Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statements included in this Form 10-Q for the fiscal quarter ended March 31, 2025.

OVERVIEW

Jack Henry & Associates, Inc. is a well-rounded financial technology company headquartered in Monett, Missouri, that employs approximately 7,200 full-time and part-time associates nationwide, and is a leading provider of technology solutions and payment processing services primarily to community and regional financial institutions. Our solutions serve approximately 7,500 clients and consist of integrated data processing systems solutions to U.S. banks ranging from de novo to multi-billion-dollar institutions with assets up to $50 billion, core data processing solutions for credit unions of all sizes, and non-core highly specialized core-agnostic products and services that enable financial institutions of every asset size and charter, and diverse corporate entities outside the financial services industry, to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. Our integrated solutions are available for on-premise installation and delivery in our private and public cloud.

Each of our solutions shares the fundamental commitment to provide high-quality business systems, service levels that consistently exceed client expectations, and integration of solutions and practical new technologies. The quality of our solutions, our high service standards, and the fundamental way we do business typically foster long-term client relationships, attract prospective clients, and have enabled us to capture substantial market share.

Through internal product development, disciplined acquisitions, and alliances with companies offering niche solutions that complement our proprietary solutions, we regularly introduce new products and services and generate new cross-sales opportunities. We provide compatible computer hardware for our on-premise installations and

secure processing environments for our outsourced solutions in our private and public cloud. We perform data conversions, software implementations, initial and ongoing client training, and ongoing client support services.

We believe our primary competitive advantage is client service. Our support infrastructure and strict standards provide service levels that generate high levels of client satisfaction and retention. We consistently measure client satisfaction using a variety of surveys, such as an annual survey on the client's anniversary date and randomly-generated surveys initiated each day by routine support requests. Dedicated surveys are also used to grade specific aspects of our client experience, including product implementation, education, and consulting services.

Our two primary revenue streams are “services and support” and “processing.” Services and support includes: “private and public cloud” revenues that predominantly have contract terms of six years at inception; “product delivery and services” revenues, which include revenues from the sales of licenses, implementation services, deconversions, consulting, and hardware; and “on-premise support” revenues, composed of maintenance fees that primarily contain annual contract terms. Processing includes: "remittance” revenues from payment processing, remote capture, and ACH transactions; “card” revenues, including card transaction processing and monthly fees; and “transaction and digital” revenues, which include transaction and mobile processing revenues. We continually seek opportunities to increase revenue while at the same time containing costs to expand margins.

We have four reportable segments: Core, Payments, Complementary, and Corporate and Other. The respective segments include all related revenues along with the related cost of revenue.

A detailed discussion of the major components of the results of operations follows. All amounts in the following discussion are in thousands, except per share amounts.

RESULTS OF OPERATIONS

For the third quarter of fiscal 2025, total revenue increased 8.6%, or $46,525, compared to the same quarter in fiscal 2024. Total revenue less deconversion revenue of $9,644 for the current fiscal quarter and $843 for the prior fiscal year third quarter results in an increase of 7.0%, quarter over quarter. This increase was primarily driven by organic growth in our revenue lines including data processing and hosting within private and public cloud, card, Jack Henry digital, which is inclusive of Banno, and payment processing, which is inclusive of PayCenter, partially offset by the decrease in license and hardware revenues, quarter over quarter.

Operating expenses increased 4.7%, or $19,884, for the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024. Total operating expenses less deconversion operating expenses of $2,794 for the current fiscal quarter and $849 for the prior fiscal year third quarter results in an increase of 4.2%. This increase was primarily driven by higher direct costs and net personnel costs partially offset by the increase in labor cost deferral.

Operating income increased 23.8%, or $26,641, for the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024. Removing from total operating income the effects of deconversion operating income of $6,851 for the current fiscal quarter and deconversion operating loss of $6 for the prior fiscal year third quarter results in an increase of 17.6%, quarter over quarter. This increase was primarily driven by organic revenue growth partially offset by increased operating expenses detailed above tempered by our disciplined approach to compensation, headcount and infrastructure costs, quarter over quarter.

