JACK HENRY & ASSOCIATES INC
For the period ended Dec 31, 2024. Filed Feb 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 7, 2025
JKHY$173.23-3.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000779152-24-000111
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-07.
0000779152-25-000009
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 55 previous paragraphs and 72 current paragraphs.
21 unchanged; 33 reworded; 14 added; 1 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Net income increased 6.4%, or $5,880, for the second quarter of fiscal 2025, compared to the second quarter of fiscal 2024. Removing from total net income the effects of deconversion net loss of $472 for the current fiscal quarter and deconversion net income of $2,890 for the prior fiscal year second quarter, results in a 10.4% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue for the second quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same quarter last fiscal year.
Current report
For the six months ended December 31, 2024, total revenue increased 5.2%, or $57,760, compared to the same period in fiscal 2024. Total revenue less deconversion revenue of $3,766 for the current fiscal year period and $9,018 for the prior fiscal year period results in an increase of 5.7%, period over period. This increase was primarily driven by organic growth in our revenue lines including data processing and hosting, card, Jack Henry digital, which is inclusive of Banno, and payment processing, which is inclusive of PayCenter.
Current report
Operating expenses increased 4.1%, or $35,149, for the six months ended December 31, 2024 compared to the same period in fiscal 2024. Total operating expenses less deconversion operating expenses of $892 for the current fiscal year period and $1,460 for the prior fiscal year period and less Voluntary Employee Departure Incentive Payment ("VEDIP") program expense of $16,443 for the prior fiscal year period results in an increase of 6.2%. This increase was primarily driven by higher direct costs, personnel costs, internal licenses and fees, and amortization. The VEDIP program, was a voluntary separation program for certain eligible employees conducted during July 2023 that included a VEDIP payment for the eligible employees who chose to participate in the program.
Current report
Operating income increased 9.0%, or $22,611, for the six months ended December 31, 2024 compared to the same period in fiscal 2024. Removing from total operating income the effects of deconversion operating income of $2,873 for the current fiscal year period and $7,558 for the prior fiscal year period and VEDIP program operating loss of $16,443 from the prior fiscal year period results in an increase of 4.2%, period over period. This increase was primarily driven by organic revenue growth partially offset by increased operating expenses detailed above.
Current report
Services and support revenue increased 3.9% for the six months ended December 31, 2024, compared to the same period in fiscal 2024. Reducing services and support revenue for deconversion revenue from each period, which was $3,766 for the current fiscal year period and $9,018 for the prior fiscal year period, results in growth of 4.8% period over period. This increase was primarily driven by double-digit growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand, partially offset by the decrease in license and hardware revenues, period over period.
Current report
Cost of revenue for the six months ended December 31, 2024, increased 5.0% compared to the same period in fiscal 2024. Reducing cost of revenue for deconversion costs from each period, which were $355 for the current fiscal year period and $891 for the prior fiscal year period, results in a 5.1% increase period over period. This increase was primarily due to higher direct costs generally consistent with increases in the related lines of revenue, higher personnel costs, including an increase in employee headcount in the trailing twelve months, and increased internal licenses and fees from increased deployments and pricing. Cost of revenue remained consistent as a percentage of total revenue compared to the prior fiscal year period.
Current report
Selling, general, and administrative expense decreased 3.7% in the six months ended December 31, 2024, compared to the same quarter in 2024. Reducing selling, general, and administrative expense for deconversion costs from each period, which were $538 for the current fiscal year period and $569 for the prior fiscal year period and for VEDIP program expense of $16,443 in the prior fiscal year period, results in an 8.3% increase period over period. This increase was primarily due to higher personnel costs, including benefits expenses from an increase in employee headcount in the trailing twelve months. Selling, general, and administrative expense decreased 1.0% as a percentage of total revenue this fiscal year period versus the prior fiscal year period.
Current report
Net income increased 12.1% to $217,036, or $2.97 per diluted share, for the six months ended December 31, 2024 compared to $193,644, or $2.65 per diluted share, in the same quarter of fiscal 2024. Removing from total net income the effects of deconversion net income of $2,184 for the current fiscal year period and $5,744 for the prior fiscal year period, and the VEDIP program net loss of $12,497 for the prior fiscal year period, results in a 7.2% increase period over period. This increase was primarily due to net organic growth in our lines of revenue for the second quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same period last fiscal year.
Current report
Revenue in the Core segment increased 4.8% and cost of revenue increased 4.7% for the six months ended December 31, 2024, compared to the six months ended December 31, 2023. Reducing Core revenue for deconversion revenue in both periods, which totaled $1,267 for the six months ended December 31, 2024, and $3,595 for the six months ended December 31, 2023, results in a 5.5% increase period over period. This increase was primarily driven by organic growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand, partially offset by a decrease in maintenance fees and software usage revenues. Reducing Core cost of revenue for deconversion costs in both periods, which totaled $125 for the six months ended December 31, 2024 and $425 for the six months ended December 31, 2023, results in a 4.9% increase period over period. The Core cost of revenue increase was primarily due to higher direct costs generally consistent with increases in related lines of revenue. Core cost of revenue remained consistent as a percentage of Core revenue for the six months ended December 31, 2024 compared to the same period in fiscal 2024.
