revolving credit and term loan facilities at March 31, 2024, and $375,000 outstanding balance under the revolving credit and term loan facilities at March 31, 2023.

Previous wording

The effective tax rate increased for the three and six months ended December 31, 2023 compared to the three and six months ended December 31, 2022 with an effective tax rate of 23.5% and 23.6%, respectively, of income before taxes, compared to 23.2% and 23.4%, respectively, of income before taxes for the same periods last fiscal year. The increases in the effective tax rates were primarily due to the differences in impacts of share-based compensation that vested during each of the comparative periods.

Current wording

The effective tax rate increased for the three and nine months ended March 31, 2024, compared to the three and nine months ended March 31, 2023, with an effective tax rate of 23.7% and 23.6%, respectively, of income before taxes, compared to 23.2% and 23.3%, respectively, of income before taxes for the same periods last fiscal year. The increase in the effective tax rate for the comparative quarters was primarily due to certain discrete period benefits recognized during the prior fiscal year quarter. The increase in the effective tax rate for the comparative year-to-date periods was primarily due to the difference in impact of share-based compensation that vested during each of the comparative periods.

Previous wording

Net income increased 13.9% to $91,965, or $1.26 per diluted share, for the second quarter of fiscal 2024 compared to $80,775, or $1.10 per diluted share, in the same quarter of fiscal 2023. Reducing net income by deconversion net income of $2,890 for the current fiscal quarter, and by deconversion net income and the effect of the gain on disposal of assets, net, of $4,152 and $918, respectively, for the prior fiscal year second quarter, results in a 17.7% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue partially offset by higher operating expenses and increased provision for income taxes in the second quarter of fiscal 2024 compared to the same quarter last fiscal year.

Current wording

Net income increased 6.8% to $87,099, or $1.19 per diluted share, for the third quarter of fiscal 2024 compared to $81,549, or $1.12 per diluted share, in the same quarter of fiscal 2023. Increasing net income by deconversion net loss of $5 for the current fiscal quarter, and decreasing net income by deconversion net income of $3,899 for the prior fiscal year third quarter, results in a 12.2% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue for the third quarter of fiscal 2024 compared to the same quarter last fiscal year.

Previous wording

Net income increased 3.4% to $193,644, or $2.65 per diluted share, for the six months ended December 31, 2023, compared to $187,324, or $2.56 per diluted share, in the same period of fiscal 2023. Removing from net income the effects of deconversion net income of $5,744, net loss from the acquisition of $3,539, and net loss from the VEDIP program of $12,497 for the current fiscal year period, and for the effects of deconversion net income of $7,090 and the gain on sale of assets, net, of $5,612 for the prior year fiscal period, results in a 16.8% increase period over period. This increase was primarily due to net organic growth in our lines of revenue partially offset by higher operating expenses and increased provision for income taxes in the six months ended December 31, 2023 compared to the same period last fiscal year.

Current wording

Net income increased 4.4% to $280,743, or $3.85 per diluted share, for the nine months ended March 31, 2024, compared to $268,873, or $3.68 per diluted share, in the same period of fiscal 2023. Removing from net income the effects of deconversion net income of $5,739, the net loss from the acquisition of $3,539, and the net loss from the VEDIP program of $12,497 for the current fiscal year period, and for the effects of deconversion net income of $10,989 and the gain on sale of assets, net, of $5,612 for the prior year fiscal period, results in a 15.4% increase period over period. This increase was primarily due to net organic growth in our lines of revenue for the nine months ended March 31, 2024, compared to the same period last fiscal year.

Previous wording

The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing services; online and mobile bill pay solutions; ACH origination and remote deposit capture processing; and risk management products and services. The Complementary segment provides additional software, hosted processing platforms, and services, including call center support, and network security management, consulting, and monitoring, that can be integrated with our core solutions, and many can be used independently. The Corporate and Other segment includes revenue and costs from hardware and other products not attributed to the other three segments, as well as operating expenses not directly attributable to the other three segments, except for items that are deemed unassigned and excluded from any segment.

Current wording

The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing services; online and mobile bill pay solutions; ACH origination and remote deposit capture processing; and risk management products and services. The Complementary segment provides additional software, hosted processing platforms, and services, including digital/mobile banking, treasury services, online account opening, fraud/AML and lending/deposit solutions, that can be integrated with our core solutions, and many can be used independently. The Corporate and Other segment includes revenue and costs from hardware and other products not attributed to the other three segments, as well as operating expenses not directly attributable to the other three segments, except for items that are deemed unassigned and excluded from any segment.

