JACK HENRY & ASSOCIATES INC (JKHY)

Jack Henry & Associates, Inc. is a financial technology company, founded in 1976, that provides technology solutions and services to community and regional banks and credit unions. It describes its aim as helping these institutions innovate faster, differentiate themselves, and compete while meeting the changing needs of their accountholders. The company says it supports over 7,200 financial institutions and diverse corporate entities. Its fundamental strategy is organic revenue and earnings growth supplemented by strategic acquisitions, with 36 acquisitions since the end of fiscal 1999. The most recent was Victor Technologies, a provider of cloud-native, API-first embedded payments solutions.

The business is organized into four segments, described in Note 14 to the financial statements. Its offerings fall into three groups. Core bank systems go to over 900 banks and include three platforms: SilverLake System, CIF 20/20 and Core Director. The core credit union system is Symitar (formerly Episys), used by over 700 credit unions. Core-agnostic and complementary products and services go to about 5,600 non-core clients and include financial performance, imaging and payment solutions, information security and risk management, retail delivery, digital and mobile banking, fraud protection and account origination. Core systems can be installed on-premise or delivered through a private cloud. The company also re-markets the required hardware and provides implementation, data conversion, training and support. It is developing the Jack Henry Platform, a public cloud-native, API-first platform meant as a modern alternative for core functions. It also offers small and medium-sized business capabilities such as Tap2Local and Rapid Transfers.

Core banking solutions serve commercial banks and savings institutions from de novo banks to those with up to $55 billion in assets. The company cites about 4,300 institutions in that range, with its core platforms supporting over 900 of them. Core credit union solutions serve credit unions of all sizes, and the company cites about 4,400 domestic credit unions, with over 700 as clients. Payments clients are supported with up to $200 billion and above in assets, and complementary clients with up to $500 billion and above. Most support and services revenue comes from private and public cloud services for hosted clients, typically on six-year contracts, recurring electronic payment solutions, generally on six-year terms, and on-premise clients, typically on one-year contracts. Software license fees and hardware sales supplement these sources. Core outsourcing contracts typically run six years and include per-account fees and minimum guaranteed payments.

Operationally, the core private cloud services run from a resilient data center configuration across multiple physical locations. Image item processing runs from two host/archive sites and several key entry and balancing locations. Accountholder statements are printed and mailed from three regional printing and rendering centers. New complementary products are developed internally, acquired, or provided through strategic alliances, guided by client input gathered by an Industry Research department. Client satisfaction is tracked through annual and support-triggered surveys, and support staff are available up to 24 hours a day, 365 days a year. The text does not identify the company's suppliers, specific competitors or headquarters location.