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Jack Henry (JKHY) Q3 Earnings Top Estimates, Revenues Rise Y/Y

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Jack Henry & Associates, Inc. (JKHY - Free Report) reported third-quarter fiscal 2022 earnings of $1.16 per share, which surpassed the Zacks Consensus Estimate by 9.4%. Further, the bottom line increased 22.1% year over year.

Revenues improved 10% year over year to $478.3 million, in line with the Zacks Consensus Estimate.

The company’s non-GAAP revenues were $460.8 million, up 7% from the year-ago quarter.

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

Top Line in Detail

Services & Support: The company generated revenues of $282.9 million from the category (59% of revenues). Notably, the figure rose 11% from the year-ago quarter, owing to growth in data processing and hosting fees, and implementation revenues. Also, accelerating deconversion fee revenues were tailwinds.

Processing: The category yielded revenues of $195.3 million (41% of revenues) in the reported quarter, up 9% year over year. This can be attributed to 6% growth in card-processing fee revenues.

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

 

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

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

Segments in Detail

Core: The company generated revenues of $150.8 million from the segment (31.5% of total revenues), increasing 12% year over year.

Payments: The segment yielded revenues of $177.5 million (37.1% of total revenues), increasing 10% from the year-ago quarter.

Complementary: The segment generated $137.7 million in revenues (28.8% of total revenues), increasing 10% year over year.

Corporate & Other: The company generated revenues of $12.2 million from the segment (2.6% of total revenues), down 1% from the prior-year quarter.

Operating Details

In third-quarter fiscal 2022, total operating expenses were $366.7 million, reflecting a year-over-year increase of 7%. This can primarily be attributed to higher personnel and travel costs, and rising expenses related to the company’s card-processing platform.

As a percentage of revenues, the figure contracted 230 basis points (bps) year over year to 76.6%.

Notably, the operating margin was 22% in the reported quarter, which expanded 200 bps on a year-over-year basis.

Balance Sheet

As of Dec 31, 2021, cash and cash equivalents totaled $39.8 million, which increased from $29.1 million as of Dec 31, 2021.

Trade receivables were $222.7 million in the reported quarter, down from $236.1 million in the previous quarter.

The current and long-term debt stood at $225.1 million at the end of the fiscal third quarter compared with $240.1 million at the end of the fiscal second quarter.

Guidance

For fiscal 2022, the company expects GAAP revenues of $1.939-$1.942 billion. Notably, the Zacks Consensus Estimate for revenues is pegged at $1.94 billion.

The company anticipates non-GAAP revenues of $1.889-$1.892 billion.

It raised the guidance for earnings from $4.75-$4.82 per share to $4.80-$4.85 per share. The Zacks Consensus Estimate for the same is pegged at $4.80 per share.

Zacks Rank & Stocks to Consider

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

Investors interested in the broader technology sector can consider better-ranked stocks like Jabil (JBL - Free Report) , Analog Devices (ADI - Free Report) , and Broadcom (AVGO - Free Report) . While Jabil currently sports a Zacks Rank #1 (Strong Buy), Analog Devices and Broadcom carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Jabil has gained 12.6% over a year. The long-term earnings growth rate for JBL is currently projected at 12%.

Analog Devices has gained 3.5% over a year. The long-term earnings growth rate for ADI is currently projected at 12.3%.

Broadcom has gained 29.5% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.5%.