Current report
Revenue in the Payments segment increased 5.8% and cost of revenue increased 3.3% for the six months ended December 31, 2024, compared to the equivalent period of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both periods, which totaled $1,948 for the six months ended December 31, 2024 and $2,560 for the six months ended December 31, 2023, results in a 6.0% increase period over period. This increase was primarily due to higher card revenue from an increase in volumes, higher payment processing revenues, including PayCenter products — Zelle, RTP, and FedNow — from an increase in volumes and new client revenue, and increased remote capture and ACH revenue. The Payments cost of revenue increase was primarily due to higher direct costs generally consistent with increases in lines of revenue. Deconversion costs did not significantly affect Payments cost of revenue period over period. Payments cost of revenue as a percentage of Payments revenue decreased 1% for the six months ended December 31, 2024 compared to the same period in fiscal 2024.
Current report
Revenue in the Complementary segment increased 6.0% and cost of revenue increased 4.5% for the six months ended December 31, 2024 compared to the equivalent period of the prior fiscal year. Reducing Complementary revenue for deconversion revenue in both periods, which totaled $533 for the six months ended December 31, 2024 and $2,806 for the six months ended December 31, 2023, results in a 6.8% increase period over period. This increase was primarily driven by organic growth in hosting revenues as new and existing clients continued to migrate to our private cloud and processing volumes expanded and increased Jack Henry digital revenue (including Banno) as the number of active users increased and volumes expanded and from the ramping up of add-on products. Reducing Complementary cost of revenue for deconversion costs in both quarters, which totaled $159 for the six months ended December 31, 2024 and $367 for the six months ended December 31, 2023, results in a 4.7% increase period over period. This increase was primarily due to higher amortization of capitalized software from capital software development projects and increased personnel costs, including benefits, from an increase in employee headcount in the trailing twelve months. Complementary cost of revenue as a percentage of Complementary revenue remained consistent for the six months ended December 31, 2024, compared to the same period in fiscal 2024.
Current report
Revenue in the Corporate and Other segment decreased 2.8% for the six months ended December 31, 2024, compared to the equivalent period of the prior fiscal year. The Corporate and Other revenue decrease was primarily due to lower hardware revenue partially offset by higher software usage and subscription revenue and increased processing fee revenue. Deconversion revenue did not significantly affect Corporate and Other revenue period over period.
Current report
The cost of revenue in the six months ended December 31, 2024, increased 8.1% when compared to the prior fiscal year period. This increase was primarily due to increased direct costs higher personnel costs, including an increase in headcount in the trailing twelve months, and increased cloud consumption costs, period over period. Deconversion costs did not significantly affect Corporate and Other cost of revenue period over period.
Current report
On October 31, 2024, the Company entered into a discretionary line of credit demand note, which provides for funding of up to $50,000 and bears interest at the prime rate less 2.0%. The note does not constitute a committed line of credit. The line of credit renews annually. There was no balance outstanding at December 31, 2024.
Removed paragraphs (1)
Previous report
In July 2023, the Company conducted a voluntary separation program for certain eligible employees that included a VEDIP payment for the eligible employees who chose to participate in the program. The Company made payments associated with the VEDIP program in the approximate amount of $16,443 from July 2023 through December 2023, including immaterial payments continuing into calendar year 2024.
Reworded paragraphs (33)
Previous wording
Jack Henry & Associates, Inc. is a well-rounded financial technology company headquartered in Monett, Missouri, that employs approximately 7,170 full-time and part-time associates nationwide, and is a leading provider of technology solutions and payment processing services primarily to community and regional financial institutions. Our solutions serve approximately 7,500 clients and consist of integrated data processing systems solutions to U.S. banks ranging from de novo to multi-billion-dollar institutions with assets up to $50 billion, core data processing solutions for credit unions of all sizes, and non-core highly specialized core-agnostic products and services that enable financial institutions of every asset size and charter, and diverse corporate entities outside the financial services industry, to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. Our integrated solutions are available for on-premise installation and delivery in our private and public cloud.
Current wording
Jack Henry & Associates, Inc. is a well-rounded financial technology company headquartered in Monett, Missouri, that employs approximately 7,200 full-time and part-time associates nationwide, and is a leading provider of technology solutions and payment processing services primarily to community and regional financial institutions. Our solutions serve approximately 7,500 clients and consist of integrated data processing systems solutions to U.S. banks ranging from de novo to multi-billion-dollar institutions with assets up to $50 billion, core data processing solutions for credit unions of all sizes, and non-core highly specialized core-agnostic products and services that enable financial institutions of every asset size and charter, and diverse corporate entities outside the financial services industry, to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. Our integrated solutions are available for on-premise installation and delivery in our private and public cloud.
