Jack Henry & Associates, Inc. JKHY reported first-quarter fiscal 2020 earnings of $1.16 per share, which surpassed the Zacks Consensus Estimate by 12 cents and surged 7.4% from the year-ago quarter.
Revenues improved 12% year over year to $438 million. The figure also outpaced the Zacks Consensus Estimate of $421 million.
Further, the company’s non-GAAP revenues came in $420.7 million, up 9.4% year over year.
The top line was driven by solid performance of core and payments segments during the reported quarter. Additionally, accelerating processing, and services and support revenues contributed to the results.
Coming to the price performance, Jack Henry has returned 12.8% on a year-to-date basis, outperforming the industry’s rally of 12.1%.
We believe Jack Henry’s continued core customer wins and robust new payment platform will instill investor optimism in the stock.
Segments in Detail
Core: The company generated $155.9 million revenues from this segment (35.6% of total revenues), improved 12% year over year.
Payments: This segment yielded $149.7 million revenues (34.2% of total revenues), climbing 12% from the year-ago quarter.
Complementary: This segment generated $117.2 million revenues (26.7% of total revenues), increasing 11% year over year.
Corporate & Other: The company generated $15.2 million revenues from this segment (3.5% of total revenues), surging 12% from the prior-year quarter.
Jack Henry & Associates, Inc. Price, Consensus and EPS Surprise
Jack Henry & Associates, Inc. price-consensus-eps-surprise-chart | Jack Henry & Associates, Inc. Quote
In first-quarter fiscal 2020, total operating expenses were $319.8 million, reflecting an increase of 10.5% year over year. This can primarily be attributed to rising headcounts, which led to an increase in personnel costs and salaries. Further, surge in selling, general and administrative expenses added to expenses.
As a percentage of revenues, operating expenses contracted 60 bps year over year to 73.1%.
Per the company reported, operating margin was 27%, expanding 100 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2018, cash and cash equivalents totaled $96.7 million, which improved from $93.6 million as of Jun 30, 2018.
Trade receivables were nearly $234.4 million, down from $310.1 million in the previous quarter.
Further, the company generated $123.1 million of cash from operations in fiscal first quarter.
Zacks Rank & Key Picks
Jack Henry currently has a Zacks Rank #3 (Hold).
Some other top-ranked stocks in the broader technology sector are Alteryx, Inc. AYX, Zendesk, Inc. ZEN and CommVault Systems, Inc. CVLT. All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Alteryx, Zendesk and CommVault is currently pegged at 39.85%, 29.52% and 10%, respectively.
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