JACK HENRY & ASSOCIATES INC - Quarter Report: 2023 December (Form 10-Q)

December 31,
2023June 30,
2023ASSETS CURRENT ASSETS: Cash and cash equivalents$ $ Receivables, net Income tax receivable Prepaid expenses and other Deferred costs Total current assets PROPERTY AND EQUIPMENT, net OTHER ASSETS: Non-current deferred costs Computer software, net of amortization Other non-current assets Customer relationships, net of amortization Other intangible assets, net of amortization Goodwill Total other assets Total assets$ $ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable$ $ Accrued expenses Accrued income taxes Three Months EndedSix Months Ended December 31,December 31, 2023202220232022REVENUE$ $ $ $ EXPENSES Cost of Revenue Research and Development Selling, General, and Administrative Three Months EndedSix Months Ended December 31,December 31, 2023202220232022PREFERRED SHARES: COMMON SHARES: Shares, beginning of period Shares issued for equity-based payment arrangements Shares issued for Employee Stock Purchase Plan Shares, end of period COMMON STOCK - PAR VALUE $0.01 PER SHARE: Balance, beginning of period$ $ $ $ Shares issued for equity-based payment arrangements Shares issued for Employee Stock Purchase Plan Balance, end of period$ $ $ $ ADDITIONAL PAID-IN CAPITAL: Balance, beginning of period$ $ $ $ Tax withholding related to share-based compensation()()()()Shares issued for Employee Stock Purchase Plan Stock-based compensation expense Balance, end of period$ $ $ $ RETAINED EARNINGS: Balance, beginning of period$ $ $ $ Six Months Ended December 31, 20232022CASH FLOWS FROM OPERATING ACTIVITIES: Net Income$ $ Adjustments to reconcile net income from operations
to net cash from operating activities: Depreciation Amortization Change in deferred income taxes()()Expense for stock-based compensation (Gain)/loss on disposal of assets ()Changes in operating assets and liabilities: Change in receivables Change in prepaid expenses, deferred costs and other()()Change in accounts payable ()Change in accrued expenses ()Change in income taxes Change in deferred revenues()()Net cash from operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Payment for acquisitions, net of cash acquired ()Capital expenditures()()Proceeds from dispositions Purchased software()()Computer software developed()()

Purchase of investment

() Net cash from investing activities()()CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings on credit facilities Repayments on credit facilities and financing leases()()Purchase of treasury stock() Dividends paid()()Tax withholding payments related to share-based compensation()()Proceeds from sale of common stock Net cash from financing activities() NET CHANGE IN CASH AND CASH EQUIVALENTS$ $()CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD$ $ CASH AND CASH EQUIVALENTS, END OF PERIOD$ $

See notes to condensed consolidated financial statements.

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JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In Thousands, Except Per Share Amounts)

NOTE 1.

financial institutions and diverse corporate entities.

Consolidation

Comprehensive Income

Allowance for Credit Losses

$ $ $ Current provision for expected credit losses Write-offs charged against allowance()()()()Recoveries of amounts previously written off () ()Allowance for credit losses - ending balance$ $ $ $

Property and Equipment

Accumulated depreciation at December 31, 2023, totaled $ and at June 30, 2023, totaled $.

Intangible Assets

to years. Accumulated amortization of intangible assets totaled $ and $ at December 31, 2023, and June 30, 2023, respectively.

Purchase of Investment

At December 31, 2023, and June 30, 2023, the Company had an investment in the preferred stock of Autobooks, Inc. (“Autobooks”) of $, which represented a non-controlling share of the voting equity as of that date. The total investment was recorded at cost and is included within other non-current assets on the Company's balance sheet. There have been no events or changes in circumstances that would indicate an impairment and no price changes resulting from observing a similar or identical investment. An impairment and/or an observable price change would be an adjustment to recorded cost. Fair value will not be estimated unless there are identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment.

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At December 31, 2023, there were shares in treasury stock and the Company had the remaining authority to repurchase up to additional shares. The total cost of treasury shares at December 31, 2023, was $. During the first six months of fiscal 2024, the Company repurchased shares. At June 30, 2023, there were shares in treasury stock and the Company had the remaining authority to repurchase up to additional shares. The total cost of treasury shares at June 30, 2023, was $ and the Company repurchased shares during the first six months of fiscal 2023.

Income Taxes

Interim Financial Statements

The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim condensed consolidated financial statements, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes, which are included in its Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended June 30, 2023.

In the opinion of the management of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly in all material respects the financial position of the Company as of December 31, 2023, the results of its operations for the three and six months ended December 31, 2023 and 2022, changes in stockholders' equity for the three and six months ended December 31, 2023 and 2022, and its cash flows for the six months ended December 31, 2023 and 2022. The condensed consolidated balance sheet at June 30, 2023, was derived from audited annual financial statements, but does not contain all of the footnote disclosures from the annual financial statements.

The results of operations for the three and six months ended December 31, 2023, are not necessarily indicative of the results to be expected for the entire fiscal year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant Accounting Policies

The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its Form 10-K for the fiscal year ended June 30, 2023. For the three and six months ended December 31, 2023, there have been no new or material changes to the significant accounting policies discussed in the Company’s Form 10-K for the fiscal year ended June 30, 2023, that are of significance, or potential significance, to the Company.

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NOTE 2.

NOTE 3.

