Jack Henry (JKHY) Q4 Earnings & Revenues Surpass Estimates

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Jack Henry & Associates, Inc. (JKHY Quick QuoteJKHY ) reported fourth-quarter fiscal 2021 earnings of $1.04 per share, which surpassed the Zacks Consensus Estimate by 11.8%. Further, the bottom line increased 9.5% sequentially and 30% year over year.

Revenues improved 10% year over year and 3.8% sequentially to $450.3 million. Further, the top line beat the Zacks Consensus Estimate of $441.4 million.

The company’s non-GAAP revenues were $442.05 million, up 10% from the year-ago quarter and 2.9% from the prior quarter.

Top-line growth was driven by strength across the Core, Payments, Complementary and Corporate segments in the reported quarter. Additionally, accelerating processing, and services and support revenues contributed to the results.

Jack Henry & Associates, Inc. Price, Consensus and EPS Surprise

 

Jack Henry & Associates, Inc. Price, Consensus and EPS Surprise

Jack Henry & Associates, Inc. price-consensus-eps-surprise-chart | Jack Henry & Associates, Inc. Quote

Top Line in Detail

Services & Support: The company generated revenues of $261.7 million from the category (58% of revenues). Notably, the figure rose 6% from the year-ago quarter, owing to 9.1% growth in data processing and hosting fees in the reported quarter. Also, a hike in software usage fees was a tailwind.

Processing: The category yielded revenues of $188.6 million (42% of revenues) in the reported quarter, up 15% year over year. This can be attributed to 22.3% growth in card processing transaction volumes. Also, increasing digital and remittance revenues contributed well.

Segments in Detail

Core: The company generated revenues of $140.8 million from the segment (31.3% of total revenues), increasing 4% year over year.

Payments: The segment yielded revenues of $169.6 million (37.6% of total revenues), increasing 16% from the year-ago quarte! r.

Complementary: The segment generated $128.7 million in revenues (28.6% of total revenues), increasing 7% year over year.

Corporate & Other: The company generated revenues of $11.2 million from the segment (2.5% of total revenues), up 17% from the prior-year quarter.

Operating Details

In fourth-quarter fiscal 2021, total operating expenses were $353.9 million, reflecting a year-over-year increase of 6%. This can primarily be attributed to higher personnel costs and rising expenses related to the company’s card processing platform.

As a percentage of revenues, the figure contracted 270 basis points (bps) year over year to 78.6%.

Notably, the operating margin was 21% in the reported quarter, which expanded 200 bps on a year-over-year basis.

Balance Sheet

As of Jun 30, 2021, cash and cash equivalents totaled $51 million, which decreased from $70.1 million as of Mar 31, 2021.

Trade receivables were $306.6 million in the reported quarter, down from $207.7 million in the previous quarter.

Further, the current and long-term debt stood at $100.2 million at the end of the fiscal fourth quarter compared with $200.2 million at the end of third-quarter fiscal 2021.

Guidance

For fiscal 2022, the company expects GAAP revenues between $1.902 billion and $1.911 billion, indicating year-over-year growth of 8.2-8.7%. Notably, the Zacks Consensus Estimate for revenues is pegged at $1.87 billion.

The company’s expectation regarding non-GAAP revenues is pegged at $1.866-$1.875 billion, suggesting growth of 7.5-8% from that reported in 2021.

It expects earnings of $4.53-$4.60, indicating year-over-year growth of 10-11.8%. The Zacks Consensus Estimate for the same is pegged at $4.55 per share.

Zacks Rank & Stocks to Consider

Jack Henry currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Digital Turbine (APPS Quick QuoteAPPS ) , Advanced Micro Devices (AMD Quick Qu! oteAMD ) ! and ASML Holding N.V. (ASML Quick QuoteASML ) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Digital Turbine, Advanced Micro Devices and ASML Holding are currently projected at 50%, 44.6% and 33.5%, respectively.

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