Q2 2025 Jack Henry & Associates Inc Earnings Call Transcript
Key Points
- Jack Henry & Associates Inc (JKHY) exceeded their second-quarter outlook with a non-GAAP revenue growth of 6.1%, slightly ahead of the anticipated 6%.
- The company set a sales record in Q2 for the second consecutive year, with 11 competitive core wins, including significant wins from financial institutions over $1 billion in assets.
- Jack Henry & Associates Inc (JKHY) achieved a high core retention rate of over 99%, excluding mergers and acquisitions, reflecting strong client confidence.
- The company received prestigious national workplace awards, including Forbes' Most Trusted Companies in America and Newsweek's Greatest Workplaces for Diversity.
- The Banno digital platform saw significant growth, with a 20% increase in registered users over the past 12 months, reaching 13.2 million users.
- Quarterly deconversion revenue was down $5 million compared to the same period last year, reflecting minimal consolidation of clients.
- Hardware revenue decreased by $2 million for the quarter and $7 million year to date, creating headwinds for services and support revenue.
- R&D expenses increased by 16% for the quarter, primarily due to higher personnel costs.
- The company faces potential price compression during client renewals, which could impact revenue if not offset by additional product sales.
- There is a potential for greater impact from industry consolidation in fiscal 2026, which could affect future revenue streams.
Good morning, and welcome to the Jack Henry's second-quarter 2025 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Vance Sherard, Vice President, Investor Relations. Please go ahead.
Thank you, Michael. Good morning, and thank you for joining the Jack Henry second-quarter fiscal 2025 earnings call. Today, I am joined by President and CEO, Greg Adelson; and CFO and Treasurer, Mimi Carsley. Following my opening remarks, Greg will share his insights on the first half of our fiscal year and provide observations on our financial results, operational metrics, and outlook. Mimi will then discuss the financial results in yesterday's press release which is available in the Investor Relations section of the Jack Henry website. Afterwards, we will open the lines for a Q&A session.
Please note that this call includes forward-looking statements which involve risks and
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