$ $ $ Product Delivery and Services On-Premise Support Services and Support Processing Total Revenue$ $ $ $

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$ Contract Assets - Current Contract Assets - Non-current Contract Liabilities (Deferred Revenue) - Current Contract Liabilities (Deferred Revenue) - Non-current

Contract assets primarily result from revenue being recognized when or as control of a solution or service is transferred to the customer, except where invoicing is contingent upon the completion of other performance obligations or payment terms differ from the provisioning of services. The current portion of contract assets is reported within prepaid expenses and other in the condensed consolidated balance sheet, and the non-current portion is included in other non-current assets. Contract liabilities (deferred revenue) primarily relate to consideration received from customers in advance of delivery of the related goods and services to the customer. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.

The Company analyzes contract language to identify if a significant financing component does exist and would adjust the transaction price for any material effects of the time value of money if the timing of payments provides either party to the contract with a significant benefit of financing the transaction.

During the three months ended December 31, 2023, and 2022, the Company recognized revenue of $ and $, respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods. For the six months ended December 31, 2023, and 2022, the Company recognized revenue of $ and $, respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods.

Amounts recognized that relate to performance obligations satisfied (or partially satisfied) in prior periods were immaterial for each period presented. These adjustments are primarily the result of transaction price re-allocations due to changes in estimates of variable consideration.

Transaction Price Allocated to Remaining Performance Obligations

As of December 31, 2023, estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period totaled $. The Company expects to recognize approximately % over the next months, % in 13-24 months, and the balance thereafter.

Contract Costs

The Company incurs incremental costs to obtain a contract as well as costs to fulfill contracts with customers that are expected to be recovered. These costs consist primarily of sales commissions, which are incurred only if a contract is obtained, and customer conversion or implementation-related costs. Capitalized costs are amortized based on the transfer of goods or services to which the asset relates, in line with the percentage of revenue recognized for each performance obligation to which the costs are allocated.

Capitalized costs totaled $ and $, at December 31, 2023, and June 30, 2023, respectively.

For the three months ended December 31, 2023, and 2022, amortization of deferred contract costs totaled $ and $, respectively. During the six months ended December 31, 2023, and 2022, amortization of deferred contract costs totaled $ and $, respectively. There were no impairment losses in relation to capitalized costs for the periods presented.

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NOTE 4.

$ $ $

Financial Liabilities:

Credit facilities$ $ $ $ June 30, 2023

Financial Assets:

Certificates of Deposit$ $ $ $

Financial Liabilities:

Credit facilities$ $ $ $

NOTE 5.

month to years. Certain leases contain renewal options for varying periods, which are at the Company’s sole discretion. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in the determination of the Company’s ROU assets and lease liabilities. Certain leases require the Company to pay taxes, insurance, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the lease liability to the extent they are variable in nature. Variable lease costs are recognized as a variable lease expense when incurred.

At December 31, 2023, and June 30, 2023, the Company had operating lease assets of $ and $, respectively. At December 31, 2023, total operating lease liabilities of $ were comprised of current operating lease liabilities of $ and noncurrent operating lease liabilities of $. At June 30, 2023, total operating

were comprised of current operating lease liabilities of $ and noncurrent operating lease liabilities of $.

Operating lease assets are included within other non-current assets, and operating lease liabilities are included within accrued expenses (current portion) and other long-term liabilities (noncurrent portion) in the Company’s condensed consolidated balance sheet. Operating lease assets were recorded net of accumulated amortization of $ and $ as of December 31, 2023, and June 30, 2023, respectively.

Operating lease costs for the three months ended December 31, 2023, and 2022, were $ and $, respectively. Total operating lease costs for the respective quarters included variable lease costs of $ and $, respectively. Operating lease costs for the six months ended December 31, 2023, and 2022, were $ and $, respectively. Total operating lease costs for the respective fiscal year-to-date periods included variable lease costs of $ and $, respectively. Operating lease expense is included within cost of services, research and development, and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, in the Company’s condensed consolidated statements of income.

For the six months ended December 31, 2023, and 2022, the Company had operating cash flows for payments on operating leases of $ and $, and ROU assets obtained in exchange for operating lease liabilities of $ and $, respectively.

As of December 31, 2023, and June 30, 2023, the weighted-average remaining lease term for the Company's operating leases was months and months, and the weighted-average discount rate was % and %, respectively.

2025 2026 2027 2028 Thereafter Total lease payments$ Less: interest()Present value of lease liabilities$

Future lease payments include $ related to options to extend lease terms that are reasonably certain of being exercised. At December 31, 2023, there were legally binding lease payments for leases signed but not yet commenced.

months. Sublease income for the three and six months ended December 31, 2023 was $ and is included within revenue on the Company's condensed consolidated statements of income. There have been no indications of impairment related to the underlying right-of-use asset.

2025 2026 2027 2028 Total sublease receipts$

NOTE 6.

, which may be increased to $ by the Company at any time until maturity. The credit agreement bears interest at a variable rate equal to (a) a rate based on an adjusted Secured Overnight Financing Rate (“SOFR”) term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus % per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus %), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit agreement. As of December 31, 2023, the Company was in compliance with all such covenants. The amended and restated credit facility terminates . There was $ and $ outstanding under the amended and restated credit facility at December 31, 2023 and June 30, 2023, respectively.

Term loan facility

On May 16, 2023, the Company entered into a term loan credit agreement with a syndicate of financial institutions, with an original principal balance of $. Borrowings under the term loan facility bear interest at a variable rate equal to (a) a rate based on an adjusted SOFR term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus % per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus %), plus an applicable percentage in each case determined by the Company's leverage ratio. The term loan credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the term loan credit agreement. As of December 31, 2023, the Company was in compliance with all such covenants. The term loan credit agreement has a maturity date of . There was $ outstanding under the term loan at December 31, 2023 and June 30, 2023.

Other lines of credit

The Company has an unsecured bank credit line which provides for funding of up to $ and bears interest at the prime rate less %. The credit line expires on . There was balance outstanding at December 31, 2023, or June 30, 2023.

