Jack Henry & Associates (JKHY) delivered solid Q3 FY2025 results with a continued shift toward high-margin, recurring revenue levers. GAAP revenue rose 9% year over year and non-GAAP revenue grew 7%, accompanied by a significant margin expansion of 207 basis points to 23.0% on a non-GAAP basis. Deconversion revenue contributed meaningfully, totaling approximately $9.6 million in Q3 and guiding a full-year deconversion range of $22–$28 million, underscoring accelerated industry consolidation. Management highlighted a durable pipeline in core processing and cloud services, successful migration of clients to private cloud, and ongoing monetization of higher-margin offerings such as Banno, digital platforms, and real-time payments facilitation.
The company reaffirmed and modestly adjusted its full-year guidance to reflect macro uncertainty, with non-GAAP revenue growth expected to be 6.0–6.5%, non-GAAP margin expansion of 60–70 basis points, a 23% tax rate, and GAAP EPS of $6.00–$6.09. Free cash flow (FCF) conversion remained robust at 65–75%, with trailing twelve-month FCF around $303 million and a strong cash-generating profile from high-recurrence, long-duration contracts. The balance sheet remains healthy, with substantial goodwill and intangibles, moderate leverage (total debt $170m; net debt $130.13m), and ample liquidity (cash $39.9m). The outlook remains constructive, anchored by 76% of total revenue from reoccurring cloud/data-processing services, a cloud-first trajectory, and an expanding suite of SMB solutions and payments technology.