Jack Henry (JKHY)

Summary

Jack Henry & Associates (JKHY) is a stable, high-return company with embedded software solutions integral to financial institutions, with a 99% customer retention rate.

Jack Henry provides core processing and payment technologies to small and mid-sized banks and credit unions. They serve 7,500+ clients, including 940 banks and 720 credit unions, through integrated solutions in core processing, payments, and complementary services. Payments is the largest revenue contributor (37%), followed by Core (31%), Complementary (28%), and Corporate & Other (4%).

• Payments (1/3 of revenue): Debit/credit card processing, bill pay and newer real-time payment solutions. Driven by volume growth, tied to increasing digital payment trends.
• Core Processing (1/3 of revenue): Software that manages essential bank operations (deposits, loans, general ledger). Built largely organically, with a focus on cloud transition.
• Complementary Solutions (1/3 of revenue): Ancillary products (fraud prevention, treasury management, digital banking) built largely through acquisitions.

Their business model centers on delivering business-critical services (mostly via long-term contracts), resulting in very high recurring revenue (around 90%).

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