Interest

The Company paid interest of $ and $ during the six months ended December 31, 2023, and 2022, respectively.

NOTE 7.

% of income before income taxes, compared to % in the prior fiscal year quarter.

For the six months ended December 31, 2023, the effective tax rate increased compared to the six months ended December 31, 2022, with an effective tax rate of % of income before taxes, compared to % for the same

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and $ in the six months ended December 31, 2023, and 2022, respectively. The increase in paid income taxes for the six months ended December 31, 2023 over the six months ended December 31, 2022 was primarily the result of the timing of payments, with a greater portion of the anticipated equivalent annual amounts being paid in the current fiscal year-to-date period.

At December 31, 2023, the Company had $ of gross unrecognized tax benefits before interest and penalties, $ of which, if recognized, would affect our effective tax rate. The Company had accrued interest and penalties of $ and $ related to uncertain tax positions at December 31, 2023, and 2022, respectively.

The U.S. federal income tax returns for fiscal 2020 and all subsequent years remain subject to examination as of December 31, 2023, under statute of limitations rules. The U.S. state income tax returns that remain subject to examination as of December 31, 2023, under the statute of limitation rules varies by state jurisdiction from fiscal 2016 through 2019 and all subsequent years. The Company anticipates potential changes due to lapsing of statutes of limitations, and examination closures could reduce the unrecognized tax benefits balance by $ to $ within twelve months of December 31, 2023.

NOTE 8.

and $ of stock-based compensation costs, respectively. Our operating income for the six months ended December 31, 2023, and 2022, included $ and $ of stock-based compensation costs, respectively.

On November 10, 2015, the Company adopted the 2015 Equity Incentive Plan (“2015 EIP”) for its employees and non-employee directors. The plan allows for grants of stock options, stock appreciation rights, restricted stock shares or units, and performance shares or units. The maximum number of shares authorized for issuance under the plan is .

Stock option awards

Under the 2015 EIP, terms and vesting periods of the options are determined by the Compensation Committee of the Board of Directors when granted. The option period must expire not more than from the option grant date. The options granted under this plan are exercisable beginning after the grant date at an exercise price equal to 100% of the fair market value of the stock at the grant date. The options terminate upon surrender of the option, after termination of employment, upon the expiration of following notification of a deceased optionee, or after grant.

During the six months ended December 31, 2023, there were options granted, forfeited, or exercised. At December 31, 2023, options were outstanding at a weighted average exercise price of $ with an aggregate intrinsic value of $.

At December 31, 2023, there was compensation cost yet to be recognized related to outstanding options. All of the options are currently exercisable, with a weighted average remaining contractual term (remaining period of exercisability) of years as of December 31, 2023.

Restricted stock unit and performance unit awards

The Company issues unit awards under the 2015 EIP. Restricted stock unit awards (which are unit awards that have service requirements only and are not tied to performance measures) generally vest over a period of to years. Performance unit awards are awards that have performance measures in addition to service requirements.

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Granted1

Vested()

Forfeited2

() Outstanding December 31, 2023 $ $

1Granted includes restricted stock unit awards and performance unit awards at 100% achievement.

2Forfeited includes restricted stock unit awards and performance unit awards forfeited for service requirements not met and performance unit awards not settled due to underachievement of performance measures.

Of the unit awards granted in fiscal 2024, were restricted stock unit awards and were performance unit awards. The restricted stock unit awards were valued at the weighted average fair value of the non-vested units based on the fair market value of the Company’s equity shares on the grant date, less the present value of expected future dividends to be declared during the vesting period, consistent with the methodology for calculating compensation expense on such awards.

of the performance unit awards granted in fiscal 2024 were valued at grant by estimating 100% payout at release and using the fair market value of the Company equity shares on the grant date, less the present value of expected future dividends to be declared during the vesting period. The payout at release of approximately half of these performance unit awards will be determined based on the Company's compound annual growth rate for revenue (excluding adjustments) for the three-year vesting period compared against goal thresholds as defined in the award agreement. The performance payout at release of the other half of these performance unit awards will be determined based on the expansion of the Company's non-GAAP operating margin over the three-year vesting period compared against goal thresholds as defined in the award agreement. of the performance unit awards have market conditions and were valued at grant using a Monte Carlo pricing model as of the measurement date customized to the specific provisions of the Company’s plan design. Per the Company's award vesting and settlement provisions, the performance unit awards that utilize a Monte Carlo pricing model were valued at grant on the basis of Total Shareholder Return (“TSR”) in comparison to the compensation peer group made up of participants approved by the Compensation Committee of the Company's Board of Directors for fiscal year 2024.

%Risk free interest rate %Annual dividend based on most recent quarterly dividend$Dividend yield %Beginning average percentile rank for TSR %

At December 31, 2023, there was $ of compensation expense that has yet to be recognized related to non-vested restricted stock unit awards, which will be recognized over a weighted average period of years.

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NOTE 9.

$ $ $ Common share information:Weighted average shares outstanding for basic earnings per share Dilutive effect of stock options, restricted stock units, and performance units Weighted average shares outstanding for diluted earnings per share Basic earnings per share$ $ $ $ Diluted earnings per share$ $ $ $

Per share information is based on the weighted average number of common shares outstanding for the three and six months ended December 31, 2023, and 2022. Stock options, restricted stock units, and performance units have been included in the calculation of diluted earnings per share to the extent they are dilutive. There were and anti-dilutive stock options, restricted stock units, or performance units excluded for the three and six months ended December 31, 2023, respectively, and and were excluded for the three and six months ended December 31, 2022, respectively.

NOTE 10.