The provision for income taxes increased 13.8%, or $3,734, for the third quarter of fiscal 2025, compared to the third quarter of fiscal 2024. Removing from the provision for income taxes the effect of taxes on deconversion net income of $1,644 for the current fiscal quarter and on deconversion net loss of $1 for the prior fiscal year third quarter results in an increase of 7.7%, quarter over quarter. This increase was primarily driven by the increase in income before income taxes partially offset by a decrease in the Company's effective tax rate due to the timing of filing our Federal tax return and recognition of return-to-provision adjustments. The effective tax rate for the current fiscal third quarter was 21.7% compared to 23.7% for the same quarter a year ago.

Net income increased 27.6%, or $24,009, for the third quarter of fiscal 2025, compared to the third quarter of fiscal 2024. Removing from total net income the effects of deconversion net income of $5,207 for the current fiscal quarter and deconversion net loss of $5 for the prior fiscal year third quarter, results in a 21.6% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue for the third quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same quarter last fiscal year.

For the nine months ended March 31, 2025, total revenue increased 6.3%, or $104,285, compared to the same period in fiscal 2024. Total revenue less deconversion revenue of $13,410 for the current fiscal year period and $9,861 for the prior fiscal year period results in an increase of 6.1%, period over period. This increase was primarily driven by organic growth in our revenue lines including data processing and hosting within private and public cloud, card, Jack Henry digital, which is inclusive of Banno, and payment processing, which is inclusive of PayCenter, partially offset by the decrease in license and hardware revenues, period over period.

Operating expenses increased 4.3%, or $55,033, for the nine months ended March 31, 2025 compared to the same period in fiscal 2024. Total operating expenses less deconversion operating expenses of $3,686 for the current fiscal year period and $2,309 for the prior fiscal year period and less Voluntary Employee Departure Incentive Payment ("VEDIP") program expense of $16,443 for the prior fiscal year period results in an increase of 5.5%. This increase was primarily driven by higher personnel costs and direct costs partially offset by the increase in labor cost deferral, period over period. The VEDIP program was a voluntary separation program for certain eligible employees conducted during July 2023 that included a VEDIP payment for the eligible employees who chose to participate in the program.

Operating income increased 13.5%, or $49,252, for the nine months ended March 31, 2025 compared to the same period in fiscal 2024. Removing from total operating income the effects of deconversion operating income of $9,724 for the current fiscal year period and $7,552 for the prior fiscal year period and VEDIP program operating loss of $16,443 from the prior fiscal year period results in an increase of 8.2%, period over period. This increase was primarily driven by organic revenue growth partially offset by increased operating expenses detailed above tempered by our disciplined approach to compensation, headcount and infrastructure costs, period over period.

The provision for income taxes increased 12.7%, or $11,051, for the nine months ended March 31, 2025, compared to the same period in fiscal 2024. Removing from the provision for income taxes the effect of taxes on deconversion net income of $2,334 for the nine months ended March 31, 2025 and $1,812 for the nine months ended March 31, 2024, and the tax benefit on VEDIP expense of $3,946 for the prior fiscal year period results in an increase of 7.4%, period over period. This increase was primarily driven by the increase in income before income taxes partially offset by a decrease in the Company's effective tax rate due to the timing of filing our Federal tax return and recognition of return-to-provision adjustments. The effective tax rate for the current fiscal year period was 23.0% compared to 23.6% for the same period a year ago.

Net income increased 16.9%, or $47,401, for the nine months ended March 31, 2025, compared to the same period in fiscal 2024. Removing from total net income the effects of deconversion net income of $7,390 for the current fiscal year period and $5,739 for the prior fiscal year period and VEDIP program net loss of $12,497 for the prior fiscal year period results in an 11.6% increase period over period. This increase was primarily due to net organic growth in our lines of revenue for the nine months ended March 31, 2025, partially offset by higher operating expenses and the increased provision for income taxes compared to the same period last fiscal year.

As we move into the fourth quarter of fiscal 2025, significant portions of our business continue to provide recurring revenue and our sales pipeline is also encouraging. Our clients continue to face regulatory and operational challenges which our products and services address, and in these times they have an even greater need for our solutions that directly address institutional profitability, efficiency, and security. We believe our strong balance sheet, access to extensive lines of credit, the strength of our existing product line, and an unwavering commitment to superior client service position us well to address current and future opportunities.

A detailed discussion of the major components of the results of operations for the three and nine months ended March 31, 2025, follows.