Previous wording
For the first quarter of fiscal 2025, total revenue increased 5.2%, or $29,614, compared to the same quarter in fiscal 2024. Total revenue less deconversion revenue of $3,697 for the current fiscal quarter and less deconversion revenues of $4,136 for the prior fiscal year first quarter results in an increase of 5.3%, quarter over quarter. This increase was primarily driven by growth in data processing and hosting, card, and Jack Henry digital revenues, including Banno.
Current wording
For the second quarter of fiscal 2025, total revenue increased 5.2%, or $28,147, compared to the same quarter in fiscal 2024. Total revenue less deconversion revenue of $69 for the current fiscal quarter and $4,882 for the prior fiscal year second quarter results in an increase of 6.1%, quarter over quarter. This increase was primarily driven by organic growth in our revenue lines including data processing and hosting, card, payment processing, which is inclusive of PayCenter, and Jack Henry digital, which is inclusive of Banno.
Previous wording
Operating expenses increased 2.5%, or $11,038, for the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024. Total operating expenses less deconversion operating expenses of $202 for the current fiscal quarter and less deconversion operating expenses of $381 and non-recurring expenses of $16,443 for the prior fiscal year first quarter results in an increase of 6.6%. This increase was primarily driven by higher personnel and direct costs, increased internal licenses and fees, and higher amortization.
Current wording
Operating expenses increased 5.7%, or $24,112, for the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. Total operating expenses less deconversion operating expenses of $690 for the current fiscal quarter and $1,079 for the prior fiscal year second quarter results in an increase of 5.8%. This increase was primarily driven by higher personnel costs and direct costs.
Previous wording
Operating income increased 14.0%, or $18,576, for the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024. Removing from total operating income the effects of deconversion operating income of $3,495 for the current fiscal quarter and deconversion operating income of $3,755 and non-recurring expenses of $16,443 for the prior fiscal year first quarter results in an increase of 1.6%, 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 $4,035, for the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. Removing from total operating income the effects of deconversion operating loss of $622 for the current fiscal quarter and deconversion operating income of $3,803 for the prior fiscal year second quarter results in an increase of 7.3%, quarter over quarter. This increase was primarily driven by organic revenue growth partially offset by increased operating expenses detailed above.
Previous wording
The provision for income taxes increased 19.1%, or $6,038, for the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024, primarily driven by the increase in income before income taxes. The effective tax rate for the current fiscal first quarter was 24.0% compared to 23.7% for the same quarter a year ago.
Current wording
The provision for income taxes increased 4.5%, or $1,278, for the second quarter of fiscal 2025, compared to the second quarter of fiscal 2024, primarily driven by the increase in income before income taxes. The effective tax rate for the current fiscal second quarter was 23.2% compared to 23.5% for the same quarter a year ago.
Previous wording
Net income increased 17.2%, or $17,512, for the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024. Removing from total net income the effects of deconversion net income of $2,656 for the current fiscal year first quarter and deconversion net income of $2,854 and the VEDIP program net loss of $12,497 for the prior fiscal year first quarter, results in a 4.7% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue for the first quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same quarter last fiscal year.
Current wording
Net income increased 12.1%, or $23,392, for the six months ended December 31, 2024, compared to the same period in fiscal 2024. Removing from total net income the effects of deconversion net income of $2,184 for the current fiscal year period and $5,744 for the prior fiscal year period and VEDIP program net loss of $12,497 for the prior fiscal year period results in a 7.2% increase period over period. This increase was primarily due to net organic growth in our lines of revenue for the six months ended December 31, 2024, partially offset by higher operating expenses and the increased provision for income taxes compared to the same period last fiscal year.
Previous wording
As we move into the second quarter of fiscal 2025, significant portions of our business continue to provide recurring revenue and our sales pipeline is also encouraging. Our clients continue to face regulatory and operational challenges which our products and services address, and in these times they have an even greater need for our solutions that directly address institutional profitability, efficiency, and security. We believe our strong balance sheet, access to extensive lines of credit, the strength of our existing product line, and an unwavering commitment to superior client service position us well to address current and future opportunities.
Current wording
As we move into the third quarter of fiscal 2025, significant portions of our business continue to provide recurring revenue and our sales pipeline is also encouraging. Our clients continue to face regulatory and operational challenges which our products and services address, and in these times they have an even greater need for our solutions that directly address institutional profitability, efficiency, and security. We believe our strong balance sheet, access to extensive lines of credit, the strength of our existing product line, and an unwavering commitment to superior client service 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 months ended September 30, 2024, follows.
Current wording
A detailed discussion of the major components of the results of operations for the three and six months ended December 31, 2024, follows.
Previous wording
Discussions compare the current fiscal year's three months ended September 30, 2024, to the prior fiscal year's three months ended September 30, 2023.
