Jack Henry & Associates Inc. (JKHY) FY4Q26 Takeaways Better than feared guidance drives relief rally

Equity Research 20 August 2026 | 1:03AM EDT

Jack Henry & Associates Inc. (JKHY): FY4Q26 Takeaways: Better than feared guidance drives relief rally

Bottom line: Shares outperformed, as we believe from investor conversations that Will Nance | positioning skewed negative, and JKHY guided to its typical earnings growth Goldman Sachs & Co. LLC

algorithm despite concerns over tougher comps on margins and decelerating growth Jack Evans | exiting 2026. To this point, despite expanding non-GAAP operating margins by Goldman Sachs & Co. LLC

90bps in 2026, JKHY is still signaling 20-40bps of expansion in 2027 and noted they Chandru Ravikumar | aim to do better over the course of the year. Thus, we think the market largely Goldman Sachs India SPL overlooked mgmt commentary that suggests a back half weighted year for both revenue and margins given mgmt’s strong track record of accurately telegraphing lumpy quarterly cadences in prior years. That all being said, the next two quarters are likely to be a bit choppy, with YoY margin declines and below target revenue growth, which will likely cap EPS growth for the first half of the year. Mgmt commentary suggested they are likely to telegraph a multi year earnings algorithm at their upcoming investor day in September, which will likely serve as the next fundamental catalyst. Putting it altogether, JKHY remains a strong executor in its space, putting up defensive compounder-like performance. While we remain positive on the execution story and track record of market share gains, we still see the valuation at 21x our C2027 EPS estimate largely reflecting growth prospects, and thus we remain Neutral rated.

Consolidated results: JKHY reported F4Q26 adjusted revenue of ~$633mn, +1% vs Visible Alpha Consensus Data. Adjusted segment income came in at ~$268mn vs. $260mn consensus, with a ~42.3% margin (~41.6% consensus). JKHY posted non-GAAP operating income of ~$133mn (vs. consensus of ~$130mn) and GAAP EPS of $1.57, ahead of the Street’s $1.44 estimate.

Formal Guidance: JKHY provided their FY2027 guidance. The company expects non-GAAP revenue between $2,659mn-$2,684mn, guiding for $23mn in deconversion fees. The company also expects non-GAAP operating expenses to fall between $2,018mn-$2,031mn (vs. consensus of $2,000mn) resulting in non-GAAP operating income between $641mn-$653mn with margins between 24.1% and 24.3%. From a GAAP perspective, the company expects revenues between $2,684mn-$2,709mn, with expenses between $2,025mn-$2,039mn resulting in operating income between $658-$670mn with margins between 24.5%-24.7%. Finally, the company expects 2027 GAAP EPS between $7.33-$7.38. Additionally, the Company indicated that the impact of the Victor acquisition will be recognized as part of non-GAAP adjusted (organic) revenue starting 10/1/2026.

Guidance from the call: The company also highlighted that their customer

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Goldman Sachs Jack Henry & Associates Inc. (JKHY)

conference is taking place in F2Q27, compared to F1Q in the prior year. The company expects this to result in a 1pt revenue headwind in F1Q and subsequently a 1pt benefit to F2Q. Moreover, the company expects revenue growth to improve through the year. On margins, the company expects margin benefits to be 2H weighted, as the company laps elevated self-insured medical cost. Finally, the company noted they expect a 23% GAAP tax rate in FY27.

Exhibit 1: GSe JKHY valuation Valuation methodology Q5-8 CY Q5-Q EBITDA - EBITDA - EBITDA - EBITDA - $ mn GP EPS P/FCF GP EPS P/FCF GP EPS P/FCF GP EPS P/FCF SBC SBC SBC SBC Multiple 10x 17x ~22x 29x 11x 20x 25x 19x 10x 18x 23x 37x 9x 17x 21x 29x Valuation KPI $1,258 $707 $8.16 $6.23 $1,112…