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Jack Henry (JKHY) Q1 Earnings Beat, Revenues Increase Y/Y

Jack Henry's (JKHY) first-quarter fiscal 2022 results reflect strength across Core, Complementary, Corporate and Payments segments.

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This story originally appeared on Zacks

Jack Henry & Associates, Inc. JKHY reported first-quarter fiscal 2022 earnings of $1.38 per share, which surpassed the Zacks Consensus Estimate by 2.9%. Further, the bottom line increased 16% year over year.

Revenues improved 8% year over year to $488.1 million. However, the top line missed the Zacks Consensus Estimate of $490 million.

The company’s non-GAAP revenues were $484.2 million, up 9% from the year-ago 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.

- Zacks

Top Line in Detail

Services & Support: The company generated revenues of $297.5 million from the category (61% of revenues). Notably, the figure rose 6% from the year-ago quarter, owing to 12% 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 $190.6 million (39% of revenues) in the reported quarter, up 12% year over year. This can be attributed to 9% growth in card-processing transaction volumes.

Segments in Detail

Core: The company generated revenues of $165.3 million from the segment (34% of total revenues), increasing 8% year over year.

Payments: The segment yielded revenues of $169.6 million (35% of total revenues), increasing 8% from the year-ago quarter.

Complementary: The segment generated $141.5 million in revenues (29% of total revenues), increasing 9% year over year.

Corporate & Other: The company generated revenues of $11.7 million from the segment (2% of total revenues), up 1% from the prior-year quarter.

Operating Details

In first-quarter fiscal 2022, total operating expenses were $354.5 million, reflecting a year-over-year increase of 6%. This can primarily be attributed to higher personnel costs, rising expenses related to the company’s card-processing platform and growing travel costs.

As a percentage of revenues, the figure contracted 130 basis points (bps) year over year to 72.6%.

Notably, the operating margin was 27% in the reported quarter, which expanded 100 bps on a year-over-year basis.

Balance Sheet

As of Sep 30, 2021, cash and cash equivalents totaled $44.3 million, which decreased from $51 million as of Jun 30, 2021.

Trade receivables were $253.2 million in the reported quarter, down from $306.6 million in the previous quarter.

The current and long-term debt stood at $65.2 million at the end of first-quarter fiscal 2022 compared with $100.2 million at the end of fourth-quarter fiscal 2021.

Guidance

For fiscal 2022, the company raised its guidance for GAAP revenues from $1.902-$1.911 billion to $1.910-$1.919 billion, indicating year-over-year growth of 8.6-9.1%. Notably, the Zacks Consensus Estimate for revenues is pegged at $1.90 billion.

The company’s expectation for non-GAAP revenues has been unchanged at $1.866-$1.875 billion, suggesting growth of 7.5-8% from that reported in 2021.

It has also raised the guidance for earnings from $4.53-$4.60 to $4.64-$4.73 per share, indicating year-over-year growth of 12.8-14.8%. The Zacks Consensus Estimate for the same is pegged at $4.59 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 Advanced Micro Devices AMD, ASE Technology ASX and Mimecast Ltd. MIME, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Advanced Micro Devices, ASE and Mimecast are currently projected at 46.2%, 35% and 26.9%, respectively.



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