, the Company acquired all of the equity interest in Payrailz, LLC (“Payrailz”). The final purchase price, following customary post-closing adjustments to the extent actual closing date working capital, cash, debt, and unpaid seller transaction expenses exceeded or were less than the amounts estimated at closing, was $. Pursuant to the merger agreement for the transaction, $ of the purchase price was placed in an escrow account at the closing, consisting of $ for any final purchase price adjustments owed by the sellers, which amount was released to the sellers on December 15, 2022, in connection with post-closing purchase price adjustments, and $ for indemnification matters under the merger agreement, which amount was released to the sellers September 20, 2023.

The primary reason for the acquisition was to expand the Company's digital financial management solutions and the purchase was funded by our revolving line of credit (Note 6) and cash generated from operations. Payrailz provides cloud-native, API-first, AI-enabled consumer and commercial digital payment solutions and experiences that enable money to be moved in the moment of need.

, and taking into account the post-closing purchase price adjustment described above, are set forth below:


Current assets			$
Identifiable intangible assets
Deferred revenue			()
Total other liabilities assumed			()
Total identifiable net assets
Goodwill
Net assets acquired			$

The goodwill of $ arising from this acquisition consists largely of the growth potential, synergies, and economies of scale expected from combining the operations of the Company with those of Payrailz, together with the value of Payrailz's assembled workforce. The goodwill from this acquisition has been allocated to our Payments segment and $ is expected to be deductible for income tax purposes.

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, computer software of $, and other intangible assets of $. The amortization period for acquired customer relationships, computer software, and other intangible assets is over a term of years, years, and years, respectively.

Current assets were inclusive of cash acquired of $. The fair value of current assets acquired included accounts receivable of $, of which were expected to be uncollectible.

NOTE 11.

reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing services, online and mobile bill pay solutions, Automated Clearing House (“ACH”) origination and remote deposit capture processing, and risk management products and services. The Complementary segment provides additional software, hosted processing platforms, and services, including call center support, network security management, consulting, and monitoring that can be integrated with the Company's Core solutions, and many can be used independently. The Corporate and Other segment includes revenue and costs from hardware and other products not attributed to any of the other three segments, as well as operating expenses not directly attributable to the other three segments.

The Company evaluates the performance of its segments and allocates resources to them based on various factors, including performance against trend, budget, and forecast. Only revenue and costs of revenue are considered in the evaluation for each segment.

Immaterial adjustments have been made between segments to reclassify revenue and cost of revenue that was recognized for the three and six months ended December 31, 2022. These reclasses were made to be consistent with the current allocation of revenue and cost of revenue by segment. Revenue reclassed for the three and six months ended December 31, 2022, from Core to Corporate and Other was $ and $, respectively, from Payments to Corporate and Other was $ and $, respectively, and from Complementary to Corporate and Other was $ and $, respectively. Cost of revenue reclassed for the three and six months ended December 31, 2022, from Core to Corporate and Other was $ and $, respectively, from Payments to Corporate and Other was $ and $, respectively, and from Complementary to Corporate and Other was $ and $, respectively.

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$ $ $ $ Processing Total Revenue Cost of Revenue Research and Development Selling, General, and Administrative Total Expenses SEGMENT INCOME$ $ $ $()OPERATING INCOME INTEREST INCOME (EXPENSE) INCOME BEFORE INCOME TAXES$

Three Months Ended

December 31, 2022

Core

Payments

Complementary

Corporate and Other

Total

REVENUE

Services and Support

Processing

Total Revenue

Cost of Revenue

Research and Development

Selling, General, and Administrative

Total Expenses

SEGMENT INCOME

()

OPERATING INCOME

INTEREST INCOME (EXPENSE)

()

INCOME BEFORE INCOME TAXES

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Six Months Ended

December 31, 2022

Core

Payments

Complementary

Corporate & Other

Total

REVENUE

Services and Support

Processing

Total Revenue

Cost of Revenue

Research and Development

Selling, General, and Administrative

Total Expenses

SEGMENT INCOME

()

OPERATING INCOME

INTEREST INCOME (EXPENSE)

()

INCOME BEFORE INCOME TAXES

The Company has not disclosed any additional asset information by segment, as the information is not generated for internal management reporting to the Chief Executive Officer, who is also the Chief Operating Decision Maker.

NOTE 12.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statements included in this Form 10-Q for the fiscal quarter ended December 31, 2023.

OVERVIEW

Jack Henry & Associates, Inc. is a well-rounded financial technology company and is a leading provider of technology solutions and payment processing services primarily to community and regional financial institutions. Our solutions consist of integrated data processing systems solutions to U.S. banks ranging from de novo to multi-billion-dollar institutions with assets up to $50 billion, core data processing solutions for credit unions of all sizes, and non-core highly specialized core-agnostic products and services that enable financial institutions of every asset size and charter, and diverse corporate entities outside the financial services industry, to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. Our integrated solutions are available for on-premise installation and delivery in our private and public cloud.

Our two primary revenue streams are “services and support” and “processing.” Services and support includes: “private and public cloud” revenue, which predominantly includes contracts with terms of seven years or longer at inception; “product delivery and services” revenue, which includes revenue from the sales of licenses, implementation services, deconversions, consulting, and hardware; and “on-premise support” revenue, composed of maintenance contracts primarily with annual terms. Processing revenue includes: "remittance” revenue from payment processing, remote capture, and ACH transactions; “card” revenue, including card transaction processing and monthly fees; and “transaction and digital” revenue, which includes transaction and mobile processing. We continually seek opportunities to increase revenue while at the same time containing costs to expand margins.

All amounts in the following discussion are in thousands, except per share amounts.

