Jack Henry & Associates (NASDAQ:JKHY) reported record fourth-quarter and fiscal 2026 results, citing revenue growth, expanding operating margins, a record number of competitive core wins and increasing adoption of its cloud, digital banking and payments offerings.
President and CEO Greg Adelson said fourth-quarter non-GAAP revenue totaled $633 million, up 7% from the prior-year period and above the company’s implied quarterly guidance. Non-GAAP operating margin was 21% in the quarter.
Record Core Sales and Larger Client Wins
Jack Henry recorded 58 competitive core wins during fiscal 2026, compared with 51 in the prior year and above its previous record of 57 wins. Only six of the wins were de novo institutions, according to Adelson, with the remainder representing competitive takeaways.
Fourteen of the 58 wins came from financial institutions with more than $1 billion in assets. Over the past three fiscal years, the company has won 45 core contracts with institutions above that threshold, representing roughly $98 billion in total assets. That compares with 15 institutions representing $26 billion in assets across fiscal 2022 and fiscal 2023, when the company began emphasizing its upmarket strategy.
During the fourth quarter, Jack Henry signed Woodforest National Bank, which has $9.2 billion in assets, as its largest new bank client in company history. The deal was among 15 competitive core wins during the quarter.
The company also reported greater success selling bundled “trifecta” deals that include core, digital banking and card services. Adelson said 59% of fiscal 2026 core wins included all three offerings, up from 39% of core wins in the prior year.
In response to analyst questions, Adelson said the company had already exceeded its first-quarter core-win pace from the prior year during the first month of fiscal 2027. Jack Henry expects to secure between 58 and 65 core wins in fiscal 2027, though it sees fewer credit-union request-for-proposal opportunities available than in the previous two years.
Cloud, Payments and Digital Adoption
Chief Financial Officer and Treasurer Mimi Carsley said cloud revenue increased 7% in the fourth quarter and represented 32% of total revenue. Processing revenue, which accounted for 44% of total revenue, increased 7% on both a GAAP and non-GAAP basis, supported by card, digital, transaction and faster-payments revenue.
Recurring revenue represented 91% of total quarterly revenue. Services and support revenue increased 3% on a GAAP basis and 6% on a non-GAAP basis, while the company continued to see growth in private- and public-cloud hosting and data processing.
Jack Henry said 79% of core clients now operate in its private cloud. The company signed 36 contracts during the year to move clients from on-premise deployments to the private cloud, including 15 institutions with more than $1 billion in assets.
Faster-payments activity continued to rise. Adoption among Jack Henry clients grew 25% for Zelle, 24% for RTP and 29% for FedNow over the past year. Transaction volume across those channels increased 45% year over year in the fourth quarter.
The company signed 65 debit and credit card deals during fiscal 2026, up from 63 a year earlier. It also reported growing adoption of newer offerings:
- Tap to Local, its small-business merchant-payment service, has been added by more than 900 banks and credit unions after more than 200 additions since the prior earnings call.
- Rapid Transfers is live at more than 140 banks and credit unions, with another 150 in implementation or onboarding.
- Banno Digital Platform signings totaled 219 for the year, up 24%, and the platform served more than 15.8 million registered users, up 11%.
- Treasury-management contract wins rose 25% to 45 for the year.
AI, Cybersecurity and Platform Strategy
Adelson said Jack Henry has 22 AI-enabled products in the market and has identified more than 20 additional AI capabilities targeted for release during the next six months. The company is using AI in its Financial Crimes Defender platform to draft summaries for Suspicious Activity Reports, an application it said can reduce drafting time by 75% to 85% while keeping investigators in control of the review process.
Other uses include translation in Banno Conversations and automated client relationship summaries in the Synapsys CRM product. Internally, the company has approved more than 100 AI tools, documented more than 890 use cases and deployed more than 50 AI agents through its internally developed platform.
Jack Henry also expanded its collaboration with Google Cloud to develop AI-driven security capabilities and joined Anthropic’s Project Glasswing cybersecurity initiative. Adelson said the company expects its Gladiator security solution set to benefit from heightened interest among financial institutions in protecting against risks associated with frontier AI models.
The company plans to integrate Open USD, a stablecoin initiative backed by financial companies including BlackRock, Mastercard and Visa, when it launches later this year. Jack Henry is also beta testing send-and-receive USDC capabilities.
Adelson said the company’s public cloud-native Jack Henry Platform remains central to its strategy, connecting its core systems to newer services. The platform includes about 25 core-related modules, and the company has a deposit-only core solution in closed beta testing. Management said it expects to provide further platform updates at its Sept. 15 Investor Day in Dallas.
Fiscal 2027 Outlook
For fiscal 2027, Jack Henry forecast GAAP revenue growth of 5.5% to 6.5% and non-GAAP revenue growth of 6.3% to 7.3%. The company expects non-GAAP operating margin to expand by 20 to 40 basis points.
Carsley said the outlook incorporates higher self-insured medical costs, cybersecurity and infrastructure investments tied to AI and frontier models, and the company’s data center consolidation initiative, Project EC 2030. She said the company is cautiously optimistic that it could raise its margin-expansion outlook as the year progresses.
The company expects first-quarter non-GAAP revenue growth to fall modestly below the low end of its full-year range, primarily because its Jack Henry Connect client conference will occur in the fiscal second quarter rather than the first quarter. The event typically produces about $6 million in revenue and approximately $10 million in expense, Carsley said.
Jack Henry projected fiscal 2027 GAAP earnings per share of $7.33 to $7.38, representing growth of 5% to 6%, and forecast free-cash-flow conversion of 85% to 100%. The company’s initial deconversion-revenue assumption is $23 million for the year.
About Jack Henry & Associates (NASDAQ:JKHY)
Jack Henry & Associates, Inc is a leading provider of technology solutions and payment processing services for the financial services industry. Founded in 1976 and headquartered in Monett, Missouri, the company develops and supports a comprehensive suite of software and services designed to help banks, credit unions and other financial institutions streamline operations, improve customer engagement and manage risk.
The company’s core processing platforms deliver end-to-end account processing, general ledger, deposit operations and loan servicing functionality.
