Jack Henry & Associates Shines in Q3 2025 with 7% Revenue Growth and 207 Basis Point Margin Expansion
Jack Henry & Associates, Inc. recently reported its third quarter fiscal year 2025 results, showcasing solid overall performance despite macroeconomic concerns and softening nonstrategic revenue. The company's commitment to a people-first culture, service excellence, technology innovation, and clear strategy backed by consistent execution continues to differentiate it in the market.
The quarterly results reflect a 7% increase in non-GAAP revenue and a non-GAAP operating margin of 23%, representing an impressive 207 basis points of margin expansion over last year. The company's GAAP revenue also saw an uptick, with deconversion revenue reaching $9.6 million in Q3, and a forecasted full-year range of $22 million to $28 million.
Greg Adelson, President and CEO, emphasized the importance of the company's core business, which consists mostly of processing and cloud services, accounting for 76% of total revenue in the quarter. This key revenue grew at a rate of 9.8%, outpacing last year's Q3 growth rate of 8.8%. The adjusted non-GAAP revenue guidance is primarily due to macroeconomic concerns and the softening of nonstrategic revenue, such as hardware purchases and consulting engagements.
However, despite these challenges, Jack Henry & Associates remains confident in its ability to deliver strong results. The company has increased its GAAP and non-GAAP guidance on margin expansion and EPS growth, thanks to disciplined expense management, project prioritization, and capital expenditures.
The company's success in winning larger competitive core deals is also noteworthy. Over the past two years, the aggregate assets of these new core takeaways have more than doubled, with 28 new core wins this fiscal year, including 11 in Q3, totaling $30 billion in assets. This compares to 35 core transactions totaling $21 billion in assets at this time last year and 31 core deals totaling $14 billion in assets two years ago.
With a strong core and total pipeline, Jack Henry & Associates is well-positioned for continued success in Q4 and beyond. The company's commitment to innovation, service excellence, and people-first culture will undoubtedly continue to drive growth and expansion in the market.