Discussions compare the current fiscal year's three and nine months ended March 31, 2025, to the prior fiscal year's three and nine months ended March 31, 2024.

REVENUE

Services and Support			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Services and Support			$	330,792					$	305,017					8.5		%				$	1,010,498					$	959,214					5.3		%
Percentage of total revenue			57		%				57		%										57		%				58		%

Services and support revenue increased 8.5% for the third quarter of fiscal 2025 compared to the same quarter a year ago. Reducing services and support revenue for deconversion revenue from each quarter, which was $9,644 for the current fiscal year quarter and $843 for the prior fiscal year quarter, results in growth of 5.6% quarter over

quarter. This increase was primarily driven by double-digit growth in data processing and hosting revenues within private and public cloud as new and existing clients migrate to our private cloud and processing volumes expand partially offset by the decrease in licenses and hardware revenues, quarter over quarter.

Services and support revenue increased 5.3% for the nine months ended March 31, 2025, compared to the same period in fiscal 2024. Reducing services and support revenue for deconversion revenue from each period, which was $13,410 for the current fiscal year period and $9,861 for the prior fiscal year period, results in growth of 5.0% period over period. This increase was primarily driven by double-digit growth in data processing and hosting revenues within private and public cloud as new and existing clients migrate to our private cloud and processing volumes expand partially offset by the decrease in license and hardware revenues, period over period.

Processing			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Processing			$	254,295					$	233,545					8.9		%				$	749,418					$	696,417					7.6		%
Percentage of total revenue			43		%				43		%										43		%				42		%

Processing revenue increased 8.9% for the third quarter of fiscal 2025 compared to the same quarter last fiscal year. This increase was primarily driven by growth in card revenue primarily from monthly service and risk management fees, improvement in Jack Henry digital revenue (including Banno) from a higher number of active users and expanding volumes and from the ramping up of add-on products, higher payment processing revenues, including PayCenter products — Zelle, RTP (Real Time Payments), and FedNow — from expanding volumes and new client revenue. Deconversion revenue did not significantly affect processing revenue quarter over quarter.

Processing revenue increased 7.6% for the nine months ended March 31, 2025 compared to the same period in fiscal 2024. This increase was primarily driven by growth in card revenue primarily from monthly service and risk management fees, improvement in Jack Henry digital revenue (including Banno) from a higher number of active users and expanding volumes and from the ramping up of add-on products, and higher payment processing revenues, including PayCenter products — Zelle, RTP, and FedNow — from expanding volumes and new client revenue. Deconversion revenue did not significantly affect processing revenue period over period.

OPERATING EXPENSES

Cost of Revenue			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Cost of Revenue			$	340,586					$	328,224					3.8		%				$	1,016,868					$	972,205					4.6		%
Percentage of total revenue			58		%				61		%										58		%				59		%

Cost of revenue for the third quarter of fiscal 2025 increased 3.8% over the prior fiscal year third quarter. Reducing cost of revenue for deconversion costs from each quarter, which were $1,873 for the current fiscal year quarter and $671 for the prior fiscal year quarter, results in a 3.4% increase quarter over quarter. This increase was primarily due to higher direct costs generally consistent with increases in the related lines of revenue and included higher processing and pass through costs. Also contributing to the increase were higher internal licenses and fees from increased deployments and pricing in the current quarter partially offset by an increase in labor cost deferral. Cost of revenue decreased 3% as a percentage of total revenue compared to the prior fiscal year quarter.

Cost of revenue for the nine months ended March 31, 2025, increased 4.6% compared to the same period in fiscal 2024. Reducing cost of revenue for deconversion costs from each period, which were $2,228 for the current fiscal year period and $1,562 for the prior fiscal year period, results in a 4.5% increase period over period. This increase was primarily due to higher direct costs generally consistent with increases in the related lines of revenue, compensation increases in the trailing twelve months, and higher internal licenses and fees from increased deployments and pricing. Also contributing to the increase were higher amortization of intangibles and increased cloud migration and consumption fees, partially offset by a decrease in license and hardware costs and increased labor cost deferral. Cost of revenue decreased 1% as a percentage of total revenue compared to the prior fiscal year period.

