Jack Henry sells the software and payment services that banks and credit unions use to run accounts and serve customers. In the fiscal year ended June 30, 2026, sales and profit grew, while lower cash taxes helped lift cash from operations to $762 million. Dividends and sharply higher share repurchases exceeded the cash left after software and equipment spending, reducing year-end cash to $12 million. The business can continue investing, but its smaller cash balance makes cash generation, borrowing capacity, and the pace of future buybacks more closely connected.
Analysis period: July 1, 2025–June 30, 2026. Research cutoff: October 16, 2026, New York time.
Source: Jack Henry FY2026 Form 10-K, consolidated income and cash-flow statements, pp. 41–44; liquidity discussion, pp. 32–34.
1. More payments and digital services expanded the business beyond its core banking systems
Payments and complementary software supplied most of the annual sales increase. A bank may first hire Jack Henry to maintain deposit and loan records, then buy card processing, mobile banking, fraud detection, or business banking tools. Those additional services let Jack Henry earn more from a customer without needing another bank to open.
This matters because its customer industry is consolidating. The filing reports that the number of U.S. commercial banks and savings institutions fell 13% between the end of 2020 and the end of 2025; credit union numbers fell 16%. When two institutions merge, they may choose a single technology provider. Jack Henry therefore needs new competitive wins and more business from surviving institutions to offset customer losses through mergers.
Its reach is broader than its core-system customer list. It serves more than 900 banks and 700 credit unions with core processing, plus roughly 5,600 clients buying products that can work with another supplier’s core system. Less than 1% of revenue comes from customers outside the United States, so this is principally a U.S. financial-services business.
Source: FY2026 Form 10-K, Item 1, “Who We Serve” and “Our Industry,” pp. 5–6; Note 2, p. 49.
The segment comparison shows where growth came from. “Segment income” below means sales less the segment’s cost of delivering its services. Company-wide research, selling, and administrative costs still have to be deducted.
| Consolidated segment results, USD millions | FY2025 revenue | FY2026 revenue | Revenue growth | FY2025 segment income | FY2026 segment income |
|---|---|---|---|---|---|
| Core banking systems | 732.924 | 768.452 | 4.8% | 437.685 | 463.566 |
| Payments | 873.498 | 936.006 | 7.2% | 413.347 | 456.467 |
| Complementary software and services | 694.771 | 752.214 | 8.3% | 425.114 | 465.488 |
| Corporate Services | 74.095 | 87.667 | 18.3% | −261.605 | −274.833 |
| Total | 2,375.288 | 2,544.339 | 7.1% | 1,014.541 | 1,110.688 |
Reporting basis: FY2025 figures use the segment classifications restated in the FY2026 filing. Corporate Services includes shared technology infrastructure costs as well as hardware and other sales; its negative result is not the loss of a stand-alone hardware business. Deducting FY2026 research expense of $176.445 million and selling and administrative expense of $299.210 million from total segment income gives consolidated operating profit of $635.033 million.
Source: FY2026 Form 10-K, Note 14, pp. 63–65; segment discussion, pp. 30–32.
Payments and Complementary together added $120.0 million of the company’s $169.1 million sales increase. Management attributes payment growth to card service and risk-management fees, faster payments, and payment processing. Digital revenue benefited from more active users and transaction volumes. Cloud processing and hosting also grew as clients and volumes increased. The filing supports these operating drivers, but does not provide a complete numerical split between price increases and additional usage.
The revenue mix also shows customers buying more hosted services. Private and public cloud revenue rose from $756.9 million to $816.1 million, while on-premise support fell from $353.1 million to $336.8 million. A prior-year contract change contributed to the software-usage decline, so the whole decrease should not be treated as customers migrating to the cloud.
Source: FY2026 Form 10-K, MD&A, pp. 28–32; Note 2 revenue categories, p. 49.