Current wording
Discussions compare the current fiscal year's three and six months ended December 31, 2024, to the prior fiscal year's three and six months ended December 31, 2023.
Previous wording
Services and support revenue increased 4.2% for the first quarter of fiscal 2025 compared to the same quarter a year ago. Reducing services and support revenue for deconversion revenue from each quarter, which was $3,697 for the current fiscal year quarter and $4,136 for the prior fiscal year quarter, results in growth of 4.4% quarter over quarter. This increase was primarily driven by double-digit growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand.
Current wording
Services and support revenue increased 3.5% for the second quarter of fiscal 2025 compared to the same quarter a year ago. Reducing services and support revenue for deconversion revenue from each quarter, which was $69 for the current fiscal year quarter and $4,882 for the prior fiscal year quarter, results in growth of 5.2% quarter over quarter. This increase was primarily driven by double-digit growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand.
Previous wording
Processing revenue increased 6.6% for the first quarter of fiscal 2025 compared to the same quarter last fiscal year. This increase was primarily driven by growth in card revenue primarily from monthly service and risk management fees, improvement in Jack Henry digital revenue (including Banno) from a higher number of active users and expanding volumes from existing products and the recent introduction of new add-on products, and higher payment processing revenues from expanding volumes and new client revenue. Deconversion revenue did not significantly affect processing revenue quarter over quarter.
Current wording
Processing revenue increased 7.3% for the second quarter of fiscal 2025 compared to the same quarter last fiscal year. This increase was primarily driven by growth in card revenue primarily from monthly service and risk management fees, higher payment processing revenues, including PayCenter products — Zelle, RTP (Real Time Payments), and FedNow — from expanding volumes and new client revenue, and improvement in Jack Henry digital revenue (including Banno) from a higher number of active users and expanding volumes and from the ramping up of add-on products. Deconversion revenue did not significantly affect processing revenue quarter over quarter.
Previous wording
Cost of revenue for the first quarter of fiscal 2025 increased 6.3% over the prior fiscal year first quarter. Reducing cost of revenue for deconversion costs from each quarter, which were $115 for the current fiscal year quarter and $270 for the prior fiscal year quarter, results in a 6.4% increase quarter over quarter. This increase was primarily due to higher direct costs generally consistent with increases in the related lines of revenue, higher personnel costs, including an increase in employee headcount in the trailing twelve months, and increased internal licenses and fees from increased deployments and pricing. Cost of revenue remained consistent as a percentage of total revenue compared to the prior fiscal year quarter.
Current wording
Cost of revenue for the second quarter of fiscal 2025 increased 3.7% over the prior fiscal year second quarter. Reducing cost of revenue for deconversion costs from each quarter, which were $240 for the current fiscal year quarter and $621 for the prior fiscal year quarter, results in a 3.8% increase quarter over quarter. This increase was primarily due to higher direct costs generally consistent with increases in the related lines of revenue and higher personnel costs, including an increase in employee headcount in the trailing twelve months. Cost of revenue decreased 1% as a percentage of total revenue compared to the prior fiscal year quarter.
Previous wording
Research and development expense increased 7.6% for the first quarter of fiscal 2025 compared to the prior fiscal year first quarter. This increase was primarily due to higher personnel costs net of capitalization including an increase in employee headcount in the trailing twelve months. Deconversion and non-recurring costs did not significantly affect research and development expenses quarter over quarter. Research and development expense for the quarter increased 1% as a percentage of total revenue compared to the prior fiscal year quarter.
Current wording
Research and development expense increased 15.8% for the second quarter of fiscal 2025 compared to the prior fiscal year second quarter. This increase was primarily due to higher personnel costs net of capitalization including an increase in employee headcount in the trailing twelve months. Deconversion and non-recurring costs did not significantly affect research and development expenses quarter over quarter. Research and development expense for the quarter increased remained consistent as a percentage of total revenue compared to the prior fiscal year quarter.
Previous wording
Selling, general, and administrative expense decreased 15.5% in the first quarter of fiscal 2025 compared to the same quarter in the prior fiscal year. Reducing selling, general, and administrative expense for deconversion costs from each quarter, which were $87 for the current fiscal year quarter and $111 for the prior fiscal year quarter and for VEDIP program expenses of $16,443 in the prior fiscal year quarter, results in a 6.9% increase quarter over quarter. This increase was primarily due to higher personnel costs, including benefits expenses from an increase in employee headcount in the trailing twelve months. Selling, general, and administrative expense decreased 3% as a percentage of total revenue this fiscal quarter versus the prior fiscal year quarter.
Current wording
Selling, general, and administrative expense increased 9.4% in the second quarter of fiscal 2025 compared to the same quarter in the prior fiscal year. Reducing selling, general, and administrative expense for deconversion costs from each quarter, which were $451 for the current fiscal year quarter and $458 for the prior fiscal year quarter results in a 9.5% increase quarter over quarter. This increase was primarily due to higher personnel costs, including benefits expenses from an increase in employee headcount in the trailing twelve months. Selling, general, and administrative expense remained consistent as a percentage of total revenue this fiscal quarter versus the prior fiscal year quarter.