Research and Development			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Research and Development			$	39,411					$	35,993					9.5		%				$	120,192					$	108,363					10.9		%
Percentage of total revenue			7		%				7		%										7		%				7		%

Research and development expense increased 9.5% for the third quarter of fiscal 2025 compared to the prior fiscal year third quarter. This increase was primarily due to higher personnel costs (net of capitalization) from compensation increases and employee headcount additions in the trailing twelve months. Deconversion and non-recurring costs did not significantly affect research and development expenses quarter over quarter. Research and development expense remained consistent as a percentage of total revenue compared to the prior fiscal year quarter.

Research and development expense increased 10.9% for the nine months ended March 31, 2025, compared to the same period in fiscal 2024. This increase was primarily due to higher personnel costs (net of capitalization) from compensation increases and employee headcount additions in the trailing twelve months. Deconversion and non-recurring costs did not significantly affect research and development expenses period over period. Research and development expense remained consistent as a percentage of total revenue compared to the prior fiscal year period.

Selling, General, and Administrative			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Selling, General, and Administrative			$	66,350					$	62,246					6.6		%				$	209,839					$	211,298					(0.7)		%
Percentage of total revenue			11		%				12		%										12		%				13		%

Selling, general, and administrative expense increased 6.6% in the third quarter of fiscal 2025 compared to the same quarter in the prior fiscal year. Reducing selling, general, and administrative expense for deconversion costs from each quarter, which were $920 for the current fiscal year quarter and $178 for the prior fiscal year quarter results in a 5.4% increase quarter over quarter. This increase was primarily due to compensation increases related to an increase in employee headcount in the trailing twelve months and higher commission expense. Selling, general, and administrative expense decreased 1% as a percentage of total revenue compared to the prior fiscal year quarter.

Selling, general, and administrative expense decreased 0.7% in the nine months ended March 31, 2025, compared to the same period in 2024. Reducing selling, general, and administrative expense for deconversion costs from each period, which were $1,458 for the current fiscal year period and $747 for the prior fiscal year period and for VEDIP program expense of $16,443 in the prior fiscal year period, results in a 7.4% increase period over period. This increase was primarily due to compensation increases related to an increase in employee headcount in the trailing twelve months and higher commissions expense. Selling, general, and administrative expense decreased 1% as a percentage of total revenue compared to the prior fiscal year period.

INTEREST INCOME (EXPENSE)			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Interest Income			$	5,899					$	6,499					(9.2)		%				$	21,406					$	16,365					30.8		%
Interest Expense			$	(2,731)					$	(4,433)					(38.4)		%				$	(8,336)					$	(12,495)					(33.3)		%

Interest income decreased due to lower interest-earning balances for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Interest income increased due to higher interest-earning balances for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024.

Interest expense decreased for the three and nine months ended March 31, 2025, compared to the three and nine months ended March 31, 2024 primarily due to a decrease in average outstanding debt period over period. There was $170,000 outstanding under the revolving credit and term loan facilities at March 31, 2025, and $250,000 outstanding under the revolving credit and term loan facilities at March 31, 2024.

PROVISION FOR INCOME TAXES			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Provision for Income Taxes			$	30,800					$	27,066					13.8		%				$	97,943					$	86,892					12.7		%
Effective Rate			21.7		%				23.7		%										23.0		%				23.6		%

The provision for income taxes increased 13.8% for the third quarter of fiscal 2025, compared to the third quarter of fiscal 2024. Removing from the provision for income taxes the effect of taxes on deconversion net income of $1,644 for the current fiscal quarter and on deconversion net loss of $1 for the prior fiscal year third quarter results in an increase of 7.7%, quarter over quarter. This increase was primarily driven by the increase in income before income taxes partially offset by a decrease in the Company's effective tax rate due to the timing of filing our Federal tax return and recognition of return-to-provision adjustments. The effective tax rate for the current fiscal third quarter was 21.7% compared to 23.7% for the same quarter a year ago.

The provision for income taxes increased 12.7% for the nine months ended March 31, 2025, compared to the same period in fiscal 2024. Removing from the provision for income taxes the effect of taxes on deconversion net income of $2,334 for the nine months ended March 31, 2025 and $1,812 for the nine months ended March 31, 2024 and the tax benefit on VEDIP expense of $3,946 for the prior fiscal year period results in an increase of 7.4%, period over period. This increase was primarily driven by the increase in income before income taxes partially offset by a decrease in the Company's effective tax rate due to the timing of filing our Federal tax return and recognition of return-to-provision adjustments. The effective tax rate for the current fiscal year period was 23.0% compared to 23.6% for the same period a year ago.