Previous wording

Immaterial adjustments have been made between segments to reclassify revenue and cost of revenue that was recognized for the three and six months ended December 31, 2022. These reclasses were made to be consistent with the current allocation of revenue and cost of revenue by segment. Revenue reclassed for the three and six months ended December 31, 2022, from Core to Corporate and Other was $1,851 and $3,661, respectively, from Payments to Corporate and Other was $10 and $16, respectively, and from Complementary to Corporate and Other was $174 and $108, respectively. Cost of revenue reclassed for the three and six months ended December 31, 2022, from Core to Corporate and Other was $1,658 and $3,294, respectively, from Payments to Corporate and Other was $658 and $1,261, respectively, and from Complementary to Corporate and Other was $326 and $659, respectively.

Current wording

Immaterial adjustments have been made between segments to reclassify revenue and cost of revenue that was recognized for the three and nine months ended March 31, 2023. These reclasses were made to be consistent with the current allocation of revenue and cost of revenue by segment. Revenue reclassed for the three and nine months ended March 31, 2023, from Core to Corporate and Other was $1,797 and $5,456, respectively, from Payments to Corporate and Other was $7 and $24, respectively, and from Complementary to Corporate and Other was $135 and $243, respectively. Cost of revenue reclassed for the three and nine months ended March 31, 2023, from Core to Corporate and Other was $1,711 and $5,004, respectively, from Payments to Corporate and Other was $662 and $1,923, respectively, and from Complementary to Corporate and Other was $329 and $989, respectively.

Previous wording

Revenue in the Core segment increased 7.9% and cost of revenue increased 4.1% for the three months ended December 31, 2023, compared to the three months ended December 31, 2022. Reducing Core revenue for deconversion revenue in both quarters, which totaled $1,929 for the three months ended December 31, 2023, and $2,115 for the three months ended December 31, 2022, results in an 8.1% increase quarter over quarter. This increase was primarily driven by growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand. Reducing Core cost of revenue for deconversion costs in both quarters, which totaled $321 for the three months ended December 31, 2023 and $277 for the three months ended December 31, 2022, results in a 4.0% increase quarter over quarter. This increase was primarily due to increased direct costs related to increases in revenue. Cost of revenue decreased 2% as a percentage of revenue for the second quarter of fiscal 2024 compared to the same quarter in fiscal 2023.

Current wording

Revenue in the Core segment increased 7.4% and cost of revenue increased 3.1% for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Reducing Core revenue for deconversion revenue in both quarters, which totaled $1,291 for the three months ended March 31, 2024, and $2,315 for the three months ended March 31, 2023, results in an 8.2% increase quarter over quarter. This increase was primarily driven by growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand. Deconversion and/or acquisition costs did not significantly affect Core cost of revenue quarter over quarter. The Core cost of revenue increase was primarily due to higher direct costs generally consistent with increases in revenue. Core cost of revenue decreased 2% as a percentage of Core revenue for the third quarter of fiscal 2024 compared to the same quarter in fiscal 2023.

Previous wording

Revenue in the Core segment increased 7.7% and cost of revenue increased 5.8% for the six months ended December 31, 2023, compared to the six months ended December 31, 2022. Reducing Core revenue for deconversion revenue in both periods, which totaled $3,595 for the six months ended December 31, 2023, and $3,933 for the six months ended December 31, 2022, results in a 7.9% increase period over period. This increase was primarily driven by the growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand. Reducing Core cost of revenue for deconversion costs in both periods, which totaled $425 for the six months ended December 31, 2023 and $418 for the six months ended December 31, 2022 results in a 5.9% increase period over period. This increase was primarily due to increased direct costs related to increases in revenue. Cost of revenue decreased 1% as a percentage of revenue for the six months ended December 31, 2023, compared to the same period in fiscal 2023.

Current wording

Revenue in the Core segment increased 7.6% and cost of revenue increased 4.9% for the nine months ended March 31, 2024, compared to the nine months ended March 31, 2023. Reducing Core revenue for deconversion revenue in both periods, which totaled $4,885 for the nine months ended March 31, 2024, and $6,248 for the nine months ended March 31, 2023, results in a 8.0% increase period over period. This increase was primarily driven by the growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand. Deconversion and/or acquisition costs did not significantly affect Core cost of revenue period over period. The Core cost of revenue increase was primarily due to higher direct costs generally consistent with increases in revenue. Core cost of revenue decreased 1% as a percentage of Core revenue for the nine months ended March 31, 2024, compared to the same period in fiscal 2023.