RESULTS OF OPERATIONS

For the second quarter of fiscal 2024, total revenue increased 8.0%, or $40,387, compared to the same quarter in fiscal 2023. Total revenue less deconversion revenue of $4,882 for the current fiscal quarter and less deconversion revenues of $6,380 for the prior fiscal year second quarter results in an increase of 8.4%, quarter over quarter. This increase was primarily driven by growth in data processing and hosting, Jack Henry digital, including Banno, card, and remote capture and ACH revenues.

Operating expenses increased 7.2%, or $28,796, for the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023. Total operating expenses less deconversion expenses of $1,079 in the current quarter and $917 for the prior fiscal year second quarter, and removing the effects of the gain on sale of assets, net, of $1,207 in the prior fiscal year second quarter, results in an increase of 6.9%, quarter over quarter. This increase was primarily driven by higher direct costs as revenues increased, higher personnel costs, including medical insurance and commissions, increased travel and entertainment expenses related to the user group meeting during the quarter, and increased internal licenses and fees.

Operating income increased 10.8%, or $11,591, for the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023. Total operating income less deconversion operating income of $3,803 in the current quarter and $5,463 for the prior fiscal year second quarter, and removing the effects of the gain on sale of assets, net, of $1,207 in the prior fiscal year second quarter, results in an increase of 14.4%, quarter over quarter. This increase was primarily driven by revenue growth partially offset by increased operating expenses detailed above.

The provision for income taxes increased 15.6%, or $3,823, for the second quarter of fiscal 2024, compared to the second quarter of fiscal 2023. The effective tax rate for the current fiscal second quarter, was 23.5% compared to 23.2% for the same quarter a year ago. The increase in the effective tax rate was primarily due to the difference in impact of share-based compensation that vested during each of the comparative quarters.

Net income increased 13.9%, or $11,190, for the second quarter of fiscal 2024, compared to the second quarter of fiscal 2023. Total net income less deconversion net income of $2,890 for the current fiscal quarter, and less net income for deconversions and the gain on disposal of assets, net, of $4,152 and $918, respectively, for the prior fiscal year second quarter, results in a 17.7% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue partially offset by higher operating expenses and increased provision for income taxes in the second quarter of fiscal 2024 compared to the same quarter last fiscal year.

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For the six months ended December 31, 2023, total revenue increased 8.0%, or $82,553, compared to the same period in fiscal year 2023. Total revenue less deconversion and acquisition revenues of $9,018 and $1,945, respectively, for the current fiscal period and less deconversion revenues of $10,899 for the prior fiscal period, results in an increase of 8.1%, period over period. This increase was primarily driven by growth in data processing and hosting, card, Jack Henry digital, other processing and payment processing revenues.

Operating expenses increased 10.0%, or $78,986, for the six months ended December 31, 2023, compared to the same period in fiscal year 2023. Total operating expenses less deconversion expenses of $1,460, acquisition-related expenses of $4,182, and voluntary employee departure incentive payment ("VEDIP") program expenses of $16,443 for the current fiscal period, and less deconversion expenses of $1,570 and removing the effects of the gain on sale of assets, net, of $7,384 for the prior fiscal year period, results in an increase of 6.4%, period over period. This increase was primarily driven by higher personnel costs, including commissions, increased direct costs related to growth in revenue, higher internal licenses and fees, and a decrease in the gain on sale of assets, net, compared to the prior fiscal year period.

Operating income increased 1.4%, or $3,567, for the six months ended December 31, 2023, compared to the same period in fiscal year 2023. Total operating income less deconversion operating income of $7,558, removing the effects of the VEDIP program of $16,443 and an acquisition operating loss of $2,237 for the current fiscal year period, less deconversion operating income of $9,330 and removing the effects of the gain on sale of assets, net, of $7,383 for the prior fiscal year period, results in a 13.6% increase period over period. This increase was primarily driven by revenue growth partially offset by increased operating expenses detailed above.

The provision for income taxes increased 4.6%, or $2,641, for the six months ended December 31, 2023, compared to the same period in fiscal year 2023. The effective tax rate for the six months ended December 31, 2023, was 23.6% compared to 23.4% for the same period a year ago. The increase in the effective tax rate was primarily due to the difference in impact of share-based compensation that vested during the comparative periods.

Net income increased 3.4%, or $6,320, for the six months ended December 31, 2023, compared to the same period a year ago. Total net income less deconversion net income of $5,744, plus net loss for the acquisition and the VEDIP program of $3,539 and $12,497, respectively, for the current fiscal year period, and less net income for deconversions and the gain on sale of assets, net, of $7,090 and $5,612, respectively, for the prior fiscal year period, results in a 16.8% increase period over period. This increase was primarily due to net organic growth in our lines of revenue partially offset by higher operating expenses and increased provision for income taxes in the six months ended December 31, 2023 compared to the same period last fiscal year.

We move into the third quarter of fiscal 2024 with significant portions of our business continuing to come from recurring revenues and our sales pipeline remaining encouraging. Our customers continue to face regulatory and operational challenges which our products and services address, and we believe they have a great need for our solutions that directly address institutional profitability, efficiency, and security. Our strong balance sheet, access to extensive lines of credit, the continued strength of our existing lines of revenue, and an unwavering commitment to superior customer service should position us well to address current and future opportunities.

A detailed discussion of the major components of the results of operations for the three and six months ended December 31, 2023, follows. On August 31, 2022, the Company acquired all of the equity interest in Payrailz, LLC (“Payrailz”). Payrailz (“acquisition”) related revenue and operating expenses mentioned in the six months ended December 31, 2023, discussions below are for the first two months of the period only.

Discussions compare the current fiscal year's three and six months ended December 31, 2023, to the prior fiscal year's three and six months ended December 31, 2022.