Previous wording
Interest income increased due to changes in average outstanding balances during the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Interest expense decreased when compared to the prior fiscal year quarter primarily due to a decrease in the amount outstanding. There was a $140,000 outstanding balance under the revolving credit and term loan facilities at September 30, 2024, and $245,000 outstanding balance under the revolving credit and term loan facilities at September 30, 2023.
Current wording
Interest income increased due to higher interest-earning balances for the three and six months ended December 31, 2024, compared to the three and six months ended December 31, 2023. Interest expense decreased when compared to the prior fiscal year quarter primarily due to a decrease in average outstanding debt period over period. There was a $150,000 outstanding balance under the revolving credit and term loan facilities at December 31, 2024, and $255,000 outstanding balance under the revolving credit and term loan facilities at December 31, 2023.
Previous wording
The effective tax rate increased for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, with an effective tax rate of 24.0% of income before taxes, compared to 23.7% of income before taxes for the same quarter last fiscal year.
Current wording
The effective tax rates for the three months ended December 31, 2024, compared to the three months ended December 31, 2023, remained generally consistent with an effective tax rate of 23.2% of income before taxes for the current fiscal quarter and 23.5% of income before taxes for the prior year fiscal quarter. The effective tax rates for the six months ended December 31, 2024, compared to the six months ended December 31, 2023, remained consistent with effective tax rates of 23.6% of income before taxes for both periods.
Previous wording
Net income increased 17.2% to $119,191, or $1.63 per diluted share, for the first quarter of fiscal 2025 compared to $101,679, or $1.39 per diluted share, in the same quarter of fiscal 2024. Removing from total net income the effects of deconversion net income of $2,656 for the current fiscal quarter and deconversion net income of $2,854 and the VEDIP program net loss of $12,497 for the prior fiscal year quarter, results in a 4.7% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue for the first quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same quarter last fiscal year.
Current wording
Net income increased 6.4% to $97,845, or $1.34 per diluted share, for the second quarter of fiscal 2025 compared to $91,965, or $1.26 per diluted share, in the same quarter of fiscal 2024. Removing from total net income the effects of deconversion net loss of $472 for the current fiscal quarter and net income of $2,890 for the prior fiscal year quarter, results in a 10.4% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue for the second quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same quarter last fiscal year.
Previous wording
Immaterial adjustments have been made between segments to reclassify cost of revenue that was recognized for the three months ended September 30, 2023. These reclasses were made to be consistent with the current allocation of cost of revenue by segment. Cost of revenue reclassed for the three months ended September 30, 2023, from Complementary to Corporate and Other, was $1,318.
Current wording
Immaterial adjustments have been made between segments to reclassify cost of revenue that was recognized for the three and six months ended December 31, 2023. These reclasses were made to be consistent with the current allocation of cost of revenue by segment. Cost of revenue reclassed for the three and six months ended December 31, 2023, from Complementary to Corporate and Other, was $1,198 and $2,515, respectively.
Previous wording
Revenue in the Core segment increased 4.9% and cost of revenue increased 7.2% for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Reducing Core revenue for deconversion revenue in both quarters, which totaled $1,287 for the three months ended September 30, 2024, and $1,665 for the three months ended September 30, 2023, results in a 5.2% increase quarter over quarter. This increase was primarily driven by growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand. Reducing Core cost of revenue for deconversion costs in both quarters, which totaled $37 for the three months ended September 30, 2024 and $103 for the three months ended September 30, 2023, results in a 7.3% increase quarter over quarter. The Core cost of revenue increase was primarily due to higher direct costs generally consistent with increases in related lines of revenue. Core cost of revenue increased 1% as a percentage of Core revenue for the first quarter of fiscal 2025 compared to the same quarter in fiscal 2024.
Current wording
Revenue in the Core segment increased 4.6% and cost of revenue increased 2.0% for the three months ended December 31, 2024, compared to the three months ended December 31, 2023. Reducing Core revenue for deconversion revenue in both quarters, which totaled $(20) for the three months ended December 31, 2024, and $1,929 for the three months ended December 31, 2023, results in a 5.8% increase quarter over quarter. This increase was primarily driven by organic growth in data processing and hosting revenues as new and existing clients migrate to our private cloud and processing volumes expand, partially offset by a decrease in maintenance fees and software usage revenues. Reducing Core cost of revenue for deconversion costs in both quarters, which totaled $88 for the three months ended December 31, 2024 and $321 for the three months ended December 31, 2023, results in a 2.3% increase quarter over quarter. The Core cost of revenue increase was primarily due to higher direct costs generally consistent with increases in related lines of revenue. Core cost of revenue decreased 1% as a percentage of Core revenue for the second quarter of fiscal 2025 compared to the same quarter in fiscal 2024.