Previous wording

Revenue in the Payments segment increased 6.5% and cost of revenue increased 3.9% for the second quarter of fiscal 2024 compared to the equivalent quarter of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both quarters, which totaled $1,555 for the second quarter of fiscal 2024 and $1,336 for the second quarter of fiscal 2023 results in a 6.4% increase quarter over quarter. This increase was primarily due to higher card revenue primarily from expanded fraud detection and prevention revenues and organic growth in transaction volumes, and higher remote capture and ACH and payment processing revenues primarily from expanding volumes and new customer revenue. Reducing Payments cost of revenue for deconversion costs in both quarters, which totaled $51 for the second quarter of fiscal 2024 and $95 for the second quarter of fiscal 2023, results in a 4.0% increase quarter over quarter. This increase was primarily due to higher direct costs related to increases in revenue. Cost of revenue as a percentage of revenue decreased 1% for the second quarter of fiscal 2024 compared to the same quarter in fiscal 2023.

Current wording

Revenue in the Payments segment increased 5.3% and cost of revenue increased 3.4% for the third quarter of fiscal 2024 compared to the equivalent quarter of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both quarters, which totaled $910 for the third quarter of fiscal 2024 and $1,643 for the third quarter of fiscal 2023, results in a 5.7% increase quarter over quarter. This increase was primarily due to higher card revenue from organic growth from slightly higher volumes, higher payment processing revenues from slightly higher volumes and new customer revenue, and increased remote capture and ACH revenue. Deconversion and/or acquisition costs did not significantly affect Payments cost of revenue quarter over quarter. The Payments cost of revenue increase was primarily due to higher direct costs generally consistent with increases in revenue. Payments cost of revenue as a percentage of Payments revenue decreased 1% for the third quarter of fiscal 2024 compared to the same quarter in fiscal 2023.

Previous wording

Revenue in the Payments segment increased 6.7% and cost of revenue increased 6.0% for the six months ended December 31, 2023, compared to the equivalent period of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both periods, which totaled $2,560 for the six months ended December 31, 2023 and $2,771 for the six months ended December 31, 2022, and acquisition revenue of $1,945 from the current fiscal year period, results in a 6.2% increase period over period. This increase was primarily due to higher card revenue primarily from expanded fraud detection and prevention revenues and organic growth in transaction volumes, higher payment processing revenue primarily from expanding volumes and new customer revenue, and remote capture and ACH revenue. Reducing Payments cost of revenue for deconversion costs in both periods, which totaled $98 for the six months ended December 31, 2023 and $159 for the six months ended December 31, 2022, and for cost of revenue from the acquisition of $3,313 from the current fiscal year period, results in a 4.4% increase period over period. This increase was primarily due to higher direct costs related to increases in revenues and higher personnel costs from an increase in employee headcount in the trailing twelve months. Cost of revenue as a percentage of revenue remained consistent for the six months ended December 31, 2023, compared to the same period in fiscal 2023.

Current wording

Revenue in the Payments segment increased 6.2% and cost of revenue increased 5.1% for the nine months ended March 31, 2024, compared to the equivalent period of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both periods, which totaled $3,470 for the nine months ended March 31, 2024 and $4,413 for the nine months ended March 31, 2023, and acquisition revenue of $1,945 from the current fiscal year period, results in a 6.1% increase period over period. This increase was primarily due to higher card revenue from organic growth from expanding volumes, higher payment processing revenue from expanding volumes and new customer revenue, and increased remote capture and ACH revenue. Deconversion and/or acquisition costs did not significantly affect Payments cost of revenue period over period. The Payments cost of revenue increase was primarily due to higher direct costs generally consistent with increases in revenues and higher personnel costs from an increase in employee headcount in the trailing twelve months. Payments cost of revenue as a percentage of Payments revenue remained consistent for the nine months ended March 31, 2024, compared to the same period in fiscal 2023.

Previous wording

Revenue in the Complementary segment increased 7.3% and cost of revenue increased 8.6% for the second quarter of fiscal 2024 compared to the equivalent quarter of the prior fiscal year. Reducing Complementary revenue for deconversion revenue in both periods, which totaled $1,355 for the second quarter of fiscal 2024 and $2,914 for the second quarter of fiscal 2023 results in an 8.6% increase quarter over quarter. This increase was primarily driven by higher Jack Henry digital revenue as active users increased and volumes expanded from existing products and new products were introduced, and hosting revenues as new and existing customers continued to migrate to our private cloud and processing volumes expanded. Reducing Complementary cost of revenue for deconversion costs in both quarters, which totaled $249 for the second quarter of fiscal 2024 and $174 for the second quarter of fiscal 2023, results in an 8.5% increase quarter over quarter. This increase was primarily due to increased amortization of capitalized software from capital software development projects and higher direct costs related to increases in revenues. Cost of revenue as a percentage of revenue remained consistent for the second quarter of fiscal 2024 compared to the same quarter in fiscal 2023.