REVENUE


Services and Support	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2023			2022					2023			2022
Services and Support	$	311,992		$	290,700		7.3	%	$	654,197		$	610,849		7.1	%
Percentage of total revenue	57		%	58		%			59		%	59		%

Services and support revenue increased 7.3% for the second quarter of fiscal 2024 compared to the same quarter a year ago. Reducing services and support revenue for deconversion revenue from each quarter, which was $4,882 for the current fiscal year quarter and $6,380 for the prior fiscal year quarter results in growth of 8.0% quarter over quarter. This increase was primarily driven by growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand and higher user group revenues from the user group meeting held during the second quarter of fiscal 2024.

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Services and support revenue increased 7.1% for the six months ended December 31, 2023 compared to the same period a year ago. Reducing services and support revenue for deconversion revenue from each period, which was $9,018 for the current fiscal year period and $10,899 for the prior fiscal year period, and acquisition revenue of $2 for the current fiscal year period, results in growth of 7.5% period over period. This increase was primarily driven by volume growth in data processing and hosting as new and existing customers migrate to our private cloud and processing volumes expand, software usage as customers continue moving to time-based licenses rather than perpetual, and hardware revenues.


Processing	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2023			2022					2023			2022
Processing	$	233,709		$	214,614		8.9	%	$	462,872		$	423,667		9.3	%
Percentage of total revenue	43		%	42		%			41		%	41		%

Processing revenue increased 8.9% for the second quarter of fiscal 2024 compared to the same quarter last fiscal year. This increase was primarily driven by growth in Jack Henry digital revenue (including Banno) from higher active users and expanding volumes from existing products and the introduction of new products, growth in card revenue primarily from higher fraud detection and prevention revenues and organic growth from expanding transaction volumes, remote capture and ACH revenue, as well as other processing and payment processing revenues from expanding volumes and new customer revenue.

Processing revenue increased 9.3% for the six months ended December 31, 2023, compared to the same period last fiscal year. Reducing processing revenue for acquisition revenue of $1,943 for the current fiscal year period, results in growth of 8.8% period over period. This increase was primarily driven by growth in card revenue primarily from higher fraud detection and prevention revenues and organic growth from expanding transaction volumes, growth in Jack Henry digital revenue (including Banno) from higher active users and expanding volumes from existing products and the introduction of new products, other processing and payment processing revenues from expanding volumes and new customer revenue, and remote capture and ACH revenues.

OPERATING EXPENSES


Cost of Revenue	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2023			2022					2023			2022
Cost of Revenue	$	320,979		$	304,589		5.4	%	$	643,981		$	602,849		6.8	%
Percentage of total revenue	59		%	60		%			58		%	58		%

Cost of revenue for the second quarter of fiscal 2024 increased 5.4% over the prior fiscal year second quarter. This increase was primarily due to higher direct costs, consistent with increases in the related revenue, increased internal licenses and fees, and higher personnel costs due to an increase in employee headcount in the trailing twelve months. Cost of revenue increased 1% compared to the prior fiscal year quarter as a percentage of total revenue.

Cost of revenue increased 6.8% for the six months ended December 31, 2023, compared to the same period last fiscal year. Reducing cost of revenue for deconversion costs from each period, which were $891 for the current fiscal period and $965 for the prior fiscal period, and for acquisition costs of $3,334 from the current fiscal period, results in a 6.3% increase period over period. This increase was primarily due to higher direct costs in line with related increases in revenue, higher personnel costs due to an increase in employee headcount in the trailing twelve months, and increased internal licenses and fees. Cost of revenue remained consistent compared to the prior fiscal year period as a percentage of total revenue.

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Research and Development	Three Months Ended December 31,						% Change		Six Months Ended December 31,						% Change
	2023			2022					2023			2022
Research and Development	$	35,478		$	36,561		(3.0)	%	$	72,370		$	69,554		4.0	%
Percentage of total revenue	7		%	7		%			6		%	7		%

Research and development expense decreased 3.0% for the second quarter of fiscal 2024 compared to the prior fiscal year second quarter. This decrease was primarily due to lower personnel costs, net of capitalization, from a decrease in employee headcount in the trailing twelve months. Research and development expense for the quarter remained consistent compared to the prior fiscal year quarter as a percentage of total revenue.

Research and development expense increased 4.0% for the six months ended December 31, 2023, compared to the same period last fiscal year. Reducing research and development expense for the effects of acquisitions of $656 for the current fiscal year period results in a 3.1% increase period over period. This increase was primarily due to an increase in personnel costs, net of capitalization, related to the Payrailz acquisition and Jack Henry Platform. Research and development expense for the current fiscal year period decreased 1% compared to the prior fiscal year period as a percentage of total revenue.


Selling, General, and Administrative	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2023		2022				2023		2022
Selling, General, and Administrative	$	70,277	$	56,788	23.8	%	$	149,051	$	114,013	30.7	%

Core	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2023		2022				2023		2022
Revenue	$	165,601	$	153,539	7.9	%	$	352,041	$	326,853	7.7	%
Cost of Revenue	$	69,370	$	66,666	4.1	%	$	145,296	$	137,270	5.8	%

Revenue in the Core segment increased 7.9% and cost of revenue increased 4.1% for the three months ended December 31, 2023, compared to the three months ended December 31, 2022. Reducing Core revenue for deconversion revenue in both quarters, which totaled $1,929 for the three months ended December 31, 2023, and $2,115 for the three months ended December 31, 2022, results in an 8.1% increase quarter over quarter. This increase was primarily driven by growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand. Reducing Core cost of revenue for deconversion costs in both quarters, which totaled $321 for the three months ended December 31, 2023 and $277 for the three months ended December 31, 2022, results in a 4.0% increase quarter over quarter. This increase was primarily due to increased direct costs related to increases in revenue. Cost of revenue decreased 2% as a percentage of revenue for the second quarter of fiscal 2024 compared to the same quarter in fiscal 2023.

