Jack Henry & Associates (JKHY) Q3 2025 earnings summary

Executive summary

• Q3 FY25 GAAP revenue rose 8.6% year-over-year, driven by strong recurring, cloud, and processing revenue, with non-GAAP revenue up 7% and GAAP EPS up 28% to $1.52 per share.

• Operating income for Q3 FY25 increased 23.8% year-over-year, reflecting disciplined cost management and robust organic growth.

• Delays in non-recurring projects and hardware purchases, along with softening in debit card transactions, led to a downward revision in revenue guidance, but margin and EPS guidance were raised.

• The sales pipeline remains robust, with significant wins among larger financial institutions and continued strong demand for digital, fraud, and payment solutions.

• For the nine months ended March 31, 2025, revenue grew 6.3% and net income increased 16.9% year-over-year.

Financial highlights

• Q3 FY25 GAAP revenue: $585.1M (+8.6% YoY); Q3 net income: $111.1M (+27.6% YoY); Q3 GAAP EPS: $1.52; Q3 operating margin: 23.7%.

• Non-GAAP operating margin expanded 207 basis points to 23%; non-GAAP adjusted operating margin: 22.9%.

• Deconversion revenue was $9.6M in Q3, with full-year guidance raised to $22–$28M.

• Cash and cash equivalents at March 31, 2025: $39.9M; outstanding debt: $170M.

• Operating cash flow for Q3 was $108M; trailing 12-month free cash flow at $303M (71% conversion); nine-month free cash flow: $139.1M.

Outlook and guidance

• FY25 GAAP revenue guidance: $2.353B–$2.370B; non-GAAP adjusted revenue: $2.331B–$2.342B.

• FY25 GAAP EPS guidance: $6.00–$6.09 (15–17% growth); non-GAAP EPS: $5.83–$5.87.

• Non-GAAP margin expansion guidance raised to 60–70 basis points; free cash flow conversion outlook unchanged at 65–75%.

• Guidance assumes no acquisitions or dispositions in FY25.

• Return on invested capital expected at 21–22%.