Sales activity gives a reason to expect further implementations. At its September investor day, Jack Henry reported 58 competitive core wins in FY2026, including 14 institutions with more than $1 billion of assets. The share of wins including core, digital, and card services together increased from 39% to 59%. This supports management’s effort to sell a broader package to each institution. Reported core-client retention above 99% excludes mergers and acquisitions, the very source of attrition that consolidation creates.
Source: September 15, 2026 investor day, Greg Adelson presentation, PDF pp. 10 and 13.
The September 21 announcement that $3 billion-asset Centreville Bank selected Jack Henry illustrates the approach. Its selection included core processing, Banno digital banking, treasury management, and workflow tools. Centreville’s executive cited room to add capabilities as the bank grows. The announcement establishes a customer selection; it gives neither contract value nor a revenue-start date.
Source: Centreville Bank selection announcement, September 21, 2026.
2. Annual profit improved, but the fourth quarter exposed rising costs
Jack Henry kept more profit from each sales dollar over the full year, although that improvement reversed in the final quarter. Annual revenue grew faster than the cost of delivering services. Payments and Complementary supplied the largest increases in segment income, more than covering higher shared infrastructure, research, and administrative costs.
The three-year record helps distinguish annual progress from the weaker finish.
| Consolidated reported results, USD millions except percentages and EPS | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
| Revenue | 2,215.543 | 2,375.288 | 2,544.339 |
| Operating profit | 489.391 | 568.715 | 635.033 |
| Operating margin | 22.09% | 23.94% | 24.96% |
| Net income | 381.816 | 455.748 | 502.776 |
| Net margin | 17.23% | 19.19% | 19.76% |
| Diluted earnings per share, USD | 5.23 | 6.24 | 6.98 |
Calculation notes: Operating margin is operating profit divided by revenue. Net margin uses net income instead. FY2026 revenue grew 7.1%, operating profit 11.7%, and net income 10.3%. FY2025 revenue growth was 7.2%.
Source: FY2026 Form 10-K, consolidated income statements, p. 41.
Annual cost of revenue increased 5.4%, below sales growth. Research expense rose 8.4%, while selling and administrative expense rose 5.7%. Management identifies higher compensation, staffing and benefits, software amortization, and internal software-license fees among the pressures. These ongoing costs remain in management’s adjusted profit figures.
Some reported income came from less regular sources. Customers terminating contracts early generated deconversion fees, often following a merger. Jack Henry recognizes those fees as the remaining services are delivered. They compensate for an ending relationship but do not establish future demand. FY2026 also included a $6.829 million pretax gain on aircraft and related equipment previously classified for sale. The small Victor acquisition contributed sales but operated at a loss in the period included.
Sources: FY2026 Form 10-K, MD&A, pp. 28–30; Note 2, pp. 48–49; Note 5, p. 53; Note 13, pp. 62–63.
Removing management’s specified items leaves the annual improvement intact. The table also tests whether the fourth-quarter decline disappears on the same adjusted basis.
| Operating-profit reconciliation, USD millions | FY2025 | FY2026 | April–June 2025 | April–June 2026 |
|---|---|---|---|---|
| Reported operating profit | 568.715 | 635.033 | 155.697 | 136.773 |
| Remove deconversion profit | −27.663 | −29.953 | −17.938 | −4.616 |
| Remove prior contract-change profit | −2.358 | 0.000 | −0.180 | 0.000 |
| Remove net asset-sale gain | 0.000 | −6.829 | 0.000 | 0.000 |
| Add back acquisition operating loss | 0.000 | 2.959 | 0.000 | 1.141 |
| Management-adjusted operating profit | 538.694 | 601.210 | 137.579 | 133.298 |
Reporting basis: All adjustments are pretax; this is an operating-profit comparison, not adjusted net income. The measure retains stock compensation and the remaining business’s depreciation and amortization.
Sources: FY2026 Form 10-K, MD&A, pp. 28–30; August 18, 2026 earnings release, “Impact of Non-GAAP Adjustments.”
