---
title: "Jack Henry Q4 FY2026 results: Revenue growth came with margin contraction"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/296268573.md"
description: "Jack Henry reported Q4 FY2026 revenue of $644.0 million, up 4.7%, but diluted EPS fell 10.2% to $1.57 due to margin contraction. Operating expenses grew faster than sales, reducing GAAP operating margin by 4.1 percentage points. Despite lower profitability, the company generated strong free cash flow and repurchased $164 million in stock. For FY2027, Jack Henry guides for revenue growth of 5.5-6.5% and EPS growth of 5.0-5.7%, with adjusted margins expected to expand modestly."
datetime: "2026-08-18T20:44:41.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/296268573.md)
  - [en](https://longbridge.com/en/news/296268573.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/296268573.md)
generator: "portal-rs"
---

# Jack Henry Q4 FY2026 results: Revenue growth came with margin contraction

Jack Henry (NASDAQ: JKHY) reported fiscal Q4 2026 revenue of $644.0 million, up 4.7% from $615.4 million, while diluted EPS fell 10.2% to $1.57 from $1.75. Net income declined 12.8% and GAAP operating margin contracted by 4.1 percentage points as cost of revenue, research and development, and selling, general and administrative expenses all grew faster than sales.

## Core performance data

The quarter combined continued revenue growth with lower profitability. Adjusted revenue increased faster than GAAP revenue after excluding deconversion revenue and other specified items, but adjusted operating income still declined, indicating that the pressure extended beyond accounting adjustments.

| Metric                    | Fiscal Q4 2026 | Fiscal Q4 2025 | Year-over-year change  |
| ------------------------- | -------------- | -------------- | ---------------------- |
| GAAP revenue              | $644.0 million | $615.4 million | +4.7%                  |
| Adjusted revenue          | $633.1 million | $593.7 million | +6.6%                  |
| GAAP operating income     | $136.8 million | $155.7 million | -12.2%                 |
| GAAP operating margin     | 21.2%          | 25.3%          | -4.1 percentage points |
| Adjusted operating income | $133.3 million | $137.6 million | -3.1%                  |
| Adjusted operating margin | 21.1%          | 23.2%          | -2.1 percentage points |
| Net income                | $111.2 million | $127.6 million | -12.8%                 |
| Diluted EPS               | $1.57          | $1.75          | -10.2%                 |

The non-GAAP measures exclude deconversions, acquisition-related results and a prior-year contract change, among other specified adjustments.

## Business and segment performance

Processing was the faster-growing major revenue category, increasing 7.5% to $283.8 million. Card revenue rose 5.4%, Jack Henry Digital and transaction revenue increased 8.6% as active users grew, and faster-payments revenue advanced 47.0%.

Services and support revenue increased 2.5% to $360.2 million. Growth included a 7.4% increase in data processing and hosting revenue within private and public cloud operations and a 27.3% rise in license and hardware revenue. These gains were partly offset by an $11.2 million decline in deconversion revenue. Excluding specified adjustments, services and support revenue grew 6.5%.

At the segment level, reported revenue increased 1.9% in Core, 4.9% in Payments and 4.7% in Complementary. On an adjusted basis, the respective growth rates were 6.0%, 6.1% and 5.6%, showing less variation among the three main operating segments than the GAAP figures suggested.

## Expense growth outweighed underlying revenue gains

The difference between GAAP and adjusted results was partly related to deconversions. Quarterly deconversion revenue fell to $9.3 million from $20.5 million, while the associated operating income contribution dropped to $4.6 million from $17.9 million. That comparison amplified the reported decline in operating income.

However, adjusted operating margin also fell by 2.1 percentage points. Cost of revenue increased 7.6%, compared with revenue growth of 4.7%, reflecting higher personnel and direct costs, increased software amortization, and additional internal licenses and fees. R&D expense rose 17.0% because of higher personnel costs, while SG&A increased 19.2% due mainly to compensation, headcount growth and the normalization of medical costs.

## Cash flow, balance sheet and capital allocation

Cash-flow figures were provided for the full fiscal year rather than the quarter. Fiscal 2026 operating cash flow increased about 18.8% to $762.0 million, while free cash flow rose about 31.4% to $539.3 million. The free-cash-flow calculation included $32.8 million of proceeds from asset sales.