NET INCOME			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Net income			$	111,108					$	87,099					27.6		%				$	328,144					$	280,743					16.9		%
Diluted earnings per share			$	1.52					$	1.19					27.6		%				$	4.49					$	3.85					16.8		%

Net income increased 27.6% to $111,108, or $1.52 per diluted share, for the third quarter of fiscal 2025 compared to $87,099, or $1.19 per diluted share, in the same quarter of fiscal 2024. Removing from total net income the effects of deconversion net income of $5,207 for the current fiscal quarter and deconversion net loss of $5 for the prior fiscal year quarter, results in a 21.6% increase quarter over quarter. This increase was primarily due to net organic growth in our lines of revenue for the third quarter of fiscal 2025 partially offset by higher operating expenses and the increased provision for income taxes compared to the same quarter last fiscal year.

Net income increased 16.9% to $328,144, or $4.49 per diluted share, for the nine months ended March 31, 2025 compared to $280,743, or $3.85 per diluted share, in the same period of fiscal 2024. Removing from total net income the effects of deconversion net income of $7,390 for the current fiscal year period and $5,739 for the prior fiscal year period, and the VEDIP program net loss of $12,497 for the prior fiscal year period, results in an 11.6% increase period over period. This increase was primarily due to net organic growth in our lines of revenue for the nine months ended March 31, 2025, partially offset by higher operating expenses and the increased provision for income taxes compared to the same period last fiscal year.

REPORTABLE SEGMENT DISCUSSION

The Company is a well-rounded financial technology company and is a leading provider of technology solutions and payment processing services primarily to community and regional financial institutions.

The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment provides additional software, hosted processing platforms, and services, including digital/mobile banking, treasury services, online account opening, fraud/anti-money laundering ("AML") and lending/deposit solutions that can be integrated with the Company's Core solutions, and many can be used independently. The Corporate and Other segment includes revenue and costs from hardware and other products not attributed to any of the other three segments, as well as operating expenses not directly attributable to the other three segments.

The Company evaluates the performance of its segments and allocates resources to them based on various factors, including performance against trend, budget, and forecast. Only revenue and costs of revenue are considered in the evaluation for each segment.

Immaterial adjustments have been made between segments to reclassify cost of revenue that was recognized for the three and nine months ended March 31, 2024. These reclasses were made to be consistent with the current allocation of cost of revenue by segment. Cost of revenue reclassed for the three and nine months ended March 31, 2024, from Complementary to Corporate and Other, was $1,195 and $3,710, respectively.

Core			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Revenue			$	180,725					$	166,655					8.4		%				$	549,523					$	518,696					5.9		%
Cost of Revenue			$	75,258					$	72,153					4.3		%				$	227,417					$	217,449					4.6		%

Revenue in the Core segment increased 8.4% and cost of revenue increased 4.3% for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Reducing Core revenue for deconversion revenue in both quarters, which totaled $4,838 for the three months ended March 31, 2025, and $1,291 for the three months ended March 31, 2024, results in a 6.4% increase quarter over quarter. This increase was primarily driven by organic growth in our Core revenue lines including data processing and hosting revenues within private and public cloud, as new and existing clients migrate to our private cloud and processing volumes expand, partially offset by a decrease in maintenance fee and credit union hardware revenues. Reducing Core cost of revenue for deconversion costs in both quarters, which totaled $1,240 for the three months ended March 31, 2025, and $225 for the three months ended March 31, 2024, results in a 2.9% increase quarter over quarter. This increase was primarily due to higher direct costs generally consistent with increases in related lines of revenue. Core cost of revenue decreased 2% as a percentage of Core revenue for the third quarter of fiscal 2025 compared to the same quarter in fiscal 2024.

