Jack Henry & Associates reported QQ1 2025 revenue of $600.98 million, up 5% year over year, with non-GAAP revenue growth of 5.3% and a 89-basis-point decline in non-GAAP margins, resulting in an operating margin of 25.2% and a net income margin near 19.8%. Management reaffirmed full-year guidance for non-GAAP revenue growth of 7-8% and anticipated margin expansion of 25-40 basis points, underscoring a path to mid-single-digit margin improvement as the year progresses. The quarter showcased strong underlying profitability driven by recurring revenue, cloud momentum, and a robust multiyear deal pipeline, including six core wins (including a $7 billion asset win) and broad deployment of private and public cloud offerings.
Key growth drivers included: ongoing cloud migration (private cloud at roughly 73% of clients with long runway to migrate to public cloud and a planned deposit-only core in 2026), accelerating Faster Payments adoption, and expanding Digital and Fraud/Compliance solutions (Financial Crimes Defender, data broker capabilities). The Banno platform continued to scale with 12 new retail clients and 18 Banno Business deals in the quarter, supported by a broad ecosystem approach and a high retention of third‑party fintechs at the annual Jack Henry Connect conference. Cash flow remained strong, with operating cash flow of $116.9 million and free cash flow of $59.2 million for QQ1, and trailing twelve-month free cash flow of $289 million (72% conversion).
Looking ahead, management emphasized execution cadence rather than quarterly deltas, noting that the true signal is the annual performance, with a favorable cadence expected in the second half as implementation efforts align with the expanded product roadmap. The investment thesis rests on leveraging a cloud-first platform, open APIs, and a broad set of differentiated solutions (Banno, Defender, 1033/API data integrations, and data broker) to win larger cores and accelerate cross-sell into banks and credit unions.