In April–June, revenue rose 4.7% to $644.0 million, but operating profit fell 12.2%. Lower deconversion profit explains much of the fall. Yet adjusted operating profit also declined 3.1%, and its margin fell from 23.2% to 21.1%. Rising personnel, medical, software, and development costs therefore matter beyond the timing of termination fees. The annual result gives evidence of improved efficiency; the final quarter gives evidence that maintaining it requires tighter control of costs as sales grow.
Source: August 18, 2026 earnings release, quarterly operating results and adjustment tables.
Annual net profit grew slightly slower than operating profit because the effective tax rate increased from 22.2% to 23.0%. The filing attributes this mainly to investment tax credits that did not recur and differences in stock-compensation tax effects. Lower interest expense helped, but lower interest income nearly offset that benefit.
Share repurchases also helped earnings per share grow faster than total profit. The average share count used for diluted EPS, which includes the effect of potential shares from employee awards, fell 1.4%, to 72.043 million. Using the prior year’s average share count, FY2026 profit would have produced about $6.88 per share, compared with approximately $6.98 using the actual count. Most EPS growth came from higher profit; roughly ten cents came from dividing that profit among fewer average shares.
Source: FY2026 Form 10-K, MD&A, p. 30; consolidated income statements, p. 41; Note 11, p. 61. The constant-share-count comparison is calculated.
3. Lower cash taxes helped fund growth, while customer contracts absorbed cash
The increase in operating cash flow reflected both higher profit and a large change in tax timing. Jack Henry paid $38.9 million of income taxes, down from $117.6 million. Its income statement still recorded $150.0 million of tax expense. Cash paid to tax authorities and tax expense measuring the year’s profit are different amounts.
The company says the July 2025 tax legislation restored immediate deductions for domestic research spending and allowed deductions for previously deferred domestic research costs. It also restored full bonus depreciation for qualifying property. These provisions reduced current cash payments without materially reducing the company’s effective tax rate.
The accounting consequence was a higher deferred tax liability: $366.1 million, versus $240.0 million. That balance records tax differences expected to reverse over time. Taking a deduction earlier leaves fewer deductions for later periods. The software and research-related tax balances explain $122.9 million of the $126.0 million net increase. This gives the cash improvement a clear explanation, but does not make the same annual increase in cash a recurring operating gain.
Source: FY2026 Form 10-K, Note 8, pp. 56–59.
The following bridge checks how reported profit became cash. Positive adjustments add cash relative to profit; negative amounts reduce it.
| Profit-to-cash bridge, USD millions | FY2025 | FY2026 |
|---|---|---|
| Net income | 455.748 | 502.776 |
| Depreciation and amortization | 204.751 | 213.241 |
| Deferred tax adjustment | −3.496 | 126.032 |
| Stock compensation | 28.392 | 32.460 |
| Other noncash disposal adjustments | 1.966 | 2.563 |
| Receivables movement | 15.056 | −29.268 |
| Prepayments, deferred contract costs, and other assets | −50.933 | −85.512 |
| Payables, accrued expenses, and income-tax balances | 15.579 | −9.431 |
| Net change in deferred revenue | −25.559 | 9.099 |
| Operating cash flow | 641.504 | 761.960 |
Calculation notes: The deferred tax adjustment is part of this reconciliation. The $78.713 million fall in cash taxes is a separate comparison of actual payments, not an additional amount to add to the bridge.
Source: FY2026 Form 10-K, consolidated cash-flow statements, p. 44; Note 8, p. 58.
Amounts billed to customers but not yet collected, after allowing for expected nonpayment, reached $349.1 million at year-end, compared with $318.0 million a year earlier. The increase was 9.8%, above revenue growth. After excluding receivables acquired with Victor, the increase used $29.3 million of operating cash. More cash remained tied up in customer bills at year-end. The provision for expected credit losses fell, giving no matching signal of a broad rise in nonpayment.
