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Jack Henry (JKHY) Up 10.3% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Jack Henry (JKHY - Free Report) . Shares have added about 10.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jack Henry due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Jack Henry Q1 Earnings Beat Estimates, Revenues Up Y/Y
Jack Henry & Associates reported first-quarter fiscal 2024 earnings of $1.39 per share, which beat the Zacks Consensus Estimate by 7.7%. The bottom line decreased 4.8% from the year-ago fiscal quarter’s reported figure.
Revenues improved 8% from the year-ago fiscal quarter’s reading to $571.37 million. The figure beat the Zacks Consensus Estimate of $564.37 million.
JKHY’s non-GAAP revenues were $565.3 million, up 7.7% from the year-ago fiscal quarter’s level.
Top-line growth was driven by growing services and support revenues. Solid growth in processing revenues also contributed well.
Strong momentum across the Core, Payments, Complementary and Corporate segments drove the results further.
Top Line in Detail
Services & Support: Jack Henry generated revenues of $342.2 million from the category (59.9% of revenues). The figure grew 6.9% from the year-ago fiscal quarter’s level, owing to a 10.4% rise in data processing and hosting fees. Accelerating hardware and software usage/subscription revenues, as well as rising deconversion fees, were positives.
Processing: The category yielded $229.2 million in revenues (40.1% of revenues), up 9.6% from the year-ago fiscal quarter’s actuals. This can be attributed to a 5.6% increase in Jack Henry's card revenues. Growing payment-processing revenues contributed well.
Segments in Detail
Core: Revenues totaled $186.44 million (32.6% of total revenues), rising 7.6% from the year-ago fiscal quarter’s figure. The figure lagged the Zacks Consensus Estimate of $188 million.
Payments: Revenues summed up to $199.36 million (35% of total revenues), increasing 6.9% from the year-ago fiscal quarter’s level. The figure lagged the consensus mark of $201 million.
Complementary: Revenues came in at $161.37 million (28.2% of total revenues), up 8.7% from the year-earlier fiscal quarter’s number. The figure came ahead of the consensus mark of $156 million.
Corporate & Other: Revenues grossed $24.2 million (4.2% of the total revenues) and surged 15.6% from the prior-year fiscal quarter’s level. The figure came ahead of the consensus mark of $18.5 million.
Operating Details
In the first quarter of fiscal 2024, total operating expenses were $438.7 million, reflecting a 12.9% increase from the prior-year fiscal quarter. This can primarily be attributed to rising direct costs and personnel costs, including benefits expenses related to the Payrailz acquisition.
As a percentage of revenues, the figure expanded 340 basis points (bps) from the year-ago fiscal quarter’s number to 76.8%.
The operating margin was 23.2%, contracting 340 bps from the year-ago fiscal quarter’s number.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalents totaled $31.5 million compared with $12.2 million as of Jun 30, 2023.
Trade receivables were $288.7 million in the reported quarter, down from $361.2 million in the previous fiscal quarter.
The current and long-term debt was $245 million at the end of first-quarter fiscal 2024 compared with $275 million at the end of the fourth quarter of fiscal 2023.
Guidance
For fiscal 2024, Jack Henry raised its guidance for GAAP revenues from $2.208-$2.229 billion to $2.211-$2.232 billion.
It also revised guidance for non-GAAP revenues from $2.190-$2.210 billion to $2.193-2.214 billion.
Management raised the guidance for earnings from $4.92-$4.99 to $4.98-$5.04 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Jack Henry has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Jack Henry has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Jack Henry (JKHY) Up 10.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Jack Henry (JKHY - Free Report) . Shares have added about 10.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jack Henry due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Jack Henry Q1 Earnings Beat Estimates, Revenues Up Y/Y
Jack Henry & Associates reported first-quarter fiscal 2024 earnings of $1.39 per share, which beat the Zacks Consensus Estimate by 7.7%. The bottom line decreased 4.8% from the year-ago fiscal quarter’s reported figure.
Revenues improved 8% from the year-ago fiscal quarter’s reading to $571.37 million. The figure beat the Zacks Consensus Estimate of $564.37 million.
JKHY’s non-GAAP revenues were $565.3 million, up 7.7% from the year-ago fiscal quarter’s level.
Top-line growth was driven by growing services and support revenues. Solid growth in processing revenues also contributed well.
Strong momentum across the Core, Payments, Complementary and Corporate segments drove the results further.
Top Line in Detail
Services & Support: Jack Henry generated revenues of $342.2 million from the category (59.9% of revenues). The figure grew 6.9% from the year-ago fiscal quarter’s level, owing to a 10.4% rise in data processing and hosting fees. Accelerating hardware and software usage/subscription revenues, as well as rising deconversion fees, were positives.
Processing: The category yielded $229.2 million in revenues (40.1% of revenues), up 9.6% from the year-ago fiscal quarter’s actuals. This can be attributed to a 5.6% increase in Jack Henry's card revenues. Growing payment-processing revenues contributed well.
Segments in Detail
Core: Revenues totaled $186.44 million (32.6% of total revenues), rising 7.6% from the year-ago fiscal quarter’s figure. The figure lagged the Zacks Consensus Estimate of $188 million.
Payments: Revenues summed up to $199.36 million (35% of total revenues), increasing 6.9% from the year-ago fiscal quarter’s level. The figure lagged the consensus mark of $201 million.
Complementary: Revenues came in at $161.37 million (28.2% of total revenues), up 8.7% from the year-earlier fiscal quarter’s number. The figure came ahead of the consensus mark of $156 million.
Corporate & Other: Revenues grossed $24.2 million (4.2% of the total revenues) and surged 15.6% from the prior-year fiscal quarter’s level. The figure came ahead of the consensus mark of $18.5 million.
Operating Details
In the first quarter of fiscal 2024, total operating expenses were $438.7 million, reflecting a 12.9% increase from the prior-year fiscal quarter. This can primarily be attributed to rising direct costs and personnel costs, including benefits expenses related to the Payrailz acquisition.
As a percentage of revenues, the figure expanded 340 basis points (bps) from the year-ago fiscal quarter’s number to 76.8%.
The operating margin was 23.2%, contracting 340 bps from the year-ago fiscal quarter’s number.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalents totaled $31.5 million compared with $12.2 million as of Jun 30, 2023.
Trade receivables were $288.7 million in the reported quarter, down from $361.2 million in the previous fiscal quarter.
The current and long-term debt was $245 million at the end of first-quarter fiscal 2024 compared with $275 million at the end of the fourth quarter of fiscal 2023.
Guidance
For fiscal 2024, Jack Henry raised its guidance for GAAP revenues from $2.208-$2.229 billion to $2.211-$2.232 billion.
It also revised guidance for non-GAAP revenues from $2.190-$2.210 billion to $2.193-2.214 billion.
Management raised the guidance for earnings from $4.92-$4.99 to $4.98-$5.04 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Jack Henry has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Jack Henry has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.