Previous wording
Revenue in the Payments segment increased 6.3% and cost of revenue increased 3.9% for the first quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both quarters, which totaled $1,914 for the first quarter of fiscal 2025 and $1,006 for the first quarter of fiscal 2024, results in a 5.9% increase quarter over quarter. This increase was primarily due to higher card revenue from organic growth from higher volumes, higher payment processing revenues from higher volumes and new client revenue, and increased remote capture and ACH revenue. The Payments cost of revenue increase was primarily due to higher direct costs generally consistent with increases in lines of revenue. Deconversion and non-recurring costs did not significantly affect Payments cost of revenue quarter over quarter. Payments cost of revenue as a percentage of Payments revenue decreased 1% for the first quarter of fiscal 2025 compared to the same quarter in fiscal 2024.
Current wording
Revenue in the Payments segment increased 5.4% and cost of revenue increased 2.8% for the second quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both quarters, which totaled $34 for the second quarter of fiscal 2025 and $1,555 for the second quarter of fiscal 2024, results in a 6.2% increase quarter over quarter. This increase was primarily due to higher card revenue from an increase in volumes, higher payment processing revenues, including PayCenter products — Zelle, RTP, and FedNow — from an increase in volumes and new client revenue, and increased remote capture and ACH revenue. The Payments cost of revenue increase was primarily due to higher direct costs generally consistent with increases in lines of revenue. Deconversion costs did not significantly affect Payments cost of revenue quarter over quarter. Payments cost of revenue as a percentage of Payments revenue decreased 2% for the second quarter of fiscal 2025 compared to the same quarter in fiscal 2024.
Previous wording
Revenue in the Complementary segment increased 6.4% and cost of revenue increased 8.2% for the first quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Complementary revenue for deconversion revenue in both quarters, which totaled $473 for the first quarter of fiscal 2025 and $1,451 for the first quarter of fiscal 2024, results in a 7.1% increase quarter over quarter. This increase was primarily driven by growth in hosting revenues as new and existing clients continued to migrate to our private cloud and processing volumes expanded and increased Jack Henry digital revenue as the number of active users increased and volumes expanded from existing and new add-on products. Reducing Complementary cost of revenue for deconversion costs in both quarters, which totaled $60 for the first quarter of fiscal 2025 and $119 for the first quarter of fiscal 2024, results in an 8.3% increase quarter over quarter. This increase was primarily due to higher amortization of capitalized software from capital software development projects and increased licenses and fees from increased deployments and prices in the current quarter. Complementary cost of revenue as a percentage of Complementary revenue increased 1% for the first quarter of fiscal 2025 compared to the same quarter in fiscal 2024.
Current wording
Revenue in the Complementary segment increased 5.6% and cost of revenue increased 0.9% for the second quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Complementary revenue for deconversion revenue in both quarters, which totaled $60 for the second quarter of fiscal 2025 and $1,355 for the second quarter of fiscal 2024, results in a 6.5% increase quarter over quarter. This increase was primarily driven by organic growth in hosting revenues as new and existing clients continued to migrate to our private cloud and processing volumes expanded and increased Jack Henry digital revenue (including Banno) as the number of active users increased and volumes expanded and from the ramping up of add-on products. Reducing Complementary cost of revenue for deconversion costs in both quarters, which totaled $99 for the second quarter of fiscal 2025 and $249 for the second quarter of fiscal 2024, results in a 1.1% increase quarter over quarter. Complementary cost of revenue as a percentage of Complementary revenue decreased 2% for the second quarter of fiscal 2025 compared to the same quarter in fiscal 2024.
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 decreased 10.2% for the first quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Corporate and Other revenue for deconversion revenue in both quarters, which totaled $23 for the first quarter of fiscal 2025 and $14 for the first quarter of fiscal 2024, results in a 10.3% decrease quarter over quarter. The Corporate and Other revenue decrease was primarily due to lower hardware revenue 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 4.7% for the second quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Corporate and Other revenue for deconversion revenue in both quarters, which totaled $(5) for the second quarter of fiscal 2025 and $43 for the second quarter of fiscal 2024, results in a 4.9% increase quarter over quarter. The Corporate and Other revenue increase was primarily due to higher processing and subscription revenues 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 first quarter of fiscal 2025 increased 7.4% when compared to the prior fiscal year quarter. This increase was primarily due to higher personnel costs, including an increase in headcount in the trailing twelve months, higher internal licenses and fees from increased deployments and prices, and increased cloud consumption costs, quarter over quarter. Deconversion and non-recurring costs did not significantly affect Corporate and Other cost of revenue 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 second quarter of fiscal 2025 increased 8.8% when compared to the prior fiscal year quarter. This increase was primarily due to increased direct costs, higher personnel costs, including an increase in headcount in the trailing twelve months, and increased cloud consumption costs, quarter over quarter. Deconversion costs did not significantly affect Corporate and Other cost of revenue quarter over quarter.