Revenue in the Core segment increased 5.9% and cost of revenue increased 4.6% for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. Reducing Core revenue for deconversion revenue in both periods, which totaled $6,105 for the nine months ended March 31, 2025, and $4,885 for the nine months ended March 31, 2024, results in a 5.8% increase period over period. This increase was primarily driven by organic growth in our Core revenue lines including data processing and hosting revenues within private and public cloud as new and existing clients migrate to our private cloud and processing volumes expand, partially offset by a decrease in maintenance fees and software usage revenues. Reducing Core cost of revenue for deconversion costs in both periods, which totaled $1,365 for the nine months ended March 31, 2025 and $650 for the nine months ended March 31, 2024, results in a 4.3% increase period over period. This increase was primarily due to higher direct costs generally consistent with increases in related lines of revenue. Core cost of revenue decreased 1% as a percentage of Core revenue for the nine months ended March 31, 2025 compared to the same period in fiscal 2024.

Payments			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Revenue			$	217,449					$	201,919					7.7		%				$	644,207					$	605,115					6.5		%
Cost of Revenue			$	116,266					$	109,848					5.8		%				$	344,023					$	330,297					4.2		%

Revenue in the Payments segment increased 7.7% and cost of revenue increased 5.8% for the third quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both quarters, which totaled $2,394 for the third quarter of fiscal 2025 and $910 for the third quarter of fiscal 2024, results in a 7.0% increase quarter over quarter. This increase was primarily due to higher card revenue from an increase in volumes and higher payment processing revenues, including PayCenter products — Zelle, RTP, and FedNow — from an increase in volumes and new client revenue. The Payments cost of revenue increase was primarily due to higher direct costs generally consistent with increases in lines of revenue. Deconversion and non-recurring costs did not significantly affect the Payments cost of revenue comparison. Payments cost of revenue as a percentage of Payments revenue decreased 1% for the third quarter of fiscal 2025 compared to the same quarter in fiscal 2024.

Revenue in the Payments segment increased 6.5% and cost of revenue increased 4.2% for the nine months ended March 31, 2025, compared to the equivalent period of the prior fiscal year. Reducing Payments revenue for deconversion revenue in both periods, which totaled $4,341 for the nine months ended March 31, 2025 and $3,470

for the nine months ended March 31, 2024, results in a 6.4% increase period over period. This increase was primarily due to higher card revenue from an increase in volumes, higher payment processing revenues, including PayCenter products — Zelle, RTP, and FedNow — from an increase in volumes and new client revenue, and increased remote capture and ACH revenue. The Payments cost of revenue increase was primarily due to higher direct costs generally consistent with increases in lines of revenue and higher compensation costs in the trailing twelve months. Deconversion and non-recurring costs did not significantly affect the Payments cost of revenue comparison. Payments cost of revenue as a percentage of Payments revenue decreased 1% for the nine months ended March 31, 2025 compared to the same period in fiscal 2024.

Complementary			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Revenue			$	167,442					$	149,231					12.2		%				$	500,080					$	463,064					8.0		%
Cost of Revenue			$	67,836					$	64,219					5.6		%				$	197,188					$	188,002					4.9		%

Revenue in the Complementary segment increased 12.2% and cost of revenue increased 5.6% for the third quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Complementary revenue for deconversion revenue, which totaled $2,324 for the third quarter of fiscal 2025 and $(1,366) for the third quarter of fiscal 2024, results in a 9.6% increase quarter over quarter. This increase was primarily driven by increased Jack Henry digital revenue (including Banno) as the number of active users increased and volumes expanded and from the ramping up of add-on products and organic growth in hosting revenues as new and existing clients continued to migrate to our private cloud and processing volumes expanded. Reducing Complementary cost of revenue for deconversion costs in both quarters, which totaled $519 for the third quarter of fiscal 2025 and $348 for the third quarter of fiscal 2024, results in a 5.4% increase quarter over quarter. This increase was primarily driven by higher direct costs generally consistent with increases in related lines of revenue. Complementary cost of revenue as a percentage of Complementary revenue decreased 3% for the third quarter of fiscal 2025 compared to the same quarter in fiscal 2024.

