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Jack Henry & Associates’ Revenue and Income Rose in 1Q16

Gabriel Kane

Jack Henry & Associates Reported Strong Results in 1Q16

Price movement

Jack Henry & Associates (JKHY) has a market cap of $6.2 billion. Its YTD (year-to-date) price movement rose quarter-over-quarter in 2015. After the earnings report in 1Q16, Jack Henry & Associates rose by 0.60% to close at $77.59 per share as of November 4, 2015. The net revenue and income rose by 6.7% and 11.4% in 1Q16. The price movement on a weekly, monthly, and YTD basis is 0.17%, 7.8%, and 26.3%, respectively.

At times, the stock has broken the support of the 20-day and 50-day moving averages in 2015. Currently, it’s trading 3.5% above the 20-day moving average, 8.8% above the 50-day moving average, and 14.6% above the 200-day moving average.

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The PowerShares DWA Technology Momentum Portfolio (PTF) invests 1.7% of its holdings in Jack Henry & Associates. PTF tracks an index of US tech firms selected and weighted by price momentum. It had a YTD price movement of 8.1% as of November 3, 2015.

Jack Henry & Associates’ competitors and their market caps are:

  • Fiserv (FISV) – $22.3 billion

  • Fidelity National Information Services (FIS) – $19.1 billion

  • Black Knight Financial Services (BKFS) – $5.5 billion

  • Corelogic (CLGX) – $3.4 billion

Performance in 1Q16

Jack Henry & Associates reported 1Q16 net revenue of $321.6 million—a rise of 6.7% compared to its net revenue of $301.5 million in 1Q15. The revenue from support and service rose by 6.8%. The revenue from hardware fell by 3.8% in 1Q16—compared to the revenue in 1Q15. The revenue from license rose to $1,604 million—compared to the revenue of $503 million in 1Q15.

The cost of sales as a percentage of sales fell by 1.7% in 1Q16—compared to the cost of sales as a percentage of sales in 1Q15. The company’s 1Q16 net income and EPS (earnings per share) rose to $51.4 million and $0.64 per share—a rise of 11.4% and 14.3% compared to the net income and EPS of $46.1 billion and $0.56 per share in 1Q15. The cash and cash equivalents fell by 43.0% in 1Q16 on a quarterly basis.

In 1Q16, some of Jack Henry & Associates’ key activities were:

  • The company acquired Bayside Business Solutions. It provides portfolio management systems for commercial lenders. It’s an industry leader in providing factoring software.

  • Its ProfitStar division introduced Call Report Pro CU—a solution for NCUA (National Credit Union Administration) regulatory reporting.

  • Fox Chase Bank has selected the SilverLake System to provide an enterprise-wide solution.

  • It declared a regular quarterly cash dividend of $0.25 per share on its common stock.

  • Its Symitar division announced the availability of SymXchange—a services-based programming interface that enables credit unions and third-party vendor partners to access and personalize data and business rules of the Episys core processing platform.

  • Pacific National Bank (PNB) has started to use the SilverLake System to improve efficiencies in digital and branch banking.

  • It introduced the Banno Platform—an integrated digital platform developed to meet customer expectations for digital experiences and support.

About Jack Henry & Associates

Jack Henry & Associates provides products and services that help customers to process financial transactions and automate business processes. It has three brands—Jack Henry Banking, Symitar, and ProfitStars. It supports financial institutions of all sizes, diverse business outside the financial industry, and other technology providers.

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