Revenue in the Core segment increased 7.7% and cost of revenue increased 5.8% for the six months ended December 31, 2023, compared to the six months ended December 31, 2022. Reducing Core revenue for deconversion revenue in both periods, which totaled $3,595 for the six months ended December 31, 2023, and $3,933 for the six months ended December 31, 2022, results in a 7.9% increase period over period. This increase was primarily driven by the growth in data processing and hosting revenues as new and existing customers migrate to our private cloud and processing volumes expand. Reducing Core cost of revenue for deconversion costs in both periods, which totaled $425 for the six months ended December 31, 2023 and $418 for the six months ended December 31, 2022 results in a 5.9% increase period over period. This increase was primarily due to increased direct costs related to increases in revenue. Cost of revenue decreased 1% as a percentage of revenue for the six months ended December 31, 2023, compared to the same period in fiscal 2023.



Corporate and Other	Three Months Ended December 31,				% Change		Six Months Ended December 31,				% Change
	2023		2022				2023		2022
Revenue	$	23,795	$	18,177	30.9	%	$	48,000	$	39,114	22.7	%
Cost of Revenue	$	75,963	$	71,566	6.1	%	$	151,938	$	140,565	8.1	%

Revenue classified in the Corporate and Other segment includes revenues from other products and services and hardware not specifically attributed to the other three segments. Revenue in the Corporate and Other segment increased 30.9% for the second quarter of fiscal 2024 compared to the equivalent quarter of the prior fiscal year. This increase was primarily due to higher user group revenues related to the user group meeting held in the current quarter that was held during the first quarter in the prior fiscal year. Corporate and Other segment deconversion revenue did not significantly affect Corporate and Other revenue increase quarter over quarter.

Cost of revenue for the Corporate and Other segment includes operating expenses not directly attributable to the other three segments. The cost of revenue in the second quarter of fiscal 2024 increased 6.1% when compared to the prior fiscal year quarter. This increase was primarily due to higher internal licenses and fees quarter over quarter. Corporate and Other segment deconversion and acquisition costs did not significantly affect the Corporate and Other cost of revenue increase quarter over quarter.

Revenue in the Corporate and Other segment increased 22.7% for the six months ended December 31, 2023, compared to the equivalent period of the prior fiscal year. This increase was primarily due to higher hardware and other processing revenues period over period. Corporate and Other segment deconversion revenue did not significantly affect the Corporate and Other revenue increase period over period.

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The cost of revenue in the six months ended December 31, 2023, increased 8.1% when compared to the prior fiscal year period. This increase was primarily due to higher internal licenses and fees, increased personnel costs, including salaries and benefits expenses, and higher cost of hardware related to the revenue increase. Corporate and Other segment deconversion and acquisition costs did not significantly affect the Corporate and Other cost of revenue increase period over period.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash and cash equivalents increased to $26,709 at December 31, 2023, from $12,243 at June 30, 2023.

The following table summarizes net cash from operating activities in the statement of cash flows:


	Six Months Ended
	December 31,
	2023		2022
Net income	$	193,644	$	187,324
Non-cash expenses	98,292		73,405
Change in receivables	90,702		102,672
Change in deferred revenue	(130,529)		(125,433)
Change in other assets and liabilities	(13,437)		(47,257)
Net cash provided by operating activities	$	238,672	$	190,711

Cash provided by operating activities for the first six months of fiscal 2024 increased 25% compared to the same period last year primarily due to a lower decrease in accrued expenses period over period. Cash from operations is primarily used to repay debt, pay dividends, repurchase stock, for capital expenditures, and acquisitions.

Cash used in investing activities for the first six months of fiscal 2024 totaled $110,959 and included: $83,408 for the ongoing enhancement and development of existing and new product and service offerings; capital expenditures on facilities and equipment of $24,458; $2,971 for the purchase and development of internal use software; and the purchase of investment of $1,000. Cash uses were partially offset by proceeds from the sale of assets of $878. Cash used in investing activities for the first six months of fiscal 2023 totaled $301,192 and included: $229,628 for an acquisition; $81,046 for the development of software; $17,376 for capital expenditures; and $1,027 for the purchase and development of internal use software. Cash uses were partially offset by proceeds from the sale of assets of $27,885.

Financing activities used cash of $113,247 for the first six months of fiscal 2024 and included payments on credit facilities of $240,000, dividends paid to stockholders of $75,722, and purchases of treasury stock of $20,000. Cash uses were partially offset by borrowings on credit facilities of $220,000 and $2,475 net cash inflow from the issuance of stock and tax withholding related to stock-based compensation. Financing activities provided cash of $87,457 in the first six months of fiscal 2023 and included borrowings on credit facilities of $365,000 partially offset by repayments on credit facilities and financing leases of $205,042, $71,454 for the payment of dividends, and $1,047 net cash outflow from the issuance of stock and tax withholding related to stock-based compensation.

Capital Requirements and Resources

The Company generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling $24,458 and $17,376 for the six months ended December 31, 2023, and December 31, 2022, respectively, were made primarily for additional equipment and the improvement of existing facilities. These additions were funded from cash generated by operations. Total consolidated capital expenditures on facilities and equipment for the Company for fiscal year 2024 are expected to be approximately $77,000 and have been or will be funded from our credit facilities and cash generated by operations.