Previous wording
The Company's cash and cash equivalents increased to $43,212 at September 30, 2024, from $38,284 at June 30, 2024.
Current wording
The Company's cash and cash equivalents decreased to $25,653 at December 31, 2024, from $38,284 at June 30, 2024.
Previous wording
Cash provided by operating activities for the first three months of fiscal 2025 decreased 26% compared to the same period last year primarily due to the decrease in the change in receivables quarter over quarter. We collected significantly more annual maintenance dollars in the fourth quarter of fiscal 2024 than we have historically collected in the fourth quarter, leaving less to be collected in the current fiscal quarter. 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 six months of fiscal 2025 decreased 13% compared to the same period last year primarily due to the decrease in the change in receivables period over period. We collected significantly more annual maintenance dollars in the fourth quarter of fiscal 2024 than we have historically collected in the fourth quarter, leaving less to be collected in the current fiscal 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 three months of fiscal 2025 totaled $58,736 and included: $42,259 for the ongoing enhancement and development of existing and new product and service offerings; capital expenditures on facilities and equipment of $12,801; $2,676 for the purchase and development of internal use software; and the purchase of investment of $2,000. Cash uses were partially offset by proceeds from investments of $1,000. Cash used in investing activities for the first three months of fiscal 2024 totaled $50,526 and included: $41,486 for the development of software; $7,612 for capital expenditures; and $2,280 for the purchase and development of internal use software. Cash uses were partially offset by proceeds from dispositions of $852.
Current wording
Cash used in investing activities for the first six months of fiscal 2025 totaled $119,800 and included: $85,803 for the ongoing enhancement and development of existing and new product and service offerings; capital expenditures on facilities and equipment of $29,469; $3,528 for the purchase and development of internal use software; and the purchase of investment of $2,000. Cash uses were partially offset by proceeds from investments of $1,000. Cash used in investing activities for the first six months of fiscal 2024 totaled $110,959 and included: $83,408 for the development of software; $24,458 for capital expenditures; $2,971 for the purchase and development of internal use software; and $1,000 for the purchase of investment. Cash uses were partially offset by proceeds from dispositions of $878.
Previous wording
Financing activities used cash of $53,232 for the first three months of fiscal 2025 and included payments on credit facilities of $85,000, dividends paid to stockholders of $40,104, and a net cash outflow from the issuance of stock and tax withholding related to stock-based compensation of $3,128. Cash uses were partially offset by borrowings on credit facilities of $75,000. Financing activities used cash of $87,389 in the first three months of fiscal 2024 and included repayments on credit facilities of $165,000, $37,863 for the payment of dividends, and the purchase of treasury stock of $20,000. Cash uses were partially offset by borrowings on credit facilities of $135,000 and $474 net cash inflow from the issuance of stock and tax withholding related to stock-based compensation.
Current wording
Financing activities used cash of $99,374 for the first six months of fiscal 2025 and included: payments on credit facilities of $165,000; dividends paid to stockholders of $80,193; the purchase of treasury stock of $17,050; and a net cash outflow from the issuance of stock and tax withholding related to stock-based compensation of $2,131. Cash uses were partially offset by borrowings on credit facilities of $165,000. Financing activities used cash of $113,247 in the first six months of fiscal 2024 and included: repayments on credit facilities of $240,000; $75,722 for the payment of dividends; and the purchase of treasury stock of $20,000. Cash uses were partially offset by borrowings on credit facilities of $220,000 and $2,475 net cash inflow from the issuance of stock and tax withholding related to stock-based compensation.
Previous wording
The Company generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling $12,801 and $7,612 for the three months ended September 30, 2024, and September 30, 2023, respectively, were made primarily for additional equipment and the improvement of existing facilities. These additions were funded from cash generated by operations. Total consolidated capital expenditures on facilities and equipment for the Company for fiscal year 2025 are expected to be approximately $68,000 and have been or will be funded from our credit facilities and cash generated by operations.
Current wording
The Company generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling $29,469 and $24,458 for the six months ended December 31, 2024, and December 31, 2023, respectively, were made primarily for additional equipment and the improvement of existing facilities. These additions were funded from cash generated by operations. Total consolidated capital expenditures on facilities and equipment for the Company for fiscal year 2025 are expected to be approximately $68,000 and have been or will be funded from our credit facilities and cash generated by operations.
Previous wording
Contractual obligations are discussed in our Annual Report on Form 10-K for the year ended June 30, 2024. There have been no material contractual obligations added for the three months ended September 30, 2024
Current wording
Contractual obligations are discussed in our Annual Report on Form 10-K for the year ended June 30, 2024. There have been no material contractual obligations added for the six months ended December 31, 2024.
Previous wording
The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or borrowings on its existing line of credit. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At September 30, 2024, there were 31,373 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,618 additional shares. The total cost of treasury shares at September 30, 2024, was $1,860,173, and the Company repurchased no shares during the first three months of fiscal 2025. At June 30, 2024, there were 31,373 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,618 additional shares. The total cost of treasury shares at June 30, 2024, was $1,860,173 and the Company repurchased 129 shares during the first three months of fiscal 2024.
