• Year summary:
  • GAAP revenue increased 4% and operating income increased 5% for the fiscal year ended June 30 2021 compared to the prior fiscal year
  • Non-GAAP adjusted revenue increased 6% and non-GAAP adjusted operating income increased 13% for the fiscal year ended June 30 2021 compared to the prior fiscal year¹
  • GAAP EPS was $412 per diluted share for the fiscal year ended June 30 2021 compared to $386 for the prior fiscal year
  • Cash at June 30 2021 was $510 million and $2133 million at June 30 2020
  • Debt related to the revolving credit line was $100 million at June 30 2021 and zero at June 30 2020
• Fourth quarter summary:
  • GAAP revenue increased 10% and operating income increased 25% for the quarter compared to the prior-year quarter
  • Non-GAAP adjusted revenue increased 10% and non-GAAP adjusted operating income increased 25% for the quarter compared to the prior-year quarter¹
  • GAAP EPS was $104 per diluted share for the quarter compared to $080 in the prior-year quarter
• Full-year fiscal 2022 guidance:
  • GAAP revenue $1902 million to $1911 million
  • GAAP EPS $453 to $460
  • Non-GAAP revenue $1866 million to $1875 million²

Jack Henry & Associates Inc (NASDAQ: JKHY) a leading provider of technology solutions and payment processing services primarily for the financial services industry today announces results for the fourth quarter and full year of fiscal 2021 and discusses its continued response to the novel coronavirus (COVID-19) pandemic

According to David Foss President and CEO We are very pleased to report another quarter of record revenue operating income and total sales bookings  Among many other successes our sales teams contracted with 13 new core clients and sold 87 new digital banking systems in the quarter  As we begin the new fiscal year our sales pipeline remains strong and we see significant opportunities to continue growing new and existing customer relationships through the successful execution of Jack Henry's client strategies in digital lending payments and open banking  We are optimistic about the strength of our technology solutions and the ability of our teams to deliver outstanding service in a market that is widely expected to increase technology and digital investments in a recovering economy

Operating Results

Revenue operating expenses operating income and net income for the three months and fiscal year ended June 30 2021 as compared to the three months and fiscal year ended June 30 2020 were as follows:

• Processing revenue increased for the fourth quarter primarily driven by growth in card processing of 223% Other increases were in remittance revenues and Jack Henry digital Services and support revenue increased for the fourth quarter primarily driven by growth in data processing and hosting fees of 91% and increased software usage fees
• Processing revenue increased for the fiscal year primarily driven by growth in card processing of 115% Other increases were in Jack Henry digital and remittance revenues Services and support revenue remained consistent when compared to the prior fiscal year with increases in Jack Henry cloud and public cloud revenues and software usage fees and offsetting decreases in deconversion fees pass-through revenues due to COVID-19 limitations³ and hardware revenue
• For the fourth quarter core segment revenue increased 4% payments segment revenue increased 16% complementary segment revenue increased 7% and corporate and other segment revenue increased 17%⁴
• For the fiscal year core segment revenue remained consistent payments segment revenue increased 7% complementary segment revenue increased 4% and corporate and other segment revenue decreased 15%⁴

Operating Expenses and Operating Income

• Cost of revenue increased for the fourth quarter primarily due to higher costs associated with our card processing platform personnel costs and operating licenses and fees
• Cost of revenue increased for the fiscal year primarily due to higher costs associated with our card processing platform personnel costs and operating licenses and fees partially offset by travel expense savings as a result of COVID-19 travel limitations³ and lower costs related to hardware
• Research and development expense decreased for the fourth quarter and fiscal year primarily due to higher capitalized research and development costs partially offset by an increase in personnel costs
• Selling general and administrative expense increased for the fourth quarter primarily due to increased personnel costs and travel expenses partially offset by the change in gain/loss on disposal of assets net
• Selling general and administrative expense decreased for the fiscal year primarily due to travel expense and other savings as a result of COVID-19 limitations and the change in gain/loss on disposal of assets net partially offset by increased personnel costs COVID-19-related savings included our national sales meeting Jack Henry Annual Conference and Symitar Education Conference that were all held virtually this year³

Net Income

• Effective tax rates for the fourth quarter of fiscal years 2021 and 2020 were 197% and 200% respectively  Effective tax rates for fiscal years 2021 and 2020 were 217% and 221% respectively

According to Kevin Williams CFO and Treasurer For both the fourth fiscal quarter and the full fiscal year our private cloud card processing and digital solutions drove our revenue growth We saw nice operating margin expansion on a non-GAAP basis for both the quarter and full fiscal year  We are very pleased to report our Return on Invested Capital (ROIC) of 21% for the full fiscal year which is up from 20% a year ago  I also want to thank all of our management team and associates for all the contributions during the year to support our customers and continue moving our company forward

Non-GAAP Impact of Deconversion Fees and Acquisitions Divestitures and Gain/Loss

The table below shows our revenue and operating income (in thousands) for the three months and fiscal year ended June 30 2021 compared to the three months and fiscal year ended June 30 2020 excluding the impacts of deconversion fees and acquisitions divestitures and gain/loss

The tables below show the segment break-out of revenue and cost of revenue for each period presented as adjusted for the items above and include a reconciliation to non-GAAP adjusted operating income presented above

The table below shows our GAAP to non-GAAP guidance for fiscal year ended June 30 2022 Non-GAAP guidance excludes the impacts of deconversion fee and acquisition and divestiture revenue