Jack Henry also pays to win and implement contracts before recovering all those costs through customer revenue. Sales commissions and implementation costs still waiting to be charged against future revenue rose from $541.7 million to $599.5 million. Separately, contract assets rose from $157.9 million to $178.5 million. These include incentives paid or credited to clients that reduce revenue over the agreement’s life.
Source: FY2026 Form 10-K, balance sheets, p. 42; Note 1, p. 46; Note 2, pp. 49–50; Note 13, p. 63.
Customer payments received before revenue is earned provide a partial offset. Deferred revenue increased to $372.5 million from $363.4 million. It represents services still owed to customers, rather than borrowing that must be repaid on a bank’s schedule.
The company estimated $8.441 billion of remaining revenue under existing contracts, with 23% expected over the following twelve months. That is approximately $1.941 billion of expected revenue, not money already collected. Some contract fees depend on transaction volumes, so estimates of future activity affect the amounts recorded. The auditors identified this estimation as a significant area of judgment.
Contracts commonly lasting six years give visibility, but Jack Henry must still perform the services, support clients, and pay the costs that generate that revenue. Growth therefore brings both future sales and upfront cash needs.
Source: FY2026 Form 10-K, Item 1, p. 5; auditor’s critical audit matter, p. 39; Notes 1–2, pp. 45 and 49–50.
4. Investment was covered, but dividends and buybacks used more than the remainder
Jack Henry financed its software and equipment spending from operations; its larger capital returns then drew on cash and borrowing. Management describes product development, selective acquisitions, dividends, and repurchases as ways to use the company’s financial resources. Repurchases reduced the share count, but they also reduced the cash immediately available for those other purposes.
For this analysis, free cash flow means operating cash less cash spending on property and equipment, purchased internal-use software, and developed software. It excludes proceeds from selling assets, acquisitions, and financial investments. This definition captures the substantial software spending that a simple “operating cash minus equipment” calculation would miss.
| Cash generation and allocation, USD millions | FY2025 | FY2026 |
|---|---|---|
| Operating cash flow | 641.504 | 761.960 |
| Property and equipment spending | 53.358 | 67.103 |
| Purchased internal-use software | 5.363 | 4.108 |
| Developed software | 172.445 | 184.243 |
| Total spending deducted | 231.166 | 255.454 |
| Free cash flow before asset sales, calculated | 410.338 | 506.506 |
| Cash dividends paid | 164.644 | 170.405 |
| Cash paid for share repurchases | 35.051 | 448.173 |
| Remainder after dividends and repurchases | 210.643 | −112.072 |
Reporting basis: Spending and distributions are shown as positive cash uses. The final row subtracts dividends and repurchases from calculated free cash flow. Jack Henry’s own free-cash-flow measure adds asset-sale proceeds; its FY2026 amount is $539.333 million, including $32.827 million from those sales.
Sources: FY2026 Form 10-K, cash-flow statements, p. 44; August 18, 2026 earnings release, free-cash-flow reconciliation.
The software spending has a business purpose: improving existing products and developing new services. The income statement’s $176.4 million research expense does not capture all that spending. Once development meets the applicable accounting requirements, some costs become software assets and are charged to profit over future years. Cash leaves when developers and suppliers are paid, even though the expense reaches the income statement later.
Net software assets increased from $617.0 million to $656.3 million. Internal-use software accounted for $492.8 million of the closing balance, up from $434.3 million. Software amortization—the annual expense for using those assets—was $154.2 million. The financial consequence is a continuing need to earn revenue from completed products as their development costs move into expenses.
Net property and equipment stayed near $220.5 million despite new spending, reflecting depreciation, asset disposals, and transfers to assets held for sale. Management says the $67.1 million cash expenditure was mainly for computer equipment. A facility with a $9.2 million carrying value was classified for sale. The filing does not divide investment between maintenance and expansion, so neither depreciation nor the spending total provides that split.
Source: FY2026 Form 10-K, liquidity discussion, pp. 32–33; accounting policies, pp. 45–46; Notes 5–6, pp. 53–55.