Despite the higher annual cash generation, cash and equivalents declined to $12.1 million from $102.0 million, and the company ended the year with $40.0 million of debt compared with none a year earlier. Fiscal 2026 financing uses included $448.2 million of share repurchases and $170.4 million of dividends, while net investing outflows were $277.7 million.

Jack Henry repurchased $164 million of stock during Q4 at an average price of $140 per share. Quarterly diluted weighted-average shares declined by approximately 2.9%, helping explain why the 10.2% EPS decline was smaller than the 12.8% decrease in net income.

## Fiscal 2027 guidance

Jack Henry expects revenue and EPS to grow in fiscal 2027. GAAP operating margin is projected to remain below fiscal 2026, while adjusted operating margin is expected to expand modestly against the comparison basis used in the guidance.

| Metric                    | Fiscal 2027 guidance  | Fiscal 2026 comparison basis | Expected change                      |
| ------------------------- | --------------------- | ---------------------------- | ------------------------------------ |
| GAAP revenue              | $2.684-$2.709 billion | $2.544 billion               | +5.5% to +6.5%                       |
| GAAP operating margin     | 24.5%-24.7%           | 25.0%                        | About -0.5 to -0.3 percentage points |
| GAAP EPS                  | $7.33-$7.38           | $6.98                        | +5.0% to +5.7%                       |
| Adjusted revenue          | $2.659-$2.684 billion | $2.502 billion               | +6.3% to +7.3%                       |
| Adjusted operating income | $641-$653 million     | $598 million                 | +7.2% to +9.1%                       |
| Adjusted operating margin | 24.1%-24.3%           | 23.9%                        | About +0.2 to +0.4 percentage points |

The adjusted comparison bases differ from the reported fiscal 2026 adjusted figures because of acquisition treatment for year-over-year comparability. The guidance assumes no acquisitions or dispositions during fiscal 2027.

CEO Greg Adelson said technology spending remained strong and pointed to a robust sales pipeline. Jack Henry recorded 58 competitive core wins during fiscal 2026, including 14 institutions with more than $1 billion in assets.

CFO Mimi Carsley said non-GAAP revenue growth should remain consistent in fiscal 2027 but cautioned that margin comparisons would be affected by difficult comparisons during the first half of the year.

## Recent insider transactions

The supplied insider data identifies two purchases with dates, prices and transaction values. No share quantities were provided, and the dataset’s separate six-month aggregate reports zero purchases, so the two views cannot be fully reconciled from the available information.

| Date         | Insider            | Role | Transaction                   | Ownership | Disclosed value |
| ------------ | ------------------ | ---- | ----------------------------- | --------- | --------------- |
| May 14, 2026 | Gregory R. Adelson | CEO  | Purchase at $133.42 per share | Indirect  | $266,840        |
| May 14, 2026 | Mimi Carsley       | CFO  | Purchase at $134.12 per share | Direct    | $50,295         |

These records describe the transactions but do not establish the insiders’ broader view of the company’s valuation or outlook.

## Risks investors should watch

-   **Quarterly expense growth:** Cost of revenue, R&D and SG&A all grew faster than revenue in Q4. Continued personnel, medical and software-related cost growth could limit margin recovery.
-   **Uneven margin progression:** Fiscal 2027 GAAP operating margin guidance remains below fiscal 2026, and management expects difficult first-half comparisons even as full-year adjusted margin is projected to improve.
-   **Comparability adjustments:** Changes in deconversion revenue, acquisition treatment and contract-related items created a meaningful gap between GAAP and adjusted growth rates. These factors can make reported trends less straightforward.
-   **Lower balance-sheet cash:** Cash declined sharply while debt increased to $40 million following substantial repurchases, dividends and investment spending. Future capital allocation will need to be viewed alongside the reduced cash balance.

## Summary

Jack Henry’s fiscal Q4 2026 showed continued demand and revenue growth, led by processing, digital transactions and faster payments, but higher operating costs and lower deconversion contributions reduced earnings and margins. Fiscal 2027 guidance calls for continued revenue and EPS growth, with investors needing to monitor expense normalization, the timing of margin improvement and capital allocation after the year-end decline in cash.

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**