Current wording
The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or borrowings on its existing line of credit. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At December 31, 2024, there were 31,472 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,518 additional shares. The total cost of treasury shares at December 31, 2024, was $1,877,223, and the Company repurchased over 99 shares during the first six months of fiscal 2025. At June 30, 2024, there were 31,373 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,618 additional shares. The total cost of treasury shares at June 30, 2024, was $1,860,173 and the Company repurchased 129 shares during the first six months of fiscal 2024.
Previous wording
On August 31, 2022, the Company entered into a five-year senior, unsecured amended and restated credit agreement that replaced a prior credit facility that was entered into on February 10, 2020. The credit agreement allows for borrowings of up to $600,000, which may be increased to $1,000,000 by the Company at any time until maturity. The credit agreement bears interest at a variable rate equal to (a) a rate based on an adjusted SOFR term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such dayplus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit agreement. As of September 30, 2024, the Company was in compliance with all such covenants. The amended and restated credit facility terminates August 31, 2027. There was $50,000 and $60,000 outstanding under the amended and restated credit facility at September 30, 2024 and June 30, 2024, respectively.
Current wording
On August 31, 2022, the Company entered into a five-year senior, unsecured amended and restated credit agreement that replaced a prior credit facility that was entered into on February 10, 2020. The credit agreement allows for borrowings of up to $600,000, which may be increased to $1,000,000 by the Company at any time until maturity. The credit agreement bears interest at a variable rate equal to (a) a rate based on an adjusted Secured Overnight Financing Rate (“SOFR”) term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such dayplus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit agreement. As of December 31, 2024, the Company was in compliance with all such covenants. The amended and restated credit facility terminates August 31, 2027. There was $60,000 outstanding under the amended and restated credit facility at December 31, 2024 and June 30, 2024.
Previous wording
On May 16, 2023, the Company entered into a term loan credit agreement with a syndicate of financial institutions, with an original principal balance of $180,000. Borrowings under the term loan facility bear interest at a variable rate equal to (a) a rate based on an adjusted SOFR term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such dayplus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 0.75%), plus an applicable percentage in each case determined by the Company's leverage ratio. The term loan credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the term loan credit agreement. As of September 30, 2024, the Company was in compliance with all such covenants. The term loan credit agreement has a maturity date of May 16, 2025. There was 90,000 outstanding under the term loan at September 30, 2024 and June 30, 2024.
Current wording
On May 16, 2023, the Company entered into a term loan credit agreement with a syndicate of financial institutions, with an original principal balance of $180,000. Borrowings under the term loan facility bear interest at a variable rate equal to (a) a rate based on an adjusted SOFR term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such dayplus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest
Previous wording
The Company has an unsecured bank credit line which provides for funding of up to $5,000 and bears interest at the prime rate less 1%. The credit line expires on April 30, 2025. There was no balance outstanding at September 30, 2024, or June 30, 2024.
Current wording
The Company has an unsecured bank credit line, which provides for funding of up to $5,000 and bears interest at the prime rate less 1.0%. The credit line expires on April 30, 2025. There was no balance outstanding at December 31, 2024, or June 30, 2024.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
The provision for income taxes increased 12.2%, or $7,316, for the six months ended December 31, 2024, compared to the same period in fiscal 2024, primarily driven by the increase in income before income taxes. The effective tax rate for the current and prior fiscal year periods remained consistent and was 23.6% for both periods.
Current report — wording carried from elsewhere
Processing revenue increased 7.0% for the six months ended December 31, 2024 compared to the same period in fiscal 2024. This increase was primarily driven by growth in card revenue primarily from monthly service and risk management fees, improvement in Jack Henry digital revenue (including Banno) from a higher number of active users and expanding volumes and from the ramping up of add-on products, and higher payment processing revenues, including PayCenter products — Zelle, RTP, and FedNow — from expanding volumes and new client revenue. Deconversion revenue did not significantly affect processing revenue period over period.
Current report — wording carried from elsewhere
Research and development expense increased 11.6% for the six months ended December 31, 2024, compared to the same period in fiscal 2024. This increase was primarily due to higher personnel costs net of capitalization including an increase in employee headcount in the trailing twelve months. Deconversion costs did not significantly affect research and development expenses period over period. Research and development expense increased 1.0% as a percentage of total revenue compared to the prior fiscal year period.
Current report — wording carried from elsewhere
Period on such day for Dollars plus 0.75%), plus an applicable percentage in each case determined by the Company's leverage ratio. The term loan credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the term loan credit agreement. As of December 31, 2024, the Company was in compliance with all such covenants. The term loan credit agreement has a maturity date of May 16, 2025. There was $90,000 outstanding under the term loan at December 31, 2024 and June 30, 2024.