Jack Henry Reports $17.9 Million in Fiscal Q1 Deconversion Revenue

Jack Henry & Associates (JKHY ) announced on October 29, 2026 that deconversion revenue for its fiscal 2027 first quarter, ended September 30, 2026, was $17.9 million. Based on those results, the Monett, Missouri-based financial technology company set its deconversion revenue estimate for full fiscal year 2027 at $30 million, according to the company’s announcement.

The majority of deconversion revenue is generated when a Jack Henry client agrees to be acquired by another financial institution, resulting in the termination of the client’s contract with Jack Henry. The company states that its recognition of deconversion revenue is driven by factors outside its control and that this revenue does not represent the true operations of its ongoing business of providing services to clients. As a result, Jack Henry excludes deconversion revenue from the non-GAAP revenue it reports in its quarterly and annual earnings releases.

Guidance Methodology Dates to a 2023 Filing

The October 29 release directed readers to a Current Report on Form 8-K filed with the Securities and Exchange Commission on August 3, 2023 for an explanation of how deconversion guidance is developed. In that filing, Jack Henry said it would adjust its approach to deconversion revenue guidance starting with fiscal year 2024. The filing describes deconversion revenue as typically recognized when a customer agrees to be acquired by another financial institution, resulting in termination of the customer’s contract with the company and payment of a deconversion fee.

Under its previous approach, the company based annual deconversion revenue guidance on a combined estimate of recent prior historical results, known activity at the beginning of a fiscal year, and estimates of economic conditions for future financial institution consolidation. Management stated in the 2023 filing that it believed the inherent unpredictability of financial institution industry consolidation would continue to create forecasting volatility, and that, given the size of deconversion fees, the new approach aimed to create a reasonable baseline while retaining focus on the company’s continuing operations.

For fiscal 2024 annual guidance, the first year under the revised method, deconversion revenue was estimated at $16.0 million, approximating the lowest actual recent annual historical result, according to the filing. The company also established a practice of pre-releasing actual quarterly deconversion revenue on Form 8-K approximately 10 days before each quarterly earnings release. In each subsequent quarterly earnings press release, full-year guidance is adjusted to reflect actual year-to-date deconversion revenue combined with the remaining quarterly estimates.

The 2023 filing stated that the fiscal 2024 deconversion revenue guidance estimate would be lower than actual fiscal 2023 deconversion revenue, resulting in a negative impact on fiscal 2024 GAAP earnings-per-share guidance at a rate of approximately $0.01 per million dollars of deconversion revenue. It added that, as fiscal 2024 progressed, this negative impact was anticipated, but not guaranteed, to be reduced, eliminated, or even turned positive as deconversion revenue was realized. The company’s stated goal in making the change was to “focus guidance on its actual continuing operations” rather than one-time deconversion fees outside its control and difficult to estimate accurately.

The first-quarter fiscal 2027 figure of $17.9 million follows deconversion revenue of $8.6 million in the fiscal 2026 first quarter, ended September 30, 2025, which the company disclosed on October 28, 2025. At that time, Jack Henry increased its deconversion revenue estimate for full fiscal 2026 guidance to $20 million. The company later reported on August 11, 2026 that deconversion revenue for the fiscal 2026 fourth quarter, ended June 30, 2026, was $9.3 million, and that the deconversion revenue total for fiscal year 2026 was $42.8 million.

Consolidation Data in the Annual Filing

Jack Henry’s annual report on Form 10-K for the fiscal year ended June 30, 2026 describes consolidation among the institutions it serves. Citing Federal Deposit Insurance Corporation data, the filing states the number of commercial banks and savings institutions declined 13% from the end of calendar year 2020 to the end of calendar year 2025, due mainly to mergers and acquisitions. Comparing calendar years 2025 to 2024, the number of transactions of FDIC-insured banks acquiring or merging with other banks or credit unions increased 55%, according to the filing.

The filing cites America’s Credit Unions data showing the number of credit unions declined 16% over the same five-year period. Despite continued industry consolidation, average assets under management for the company’s banking core clients grew from $1.29 billion to $1.42 billion, and average assets under management for its credit union core clients grew from $1.20 billion to $1.31 billion, the filing states. Jack Henry provides core processing to over 900 banks and over 700 credit unions and serves approximately 5,600 non-core clients, according to the filing.

Jack Henry will issue its first quarter fiscal 2027 earnings press release after market close on November 3, 2026, and will host a live webcast of the earnings conference call on November 4, 2026, beginning at 7:45 a.m. Central (8:45 a.m. Eastern), according to an October 21, 2026 announcement. The US dial-in number for the call is (833) 630-0605 and the international dial-in number is +1 412-317-1830. An archived replay will be available on the company’s website approximately one hour after the live call, or by phone at (855) 669-9658 with replay access code 9836250.