Current wording

Revenue in the Complementary segment increased 5.1% and cost of revenue increased 7.2% for the third quarter of fiscal 2024 compared to the equivalent quarter of the prior fiscal year. Increasing Complementary revenue for the reversal of deconversion revenue in the current fiscal year quarter of $1,366 (see note in Results of Operations and Revenue on page 22), and decreasing Complementary revenue for deconversion revenue of $2,170 for the third quarter of fiscal 2023, results in a 7.7% increase quarter over quarter. This increase was primarily driven by higher Jack Henry digital revenue as active users increased and volumes expanded from existing products and new products were introduced, and hosting revenues as new and existing customers continued to migrate to our private cloud and processing volumes expanded. Reducing Complementary cost of revenue for deconversion costs in both quarters, which totaled $348 for the third quarter of fiscal 2024 and $166 for the third quarter of fiscal 2023, results in a 6.9% increase quarter over quarter. This increase was primarily due to higher direct costs generally consistent with increases in revenues and increased amortization of capitalized software from capital software development projects. Complementary cost of revenue as a percentage of Complementary revenue increased 1% for the third quarter of fiscal 2024 compared to the same quarter in fiscal 2023.

Previous wording

Revenue in the Complementary segment increased 8.0% and cost of revenue increased 7.9% for the six months ended December 31, 2023, compared to the equivalent period of the prior fiscal year. Reducing Complementary revenue for deconversion revenue in both periods, which totaled $2,806 for the six months ended December 31, 2023 and $4,149 for the six months ended December 31, 2022, results in an 8.6% increase period over period. This increase was primarily driven by higher Jack Henry digital revenue as active users increased and volumes expanded from existing products and new products were introduced, and hosting revenues, as new and existing customers continued to migrate to our private cloud and processing volumes expanded. Complementary segment deconversion costs did not significantly affect the Complementary segment cost of revenue increase period over period. The Complementary segment cost of revenue increase was primarily due to higher direct costs related to increases in revenue, increased amortization of capitalized software from capital software development projects, and higher internal licenses and fees. Cost of revenue as a percentage of revenue remained consistent for the six months ended December 31, 2023, compared to the same period in fiscal 2023.

Current wording

Revenue in the Complementary segment increased 7.1% and cost of revenue increased 7.7% for the nine months ended March 31, 2024, compared to the equivalent period of the prior fiscal year. Reducing Complementary revenue for deconversion revenue in both periods, which totaled $1,440 for the nine months ended March 31, 2024, and $6,319 for the nine months ended March 31, 2023, results in an 8.3% increase period over period. This increase was primarily driven by higher Jack Henry digital revenue as active users increased and volumes expanded from existing products and new products were introduced, and hosting revenues, as new and existing customers continued to migrate to our private cloud and processing volumes expanded. Reducing Complementary cost of revenue for deconversion costs in both periods, which totaled $715 for the nine months ended March 31, 2024, and $538 for the nine months ended March 31, 2023, results in a 7.6% increase period over period. This increase was primarily due to higher direct costs generally consistent with increases in revenue and increased amortization of capitalized software from capital software development projects. Complementary cost of revenue as a percentage of Complementary revenue remained consistent for the nine months ended March 31, 2024, compared to the same period in fiscal 2023.

Previous wording

Revenue classified in the Corporate and Other segment includes revenues from other products and services and hardware not specifically attributed to the other three segments. Revenue in the Corporate and Other segment increased 30.9% for the second quarter of fiscal 2024 compared to the equivalent quarter of the prior fiscal year. This increase was primarily due to higher user group revenues related to the user group meeting held in the current quarter that was held during the first quarter in the prior fiscal year. Corporate and Other segment deconversion revenue did not significantly affect Corporate and Other revenue increase quarter over quarter.

Current wording

Revenue classified in the Corporate and Other segment includes revenues from other products and services and hardware not specifically attributed to the other three segments. Revenue in the Corporate and Other segment increased 5.8% for the third quarter of fiscal 2024 compared to the equivalent quarter of the prior fiscal year. The Corporate and other revenue increase was primarily due to the increase in other processing revenue quarter over quarter. Deconversion and/or acquisition revenue did not significantly affect Corporate and Other revenue quarter over quarter.

