Profits Grow Faster Than Sales At Jack Henry In Fiscal Q1

November 14, 2011 Timothy Prickett Morgan

Jack Henry & Associates, a software and services provider for the financial sector that has a decently sized IBM i business, has turned in another good quarter of sales.

In the quarter ended in September, which was Jack Henry’s first quarter of fiscal 2012, hardware sales, which includes Power Systems running IBM i as well as other platforms, rose by 7 percent to $15.8 million. Software license sales skyrocketed 30 percent to $12.3 million, and support and services revenues were up a more modest 5 percent but weighed in at $220.3 million. (Within the support and services segment, Jack Henry’s electronic payment services, which includes ATM, debit, and credit card processing on behalf of clients, grew by 12 percent.) All told, Jack Henry had $248.3 million in sales, up 6 percent. Net income for the quarter was up 15 percent to $36.5 million.

“We started out our fiscal 2012 with record first quarter revenue, gross profit, and net income compared to any prior first quarter period in our history,” said Tony Wormington, Jack Henry’s president, in a statement accompanying the financial figures. “There were nice contributions from all three lines of reported revenue.”

Jack Henry ended the quarter with $108 million in cash, and it is reasonable to expect that the company will use at least some of this war chest to make strategic acquisitions.