Balance Sheet and Cash Flow Review

• At June 30 2021 cash and cash equivalents decreased to $510 million from $2133 million at June 30 2020*
• Trade receivables totaled $3066 million at June 30 2021 compared to $3009 million at June 30 2020
• The Company had $100 million of borrowings at June 30 2021 and zero at June 30 2020*
• Total deferred revenue increased to $3956 million at June 30 2021 compared to $3896 million a year ago
• Stockholders' equity decreased to $13193 million at June 30 2021 compared to $15497 million a year ago

The following table summarizes net cash from operating activities:

The following table summarizes net cash from investing activities:

The following table summarizes net cash from financing activities:

Use of Non-GAAP Financial Information

Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States GAAP include the standards conventions and rules accountants follow in recording and summarizing transactions in the preparation of financial statements  In addition to reporting financial results in accordance with GAAP we have provided certain non-GAAP financial measures including adjusted revenue adjusted operating income adjusted segment income adjusted cost of revenue and adjusted operating expenses

We believe non-GAAP financial measures help investors better understand the underlying fundamentals and true operations of our business  The non-GAAP financial measures presented eliminate one-time deconversion fees and acquisitions divestitures and gain/loss all of which management believes are not indicative of the Company's operating performance Such adjustments give investors further insight into our performance For these reasons management also uses these non-GAAP financial measures in its assessment and management of the Company's performance

Any non-GAAP financial measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP measures Reconciliations of the non-GAAP financial measures to related GAAP measures are included

COVID-19 Impact and Response

Since its outbreak in early 2020 COVID-19 has rapidly spread and continues to represent a public health concern The health safety and well-being of our employees and customers is of paramount importance to us In March 2020 we established an internal task force composed of executive officers and other members of management to frequently assess updates to the COVID-19 situation and recommend Company actions We offered remote working as a recommended option to employees whose job duties allowed them to work off-site and we suspended all non-essential business travel This company-wide recommendation extended until July 1 2021 at which point we began transition to a return to our facilities and normalization of travel activities Individual decisions on returning to the office were manager-coordinated and based on conversations with specific teams and departments  A large number of our employees requested to remain fully remote or participate in a hybrid approach where they would split their time between remote and in-person working We have not required employees who return to our facilities to receive vaccinations but we have provided information on vaccine providers as well as hosted on-site COVID-19 vaccination clinics at several of our facilities for our employees and their families On August 3 2021 we reimplemented our company-wide recommendation for remote work and are encouraging a cautious approach to business travel based on the spread of the Delta variant and increased infection rates For those employees who are at our facilities we have introduced enhanced sanitation procedures and we require face masks for both vaccinated and unvaccinated employees As of August 13 2021 the majority of our employees were continuing to work remotely either full time or in a hybrid capacity

Customers

We work closely with our customers who are scheduled for on-site visits to ensure their needs are met while taking necessary safety precautions when our employees are required to be at a customer site Delays of customer system installations due to COVID-19 have been limited and we have developed processes to handle remote installations when available We expect these processes to provide flexibility and value both during and after the COVID-19 pandemic Even though a substantial portion of our workforce has worked remotely during the outbreak and business travel has been curtailed we have not yet experienced significant disruption to our operations We believe our technological capabilities are well positioned to allow our employees to work remotely without materially impacting our business

Financial impact

Despite the changes and restrictions caused by COVID-19 the overall financial and operational impact on our business has been limited and our liquidity balance sheet and business trends remain strong We experienced positive operating cash flows during fiscal 2021 and we do not expect that to change in the near term However we are unable to accurately predict the future impact of COVID-19 due to a number of uncertainties including further government actions; the duration severity and recurrence of the outbreak including the onset of variants of the virus; the speed and effectiveness of vaccine and treatment developments; the speed of economic recovery; the potential impact to our customers vendors and employees; and how the potential impact might affect future customer services processing and installation-related revenue and processes and efficiencies within the Company directly or indirectly impacting financial results We will continue to monitor COVID-19 and its possible impact on the Company and to take steps necessary to protect the health and safety of our employees and customers

Quarterly Conference Call

The Company will hold a conference call on August 18 2021; at 7:45 am Central Time and investors are invited to listen at wwwjackhenrycom

About Jack Henry & Associates Inc®

Jack Henry (NASDAQ: JKHY) is a leading provider of technology solutions primarily for the financial services industry We are an S&P 500 company that serves approximately 8400 clients nationwide through three divisions: Jack Henry Banking® supports banks ranging from community banks to multi-billion-dollar institutions; Symitar® provides industry-leading solutions to credit unions of all sizes; and ProfitStars® offers highly specialized solutions to financial institutions of every asset size as well as diverse corporate entities outside of the financial services industry With a heritage that has been dedicated to openness partnership and user centricity for more than 40 years we are well-positioned as a driving market force in future-ready digital solutions and payment processing services We empower our clients and consumers with the human-centered tech-forward and insights-driven solutions that will get them where they want to go Are you future ready? Additional information is available at wwwjackhenrycom

Statements made in this news release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934  Because forward-looking statements relate to the future they are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements  Such risks and uncertainties include but are not limited to those discussed in the Company's Securities and Exchange Commission filings including the Company's most recent reports on Form 10-K and Form 10-Q particularly under the heading Risk Factors Any forward-looking statement made in this news release speaks only as of the date of the news release and the Company expressly disclaims any obligation to publicly update or revise any forward-looking statement whether because of new information future events or otherwise