Jack Henry & Associates (JKHY) Q2 2026 earnings summary

Executive summary

• Achieved record quarterly results with GAAP revenue up 7.9% year-over-year to $619.3 million and non-GAAP revenue up 6.7%, driven by organic growth in digital, card, and payments products.

• Net income rose 27.4% to $124.7 million, with GAAP EPS up 28.6% to $1.72 for the quarter and $3.70 year-to-date.

• Operating income increased 29.4% year-over-year, reflecting strong sales performance, disciplined cost control, and margin expansion.

• Strong core segment wins, including 22 competitive deals, and robust demand for cloud-native and innovative solutions.

• Completed the acquisition of Victor Technologies, expanding Payments-as-a-Service and embedded payments capabilities.

Financial highlights

• Quarterly revenue reached $619.3 million, up from $573.8 million a year ago; six-month revenue was $1.26 billion, up 7.6% year-over-year.

• Non-GAAP operating margin improved to 25.1% for the quarter, up from 21.6% a year ago; GAAP operating margin was 25.7%.

• Free cash flow for the six months ended December 31, 2025, was $172 million, up from $88 million a year earlier.

• Return on average shareholders' equity was 24.3%, up from 21.9% a year ago.

• Cloud revenue grew 8% and now represents 33% of total revenue; recurring revenue exceeded 92%.

Outlook and guidance

• Fiscal 2026 GAAP revenue guidance: $2,508–$2,525 million; non-GAAP adjusted revenue: $2,474–$2,491 million.

• GAAP EPS guidance: $6.61–$6.72; non-GAAP margin expansion guidance raised to 50–75 bps, with some margin contraction expected in H2 due to normalized expenses.

• Management expects continued industry-leading revenue growth and margin expansion, supported by strong technology spending and a healthy sales pipeline.

• Free cash flow conversion outlook tightened to 90%–100%, with bias to the higher end.

• Revenue growth rates expected to slow in the second half of fiscal 2026 due to tougher comparables.