It has been about a month since the last earnings report for Jack Henry (JKHY). Shares have added about 2.8% 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 the most recent earnings report in order to get a better handle on the important drivers.

Jack Henry Q2 Earnings Top Estimates, Revenues Miss

Jack Henry & Associates reported second-quarter fiscal 2025 GAAP earnings of $1.34 per share, beating the Zacks Consensus Estimate by 2.3%. The figure increased 6.3% year over year.

Jack Henry & Associates’ revenues of $573.85 million missed the Zacks Consensus Estimate by 0.4%. The figure increased 5.2% year over year.

After adjusting for deconversion revenues of $69,000, non-GAAP revenues were $573.78 million, up 6.1% year over year. Adjusted earnings were $1.35 per share, up 10.4% year over year.

JKHY’s Q2 Fiscal 2025 Details

Jack Henry & Associates’ top-line growth was driven by modest growth across its Core, Payments, Complementary and Corporate & Other segments. Revenues from Services and Support (56.3% of total revenues) were $323.03 million, up 3.5% year over year. The figure missed the consensus mark of $329 million.

Second-quarter fiscal 2025 revenues from Processing (43.7% of total revenues) were $250.8 million, up 7.3% year over year. The figure marginally surpassed the consensus mark of $250.2 million. Revenues from Core segments (30.2% of total revenues) in the second quarter of fiscal 2025 were $173.2 million, up 4.6% year over year.

Revenues from Payments (37.4% of total revenues) were $214.8 million, which rose 5.4% year over year. Revenues from Complementary (28% of total revenues) were $160.9 million, up 5.6% year over year.

Revenues from Corporate & Other (4.3% of total revenues) were $24.9 million, up 4.7% year over year. JKHY’s fiscal second-quarter adjusted EBITDA was $175.4 million, up 6.3% year over year. The adjusted EBITDA margin expanded 40 basis points (bps) on a year-over-year basis to 30.6%.

Adjusted operating income increased 7.3% year over year to $123 million. Adjusted operating margin contracted 40 bps year over year to 21.4%.

Balance Sheet

As of Dec. 31, 2024, JKHY’s cash and cash equivalents were $25.6 million compared with $43 million as of Sept. 30.

Current and long-term debt was $150 million as of Dec. 30, higher than $140 million as of Sept. 30.

Net cash from operating activities was $206.5 million, while free cash flow was $87.7 million in the six-month ended Dec. 31.

Guidance

For fiscal 2025, Jack Henry & Associates has kept its GAAP revenue expectations unchanged in the $2.369-$2.391 billion range compared to the guidance released in the previous quarter. JKHY still expects non-GAAP revenues in the band of $2.353-$2.375 billion.

GAAP operating margin is still anticipated between 23% and 23.2%. Adjusted operating margin is expected between 22.7% and 22.8%.

Management expects GAAP earnings per share in the range of $5.78-$5.87.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Jack Henry has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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 #2 (Buy). We expect an above average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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