In July 2023, the Company conducted a voluntary separation program for certain eligible employees that includes a voluntary employee departure incentive payment (VEDIP) for the eligible employees who chose to participate in the program. The Company made payments associated with the VEDIP program in the approximate amount of $16,443 from July 2023 through December 2023, including immaterial payments continuing into calendar 2024.

On August 8, 2023, the Company entered into a contract to purchase fixed assets that added contractual spend obligations of $30,392 for the period of December 15, 2023, through June 30, 2025. This commitment is in addition to the commitments discussed in our Annual Report on Form 10-K for the year ended June 30, 2023.

The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or borrowings on its existing line of credit. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At December 31, 2023, there were 31,323 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,667 additional shares. The total cost of treasury shares at December 31, 2023, was $1,852,118, and the Company repurchased 129 shares during the first six months of fiscal 2024. At June 30, 2023, there were 31,194 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,796 additional shares. The total cost of treasury shares at June 30, 2023, was $1,832,118 and the Company repurchased no shares during the first six months of fiscal 2023.

Credit facilities

On August 31, 2022, the Company entered into a five-year senior, unsecured amended and restated credit agreement that replaced a prior credit facility that was entered into on February 10, 2020. The credit agreement allows for borrowings of up to $600,000, which may be increased to $1,000,000 by the Company at any time until maturity. The credit agreement bears interest at a variable rate equal to (a) a rate based on an adjusted Secured Overnight Financing Rate (“SOFR”) term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit agreement. As of December 31, 2023, the Company was in compliance with all such covenants. The amended and restated credit facility terminates August 31, 2027. There was $75,000 and $95,000 outstanding under the amended and restated credit facility at December 31, 2023 and June 30, 2023, respectively.

Term loan facility

On May 16, 2023, the Company entered into a term loan credit agreement with a syndicate of financial institutions, with an original principal balance of $180,000. Borrowings under the term loan facility bear interest at a variable rate equal to (a) a rate based on an adjusted SOFR term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 0.75%), plus an applicable percentage in each case determined by the Company's leverage ratio. The term loan credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the term loan credit agreement. As of December 31, 2023, the Company was in compliance with all such covenants. The term loan credit agreement has a maturity date of May 16, 2025. There was $180,000 outstanding under the term loan at December 31, 2023 and June 30, 2023.

Other lines of credit

The Company has an unsecured bank credit line which provides for funding of up to $5,000 and bears interest at the prime rate less 1%. The credit line expires on April 30, 2025. There was no balance outstanding at December 31, 2023, or June 30, 2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Dollar amounts in this item are in thousands.

Market risk refers to the risk that a change in the level of one or more market prices, interest rates, indices, volatilities, correlations or other market factors such as liquidity, will result in losses for a certain financial instrument or group of financial instruments. We are currently exposed to credit risk on credit extended to customers and interest risk on outstanding debt. We do not currently use any derivative financial instruments. We actively monitor these risks through a variety of controlled procedures involving senior management.

Based on the controls in place and the credit worthiness of the customer base, we believe the credit risk associated with the extension of credit to our customers will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

We had $255,000 outstanding debt with variable interest rates as of December 31, 2023, and a 1% increase in our borrowing rate would increase our annual interest expense by $2,550.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of our management, including the Company's Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon that evaluation (required in Exchange Act Rules 13a-15(b) and 15d-15(b)), the CEO and CFO concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. For this purpose, disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to the Company's management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended December 31, 2023, there were no changes in the Company's internal control over financial reporting which were identified in connection with management’s evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to various routine legal proceedings and claims arising in the ordinary course of our business. In the opinion of management, any liabilities resulting from current lawsuits are not expected, either individually or in the aggregate, to have a material adverse effect on our consolidated financial statements. In accordance with U.S. GAAP, we record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These liabilities are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case or proceeding.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following shares of the Company were repurchased during the quarter ended December 31, 2023:


	Total Number of Shares Purchased	Average Price of Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under the Plans (1)
October 1 - October 31, 2023	—	$	—	—	3,667,497
November 1 - November 30, 2023	—	—		—	3,667,497
December 1 - December 31, 2023	—	—		—	3,667,497
Total	—	$	—	—	3,667,497

(1) Total stock repurchase authorizations approved by the Company's Board of Directors as of May 14, 2021, were for 35,000,000 shares. Under these authorizations, the Company has repurchased and not re-issued 31,323,119 shares and has repurchased and re-issued 9,384 shares. These authorizations have no specific dollar or share price targets and no expiration dates.

ITEM 5. OTHER INFORMATION

Rule 10b-5(1) Trading Plans

During the three months ended December 31, 2023, no director or officer of the Company adopted or terminated a “ or “,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS

31.1 Certification of the Chief Executive Officer.

31.2 Certification of the Chief Financial Officer.

32.1 Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.

32.2 Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

101.INS* XBRL Instance Document- the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document

101.SCH* XBRL Taxonomy Extension Schema Document

101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF* XBRL Taxonomy Extension Definition Linkbase Document

101.LAB* XBRL Taxonomy Extension Label Linkbase Document

101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Furnished with this quarterly report on Form 10-Q are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at December 31, 2023, and June 30, 2023, (ii) the Condensed Consolidated Statements of Income for the three and six months ended December 31, 2023, and 2022, (iii) the Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended December 31, 2023, and 2022, (iv) the Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2023, and 2022, and (v) Notes to Condensed Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.


		JACK HENRY & ASSOCIATES, INC.

Date:	February 8, 2024	/s/ David B. Foss
		David B. Foss
		Chief Executive Officer and Board Chair

Date:	February 8, 2024	/s/ Mimi L. Carsley
		Mimi L. Carsley
		Chief Financial Officer and Treasurer

JACK HENRY & ASSOCIATES INC - Quarter Report: 2023 December (Form 10-Q)

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