Jack Henry & Associates, Inc. (JKHY Quick QuoteJKHY - Free Report) reported fourth-quarter fiscal 2022 earnings of $1.10 per share, which surpassed the Zacks Consensus Estimate by 10%. Further, the bottom line increased 6% year over year.

Revenues improved 7% year over year to $482.7 million, which surpassed the Zacks Consensus Estimate of $480.8 million.

The company’s non-GAAP revenues were $477.4 million, up 8% from the year-ago quarter.

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

Top Line in Detail

Services & Support: The company generated revenues of $279.7 million from the category (58% of revenues). Notably, the figure rose 7% from the year-ago quarter, owing to growth in cloud processing revenues.

However, declining deconversion fees were negatives.

Processing: The category yielded revenues of $202.9 million (42% of revenues) in the reported quarter, up 8% year over year. This can be attributed to 31.3% growth in Jack Henry's digital revenues and growing card-processing fee revenues.

Segments in Detail

Core: The company generated revenues of $151.5 million from the segment (31.4% of the total revenues), increasing 8% year over year.

Payments: The segment yielded revenues of $177.3 million (36.7% of the total revenues), increasing 5% from the year-ago quarter.

Complementary: The segment generated $140.3 million in revenues (29.1% of the total revenues), increasing 9% year over year.

Corporate & Other: The company generated revenues of $13.6 million from the segment (2.8% of the total revenues), up 22% from the prior-year quarter.

Operating Details

In fourth-quarter fiscal 2022, total operating expenses were $378.9 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 10 basis points (bps) year over year to 78.5%.

Notably, the operating margin was 22% in the reported quarter, which expanded 100 bps on a year-over-year basis.

Balance Sheet

As of Jun 30, 2022, cash and cash equivalents totaled $48.8 million, which increased from $39.8 million as of Mar 31, 2022.

Trade receivables were $348.1 million in the reported quarter, up from $222.7 million in the previous quarter.

The current and long-term debt stood at $115.1 million at the end of the fiscal fourth quarter compared with $225.1 million at the end of the fiscal third quarter.

Guidance

For fiscal 2023, the company expects GAAP revenues of $2.080-$2.087 billion. Notably, the Zacks Consensus Estimate for revenues is pegged at $2.08 billion.

The company anticipates non-GAAP revenues of $2.045-$2.052 billion.

It expects earnings of $5.05-$5.09 per share. The Zacks Consensus Estimate for the same is pegged at $5.16 per share.

Zacks Rank & Stocks to Consider

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

Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Arista Networks (ANET Quick QuoteANET - Free Report) , Keysight Technologies (KEYS Quick QuoteKEYS - Free Report) and ASE Technology (ASX Quick QuoteASX - Free Report) . While Arista Networks sports a Zacks Rank #1 (Strong Buy), Keysight Technologies and ASE Technology carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks has lost 9.6% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 18.9%.

Keysight Technologies has lost 17.4% in the year-to-date period. KEYS’ long-term earnings growth rate is currently projected at 9.1%.

ASE technology has lost 19.2% in the year-to-date period. The long-term earnings growth rate for ASX is currently projected at 23.1%.