Previous wording

Cost of revenue for the Corporate and Other segment includes operating expenses not directly attributable to the other three segments. The cost of revenue in the second quarter of fiscal 2024 increased 6.1% when compared to the prior fiscal year quarter. This increase was primarily due to higher internal licenses and fees quarter over quarter. Corporate and Other segment deconversion and acquisition costs did not significantly affect the Corporate and Other cost of revenue increase quarter over quarter.

Current wording

Cost of revenue for the Corporate and Other segment includes operating expenses not directly attributable to the other three segments. The cost of revenue in the third quarter of fiscal 2024 increased 15.3% when compared to the prior fiscal year quarter. This increase was primarily due to higher internal licenses and fees from increased pricing and deployment and higher personnel costs, including an increase in headcount in the trailing twelve months and higher bonus attainment, quarter over quarter. Deconversion and/or acquisition costs did not significantly affect Corporate and Other cost of revenue quarter over quarter.

Previous wording

Revenue in the Corporate and Other segment increased 22.7% for the six months ended December 31, 2023, compared to the equivalent period of the prior fiscal year. This increase was primarily due to higher hardware and other processing revenues period over period. Corporate and Other segment deconversion revenue did not significantly affect the Corporate and Other revenue increase period over period.

Current wording

Revenue in the Corporate and Other segment increased 17.1% for the nine months ended March 31, 2024, compared to the equivalent period of the prior fiscal year. This increase was primarily due to higher other processing and hardware revenues period over period. Deconversion and/or acquisition revenue did not significantly affect Corporate and Other revenue period over period.

Previous wording

The cost of revenue in the six months ended December 31, 2023, increased 8.1% when compared to the prior fiscal year period. This increase was primarily due to higher internal licenses and fees, increased personnel costs, including salaries and benefits expenses, and higher cost of hardware related to the revenue increase. Corporate and Other segment deconversion and acquisition costs did not significantly affect the Corporate and Other cost of revenue increase period over period.

Current wording

Cost of revenue for the Corporate and Other segment for the nine months ended March 31, 2024, increased 10.5% when compared to the prior fiscal year period. This increase was primarily due to higher internal licenses and fees from increased pricing and deployment and higher personnel costs, including an increase in headcount in the trailing twelve months and higher bonus attainment, period over period. Deconversion and/or acquisition costs did not significantly affect Corporate and Other cost of revenue period over period.

Previous wording

The Company's cash and cash equivalents increased to $26,709 at December 31, 2023, from $12,243 at June 30, 2023.

Current wording

The Company's cash and cash equivalents increased to $27,254 at March 31, 2024, from $12,243 at June 30, 2023.

Previous wording

Cash provided by operating activities for the first six months of fiscal 2024 increased 25% compared to the same period last year primarily due to a lower decrease in accrued expenses period over period. Cash from operations is primarily used to repay debt, pay dividends, repurchase stock, for capital expenditures, and acquisitions.

Current wording

Cash provided by operating activities for the first nine months of fiscal 2024 increased 62% compared to the same period last year primarily due to the increase in accrued expenses period over period. Cash from operations is primarily used to repay debt, pay dividends, repurchase stock, for capital expenditures, and acquisitions.

Previous wording

Cash used in investing activities for the first six months of fiscal 2024 totaled $110,959 and included: $83,408 for the ongoing enhancement and development of existing and new product and service offerings; capital expenditures on facilities and equipment of $24,458; $2,971 for the purchase and development of internal use software; and the purchase of investment of $1,000. Cash uses were partially offset by proceeds from the sale of assets of $878. Cash used in investing activities for the first six months of fiscal 2023 totaled $301,192 and included: $229,628 for an acquisition; $81,046 for the development of software; $17,376 for capital expenditures; and $1,027 for the purchase and development of internal use software. Cash uses were partially offset by proceeds from the sale of assets of $27,885.

Current wording

Cash used in investing activities for the first nine months of fiscal 2024 totaled $164,505 and included: $125,351 for the ongoing enhancement and development of existing and new product and service offerings; capital expenditures on facilities and equipment of $34,347; $4,561 for the purchase and development of internal use software; and the purchase of investment of $1,146. Cash uses were partially offset by proceeds from the sale of assets of $900. Cash used in investing activities for the first nine months of fiscal 2023 totaled $355,561 and included: $229,628 for an acquisition; $124,110 for the development of software; $27,237 for capital expenditures; $1,471 for the purchase and development of internal use software; and the purchase of investment of $1,000. Cash uses were partially offset by proceeds from the sale of assets of $27,885.