Jack Henry & Associates Announces Fiscal Third Quarter 2025 Deconversion Revenue Results
Rhea-AI Summary
Jack Henry has reported its fiscal third quarter 2025 deconversion revenue of $9.6 million for the period ending March 31, 2025. The company has updated its full-year fiscal 2025 deconversion revenue guidance to range between $22 million and $28 million.
Deconversion revenue primarily occurs when a Jack Henry client is acquired by another financial institution, leading to contract termination. The company emphasizes that this revenue stream is outside their control and does not reflect their core business operations of providing services to clients. As such, Jack Henry excludes deconversion revenue from non-GAAP revenue in their quarterly and annual earnings releases.
This forward-looking statement is subject to inherent risks and uncertainties that could affect actual results, as detailed in Jack Henry's SEC filings, particularly under the Risk Factors section.
Positive
- Q3 2025 deconversion revenue of $9.6M realized
- Full year fiscal 2025 deconversion revenue guidance maintained between $22M-$28M
Negative
- Deconversion revenue primarily comes from client loss due to acquisitions
- Revenue stream is outside company's control and not representative of core business operations
- Company excludes deconversion revenue from non-GAAP reporting due to its unpredictable nature
Insights
Jack Henry reports $9.6M in Q3 deconversion revenue and updates FY2025 guidance to $22-28M for this non-core revenue stream.
Jack Henry & Associates has reported
This disclosure highlights an important aspect of Jack Henry's financial reporting structure. Deconversion revenue, which occurs primarily when client financial institutions are acquired by other entities and terminate their Jack Henry contracts, represents a non-operational revenue stream that the company explicitly excludes from its non-GAAP financial reporting.
The company's approach to separating deconversion revenue from its non-GAAP metrics demonstrates prudent financial transparency. Since this revenue stream is:
- Generated by factors outside Jack Henry's control
- Irregular and unpredictable in timing
- Not representative of ongoing business operations
By isolating these termination fees in their reporting, management provides investors with clearer visibility into the company's sustainable revenue streams versus one-time contract termination payments. The updated guidance range suggests management now has improved visibility into potential client acquisition activity for the remainder of fiscal 2025.
Without comparative figures from previous periods in this press release, it's difficult to determine whether the current figures represent an increase or decrease in deconversion activity, which would correlate with financial institution consolidation rates affecting Jack Henry's client base.
The majority of deconversion revenue is generated when one of Jack Henry's clients agrees to be acquired by another financial institution, resulting in the termination of the client's contract with Jack Henry. In these circumstances, Jack Henry's recognition of deconversion revenue is driven by factors outside Jack Henry's control, and this revenue does not represent the true operations of Jack Henry's ongoing business of providing services to clients. As a result, Jack Henry excludes deconversion revenue from non-GAAP revenue reported in its quarterly and annual earnings releases.
Statements made in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Because forward-looking statements relate to the future, they are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, those discussed in Jack Henry's Securities and Exchange Commission filings, including Jack Henry's most recent reports on Form 10-K and Form 10-Q, particularly under the heading Risk Factors. Any forward-looking statement made in this current report speaks only as of the date of the current report, and Jack Henry's expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether because of new information, future events or otherwise.
About Jack Henry & Associates, Inc.®
Jack HenryTM (Nasdaq: JKHY) is a well-rounded financial technology company that strengthens connections between financial institutions and the people and businesses they serve. We are an S&P 500 company that prioritizes openness, collaboration, and user centricity – offering banks and credit unions a vibrant ecosystem of internally developed modern capabilities as well as the ability to integrate with leading fintechs. For more than 48 years, Jack Henry has provided technology solutions to enable clients to innovate faster, strategically differentiate, and successfully compete while serving the evolving needs of their accountholders. We empower approximately 7,500 clients with people-inspired innovation, personal service, and insight-driven solutions that help reduce the barriers to financial health. Additional information is available at www.jackhenry.com.
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SOURCE Jack Henry & Associates, Inc.
FAQ
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