Buybacks were the largest change in cash allocation. They rose by $413.1 million, while free cash flow before asset sales rose by $96.2 million. Including the Victor purchase, net financial investments, and asset-sale proceeds, investing activities used $277.7 million. Financing activities used $574.1 million, despite $40.0 million of net borrowing. Those flows reconcile to an $89.9 million reduction in cash.
This also explains why shareholders’ equity fell despite higher profit. Equity declined from $2.131 billion to $2.052 billion because repurchases and dividends exceeded net income and the additions from employee share arrangements. The company bought 2.947 million shares into treasury, rather than retiring them, while issuing 181,632 shares for employee plans. Outstanding shares fell from 72.836 million to 70.071 million. Stock compensation expense was $32.460 million, compared with $28.392 million; buybacks more than offset the shares issued during the year.
Source: FY2026 Form 10-K, balance sheets and equity statements, pp. 42–43; cash-flow statements, p. 44; Note 1, p. 47.
A bank credit line provides additional access to cash. Jack Henry replaced its previous agreement in March 2026 with a $1 billion line that allows repeated borrowing and repayment without pledging assets. With $40 million outstanding at June 30, unused borrowing capacity was $960 million, subject to the agreement’s conditions. The facility matures in March 2031, pushing the main refinancing date beyond the prior August 2027 maturity. A separate unused $50 million line expired in July 2026 and is not counted as continuing capacity.
Borrowing costs vary with market rates and the company’s debt position. The agreement charges adjusted SOFR, a short-term interest-rate benchmark, plus 1.000–1.625 percentage points, or an alternative base-rate formula. Unused commitments also carry a fee. The company reported compliance with its financial covenants. Annual interest expense fell to $5.4 million, and interest paid was $4.6 million; a one-percentage-point rate increase on the closing $40 million borrowing would add $0.4 million a year.
Sources: FY2026 Form 10-K, Note 7, p. 55; market-risk disclosure, p. 36; March 25, 2026 credit agreement, “Applicable Margin” and Section 6.20.
Operating commitments also require cash. The filing discloses $2.136 billion of contractual purchase obligations, separate from financing debt. It identifies $94.146 million of agreements signed in June 2026, spread evenly over fiscal 2027–2029, or $31.382 million annually. The filing does not provide a full maturity schedule for the remaining purchase obligations, so the entire total should not be treated as payable next year.
Existing operating leases require $41.611 million of undiscounted payments, including $10.275 million in FY2027. Their balance-sheet liability is $37.821 million after discounting future payments. The company also disclosed $5.920 million for leases signed but not yet commenced and $32.952 million of property-and-equipment purchase commitments. These commitments reinforce the value of flexible buybacks: operating and development needs continue even when management chooses to reduce repurchases.
Source: FY2026 Form 10-K, capital requirements, p. 33; Note 4, pp. 51–52. The detailed commitments are not added to the purchase-obligation total because their overlap is not fully specified.
5. Modernization can deepen customer relationships, but competitors offer similar paths
Jack Henry’s strategy is to add useful services without forcing every customer to replace its entire banking system. Its public-cloud platform connects existing core systems with newer services such as payments, reporting, deposit servicing, and fraud tools. That lets a bank adopt functions in stages. For Jack Henry, the intended benefit is more services sold across an established customer base and to institutions using other core providers.
The small-business strategy follows the same logic. Tap2Local lets businesses accept in-person payments through compatible mobile devices. Rapid Transfers supports faster access to funds. Banks can use these services to improve their offering to business owners; Jack Henry can earn from providing the technology and processing the resulting activity. Adoption and actual usage determine how much revenue follows.
Source: FY2026 Form 10-K, technology modernization and small-business strategy, pp. 7–8.
The $42.390 million Victor acquisition added technology for connecting embedded payment services directly to a bank’s core system. Management’s stated purpose was to expand Payments-as-a-Service capabilities. Of the purchase price, $22.943 million became goodwill—the portion assigned to expected benefits beyond separately identified assets. That acquisition explains the entire increase in goodwill to $827.740 million.
