Jack Henry Says SilverLake Banking System Still Has It
February 20, 2012 Timothy Prickett Morgan
Jack Henry & Associates is one of the largest peddlers of applications and services to small and large financial services institutions, and not only are the company’s Windows-based products doing well. So are its IBM i-based applications, known appropriately enough as the SilverLake System, after the internal IBM code-name for the AS/400 while that machine was in development.
Apropos of nothing except a little excitement perhaps, Jack Henry put out a statement saying that in the past eight months, five mid-tier banks–meaning those with assets of between $1 billion and $20 billion–have opted to use the SilverLake System to run their banks, replacing legacy banking systems. In this case, “legacy” means mainframe. (Funny, isn’t it?) Interestingly, four of the banks are going to run the SilverLake applications in an outsourced environment, while only one is outing it on machinery in its own data center.
Jack Henry says that it has about a 20 percent share of the applications market in the mid-tier banking segment. The company has more than 1,500 customers using its Windows or IBM i banking suites, and a total of 11,200 customers using its software and processing services.
In its most recent quarter ended in December, Jack Henry booked $255.9 million in sales, up 5.5 percent, with net income of $38.5 million, up 6.9 percent. (That was the company’s second quarter of fiscal 2012.) Software license sales were down 12.3 percent, however, to $13.6 million. Software and support sales rose by 6.2 percent to $225.6 million. Jack Henry has $95.2 million in the bank, more than double what it had in December 2010, and it has a services backlog of $378.8 million, up 5 percent from the year-ago period. So it is in pretty good shape to weather a downturn in license sales.