Jack Henry & Associates JKHY 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.

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JKHY’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 4.25%.

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.

Jack Henry & Associates’ modest second-quarter performance and unchanged fiscal 2025 guidance from the previous quarter are unlikely to significantly boost JKHY’s stock price. Shares of JKHY have risen 6.6%, underperforming the Zacks Computers - IT Services industry’s return of 9.5%.

JKHY’s Q2 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%.

JKHY’s Balance Sheet Remains Strong

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.

JKHY 2025 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.

The Zacks Consensus Estimate for revenues is pegged at $2.37 billion, suggesting a year-over-year rise of 7.05%.

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.

The Zacks Consensus Estimate for earnings is pegged at $5.81 per share, indicating a year-over-year increase of 11.1%.

Zacks Rank and Other Stocks to Consider

Currently, JKHY carries a Zacks Rank #2 (Buy).

Bill Holdings BILL, Celestica CLS and CrowdStrike CRWD are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. BILL, CLS and CRWD sport Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus mark for BILL’s 2025 earnings has been revised upward by a penny to $1.77 per share over the past 60 days, indicating a 13% year-over-year increase. BILL shares have gained 26.2% in the past year.

The consensus mark for CLS’ 2025 earnings has been revised upward by 33 cents to $4.75 per share over the past seven days, indicating a 22.4% year-over-year increase. CLS shares have risen 257.3% in the past year.

The consensus mark for CRWD’s 2025 earnings has been revised upward by a penny to $3.74 per share over the past 30 days, indicating a 21% year-over-year increase. CRWD shares have gained 34.6% in the past year.

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