Victor’s included revenue of $5.193 million was small relative to group sales, while its operating loss was $2.959 million. Its near-term contribution was therefore additional capability with a cost, rather than a major source of current earnings. The business case depends on selling that capability more widely through Jack Henry’s bank relationships.
Source: FY2026 Form 10-K, MD&A, pp. 28–32; Notes 6 and 13, pp. 54 and 62–63. Victor’s operating loss equals $5.193 million of included revenue less $8.152 million of included operating costs.
The competitive counterweight is concrete. Fiserv’s May 2026 description of CoreAdvance also emphasizes modular services, open interfaces, and a cloud layer that allows banks to add capabilities gradually. Jack Henry therefore cannot rely on the idea of gradual modernization alone to distinguish its offering. Its customer service, successful implementations, integration quality, and breadth of products must make the difference. Its competitive core wins are evidence of selling success, while the cost of supporting these services remains visible in the fourth-quarter results.
Sources: Fiserv, “CoreAdvance: Modern Banking Designed on Five Key Principles,” May 22, 2026; FY2026 Form 10-K, competition discussion, p. 12, and MD&A.
A further development arrived on October 16: Jack Henry announced plans to integrate with Google Cloud Universal Ledger for tokenized deposits. The proposed service would represent deposits on a shared digital ledger and support programmable, around-the-clock settlement. Management’s purpose is to help banks retain deposit relationships while offering new payment capabilities. The announcement supplies no quantified revenue or deployment timetable, so it strengthens the product direction without establishing a near-term earnings contribution.
Source: Jack Henry’s expanded Google Cloud collaboration, October 16, 2026, published at 11:00 a.m. Eastern time.
6. Trust and implementation costs are the main tests of the next stage
The company has demand to pursue, but protecting customer information and turning new services into profitable usage remain essential. This is especially important for a provider whose clients depend on uninterrupted banking and payment operations.
On August 31, after the annual filing, Jack Henry disclosed a cybersecurity incident affecting a limited part of its internal, non-production environment. According to the company’s investigation at that date, personal information associated with fewer than ten clients was affected. It said client-facing systems, core platforms, and daily processing were not accessed or disrupted, and it judged the incident financially immaterial. It offered two years of credit monitoring and engaged outside forensic specialists.
Management’s report of uninterrupted service limits the demonstrated operating impact. The exposure of personal information still matters because trust supports contract retention and new sales. The August 31 statement provided no quantified remediation or legal-loss estimate; its assessment remains the dated basis used here.
Source: Jack Henry cybersecurity statement, August 31, 2026.
The filing’s other legal disclosures do not identify litigation expected by management to materially harm the consolidated accounts, and they provide no quantified reasonably possible loss range. Tax examinations are more specific: the IRS was examining fiscal 2023–2025 returns at June 30. Tax benefits the company had not accepted as sufficiently certain totaled $23.639 million, with $5.266 million of interest and penalties. After amounts presented against tax assets, the associated long-term liability was $24.905 million. Management did not expect material findings, but the timing and final amount of settlements were uncertain.
These exposures sit alongside the ongoing cost of meeting banking, payment-network, privacy, and security requirements. A new payment service must work reliably and satisfy those requirements before broader usage can translate into profitable growth.
Source: FY2026 Form 10-K, Items 1A and 3, pp. 15–24; Note 8, pp. 58–59; contractual-obligation exclusions, p. 33.
Management’s September investor-day forecast set FY2027 reported revenue at $2.684–$2.709 billion and reported operating margin at 24.5%–24.7%. Those margins are slightly below FY2026’s 24.96%. Applying the endpoints gives approximately $657.6–$669.1 million of operating profit, calculated, versus $635.0 million actually earned in FY2026. The forecast therefore anticipates sales growth lifting total profit even with a lower reported margin.
