Jack Henry & Associates (JKHY) Wolfe Research FinTech Forum summary

Market environment and customer demand

• Financial institutions prioritize deposit gathering, lending, efficiency, and fraud prevention regardless of economic cycles.

• IT spending remains resilient, with banks and credit unions maintaining 5-10% annual growth in technology investments.

• Digital transformation continues, with significant migration from legacy products to modern digital solutions like Banno.

• Demand for digital, payments, and fraud solutions remains high, with faster payments adoption accelerating due to FedNow and RTP.

• Cloud adoption is strong, with 75% of clients now hosted and a steady migration from on-premise to private cloud, providing revenue uplift and margin benefits.

Revenue growth, guidance, and financial outlook

• Revenue acceleration is expected in the second half of the year, driven by strong sales pipeline and implementation visibility.

• Revenue streams are diversified, with about 25% tied to consumer sentiment, but overall business is insulated from economic turbulence.

• Non-GAAP revenue growth is targeted at 7-8% annually, with ongoing operating margin expansion and high retention rates.

• Free cash flow is recovering after tax-related headwinds, with a goal to return to 90-100% conversion.

• Return on invested capital typically exceeds 20%, supporting continued investment and capital return.

Competitive landscape and innovation

• Market share is increasing due to transparency, innovation, and high service levels, despite aggressive competitor pricing.

• Product roadmaps are published every six months, ensuring clients are informed about innovation progress.

• Cloud modernization is a multi-year journey, with a public cloud core for deposits expected in early 2026 and lending to follow.

• The Move partnership targets small and medium businesses, enabling rapid payments and streamlined reconciliation through digital channels.

• Ongoing innovation includes new products like Financial Crimes Defender and Enterprise Account Origination, supporting long-term differentiation.