Revenue in the Complementary segment increased 8.0% and cost of revenue increased 4.9% for the nine months ended March 31, 2025, compared to the equivalent period of the prior fiscal year. Reducing Complementary revenue for deconversion revenue in both periods, which totaled $2,857 for the nine months ended March 31, 2025, and $1,440 for the nine months ended March 31, 2024, results in a 7.7% increase period over period. This increase was primarily driven by organic growth in hosting revenues as new and existing clients continued to migrate to our private cloud and processing volumes expanded, increased Jack Henry digital revenue (including Banno) as the number of active users increased and volumes expanded and from the ramping up of add-on products, and higher maintenance fee revenue. The Complementary cost of revenue increase was primarily driven by higher direct costs generally consistent with increases in related lines of revenue, compensation increases in the trailing twelve months, and increased amortization of capitalized software from capital software development projects. Deconversion and non-recurring costs did not significantly affect the Complementary cost of revenue comparison. Complementary cost of revenue as a percentage of Complementary revenue decreased 1% for the nine months ended March 31, 2025, compared to the same period in fiscal 2024.

Corporate and Other			Three Months Ended March 31,												% Change						Nine Months Ended March 31,												% Change
			2025						2024												2025						2024
Revenue			$	19,471					$	20,757					(6.2)		%				$	66,106					$	68,756					(3.9)		%
Cost of Revenue			$	81,226					$	82,004					(0.9)		%				$	248,240					$	236,457					5.0		%

Revenue classified in the Corporate and Other segment includes revenues from other products and services and hardware not specifically attributed to the other three segments. Revenue in the Corporate and Other segment decreased 6.2% for the third quarter of fiscal 2025 compared to the equivalent quarter of the prior fiscal year. Reducing Corporate and Other revenue for deconversion revenue in both quarters, which totaled $88 for the third quarter of fiscal 2025 and $8 for the third quarter of fiscal 2024, results in a 6.6% decrease quarter over quarter. This decrease was primarily due to lower hardware revenue quarter over quarter. Cost of revenue for the Corporate and Other segment includes operating expenses not directly attributable to the other three segments. The Corporate and Other cost of revenue in the third quarter of fiscal 2025 decreased 0.9% when compared to the prior fiscal year quarter. This decrease was primarily due to lower hardware costs in line with lower hardware revenues, decreased personnel costs, and increased shared services chargeback, partially offset by higher direct costs and

increased cloud consumption costs. Deconversion and non-recurring costs did not significantly affect the Corporate and Other cost of revenue comparison.

Revenue in the Corporate and Other segment decreased 3.9% for the nine months ended March 31, 2025, compared to the equivalent period of the prior fiscal year. The Corporate and Other revenue decrease was primarily due to lower hardware revenue partially offset by higher subscription and software usage revenue, increased processing revenue, and higher data processing and hosting revenue within private and public cloud. Deconversion revenue did not significantly affect the Corporate and Other revenue comparison. The Corporate and Other cost of revenue in the nine months ended March 31, 2025, increased 5.0% when compared to the prior fiscal year period. This increase was primarily due to increased direct costs, higher cloud consumption costs, and increased internal licenses and fees partially offset by lower cost of hardware in line with lower hardware revenue. Deconversion and non-recurring costs did not significantly affect the Corporate and Other cost of revenue comparison.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash and cash equivalents increased to $39,870 at March 31, 2025, from $38,284 at June 30, 2024.

The following table summarizes net cash from operating activities in the statement of cash flows:

			Nine Months Ended
			March 31,
			2025						2024
Net income			$	328,144					$	280,743
Non-cash expenses			162,907						156,565
Change in receivables			50,871						97,835
Change in deferred revenue			(167,104)						(185,784)
Change in other assets and liabilities			(60,426)						(13,117)
Net cash provided by operating activities			$	314,392					$	336,242

Cash provided by operating activities for the first nine months of fiscal 2025 decreased 6% compared to the same period last year primarily due to the decrease in the change in receivables period over period. We collected significantly more annual maintenance dollars in the fourth quarter of fiscal 2024 than we have historically collected in the fourth quarter, leaving less to be collected in the current fiscal year period. Cash from operations is primarily used to repay debt, pay dividends, repurchase stock, for capital expenditures, and acquisitions.

Cash used in investing activities for the first nine months of fiscal 2025 totaled $176,317 and included: $130,298 for the ongoing enhancement and development of existing and new product and service offerings; capital expenditures on facilities and equipment of $41,186; $3,833 for the purchase and development of internal use software; and the purchase of investment of $2,000. Cash uses were partially offset by proceeds from investments of $1,000. Cash used in investing activities for the first nine months of fiscal 2024 totaled $164,505 and included: $125,351 for the development of software; $34,347 for capital expenditures; $4,561 for the purchase and development of internal use software; and $1,146 for the purchase of investment. Cash uses were partially offset by proceeds from dispositions of $900.