The forecast included an initial $23 million deconversion-revenue assumption, compared with $42.830 million earned in FY2026. Management also illustrated $250 million of potential FY2027 buybacks, below FY2026’s $448.173 million, and $410–$520 million of free cash flow under its definition. These are plans and estimates. A lower repurchase pace would leave more room for dividends, development, and cash rebuilding; the eventual room depends on actual collections, tax payments, and spending.
Sources: September 15, 2026 investor day, finance presentation, PDF pp. 6 and 10; FY2026 Form 10-K, MD&A and cash-flow statements. The operating-profit range is calculated from guidance endpoints, not a separately issued forecast. Management’s free-cash-flow definition includes asset-sale proceeds.
7. Growth can fund modernization, while buybacks determine the cash left behind
Jack Henry can fund continued modernization, but repeating FY2026’s capital returns would require more cash generation or additional funding. Existing bank relationships, broader product sales, and new core wins support its business outlook. Annual profit improvement survived the removal of management’s specified adjustments, which makes the progress more substantial than an asset-sale gain or termination-fee fluctuation alone.
The weaker final quarter narrows the conclusion: successful sales still have to cover rising staffing, development, infrastructure, and security costs. Lower cash taxes helped fund the year’s activity, while repurchases consumed much of the financial flexibility that activity produced. The long-dated credit facility provides substantial borrowing capacity, but the smaller cash balance leaves less internally held money available for unexpected needs.
The next stage looks strongest if new contracts become live, paying customers, additional products earn revenue without comparable increases in delivery costs, and capital returns fit the cash remaining after investment. Continued cost pressure, customer losses through mergers, or a broader security impact would weaken that assessment. The company’s opportunity is to turn its expanding product range into more profitable service relationships while rebuilding room in its cash budget.
Sources: FY2026 Form 10-K, Items 1, 1A and 7, consolidated financial statements, and Notes 2 and 7; August 18 earnings release, fourth-quarter results; investor-day and cybersecurity sources cited above. The conclusion is an assessment of these disclosed results and conditions.
Reporting basis and calculation notes
Reporting basis: Jack Henry & Associates, Inc. (Nasdaq: JKHY), CIK 0000779152; consolidated U.S. GAAP Form 10-K for the year ended June 30, 2026; filed August 28, 2026; accession 0000779152-26-000067. All subsidiaries are wholly owned and intercompany amounts are eliminated. FY2025 and FY2024 mean the twelve months ended June 30 of those years. April–June comparisons are separate three-month periods. The main financial statements are audited; quarterly and adjusted figures come from the company’s earnings release.
Sources: SEC filing index; 10-K, Note 1 and auditor’s report, pp. 38–39 and 45. Financial-statement totals were also checked against the filing’s XBRL instance, using consolidated annual contexts, U.S. dollar units, and the appropriate balance-sheet dates. Filing amounts in thousands are converted to millions here; per-share amounts remain dollars.
Calculation notes: The research cutoff is October 16, 2026, New York time. Post-filing evidence used consists of the August 31 incident statement, September 15 investor-day materials, September 21 Centreville announcement, and October 16 Google Cloud announcement. These sources update the relevant business questions; they do not establish that every intervening development was reviewed. The security assessment remains dated August 31.
Calculation notes: To compare adjusted operating margins, revenue must be adjusted too. The following checks remove the same categories used in management’s operating-profit reconciliation. All amounts are USD millions.
| Revenue reconciliation | FY2025 | FY2026 | April–June 2025 | April–June 2026 |
|---|---|---|---|---|
| Reported revenue | 2,375.288 | 2,544.339 | 615.372 | 644.023 |
| Remove deconversion revenue | −33.905 | −42.830 | −20.495 | −9.327 |
| Remove contract-change revenue | −15.874 | 0.000 | −1.202 | 0.000 |
| Remove acquisition revenue | 0.000 | −5.193 | 0.000 | −1.598 |
| Adjusted revenue | 2,325.509 | 2,496.316 | 593.675 | 633.098 |
Annual adjusted operating profit divided by this revenue gives margins of 23.16% and 24.08%, an increase of 0.92 percentage points. The comparable quarterly margins are 23.17% and 21.05%. These are non-GAAP measures with specific exclusions, not a claim that every remaining dollar is recurring.
Sources: FY2026 Form 10-K, MD&A, pp. 28–30; August 18 earnings release, adjustment tables. Operating-profit adjustments are pretax and no adjusted net-income measure is used.
Calculation notes: Assets equal liabilities plus shareholders’ equity in both years. In USD millions, FY2026 reconciles as 1,093.762 of liabilities + 2,051.949 of equity = 3,145.711 of assets. FY2025 reconciles as 913.138 of liabilities + 2,130.832 of equity = 3,043.970 of assets.
The cash statements also reconcile. In USD millions, FY2026 opening cash of 101.953 + operating inflow of 761.960 − investing outflow of 277.738 − financing outflow of 574.119 = closing cash of 12.056.
For FY2025, opening cash of 38.284 + operating inflow of 641.504 − investing outflow of 232.163 − financing outflow of 345.672 = closing cash of 101.953, also in USD millions. These endpoints equal balance-sheet cash and cash equivalents; no separate restricted-cash balance is presented.
The equity table separates accumulated profit from employee share arrangements and the cost of repurchased shares. Treasury shares are deducted from equity.
| Equity components, USD millions | June 30, 2025 | FY2026 change | June 30, 2026 |
|---|---|---|---|
| Common stock at par | 1.044 | 0.002 | 1.046 |
| Additional paid-in capital | 652.218 | 36.917 | 689.135 |
| Retained earnings | 3,372.794 | 332.371 | 3,705.165 |
| Treasury stock deduction | −1,895.224 | −448.173 | −2,343.397 |
| Total shareholders’ equity | 2,130.832 | −78.883 | 2,051.949 |
Retained earnings increased by net income of $502.776 million less dividends of $170.405 million. Paid-in capital increased through $32.460 million of stock compensation and $11.635 million of employee share purchases, less $7.177 million of employee tax withholding and $0.001 million allocated to common stock’s par value. Comprehensive income equaled net income, so no other comprehensive-income movement is required.
Closing shares outstanding equal 104,597,621 issued shares less 34,526,862 treasury shares, or 70,070,759. The filing presents no separate inventory balance.
Calculation notes: Receivables increased by $31.134 million, including $1.866 million acquired with Victor; subtracting that acquisition amount leaves the $29.268 million operating cash use. The credit-loss allowance is the amount set aside for expected nonpayment. Its $6.659 million opening balance + $1.920 million of new expected-loss expense − $2.250 million of bills written off − $0.068 million of other movements = $6.261 million at year-end. The balance fell because write-offs and other reductions exceeded the new expense.
Sources: FY2026 Form 10-K, financial statements, pp. 41–44; Notes 1 and 13, pp. 46–47 and 62–63.
Calculation notes: The credit agreement normally limits its defined net-debt-to-earnings ratio to 3.5 times and requires its defined earnings-to-interest ratio to be at least 3.5 times. A qualifying acquisition can temporarily raise the former limit to 4.0 times, subject to conditions. These tests use earnings before interest, taxes, depreciation, and amortization, with the adjustments specified in the contract. Unused commitment fees range from 0.100% to 0.200% annually.
Lease payments fall due as follows, in USD millions:
| Payment period | Amount |
|---|---|
| FY2027 | 10.275 |
| FY2028 | 9.982 |
| FY2029 | 7.379 |
| FY2030 | 6.061 |
| FY2031 | 4.777 |
| Later years | 3.137 |
| Total payments | 41.611 |
Subtracting $3.790 million to reflect the timing of future payments gives the $37.821 million liability recorded today.
Sources: March 25, 2026 credit agreement, pricing definitions and Section 6.20; FY2026 Form 10-K, Note 4, p. 52.
This report provides business and financial information for general education. It is not investment advice or a recommendation to buy or sell securities.