Financing activities used cash of $136,489 for the first nine months of fiscal 2025 and included: payments on credit facilities of $235,000; dividends paid to stockholders of $122,464; and the purchase of treasury stock of $35,052. Cash uses were partially offset by borrowings on credit facilities of $255,000 and $1,027 net cash inflow from the issuance of stock and tax withholding related to stock-based compensation. Financing activities used cash of $156,726 in the first nine months of fiscal 2024 and included: repayments on credit facilities of $360,000; $115,792 for the payment of dividends; and the purchase of treasury stock of $20,000. Cash uses were partially offset by borrowings on credit facilities of $335,000 and $4,066 net cash inflow from the issuance of stock and tax withholding related to stock-based compensation.

Capital Requirements and Resources

The Company generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling $41,186 and $34,347 for the nine months ended March 31, 2025, and March 31, 2024, respectively, were made primarily for additional equipment and the improvement of existing facilities. These additions were funded from cash generated by operations. Total consolidated capital expenditures on facilities and equipment for the Company for fiscal year 2025 are expected to be approximately $68,000 and have been or will be funded from our credit facilities and cash generated by operations.

Contractual obligations are discussed in our Annual Report on Form 10-K for the year ended June 30, 2024. There have been no material contractual obligations added for the nine months ended March 31, 2025.

The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or borrowings on its existing line of credit. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At March 31, 2025, there were 31,580 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,411 additional shares. The total cost of treasury shares at March 31, 2025, was $1,895,225, and the Company repurchased 207 shares during the first nine months of fiscal 2025. At June 30, 2024, there were 31,373 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,618 additional shares. The total cost of treasury shares at June 30, 2024, was $1,860,173 and the Company repurchased 129 shares during the first nine months of fiscal 2024.

Credit facilities

On August 31, 2022, the Company entered into a five-year senior, unsecured amended and restated credit agreement that replaced a prior credit facility that was entered into on February 10, 2020. The credit agreement allows for borrowings of up to $600,000, which may be increased to $1,000,000 by the Company at any time until maturity. The credit agreement bears interest at a variable rate equal to (a) a rate based on an adjusted Secured Overnight Financing Rate (“SOFR”) term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit agreement. As of March 31, 2025, the Company was in compliance with all such covenants. The amended and restated credit facility terminates August 31, 2027. There was $80,000 and $60,000 outstanding under the amended and restated credit facility at March 31, 2025 and June 30, 2024, respectively.

Term loan facility

On May 16, 2023, the Company entered into a term loan credit agreement with a syndicate of financial institutions, with an original principal balance of $180,000. Borrowings under the term loan facility bear interest at a variable rate equal to (a) a rate based on an adjusted SOFR term rate or (b) an alternate base rate (the highest of (i) 0%, (ii) the Prime Rate for such day, (iii) the sum of the Federal Funds Effective Rate for such day plus 0.50% per annum and (iv) the Adjusted Term SOFR Screen Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day for Dollars plus 0.75%), plus an applicable percentage in each case determined by the Company's leverage ratio. The term loan credit agreement is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the term loan credit agreement. As of March 31, 2025, the Company was in compliance with all such covenants. The term loan credit agreement has a maturity date of May 16, 2025, and the Company intends to repay the outstanding balance of the term loan with a combination of cash on hand and a borrowing under its revolving credit facility. There was $90,000 outstanding under the term loan at March 31, 2025 and June 30, 2024.

Other lines of credit

The Company has an unsecured bank credit line, which provides for funding of up to $5,000 and bears interest at the prime rate less 1.0%. The credit line expired on April 30, 2025. There was no balance outstanding at March 31, 2025, or June 30, 2024.

On October 31, 2024, the Company entered into a discretionary line of credit demand note, which provides for funding of up to $50,000 and bears interest at the prime rate less 2.0%. The note does not constitute a committed line of credit. The line of credit expires on October 31, 2025. There was no balance outstanding at March 31, 2025.